AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 11, 1998
REGISTRATION NO.
============================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SUNBEAM CORPORATION
(Exact name of Registrant as specified in its Charter)
DELAWARE 3634 25-1638266
(State or Other (Primary Standard (I.R.S. Employer
Jurisdiction of Industrial Classification Identification Number)
Incorporation or Code Number)
Organization)
1615 SOUTH CONGRESS AVENUE, SUITE 200
DELRAY BEACH, FLORIDA 33445
(561) 243-2100
(Address, including zip code, and telephone number,
including area code, of Registrant's principal executive offices)
DAVID C. FANNIN, ESQ.
EXECUTIVE VICE PRESIDENT, CHIEF LEGAL OFFICER AND SECRETARY
SUNBEAM CORPORATION
1615 SOUTH CONGRESS AVENUE, SUITE 200
DELRAY BEACH, FLORIDA 33445
(561) 243-2100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
RICHARD L. EASTON, ESQ.
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
ONE RODNEY SQUARE
WILMINGTON, DELAWARE 19801
(302) 651-3000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC: As soon as practicable after the effective date of this
Registration Statement, which relates to the issuance of common stock of
Sunbeam Corporation ("Sunbeam") in the merger (the "Coleman Merger") of
Camper Acquisition Corp., a wholly owned subsidiary of Sunbeam ("CAC"),
with and into The Coleman Company, Inc. ("Coleman"), pursuant to the
Agreement and Plan of Merger, dated as of February 27, 1998 (the "Coleman
Merger Agreement"), among Sunbeam, CAC and Coleman.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box. |_|
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED PROPOSED
TITLE OF EACH CLASS AMOUNT MAXIMUM MAXIMUM AMOUNT OF
OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER SECURITY OFFERING PRICE(2) FEE
- ------------------- ---------- -------------- ----------------- ------------
<S> <C> <C> <C> <C>
Common Stock, par
value $.01 per share..... 7,199,452(1) N.A. $196,536,040 $57,978
</TABLE>
- ----------------
(1) Based on the number of shares of common stock, par value $.01 per
share ("Coleman Common Stock"), of Coleman to be exchanged in the
Coleman Merger, assuming the exercise of all outstanding options to
purchase shares of Coleman Common Stock, multiplied by 0.5677 of a
share of Sunbeam Common Stock, the stock portion of the Per Share
Merger Consideration (as defined herein).
(2) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act of 1933, as amended
(the "Securities Act"), and computed pursuant to Rule 457(f) under the
Securities Act by multiplying $21.9375, the average of the high and low
sale prices of Coleman Common Stock on May 8, 1998, as reported on the
New York Stock Exchange, Inc. Composite Transactions Tape, by
12,681,790, the number of shares of Coleman Common Stock to be
exchanged in the Coleman Merger, assuming the exercise of all
outstanding options to purchase shares of Coleman Common Stock, and
deducting $6.44 per share, or an aggregate of $81,670,728, in respect
of the cash portion of the Per Share Merger Consideration.
------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE
WITH SECTION 8(a) OF THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
============================================================================
PRELIMINARY COPY -- SUBJECT TO COMPLETION
MAY 11, 1998
[THE COLEMAN COMPANY, INC. LOGO]
_______ __, 1998
Dear Stockholders:
As you are no doubt aware, on February 27, 1998, Coleman
entered into an Agreement and Plan of Merger (the "Coleman Merger
Agreement") with Sunbeam Corporation ("Sunbeam") and Camper Acquisition
Corp., a wholly owned subsidiary of Sunbeam ("CAC"). Pursuant to the
Coleman Merger Agreement, CAC will be merged with and into Coleman, with
Coleman continuing as the surviving corporation (the "Coleman Merger"). In
the Coleman Merger, each outstanding share of common stock, par value $.01
per share ("Coleman Common Stock"), of Coleman (other than shares held
indirectly by Sunbeam and dissenting shares, if any) will be converted into
the right to receive 0.5677 of a share of common stock, par value $.01 per
share, of Sunbeam ("Sunbeam Common Stock") and $6.44 in cash, without
interest thereon. Upon consummation of the Coleman Merger, Coleman will
become an indirect wholly owned subsidiary of Sunbeam.
At the same time Sunbeam and Coleman entered into the Coleman
Merger Agreement, Sunbeam entered into a second Agreement and Plan of
Merger (as amended, the "Holdings Merger Agreement") with Coleman (Parent)
Holdings Inc. ("Parent Holdings"), an indirect wholly owned subsidiary of
Mafco Holdings Inc. ("Mafco"), and CLN Holdings Inc., a wholly owned
subsidiary of Parent Holdings ("CLN Holdings"). On March 30, 1998, CLN
Holdings was merged with a wholly owned subsidiary of Sunbeam pursuant to
the Holdings Merger Agreement (the "Holdings Merger"). As a result of the
Holdings Merger, Sunbeam became the indirect owner of the 44,067,520 shares
of Coleman Common Stock held by Coleman Worldwide Corporation ("Coleman
Worldwide"), a wholly owned subsidiary of CLN Holdings. The shares of
Coleman Common Stock indirectly acquired by Sunbeam in the Holdings Merger
represented more than 80% of the total number of then outstanding shares.
As a result of subsequent option exercises by employees and former
employees of Coleman, such shares represent approximately _____% of the
currently outstanding shares of Coleman Common Stock.
On February 27, 1998, the Board of Directors of Coleman (the
"Old Coleman Board") unanimously approved the Coleman Merger Agreement and
the Coleman Merger. That same day, Coleman Worldwide, as the then owner of
more than 80% of the outstanding shares of Coleman Common Stock, executed a
written consent in lieu of a meeting of Coleman stockholders approving the
Coleman Merger Agreement and the Coleman Merger. ACCORDINGLY, NO FURTHER
ACTION IS REQUIRED ON THE PART OF THE STOCKHOLDERS OF COLEMAN IN ORDER TO
CONSUMMATE THE COLEMAN MERGER. The accompanying Information
Statement/Prospectus also constitutes the notice required by Section 228(d)
of the General Corporation Law of the State of Delaware of the taking of
action by written consent by Coleman Worldwide in lieu of a meeting of
stockholders of Coleman.
Credit Suisse First Boston Corporation ("Credit Suisse First
Boston") acted as exclusive financial advisor to Coleman in connection with
the Coleman Merger and, on February 27, 1998, delivered to the Old Coleman
Board an oral opinion, which was subsequently confirmed in writing, that as
of such date and based upon and subject to the matters set forth therein,
the consideration to be received in the Coleman Merger by the stockholders
of Coleman other than Coleman Worldwide and its affiliates was fair from a
financial point of view to such stockholders. A copy of the written opinion
of Credit Suisse First Boston rendered to the Old Coleman Board in
connection with the Coleman Merger, which sets forth a description of the
assumptions made, matters considered and limitations on the review
undertaken, is included as Annex II to the accompanying Information
Statement/Prospectus.
On March 30, 1998, upon consummation of the Holdings Merger,
all of the members of the Old Coleman Board resigned, the number of
directors constituting the board of directors of Coleman was fixed at five,
and I and four other designees of Sunbeam were elected as the directors of
Coleman.
IT IS CURRENTLY ANTICIPATED THAT THE COLEMAN MERGER WILL BE
CONSUMMATED ON OR ABOUT __________, 1998, WHICH IS THE TWENTY-FIRST
BUSINESS DAY FOLLOWING THE DATE ON WHICH THE ACCOMPANYING INFORMATION
STATEMENT/PROSPECTUS IS FIRST BEING MAILED TO HOLDERS OF COLEMAN COMMON
STOCK.
The accompanying Information Statement/Prospectus includes
details of the Coleman Merger, including a discussion of the background of,
reasons for and terms of the Coleman Merger. I urge you to read this
material carefully.
Very truly yours,
Russell A. Kersh
President
PRELIMINARY COPY -- SUBJECT TO COMPLETION
MAY 11, 1998
THE COLEMAN COMPANY, INC.
INFORMATION STATEMENT
----------
SUNBEAM CORPORATION
PROSPECTUS
----------
This Information Statement/Prospectus (the "Information
Statement/Prospectus") is being furnished to the holders of common stock,
par value $.01 per share ("Coleman Common Stock"), of The Coleman Company,
Inc., a Delaware corporation ("Coleman"), in connection with the merger
(the "Coleman Merger") of Camper Acquisition Corp. ("CAC"), a Delaware
corporation and a newly formed, wholly owned subsidiary of Sunbeam
Corporation, a Delaware corporation ("Sunbeam"), with and into Coleman,
with Coleman continuing as the surviving corporation (the "Surviving
Corporation") and as an indirect wholly owned subsidiary of Sunbeam. The
Coleman Merger will be effected pursuant to the Agreement and Plan of
Merger, dated as of February 27, 1998 (the "Coleman Merger Agreement"),
among Coleman, Sunbeam and CAC. Upon the terms and subject to the
conditions set forth in the Coleman Merger Agreement, at the effective time
of the Coleman Merger (the "Coleman Effective Time"), each outstanding
share of Coleman Common Stock (other than shares held indirectly by Sunbeam
and dissenting shares, if any) will be converted into the right to receive
0.5677 of a share of common stock, par value $.01 per share, of Sunbeam
("Sunbeam Common Stock") and $6.44 in cash, without interest thereon
(collectively, the "Per Share Merger Consideration"). Cash will be paid in
lieu of fractional shares of Sunbeam Common Stock.
At the same time that Sunbeam entered into the Coleman Merger
Agreement, Sunbeam also entered into an Agreement and Plan of Merger, dated
as of February 27, 1998 (as amended, the "Holdings Merger Agreement"), with
Laser Acquisition Corp., a Delaware corporation and a newly formed, wholly
owned subsidiary of Sunbeam ("LAC"), Coleman (Parent) Holdings Inc.
("Parent Holdings"), a Delaware corporation and an indirect wholly owned
subsidiary of Mafco Holdings Inc. ("Mafco"), and CLN Holdings Inc., a
Delaware corporation and a wholly owned subsidiary of Parent Holdings ("CLN
Holdings"). On March 30, 1998, pursuant to the Holdings Merger Agreement,
CLN Holdings was merged with and into LAC, with LAC continuing as the
surviving corporation and as a wholly owned subsidiary of Sunbeam (the
"Holdings Merger"). In the Holdings Merger, Parent Holdings received
14,099,749 shares of Sunbeam Common Stock and $159,956,756 in cash in
exchange for all of the outstanding shares of CLN Holdings. As a result of
the Holdings Merger, Sunbeam became the indirect owner of the 44,067,520
shares of Coleman Common Stock held by Coleman Worldwide Corporation, a
Delaware corporation and a wholly owned subsidiary of CLN Holdings
("Coleman Worldwide"). The shares of Coleman Common Stock indirectly
acquired by Sunbeam in the Holdings Merger represented more than 80% of the
total number of then outstanding shares. As a result of subsequent option
exercises by employees and former employees of Coleman, such shares
represent approximately _____% of the currently outstanding shares of
Coleman Common Stock.
On February 27, 1998, the Board of Directors of Coleman (the
"Old Coleman Board") unanimously approved the Coleman Merger Agreement and
the Coleman Merger. That same day, Coleman Worldwide, as the then owner of
more than 80% of the outstanding shares of Coleman Common Stock, executed a
written consent in lieu of a meeting of Coleman stockholders approving the
Coleman Merger Agreement and the Coleman Merger. ACCORDINGLY, NO FURTHER
ACTION IS REQUIRED ON THE PART OF THE STOCKHOLDERS OF COLEMAN IN ORDER TO
CONSUMMATE THE COLEMAN MERGER. A copy of the Coleman Merger Agreement is
attached hereto as Annex I.
Credit Suisse First Boston Corporation ("Credit Suisse First
Boston") acted as exclusive financial advisor to Coleman in connection with
the Coleman Merger and, on February 27, 1998, Credit Suisse First Boston
delivered to the Old Coleman Board an oral opinion, which was subsequently
confirmed in writing (the "Credit Suisse First Boston Opinion"), that as of
such date and based upon and subject to the matters set forth therein, the
Per Share Merger Consideration was fair from a financial point of view to
the stockholders of Coleman other than Coleman Worldwide and its affiliates
(the "Coleman Public Stockholders"). The full text of the Credit Suisse
First Boston Opinion is attached as Annex II to this Information
Statement/Prospectus and should be read carefully in its entirety. The
Credit Suisse First Boston Opinion is directed only to the matters set
forth therein. For information on the procedures followed, assumptions
made, matters considered and limitations on the review undertaken by Credit
Suisse First Boston, see "SPECIAL FACTORS Opinion of Financial Advisor to
Coleman."
On March 30, 1998, upon consummation of the Holdings Merger,
all of the members of the Old Coleman Board resigned, the number of
directors constituting the board of directors of Coleman was fixed at five,
and five designees of Sunbeam were elected as the directors of Coleman.
COLEMAN STOCKHOLDERS WHO OBJECT TO THE COLEMAN MERGER AND DO
NOT WISH TO ACCEPT THE PER SHARE MERGER CONSIDERATION HAVE THE RIGHT TO
DISSENT FROM THE COLEMAN MERGER AND TO HAVE THE FAIR VALUE OF THEIR SHARES
OF COLEMAN COMMON STOCK JUDICIALLY APPRAISED AND PAID TO THEM IN CASH BY
COMPLYING WITH THE PROCEDURES SET FORTH IN SECTION 262 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE (THE "DGCL"). SEE "RISK FACTORS"
COMMENCING ON PAGE 16 FOR A DESCRIPTION OF CERTAIN MATTERS THAT SHOULD BE
CONSIDERED BY COLEMAN STOCKHOLDERS IN REVIEWING THE INFORMATION CONTAINED
HEREIN AND IN DECIDING WHETHER TO ACCEPT THE PER SHARE MERGER CONSIDERATION
OR EXERCISE THEIR APPRAISAL RIGHTS.
This Information Statement/Prospectus also constitutes the
Prospectus of Sunbeam filed as part of a Registration Statement on Form S-4
(the "Registration Statement") with the Securities and Exchange Commission
(the "SEC") under the Securities Act of 1933, as amended (the "Securities
Act"), relating to the registration of shares of Sunbeam Common Stock to be
issued in the Coleman Merger. This Information Statement/Prospectus also
constitutes the notice required by Section 262(d)(2) of the DGCL with
respect to the availability of appraisal rights in connection with the
Coleman Merger. See "APPRAISAL RIGHTS." This Information
Statement/Prospectus also constitutes the notice required by Section 228(d)
of the DGCL of the taking of action by written consent by Coleman Worldwide
in lieu of a meeting of stockholders of Coleman.
Sunbeam Common Stock is listed for trading under the symbol
"SOC" on the New York Stock Exchange, Inc. (the "NYSE"). Coleman Common
Stock is listed for trading under the symbol "CLN" on the NYSE, the Pacific
Stock Exchange and the Midwest Stock Exchange. On February 27, 1998, the
last trading day prior to the execution of the Coleman Merger Agreement,
the last reported sale prices of Sunbeam Common Stock and Coleman Common
Stock, as reported on the NYSE Composite Transactions Tape, were $41.750
per share and $20.875 per share, respectively. On March 18, 1998, the last
trading day prior to the announcement by Sunbeam that it was possible that
its net sales for the first quarter 1998 might be lower than the range of
Wall Street analysts' estimates, the last reported sale prices of Sunbeam
Common Stock and Coleman Common Stock, as reported on the NYSE Composite
Transactions Tape, were $50.063 per share and $33.875 per share,
respectively. On _____ __, 1998, the last trading day prior to the date of
this Information Statement/Prospectus, the last reported sale prices of
Sunbeam Common Stock and Coleman Common Stock, as reported on the NYSE
Composite Transactions Tape, were $___ per share and $___ per share,
respectively. Stockholders are urged to obtain current market quotations
for Sunbeam Common Stock and Coleman Common Stock.
This Information Statement/Prospectus is first being mailed to
holders of Coleman Common Stock on or about _____ ___, 1998.
IT IS CURRENTLY ANTICIPATED THAT THE COLEMAN MERGER WILL BE
CONSUMMATED ON OR ABOUT __________, 1998, WHICH IS THE TWENTY-FIRST
BUSINESS DAY FOLLOWING THE DATE ON WHICH THIS INFORMATION
STATEMENT/PROSPECTUS IS FIRST BEING MAILED TO HOLDERS OF COLEMAN COMMON
STOCK.
-----------
THE COLEMAN MERGER WAS APPROVED BY COLEMAN WORLDWIDE, AS
THE HOLDER OF COLEMAN COMMON STOCK HAVING SUFFICIENT
VOTING POWER TO APPROVE THE COLEMAN MERGER AGREE-
MENT AND THE COLEMAN MERGER. THIS INFORMATION
STATEMENT/PROSPECTUS IS BEING PROVIDED TO YOU
SOLELY FOR YOUR INFORMATION AND IN CONNEC-
TION WITH YOUR DECISION AS TO WHETHER TO
ACCEPT THE PER SHARE MERGER CONSIDER-
ATION OR TO EXERCISE APPRAISAL RIGHTS.
COLEMAN IS NOT ASKING FOR YOUR PROXY
AND YOU ARE REQUESTED NOT TO SEND
A PROXY. DO NOT SEND YOUR COLEMAN
STOCK CERTIFICATES TO SUNBEAM
OR COLEMAN AT THIS TIME.
-------------
NEITHER THIS TRANSACTION NOR THESE SECURITIES HAVE
BEEN APPROVED OR DISAPPROVED BY THE SEC. THE SEC
HAS NOT PASSED UPON THE FAIRNESS OR MERITS OF
THIS TRANSACTION NOR UPON THE ACCURACY OR
ADEQUACY OF THE INFORMATION CONTAINED
IN THIS INFORMATION STATEMENT/
PROSPECTUS. ANY REPRESENTA-
TION TO THE CONTRARY IS
UNLAWFUL.
-------------
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE
SECURITIES HAS BEEN FILED WITH THE SEC BUT HAS NOT
YET BECOME EFFECTIVE. THESE SECURITIES MAY NOT BE
SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO
THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS INFORMATION STATEMENT/
PROSPECTUS SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF
AN OFFER TO BUY NOR SHALL THERE BE
ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION
OR QUALIFICATION UNDER THE
SECURITIES LAWS OF ANY
SUCH STATE.
-------------
The date of this Information Statement/Prospectus is _____________, 1998.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS WITH RESPECT TO THE MATTERS DESCRIBED IN THIS
INFORMATION STATEMENT/PROSPECTUS OTHER THAN THOSE CONTAINED OR INCORPORATED
BY REFERENCE HEREIN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY EITHER
SUNBEAM OR COLEMAN. THIS INFORMATION STATEMENT/PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN ANY JURISDICTION TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS INFORMATION STATEMENT/PROSPECTUS NOR ANY DISTRIBUTION OF
SECURITIES HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF SUNBEAM OR COLEMAN SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Sunbeam and Coleman are subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and in accordance therewith file reports, proxy statements
and other information with the SEC. Such reports, proxy statements and
other information may be inspected and copied at the public reference
facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549 and should be available for inspection
and copying at the following Regional Offices of the SEC: Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and 7 World
Trade Center, 13th Floor, New York, New York 10048. The SEC also maintains
a Website at http://www.sec.gov that contains reports, proxy statements and
other information. Copies of such materials relating to Sunbeam and Coleman
can also be inspected at the NYSE, 20 Broad Street, New York, New York
10005. After consummation of the Coleman Merger, Coleman will no longer be
required to file reports, proxy statements or other information with the
SEC. Instead, such information will be included, to the extent required, in
filings made by Sunbeam.
This Information Statement/Prospectus does not contain all of
the information set forth in the Registration Statement, certain parts of
which are omitted in accordance with the rules and regulations of the SEC.
Reference is made to the Registration Statement and the exhibits thereto
for further information. Statements contained or incorporated by reference
herein concerning the provisions of any agreement or other document filed
as an exhibit to the Registration Statement or otherwise filed with the SEC
are not necessarily complete and reference is hereby made to the copy
thereof so filed for more detailed information, each such statement being
qualified in its entirety by such reference.
THIS INFORMATION STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE
DOCUMENTS THAT ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF
SUCH DOCUMENTS (OTHER THAN EXHIBITS THERETO WHICH ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE HEREIN) ARE AVAILABLE, WITHOUT CHARGE, TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER OF SHARES OF COLEMAN COMMON STOCK TO
WHOM THIS INFORMATION STATEMENT/PROSPECTUS IS DELIVERED, UPON REQUEST, IN
THE CASE OF DOCUMENTS RELATING TO COLEMAN, TO THE COLEMAN COMPANY, INC.,
2111 EAST 37TH STREET NORTH, WICHITA, KANSAS 67219, ATTENTION: DAVID C.
FANNIN, SECRETARY, TELEPHONE: (316) 832- 2700, AND, IN THE CASE OF
DOCUMENTS RELATING TO SUNBEAM, TO SUNBEAM CORPORATION, 1615 SOUTH CONGRESS
AVENUE, SUITE 200, DELRAY BEACH, FLORIDA 33445, ATTENTION: DAVID C. FANNIN,
SECRETARY, TELEPHONE: (561) 243-2100. IN ORDER TO ENSURE DELIVERY OF
DOCUMENTS PRIOR TO THE CONSUMMATION OF THE COLEMAN MERGER, ANY REQUEST
THEREFOR SHOULD BE MADE NOT LATER THAN __________, 1998.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents heretofore filed with the SEC pursuant
to the Exchange Act are incorporated herein by reference:
(1) Coleman's Annual Reports on Form 10-K for the fiscal years ended
December 31, 1997, 1996 and 1995;
(2) Coleman's Current Reports on Form 8-K reporting events occurring
on February 27, 1998 (as amended), March 24, 1998 (as amended) and March
30, 1998;
(3) Coleman's Information Statement pursuant to Section 14(f) of the
Exchange Act mailed to Coleman stockholders on or about March 18, 1998;
(4) CLN Holdings' Annual Reports on Form 10-K for the fiscal years
ended December 31, 1997, 1996 and 1995;
(5) CLN Holdings' Current Reports on Form 8-K reporting events
occurring on February 27, 1998 (as amended), March 24, 1998 (as amended)
and March 30, 1998;
(6) Sunbeam's Annual Report on Form 10-K for the fiscal year ended
December 28, 1997;
(7) Sunbeam's Notice of 1998 Annual Meeting and Proxy Statement
relating thereto;
(8) Sunbeam's Current Report on Form 8-K reporting events occurring
on March 30, 1998 (as amended);
(9) The Consolidated Financial Statements on pp. F-1 to F-21 in the
Annual Report on Form 10-K of First Alert, Inc. for the fiscal year ended
December 31, 1997;
(10) The Consolidated Financial Statements on pp. F-1 to F-18 in the
Annual Report on Form 10-K of Signature Brands USA, Inc. for the fiscal
year ended September 28, 1997; and
(11) The unaudited interim Consolidated Financial Statements on pp. 1
to 14 in the Quarterly Report on Form 10-Q of Signature Brands for the
fiscal quarter ended on December 28, 1997.
All reports and other documents filed with the SEC by either
Coleman or Sunbeam pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act subsequent to the date of this Information
Statement/Prospectus and prior to the date of the consummation of the
Coleman Merger shall be deemed to be incorporated by reference herein and
to be a part hereof from the dates of filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Information Statement/Prospectus to the
extent that a statement contained herein, or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Information Statement/Prospectus.
-----------------
FORWARD-LOOKING STATEMENTS
CERTAIN STATEMENTS IN THIS INFORMATION STATEMENT/PROSPECTUS
(INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN) CONSTITUTE
"FORWARD-LOOKING STATEMENTS" WITHIN THE MEANING OF THE PRIVATE SECURITIES
LITIGATION REFORM ACT OF 1995. SUCH FORWARD-LOOKING STATEMENTS INVOLVE
KNOWN AND UNKNOWN RISKS, UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE
THE ACTUAL RESULTS, PERFORMANCE, OR ACHIEVEMENTS OF SUNBEAM OR COLEMAN TO
BE MATERIALLY DIFFERENT FROM ANY FUTURE RESULTS, PERFORMANCE, OR
ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH FORWARD-LOOKING STATEMENTS. WHEN
USED IN THIS INFORMATION STATEMENT/PROSPECTUS, THE WORDS "ESTIMATE,"
"PROJECT," "INTEND," "EXPECT" AND SIMILAR EXPRESSIONS, WHEN USED IN
CONNECTION WITH SUNBEAM OR COLEMAN, INCLUDING THEIR RESPECTIVE MANAGEMENTS,
ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING
STATEMENTS WERE BASED ON VARIOUS FACTORS AND WERE DERIVED UTILIZING
NUMEROUS IMPORTANT ASSUMPTIONS AND OTHER IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS. IMPORTANT ASSUMPTIONS AND OTHER IMPORTANT FACTORS THAT COULD
CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE IN THE FORWARD-LOOKING
STATEMENTS WITH RESPECT TO SUNBEAM OR COLEMAN INCLUDE, BUT ARE NOT LIMITED
TO: (I) RISKS ASSOCIATED WITH LEVERAGE, INCLUDING COST INCREASES DUE TO
RISING INTEREST RATES; (II) RISKS ASSOCIATED WITH SUNBEAM'S ABILITY TO
CONTINUE ITS STRATEGY OF GROWTH THROUGH ACQUISITIONS; (III) RISKS
ASSOCIATED WITH SUNBEAM'S ABILITY TO SUCCESSFULLY INTEGRATE ALL OF ITS
RECENT ACQUISITIONS; (IV) RISKS ASSOCIATED WITH SUNBEAM'S ABILITY TO
INCREASE REVENUES BY LEVERAGING SALES OF SUNBEAM, SIGNATURE BRANDS AND
FIRST ALERT PRODUCTS THROUGH COLEMAN'S EXISTING DISTRIBUTION CHANNELS, AND
BY LEVERAGING SALES OF COLEMAN, SIGNATURE BRANDS AND FIRST ALERT PRODUCTS
THROUGH SUNBEAM'S EXISTING DISTRIBUTION CHANNELS, PARTICULARLY IN FOREIGN
MARKETS; (V) RISKS ASSOCIATED WITH SUNBEAM'S ABILITY TO REALIZE THE
ANTICIPATED COST SAVINGS OF ITS RESTRUCTURING PROGRAM, INCLUDING THE
TIMING THEREOF; (VI) RISKS ASSOCIATED WITH SUNBEAM'S ABILITY TO IMPLEMENT
ITS PLANNED DIVESTITURES, INCLUDING THE AMOUNT OF THE NET PROCEEDS TO BE
REALIZED AND THE TIMING THEREOF; SUNBEAM'S ABILITY TO MAKE EFFECTIVE
ACQUISITIONS IN THE FUTURE AND TO SUCCESSFULLY INTEGRATE NEWLY ACQUIRED
BUSINESSES INTO EXISTING OPERATIONS AND THE RISKS ASSOCIATED WITH SUCH
NEWLY ACQUIRED BUSINESSES; (VIII) SUNBEAM'S AND COLEMAN'S ABILITY TO
MAINTAIN AND INCREASE MARKET SHARE FOR THEIR RESPECTIVE PRODUCTS AT
ANTICIPATED MARGINS; (IX) SUNBEAM'S ABILITY TO SUCCESSFULLY INTRODUCE NEW
PRODUCTS AND TO PROVIDE ON-TIME DELIVERY AND A HIGH LEVEL OF CUSTOMER
SERVICE; (X) CHANGES IN LAWS AND REGULATIONS, INCLUDING CHANGES IN TAX
RATES, ACCOUNTING STANDARDS, ENVIRONMENTAL LAWS, OCCUPATIONAL, HEALTH AND
SAFETY LAWS; (XI) ACCESS TO FOREIGN MARKETS TOGETHER WITH FOREIGN ECONOMIC
CONDITIONS, INCLUDING CURRENCY FLUCTUATIONS; (XII) UNCERTAINTY AS TO THE
EFFECT OF COMPETITION IN SUNBEAM'S OR COLEMAN'S EXISTING AND POTENTIAL
FUTURE LINES OF BUSINESS; (XIII) FLUCTUATIONS IN THE COST AND AVAILABILITY
OF RAW MATERIALS AND/OR PRODUCTS IN RELATION TO HISTORICAL LEVELS; (XIV)
CHANGES IN THE AVAILABILITY AND RELATIVE COSTS OF LABOR; (XV) EFFECTIVENESS
OF ADVERTISING AND MARKETING PROGRAMS; (XVI) THE EFFECT OF, OR CHANGES IN,
GENERAL ECONOMIC CONDITIONS; (XVII) ECONOMIC UNCERTAINTY IN JAPAN, KOREA
AND OTHER ASIAN COUNTRIES, AS WELL AS MEXICO, VENEZUELA AND OTHER LATIN
AMERICAN COUNTRIES; (XVIII) WEATHER CONDITIONS THAT ARE ADVERSE TO THE
SPECIFIC BUSINESSES OF SUNBEAM AND COLEMAN; AND (XIX) RISKS RELATED
TO PRODUCT QUALITY, INCLUDING EXCESS WARRANTY COSTS, PRODUCT LIABILITY
EXPENSE AND COSTS OF POSSIBLE PRODUCT RECALLS. OTHER FACTORS AND
ASSUMPTIONS NOT IDENTIFIED ABOVE WERE ALSO INVOLVED IN THE DERIVATION OF
THESE FORWARD- LOOKING STATEMENTS, AND THE FAILURE OF SUCH OTHER
ASSUMPTIONS TO BE REALIZED AS WELL AS OTHER FACTORS MAY ALSO CAUSE ACTUAL
RESULTS TO DIFFER MATERIALLY FROM THOSE PROJECTED. NEITHER SUNBEAM NOR
COLEMAN ASSUMES ANY OBLIGATION TO UPDATE THESE FORWARD-LOOKING STATEMENTS
TO REFLECT ACTUAL RESULTS, CHANGES IN ASSUMPTIONS OR CHANGES IN OTHER
FACTORS AFFECTING SUCH FORWARD-LOOKING STATEMENTS.
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION................................................
INCORPORATION OF DOCUMENTS BY REFERENCE..............................
FORWARD-LOOKING STATEMENTS...........................................
SUMMARY..............................................................
THE COMPANIES......................................................
RECENT DEVELOPMENTS................................................
THE MERGER.........................................................
APPRAISAL RIGHTS...................................................
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS.....................
MATERIAL CONTACTS BETWEEN SUNBEAM AND COLEMAN AND ITS
AFFILIATES.......................................................
SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL
INFORMATION OF SUNBEAM...........................................
SELECTED CONSOLIDATED FINANCIAL DATA OF COLEMAN....................
COMPARATIVE PER SHARE DATA.........................................
MARKET PRICES AND DIVIDENDS PAID...................................
RISK FACTORS.........................................................
SPECIAL FACTORS......................................................
BACKGROUND OF THE MERGER...........................................
COLEMAN'S REASONS FOR THE COLEMAN MERGER AND APPROVAL OF
THE OLD COLEMAN BOARD............................................
OPINION OF FINANCIAL ADVISOR TO COLEMAN............................
SUNBEAM'S REASONS FOR THE COLEMAN MERGER...........................
PURPOSES AND EFFECTS OF THE COLEMAN MERGER.........................
SUNBEAM'S PLANS AND PROPOSALS FOR COLEMAN..........................
POSITION OF SUNBEAM ON THE FAIRNESS OF THE COLEMAN MERGER..........
OPINION OF FINANCIAL ADVISOR TO SUNBEAM............................
THE COLEMAN MERGER...................................................
GENERAL............................................................
INTERESTS OF CERTAIN PERSONS IN THE MERGER.........................
CONVERSION OF COLEMAN COMMON STOCK.................................
EXCHANGE OF COLEMAN COMMON STOCK...................................
NO FRACTIONAL SHARES...............................................
CONDITIONS.........................................................
GOVERNMENTAL AND REGULATORY APPROVALS..............................
EMPLOYEE MATTERS...................................................
CONTINUATION OF EXISTING INDEMNIFICATION RIGHTS....................
ACCOUNTING TREATMENT...............................................
STOCK EXCHANGE LISTING.............................................
DELISTING AND DEREGISTRATION OF COLEMAN COMMON STOCK...............
OWNERSHIP OF COLEMAN COMMON STOCK..................................
OWNERSHIP INTEREST OF COLEMAN STOCKHOLDERS IN SUNBEAM
AFTER THE COLEMAN MERGER.........................................
EXPENSES...........................................................
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS.......................
APPRAISAL RIGHTS.....................................................
SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION...................
MATERIAL CONTACTS BETWEEN SUNBEAM AND COLEMAN AND ITS
AFFILIATES...........................................................
HOLDINGS MERGER AGREEMENT..........................................
REGISTRATION RIGHTS AGREEMENT......................................
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS...................
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET........................
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS..............
NOTES TO UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS........
DESCRIPTION OF SUNBEAM CAPITAL STOCK.................................
DESCRIPTION OF COLEMAN CAPITAL STOCK.................................
DIRECTORS AND EXECUTIVE OFFICERS OF SUNBEAM, CAC AND COLEMAN.........
EXPERTS..............................................................
LEGAL OPINIONS.......................................................
ANNEX I - COLEMAN MERGER AGREEMENT
ANNEX II - OPINION OF CREDIT SUISSE FIRST BOSTON CORPORATION
ANNEX III - SECTION 262 OF THE GENERAL CORPORATION LAW OF THE STATE OF
DELAWARE
SUMMARY
The following is a summary of certain information contained
elsewhere or incorporated by reference in this Information
Statement/Prospectus. Reference is made to, and this summary is qualified
in its entirety by, the more detailed information contained or incorporated
by reference in this Information Statement/Prospectus and the Annexes
hereto. As used herein, unless the context otherwise clearly requires:
"Sunbeam" refers to Sunbeam Corporation and its subsidiaries, other than
Coleman, and "Coleman" refers to The Coleman Company, Inc. and its
subsidiaries. Capitalized terms not defined in this Information
Statement/Prospectus have the respective meanings specified in the Coleman
Merger Agreement.
------------------
STOCKHOLDERS OF COLEMAN ARE URGED TO READ THIS INFORMATION
STATEMENT/PROSPECTUS AND THE ANNEXES HERETO IN THEIR ENTIRETY AND SHOULD
CONSIDER CAREFULLY THE INFORMATION SET FORTH BELOW AND UNDER THE CAPTION
"RISK FACTORS" IN DETERMINING WHETHER TO ACCEPT THE PER SHARE MERGER
CONSIDERATION OR TO EXERCISE THEIR APPRAISAL RIGHTS UNDER SECTION 262 OF
THE DGCL.
------------------
THE COMPANIES
Sunbeam. Sunbeam is a leading designer, manufacturer and
marketer of branded consumer products. Sunbeam's primary business is the
manufacture, marketing and distribution of durable household consumer
products through mass merchandisers, home centers and other channels in the
United States and internationally. Sunbeam also sells its products to
commercial end users, such as hotels and other institutions. Sunbeam
products enjoy a long-standing reputation for quality, and a majority of
Sunbeam's sales are from products which hold the number one or two position
in their respective product categories. In 1997, Sunbeam's net sales were
approximately $1,168 million.
Sunbeam's principal executive offices are located at 1615 South
Congress Avenue, Suite 200, Delray Beach, Florida 33445, and its telephone
number is (561) 243-2100. For further information concerning Sunbeam, see
"AVAILABLE INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
Coleman. Coleman is a leading manufacturer and marketer of
consumer products for outdoor recreation and home hardware use on a global
basis. Coleman's products have been sold domestically and internationally
under the Coleman brand name since the 1920s. Coleman attributes its
leading market position to the strength of its brand name, broad product
line, product quality and innovation, and marketing, distribution and
manufacturing expertise. Coleman's products, which are used mostly for
outdoor recreation and home improvement projects, are distributed
predominantly through mass merchandisers, home centers and other retail
outlets. Coleman had net revenues in 1997 of approximately $1,154 million.
Coleman's principal executive offices are located at 2111 East 37th Street
North, Wichita, Kansas 67219, and its telephone number is (316) 832-2700.
For further information concerning Coleman, see "AVAILABLE INFORMATION" and
"INCORPORATION OF DOCUMENTS BY REFERENCE."
CAC. CAC was incorporated in Delaware on February 26, 1998 as a
wholly owned subsidiary of Sunbeam for the purpose of consummating the
Coleman Merger. CAC has engaged in no other business activities and has no
significant assets or liabilities. CAC's principal executive offices are
located at 1615 South Congress Avenue, Suite 200, Delray Beach, Florida
33445, and its telephone number is (561) 243-2100.
RECENT DEVELOPMENTS
The Acquisitions. In the Holdings Merger, which was consummated
on March 30, 1998, Sunbeam acquired indirect beneficial ownership of
44,067,520 shares of Coleman Common Stock, which represented more than 80%
of the total number of then outstanding shares, in exchange for 14,099,749
shares of Sunbeam Common Stock and $159,956,756 in cash. In addition, on
April 3, 1998, Sunbeam acquired a more than 90% interest in each of First
Alert, Inc. ("First Alert"), a leading manufacturer of smoke and carbon
monoxide detectors, and Signature Brands USA, Inc. ("Signature Brands"), a
leading manufacturer of consumer and professional products, pursuant to
cash tender offers for each company's outstanding shares. Sunbeam completed
its acquisitions of the remaining publicly held shares of each of First
Alert and Signature Brands pursuant to merger transactions consummated on
April 6, 1998. The First Alert acquisition was valued at approximately $178
million, including the assumption of debt, and the Signature Brands
acquisition was valued at $253 million, including the assumption of debt.
Sunbeam's acquisitions of Coleman, First Alert and Signature Brands are
collectively referred to herein as the "Acquisitions."
Financing Transactions. In order to finance the cash portion of
the Acquisitions and the repayment of substantially all of the indebtedness
of Sunbeam, Coleman, Coleman Worldwide, LAC (as successor to CLN Holdings),
Signature Brands and First Alert, Sunbeam consummated an offering (the
"Offering") of Zero Coupon Convertible Senior Subordinated Debentures due
2018 (the "Debentures") at a yield to maturity of 5% (or approximately
$2,014 million principal amount at maturity) on March 19, 1998 which netted
approximately $727 million of proceeds to Sunbeam, and borrowed
approximately $1,315 million under a new bank credit facility (the "New
Credit Facility"). See "SOURCE AND AMOUNT OF FUNDS AND OTHER
CONSIDERATION."
New Employment Contracts. As of February 1, 1998, Sunbeam
entered into new three-year employment contracts with Albert J. Dunlap,
Sunbeam's Chairman and Chief Executive Officer, and two other senior
executives, all of which include substantial equity-based compensation. See
"UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS."
Results for 1998 First Quarter; Outlook for the Remainder of
1998. On March 19, 1998, Sunbeam issued a press release in which it stated
that it was possible that its net sales for the first quarter of 1998 might
be lower than the range of Wall Street analysts' estimates of $285 million
to $295 million, but that net sales were expected to exceed 1997 first
quarter net sales of $253.4 million. On April 3, 1998, Sunbeam issued a
subsequent press release announcing that first quarter net sales were then
expected to be approximately 5% lower than those achieved in the first
quarter of 1997. Due to the reduced level of sales and significant one-time
charges and costs, Sunbeam said it was then expecting to show a loss for
the first quarter. Later that afternoon, in a conference call with analysts
and investors, Mr. Dunlap said that the one-time charges would be
approximately 40 cents per share and would relate to costs associated with
the previously disclosed new three-year employment agreements he and two
other senior executives of Sunbeam had recently entered into and to the
early repayment of certain existing Sunbeam indebtedness and interest
charges on certain of the indebtedness incurred to finance the
Acquisitions.
On May 11, 1998, Sunbeam issued the following press release:
SUNBEAM REPORTS 1ST QUARTER RESULTS;
EXPECTS 1998 EPS IN $1.00 RANGE BEFORE CHARGES, 1999 EPS IN $2.00 RANGE
OUTLINES COMPREHENSIVE GROWTH PLAN BUILDING ON SIX #1 BRANDS
WILL INCREASE INTERNATIONAL SALES, ACCELERATE NEW PRODUCTS, CREATE TEAMS FOR
SIX LARGEST CUSTOMERS, USE SINGLE GLOBAL AD AGENCY TO
LEVERAGE $160 MILLION MARKETING BUDGET
EXPECTS $265 MILLION IN NEW REVENUES FROM INTEGRATION PLAN AND NEW PRODUCTS;
SETS GOALS FOR TOP LINE GROWTH OF 10-12%, MARGINS OF 15-18%, EPS
GROWTH OF 15-20%
EXPECTS COST SAVINGS OF $250 MILLION FROM INTEGRATION PLAN AND OUTSOURCING;
PLANS TO DIVEST COLEMAN'S EAST PAK UNIT, COMPRESSOR AND HOT TUB BUSINESSES
- ------------------------------------------------------------------------------
DELRAY BEACH, FL, MAY 11, 1998 - Sunbeam Corporation (NYSE: SOC)
today reported results for the first quarter ended March 31, 1998, and
announced a comprehensive growth plan designed to take full advantage of
Sunbeam's strategic opportunities.
First Quarter Results
Revenues for the first quarter of 1998 were $244.3 million, compared
with $253.5 million in the first quarter of 1997. Before one-time charges
of $36.8 million for early retirement of debt and compensation expense
relating to new three-year employment agreements with Sunbeam's top three
executives, there was a net loss from continuing operations of $7.8 million
in the 1998 quarter versus net income from continuing operations of $20.6
million in the year-ago quarter. After the one-time charges of $.43 per
share, the loss per share was $0.52 in the 1998 quarter compared with
earnings per share of $0.08 in the 1997 period.
Domestic sales, representing 74% of total revenues (excluding
Coleman) in the 1998 quarter, declined 15.4% from the 1997 quarter due to
lower price realization and unit volume declines. Most of the domestic
sales decline was in outdoor cooking products due to lower than anticipated
retail sell-through of these products. International sales, representing
26% of total revenues during the first quarter, grew 14.0% over the first
quarter of 1997. This sales growth was driven primarily by improved
distribution and new product sales in Latin America, partially offset by
lower sales of outdoor cooking products in Europe and Canada. The gross
margin for the first quarter of 1998 decreased 13.3 percentage points to
13.4%, primarily due to margin erosion in the appliance, health at home and
outdoor cooking categories.
Earnings Expectations
Based on the growth and restructuring initiatives being announced
today, including the anticipated synergies and associated cost savings,
Sunbeam currently expects full-year 1998 earnings in the range of
approximately $1.00 per share, excluding one-time costs to integrate
Coleman, First Alert and Signature Brands into Sunbeam and to close two of
Sunbeam's Mexican facilities. These one-time costs are expected to total
approximately $280 million pre-tax, including cash costs of approximately
$150 million pre-tax. Sunbeam also expects to take an extraordinary cash
charge of approximately $100 million pre-tax in the second quarter of 1998
for early retirement of existing Coleman debt. Based on the growth and
restructuring initiatives, including the anticipated synergies and
associated cost savings, Sunbeam currently expects 1999 earnings in the
range of approximately $2.00 per share. From this 1999 base, Sunbeam's goal
for earnings per share growth in future years is now in the range of
15-20%.
Growth Plans
Based on the growth and restructuring initiatives, Sunbeam has set
new long-term goals for annual revenue growth of 10-12% and operating
margins of 15-18%. Top-line growth is expected to be driven by global
expansion of six power brands -- Sunbeam(R), Oster(R), Coleman(R), Mr.
Coffee(R), First Alert(R), and Grillmaster(R), all of which are already #1
in market share in their respective primary product categories. Sunbeam
expects the integration of its three recent acquisitions and planned new
products to generate at least $265 million in incremental annual revenues.
These new revenues are expected to come from leveraging complementary
international distribution strengths, domestic sales synergies and
accelerated new product development.
For example, Coleman has a strong existing distribution system in
Europe and Asia which can increase sales of Sunbeam(R), Mr. Coffee(R), and
First Alert(R) products, while Sunbeam has a strong existing distribution
system in Latin America which can increase sales of Coleman(R), Mr.
Coffee(R), and First Alert(R) products. Sunbeam is also establishing
dedicated, multifunctional teams to serve each of its six largest
customers, which together currently represent a total of approximately $1
billion in annual revenues to Sunbeam. Sunbeam also plans to use a single
global advertising agency for all of its products to maximize the
effectiveness of its $160 million in current annual marketing support
spending in driving the growth of its power brands on a worldwide basis,
and will immediately solicit proposals from qualified agencies.
Cost Savings
Sunbeam also expects incremental annual cost savings of approximately
$250 million from integrating the three acquisitions, closing two Sunbeam
factories in Mexico (which have 2,800 employees), and outsourcing
production of certain components and finished goods. These cost savings,
which are expected to be fully realized by mid-1999, will come from
combining four companies into a single streamlined organization and
adoption of Sunbeam's outsourcing strategy.
Specific actions include reducing headcount by approximately 2,300 in
addition to the Mexican factory closings; combining 10 existing
headquarters in the four companies into one new headquarters in Boca Raton,
Florida; consolidating 23 multi-purpose factories into 15 plants focused on
related products; and consolidating from 47 to 14 warehouses and from 35 to
15 sales offices. Sunbeam also plans to divest three Coleman businesses
with a total of 1,300 employees that do not fit its strategic focus: the
East Pak(R) backpack division and the compressor and hot tub businesses.
Morgan Stanley Dean Witter & Co. has been retained for the divestitures,
which are expected to generate aggregate pre-tax proceeds of $250-350
million based on preliminary estimates. Upon completion of these
divestitures, integration of the three recent acquisitions, and planned
hiring, Sunbeam expects to have a total work force of approximately 9,500
people.
The eight factories expected to be closed, either through
consolidation into other factories or outsourcing, are:
Location Company Products Made
-------- ------- -------------
Acuna, Mexico Sunbeam Appliances
Mexico City, Mexico Sunbeam Appliances
Costa Rica Coleman Components
Maize, Kansas Coleman Machine shop
Pocola, Oklahoma Coleman Furniture
Cedar City, Utah Coleman Sleeping bags
Aurora, Illinois First Alert Fire extinguishers
Cleveland, Ohio Signature Brands Coffee makers
Chairman's Outlook
"Sunbeam has taken aggressive steps to address the issues that led to
unacceptable financial performance in the first quarter of 1998 after
strong growth in 1997. The Sunbeam turnaround is real, and we now have the
right organizational structure in place to take full advantage of our power
brands and unique strategic position in durable household and outdoor
leisure products," said Al Dunlap, Chairman and Chief Executive Officer.
"Sunbeam's new organization is largely complete. So far in 1998, we have
made 47 senior hires from the outside, added 8 executives from the three
acquired companies to our management team as Vice Presidents or Directors
and many more in other key positions. We plan two dozen more senior
recruits this year as we complete the infrastructure to support long-term
growth and industry consolidation. Our commitment to create shareholder
value is undiminished, but 1998 will be a transitional year as we complete
the simultaneous integration of Coleman, First Alert and Signature Brands
into Sunbeam while strengthening our marketing, customer service and new
product development capabilities. We see enormous opportunities for
sustained growth in the U.S. and overseas and a return to strong financial
performance in 1999 and beyond that will reward our shareholders." . . .
# # #
Actual results for the second quarter and the remainder of 1998
could differ materially from the statements contained in the press release
due to various factors, including those set forth herein under the captions
"FORWARD-LOOKING STATEMENTS" and "RISK FACTORS" and those set forth in
documents incorporated herein by reference.
Litigation. Following the issuance of the April 3, 1998 press
release, at least four purported class action lawsuits were filed in
federal court in Florida against Sunbeam and certain of its officers and
directors alleging violations of the federal securities laws. The
complaints in the lawsuits are essentially the same and allege that Sunbeam
issued a series of materially false and misleading statements regarding its
1997 fourth quarter and 1998 first quarter sales and earnings and/or that
Sunbeam misrepresented and/or omitted material information in its public
filings and statements concerning its business operations, sales and sales
trends for the purpose of artificially inflating the market price of
Sunbeam Common Stock. All of the lawsuits seek unspecified money damages.
Sunbeam believes the lawsuits are without merit and intends to vigorously
defend the lawsuits.
Coleman. On March 24, 1998, Coleman completed the previously
announced sale of its wholly owned subsidiary, Coleman Safety & Security
Products, Inc., to Siebe plc. The sale price was approximately $105 million
and is subject to a post-closing adjustment.
THE MERGER
General. At the Coleman Effective Time, CAC will be merged with
and into Coleman, with Coleman continuing as the Surviving Corporation and
an indirect wholly owned subsidiary of Sunbeam. As a result of the Coleman
Merger, the separate corporate existence of CAC will cease and Coleman will
succeed to all the rights and be responsible for all the obligations of CAC
in accordance with the DGCL. Upon the terms and subject to the conditions
set forth in the Coleman Merger Agreement, each share of Coleman Common
Stock issued and outstanding immediately prior to the Coleman Effective
Time (other than shares held indirectly by Sunbeam and dissenting shares,
if any) will be converted into the right to receive the Per Share Merger
Consideration. Cash will be paid in lieu of any fractional shares of
Sunbeam Common Stock. See "THE COLEMAN MERGER - No Fractional Shares."
The Coleman Merger will become effective when a properly
executed certificate of merger (the "Certificate of Merger") is duly filed
with the Secretary of State of the State of Delaware. It is currently
anticipated that the Certificate of Merger will be filed, and the Coleman
Merger will become effective, on ___________, 1998 which is the
twenty-first business day following the date of mailing of this Information
Statement/Prospectus to Coleman stockholders.
No Action Required by Coleman Stockholders To Consummate the
Coleman Merger. On February 27, 1998, Coleman Worldwide, as the then owner
of more than 80% outstanding shares of Coleman Common Stock, executed a
written consent in lieu of a meeting of stockholders of Coleman approving
the Coleman Merger Agreement and the Coleman Merger. ACCORDINGLY, NO
FURTHER ACTION ON THE PART OF THE STOCKHOLDERS OF COLEMAN IS REQUIRED TO
CONSUMMATE THE COLEMAN MERGER.
Opinion of Coleman's Financial Advisor. Credit Suisse First
Boston has acted as exclusive financial advisor to Coleman in connection
with the Coleman Merger. On February 27, 1998, Credit Suisse First Boston
delivered to the Old Coleman Board an oral opinion, which was subsequently
confirmed in writing that, as of such date and based upon and subject to
the matters set forth therein, the Per Share Merger Consideration was fair
from a financial point of view to the Coleman Public Stockholders. The full
text of the Credit Suisse First Boston Opinion is attached as Annex II to
this Information Statement/Prospectus and should be read carefully in its
entirety. The Credit Suisse First Boston Opinion is directed only to the
matters set forth therein. For information on the procedures followed,
assumptions made, matters considered and limitations on the review
undertaken by Credit Suisse First Boston, see "SPECIAL FACTORS - Opinion of
Financial Advisor to Coleman."
Interests of Certain Persons in the Merger. In considering the
approval of the Coleman Merger by the Old Coleman Board, Coleman
stockholders should be aware that certain persons, including certain former
directors and executive officers of Coleman, as well as others, have
interests in the Coleman Merger that are in addition to those of Coleman
stockholders generally, including with respect to: (i) the accelerated
vesting of options to purchase Coleman Common Stock, (ii) certain
indemnification rights, (iii) certain severance arrangements and (iv)
certain rights to require the registration under the Securities Act of
shares of Sunbeam Common Stock held by such persons. See "THE COLEMAN
MERGER - Interests of Certain Persons in the Coleman Merger."
Conditions. Substantially all the conditions to the parties'
obligations to consummate the Coleman Merger have been, or have been deemed
to have been, satisfied, and the Coleman Merger will be consummated on or
about _________, 1998 as expected, unless prior thereto an action
challenging the Coleman Merger is commenced and a court order prohibiting
the Coleman Merger is entered.
Governmental and Regulatory Approvals. On March 4, 1998,
Sunbeam and Ronald O. Perelman, as the then ultimate parent of Coleman,
filed notifications and report forms under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), with the Federal
Trade Commission (the "FTC") and the Antitrust Division of the Department
of Justice (the "Antitrust Division") relating to the Holdings Merger and
the Coleman Merger. The applicable waiting period under the HSR Act was
terminated on March 27, 1998. However, notwithstanding the termination of
the waiting period under the HSR Act, the FTC, the Antitrust Division, a
state or a private person or entity could seek under federal or state
antitrust laws, among other things, to enjoin or rescind the Holdings
Merger or the Coleman Merger. Although Sunbeam and Coleman believe that the
Holdings Merger and the Coleman Merger do not violate the U.S. antitrust
laws, there can be no assurance that if such a challenge is made, it would
not be successful. Neither Sunbeam nor Coleman believes that any other
material governmental or regulatory consents are required in connection
with consummation of the Coleman Merger. See "THE COLEMAN MERGER -
Governmental and Regulatory Approvals."
APPRAISAL RIGHTS
Holders of Coleman Common Stock who object to the Coleman
Merger and do not wish to accept the Per Share Merger Consideration have
the right to dissent from the Coleman Merger and to have the fair value of
their shares of Coleman Common Stock judicially appraised and paid to them
in cash by complying with the procedures set forth in Section 262 of the
DGCL. The full text of Section 262 of the DGCL is attached hereto as Annex
III to this Information Statement/Prospectus. Any stockholder considering
the exercise of appraisal rights in connection with the Coleman Merger
should review Annex III carefully. Failure to take any of the steps
required under Section 262 of the DGCL on a timely basis may result in the
loss of appraisal rights. See "APPRAISAL RIGHTS" and Annex III to this
Information Statement/Prospectus.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The receipt of the Per Share Merger Consideration by a holder
of Coleman Common Stock (a "Holder") pursuant to the Coleman Merger will be
a taxable transaction for U.S. Federal income tax purposes and may also be
a taxable transaction under applicable state, local, foreign and other tax
laws. In general, for U.S. Federal income tax purposes, a Holder will
recognize gain or loss equal to the difference between (i) the amount of
cash and the fair market value (determined as of the Coleman Effective
Time) of the Sunbeam Common Stock received in exchange for such Holder's
shares of Coleman Common Stock and (ii) the adjusted tax basis of such
shares of Coleman Common Stock. Such gain or loss will be capital gain or
loss if the shares of Coleman Common Stock have been held by such Holder as
a capital asset and will be long-term capital gain or loss if such shares
have been held for more than twelve months. See "CERTAIN U.S. FEDERAL
INCOME TAX CONSIDERATIONS."
MATERIAL CONTACTS BETWEEN SUNBEAM AND COLEMAN AND ITS AFFILIATES
Holdings Merger Agreement. At the same time that Sunbeam
entered into the Coleman Merger Agreement, Sunbeam entered into the
Holdings Merger Agreement with LAC, Parent Holdings and CLN Holdings. On
March 30, 1998, pursuant to the Holdings Merger Agreement, the Holdings
Merger was consummated and Parent Holdings received 14,099,749 shares of
Sunbeam Common Stock and $159,956,756 in cash, in exchange for all of the
outstanding shares of CLN Holdings. As a result of the Holdings Merger,
Sunbeam became the indirect owner of more than 80% of the then outstanding
shares of Coleman Common Stock. Pursuant to the Holdings Merger Agreement,
upon consummation of the Holdings Merger, all the directors of Coleman
resigned as directors of Coleman, the number of directors constituting the
board of directors of Coleman was fixed at five, and five designees of
Sunbeam were elected as directors of Coleman.
Registration Rights Agreement. The shares of Sunbeam Common
Stock issued to Parent Holdings in the Holdings Merger were not registered
under the Securities Act. Accordingly, in connection with the consummation
of the Holdings Merger, Sunbeam entered into the Registration Rights
Agreement with Parent Holdings dated as of March 29, 1998 (the
"Registration Rights Agreement"). Pursuant to the Registration Rights
Agreement, Parent Holdings will be, among other things, entitled to cause
Sunbeam to register under the Securities Act the shares of Sunbeam Common
Stock received by it in the Holdings Merger (subject to certain limitations
on the ability of Parent Holdings to dispose of such shares pursuant to the
Holdings Merger Agreement). Sunbeam has also agreed to permit any
registration statement filed by Sunbeam in connection with the Registration
Rights Agreement to be used by former affiliates of Coleman for resales of
Sunbeam Common Stock received by such affiliates in the Coleman Merger,
provided that any affiliate so registering shares agrees to be bound by the
terms of the Registration Rights Agreement. See "MATERIAL CONTACTS BETWEEN
SUNBEAM AND COLEMAN AND ITS AFFILIATES."
SELECTED CONSOLIDATED HISTORICAL AND PRO FORMA FINANCIAL INFORMATION OF
SUNBEAM
The following selected consolidated historical financial
information of Sunbeam with respect to each year in the five-year period
ended December 28, 1997 is derived from the Consolidated Financial
Statements of Sunbeam. The balance sheet data as of December 28, 1997 and
the statement of operations and cash flow data for the fiscal year ended
December 28, 1997 are included in documents incorporated by reference in
this Information Statement/Prospectus. The statement of operations and cash
flow data for the fiscal years ended December 29, 1996, December 31, 1995,
January 1, 1995 and January 2, 1994 and the balance sheet data as of
December 29, 1996, December 31, 1995, January 1, 1995 and January 2, 1994
have been derived from Sunbeam's Consolidated Financial Statements
previously filed with the SEC but not incorporated by reference herein.
Such Consolidated Financial Statements have been audited by Arthur Andersen
LLP, independent auditors for Sunbeam ("Arthur Andersen"). The selected
consolidated historical financial information should be read in conjunction
with the Consolidated Financial Statements of Sunbeam and the notes thereto
incorporated by reference herein.
The pro forma financial information shown below has been
derived from, and should be read in conjunction with, the Unaudited Pro
Forma Condensed Financial Statements, including the notes thereto,
appearing elsewhere in this Information Statement/Prospectus. The selected
unaudited pro forma financial information gives pro forma effect to (i) the
Acquisitions (including the acquisition of the entire equity interest in
Coleman pursuant to the Holdings Merger and the Coleman Merger) accounted
for under the purchase method of accounting, (ii) the borrowing of
approximately $1,298 million under the New Credit Facility, (iii) the
Offering and (iv) the use of the net proceeds from the Offering and the
borrowings under the New Credit Facility as described in the notes to the
unaudited pro forma condensed financial statements (collectively, the "Pro
Forma Transactions"). The selected unaudited pro forma statement of
operations and earnings per share data give effect to the Pro Forma
Transactions as if they had occurred on December 30, 1996, the first day of
Sunbeam's most recently completed fiscal year. The selected unaudited pro
forma balance sheet data gives effect to the Pro Forma Transactions as if
they had occurred on December 28, 1997, the last day of Sunbeam's most
recently completed fiscal year.
The selected unaudited pro forma financial information is
presented for illustrative purposes only and is not necessarily indicative
of the operating results or financial position that would have occurred had
the Pro Forma Transactions been consummated as of the dates indicated, nor
is the selected unaudited pro forma financial information necessarily
indicative of future operating results or financial position. This selected
unaudited pro forma financial information should be read in conjunction
with Sunbeam's Consolidated Financial Statements and the notes thereto
which are incorporated by reference herein and the information set forth
under the caption "UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS." See
"AVAILABLE INFORMATION" and "INCORPORATION OF DOCUMENTS BY REFERENCE."
<TABLE>
<CAPTION>
FISCAL YEAR ENDED
------------------------------------------------------------------------------------
January 2, January 1, December 31, December 29, December 28, December 28,
1994 1995 1995 1996(a) 1997 1997
---- ---- ---- ------- ---- Pro Forma
---------
(unaudited)
(in millions, except per share data)
<S> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net Sales ................... $ 927.5 $ 1,044.3 $ 1,016.9 $ 984.2 $ 1,168.2 $ 2,595.4
Operating earnings (loss) ... 134.0 151.0 70.3 (285.2) 199.4 208.2
Earnings (loss) from
continuing operations ..... 76.9 85.3 37.6 (196.7) 123.1 30.1(d)
Net earnings (loss) ......... 88.8 107.0 50.5 (228.3) 109.4
EARNINGS PER SHARE DATA(b):
Average common and common
equivalent shares
outstanding ............... 87.90 82.60 82.80 82.90 87.50 106.98
Diluted earnings (loss)
per share from
continuing operations ..... 0.87 1.03 0.45 (2.37) 1.41 0.28(d)
Diluted earnings (loss)
per share ................. 1.01 1.30 0.61 (2.75) 1.25
Cash dividends declared
per share ................. 0.04 0.04 0.04 0.04 0.04 0.04
BALANCE SHEET DATA
(AT END OF PERIOD):
Working capital ............. $ 261.4 $ 294.8 $ 411.7 $ 352.6 $ 459.9 $ 928.4
Total assets ................ 928.8 1,008.9 1,158.7 1,072.7 1,120.3 3,977.0(c)
Total long-term debt ........ 133.4 124.0 161.6 201.1 194.6 2,047.8
Shareholders' equity ........ 370.0 454.7 601.0 395.3 531.9 1,197.8
</TABLE>
- ---------
(a) Includes special charges of $337.6 million before taxes. See Notes 8
and 9 of Notes to Sunbeam's 1997 Consolidated Financial Statements
which are incorporated by reference herein.
(b) Reflects the adoption of SFAS No. 128, Earnings Per Share. See Note 1
of Notes to Sunbeam's 1997 Consolidated Financial Statements which are
incorporated by reference herein.
(c) Includes goodwill and other intangible assets of $2,013.8.
(d) Does not include prepayment penalties and the write off of related
deferred financing costs, net of tax, on the early retirement of
certain existing Sunbeam and CLN Holdings debt. See notes (h) and (t)
of the notes to the unaudited pro forma condensed financial
statements.
SELECTED CONSOLIDATED FINANCIAL DATA OF COLEMAN
The following selected consolidated historical financial
information of Coleman with respect to each year in the five-year period
ended December 31, 1997 is derived from the Consolidated Financial
Statements of Coleman. The balance sheet data for each of the two years in
the period ended December 31, 1997 and the statement of operations and cash
flow data for each of the three years in the period ended December 31, 1997
are included in documents incorporated by reference in this Information
Statement/Prospectus. The statement of operations and cash flow data for
the fiscal years ended December 31, 1994 and 1993 and balance sheet data as
of December 31, 1995, 1994 and 1993 have been derived from Coleman's
audited Consolidated Financial Statements previously filed with the SEC but
not incorporated herein by reference. The selected consolidated historical
financial information should be read in conjunction with the Consolidated
Financial Statements and the notes thereto of Coleman incorporated by
reference herein. See "AVAILABLE INFORMATION" and "INCORPORATION OF
DOCUMENTS BY REFERENCE."
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
(Amounts in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Net revenues .................. $ 575,415 $ 751,580 $ 933,574 $ 1,220,216 $ 1,154,294
Cost of sales(a) .............. 400,052 535,710 649,427 928,497 840,331
Gross profit .................. 175,363 215,870 284,147 291,719 313,963
Selling, general and
administrative expenses ..... 102,038 128,466 174,688 291,669 266,283
Asset impairment charge(b) .... -- -- 12,289 -- --
Restructuring expense(c) ...... -- 18,456 -- -- --
Interest expense, net ......... 7,706 13,374 24,545 38,727 40,852
Amortization of goodwill
and deferred charges ......... 5,330 6,209 7,745 10,473 11,338
Other expenses, net ........... 746 1,138 334 1,151 1,867
(Loss) earnings before income
taxes, minority interest
and extraordinary item ...... 59,543 48,227 64,546 (50,301) (6,377)
Income tax (benefit) expense... 24,569 14,747 24,479 (10,927) (5,227)
Minority interest ............. -- -- -- 1,872 1,386
(Loss) earnings before
extraordinary item .......... 34,974 33,480 40,067 (41,246) (2,536)
Extraordinary loss on early
extinguishment of debt,
net of income taxes ......... -- (677) (787) (647) --
Net (loss) earnings ........... $ 34,974 $ 32,803 $ 39,280 $ (41,893) $ (2,536)
Net (loss) earnings per
common share ................ 0.65 0.61 0.74 (0.79) (0.05)
OTHER DATA:
Cash and cash equivalents ..... $ 5,593 $ 8,319 $ 12,065 $ 17,299 $ 13,031
Capital expenditures .......... (35,141) (34,915) (29,053) (41,334) (26,973)
Depreciation and amortization.. 16,347 22,755 26,523 36,358 37,977
BALANCE SHEET DATA:
Total assets .................. $ 526,706 $ 712,265 $ 844,487 $ 1,160,086 $ 1,041,764
Long-term debt (including
current portions) ........... 168,858 291,175 355,257 583,613 477,799
Stockholders' equity .......... 228,104 253,363 292,342 252,945 240,469
</TABLE>
FISCAL YEAR ENDED DECEMBER 31,
-------------------------------------
1996 1997
---- ----
Ratio of Earnings to Fixed
Charges (d).................. (e) 0.87
---
(a) Coleman recorded restructuring and certain other charges totaling
$22,501 and $52,516, net of tax for the years ended December 31, 1997
and 1996, respectively. Cost of sales includes pre-tax charges of
$19,673 and $44,005; selling, general and administrative expenses
include pre-tax charges of $16,746 and $30,195; and the provision for
income tax benefits includes $13,918 and $21,684 of net tax benefits
in the years ended December 31, 1997 and 1996, respectively, resulting
from these charges.
(b) Asset impairment charge reflects primarily the non-recurring charge
taken in connection with the adoption of FAS 121.
(c) Restructuring expense reflects primarily the non-recurring charge
taken in connection with Coleman's restructuring of its German
manufacturing operations, including selling its plastic cooler
business located in Inheiden, Germany and Loucka, Czech Republic,
which includes severance costs, commitments to third parties and
write-downs of leasehold improvements and other assets to estimated
realizable values.
(d) In computing the ratio of earnings to fixed charges: (a) earnings
represent income from continuing operations before income taxes and
fixed charges (exclusive of interest capitalized); and (b) fixed
charges consist of interest expense, capitalized interest and the
estimated interest portion of rental expense.
(e) For the fiscal year ended December 31, 1996, earnings were
insufficient to cover fixed charges by $50,301.
COMPARATIVE PER SHARE DATA
Set forth below is comparative per share data for Sunbeam (on a
historical and consolidated pro forma basis) and for Coleman (on a
historical and pro forma equivalent basis). Historical information for
Sunbeam and Coleman has been derived from their respective selected
financial data included elsewhere herein. Pro forma information for Sunbeam
was derived from the Unaudited Pro Forma Condensed Financial Statements of
Sunbeam as of and for the year ended December 28, 1997 included elsewhere
in this Information Statement/Prospectus. Pro forma equivalent information
for Coleman was calculated by multiplying the pro forma per share amounts
for Sunbeam by the exchange ratio of Coleman Common Stock for Sunbeam
Common Stock. Equivalent market value per share data for Coleman was
calculated by multiplying the market value per share of Sunbeam Common
Stock by the exchange ratio of Coleman Common Stock for Sunbeam Common
Stock and adding the cash consideration to be received by Coleman
stockholders in the Coleman Merger.
<TABLE>
<CAPTION>
At December 28, 1997
-------------------------------------------------------
Coleman
Sunbeam Coleman Pro Forma Pro Forma
Historical Historical Consolidated Equivalent
---------- ---------- ------------ ----------
<S> <C> <C> <C> <C>
Cash dividends per share $ 0.04 $ 0.00 $ 0.04 $ 0.02
Earnings (loss) per share 1.25 (0.05) 0.28 0.16
Book value per share 5.90 4.50 11.45 6.50
</TABLE>
MARKET PRICES AND DIVIDENDS PAID
Set forth below are the last reported sale prices of Sunbeam
Common Stock and Coleman Common Stock on February 27, 1998, the last
trading day prior to the execution of the Coleman Merger Agreement, on
March 18, 1998, the last trading day prior to Sunbeam's announcement that
its net sales for the first quarter of 1998 might be lower than the range
of Wall Street analysts' estimates, on April 2, 1998, the last trading day
prior to Sunbeam's announcement that its first quarter net sales were then
expected to be approximately 5% lower than those achieved in the first
quarter of 1997 and that it was then expecting to show a loss for the
quarter, and on _________, 1998, the last trading day prior to the date of
this Information Statement/Prospectus, as reported on the NYSE Composite
Transactions Tape, and the equivalent pro forma prices of Coleman Common
Stock on such dates, as determined by multiplying such last reported sale
prices of Sunbeam Common Stock by 0.5677 and adding $6.44:
Sunbeam Coleman
Common Common Coleman
Stock Stock Equivalent
------- -------- ----------
February 27, 1998............ 41.750 20.875 30.14
March 18, 1998............... 50.063 33.875 34.86
April 2, 1998................ 45.563 31.688 32.31
____________, 1998.......... ______ _____ _____
The number of shares of Sunbeam Common Stock to be received by
holders of Coleman Common Stock in the Coleman Merger as part of the Per
Share Merger Consideration is fixed at 0.5677 of a share of Sunbeam Common
Stock for each share of Coleman Common Stock. Such number will not be
adjusted in the event of any increase or decrease in the price of either
Sunbeam Common Stock or Coleman Common Stock between February 27, 1998 and
the Coleman Effective Time. The market price of Sunbeam Common Stock has
ranged from a low of $______ to a high of $______ during the period from
February 27, 1998 through _____, 1998, the last trading day prior to the
date of this Information Statement/Prospectus, and may increase or decrease
between the date of this Information Statement/Prospectus and the Coleman
Effective Time. Stockholders of Coleman are urged to obtain current market
quotations for Sunbeam Common Stock and Coleman Common Stock. See "RISK
FACTORS."
Coleman Common Stock is traded on the NYSE, the Pacific Stock
Exchange and the Midwest Stock Exchange under the symbol "CLN". Sunbeam
Common Stock is traded on the NYSE under the symbol "SOC." The following
table sets forth, for the periods indicated, the range of the high and low
sale prices of Coleman Common Stock and Sunbeam Common Stock, respectively,
as reported on the NYSE Composite Transactions Tape.
Coleman Sunbeam
------- -------
Common Stock Common Stock
------------ ------------
High Low High Low
---- --- ---- ---
1996
First Quarter.... $ 26.000 $ 16.313 $ 19.750 $ 15.125
Second Quarter... 23.250 19.813 17.125 13.500
Third Quarter.... 21.625 13.750 24.750 12.250
Fourth Quarter... 15.250 11.750 29.500 22.750
1997
First Quarter.... $ 16.125 $ 11.500 $ 34.500 $ 24.625
Second Quarter... 19.125 12.875 40.750 29.750
Third Quarter.... 18.000 15.188 45.750 35.750
Fourth Quarter... 16.813 12.375 50.438 37.000
1998
First Quarter.... $ 35.563 $ 12.063 $ 53.000 $ 35.500
Second Quarter
(through _______
1998)............ $ ______ $ ______ $ ______ $ ______
Sunbeam has paid regular quarterly cash dividends of $0.01 per
share since December 15, 1992. Sunbeam presently intends to continue to pay
cash dividends at a quarterly rate of $0.01 per share; however, future
payments of cash dividends will be at the discretion of the board of
directors of Sunbeam (the "Sunbeam Board") and are dependent upon Sunbeam's
results of operations, financial condition and other relevant factors. The
New Credit Facility contains covenants customary for credit facilities of a
similar nature, including certain limitations on the ability of Sunbeam and
its subsidiaries to declare and pay dividends. See "SOURCE AND AMOUNT OF
FUNDS AND OTHER CONSIDERATION."
Coleman has not declared a cash dividend on the Coleman Common
Stock subsequent to its initial public offering in February 1992 and, under
the Coleman Merger Agreement, Coleman is prohibited from paying any cash
dividends prior to the Coleman Effective Time.
Following the consummation of the Coleman Merger, the Coleman
Common Stock will be delisted from the NYSE and deregistered under the
Exchange Act.
RISK FACTORS
In reviewing the information contained herein and in deciding
whether to accept the Per Share Merger Consideration or to exercise their
appraisal rights under Section 262 of the DGCL, stockholders of Coleman
should consider the following matters:
FIXED EXCHANGE RATIO. The number of shares of Sunbeam Common
Stock to be received by holders of Coleman Common Stock in the Coleman
Merger as part of the Per Share Merger Consideration is fixed at 0.5677 of
a share of Sunbeam Common Stock for each share of Coleman Common Stock.
Such number will not be adjusted in the event of any increase or decrease
in the market price of Sunbeam Common Stock between February 27, 1998 and
the Coleman Effective Time. The market price of Sunbeam Common Stock has
ranged from a low of $_______ to a high of $______ during the period from
February 27, 1998 through ___, 1998, the last trading day prior to the date
of this Information Statement/Prospectus, and may increase or decrease
between the date of this Information Statement/Prospectus and the Coleman
Effective Time. Such variation may be the result of changes in the
business, operations or prospects of Sunbeam or Coleman, general market and
economic conditions and other factors. Stockholders of Coleman are urged to
obtain current market quotations for Sunbeam Common Stock and Coleman
Common Stock. See "SUMMARY - Market Prices and Dividends Paid."
SUBSTANTIAL LEVERAGE; ABILITY TO SERVICE INDEBTEDNESS. Sunbeam
is highly leveraged, with indebtedness that is very substantial in relation
to its shareholders' equity. After giving pro forma effect to the
Acquisitions, borrowings under the New Credit Facility, the Offering and
the use of the net proceeds therefrom as described in the notes to the
unaudited pro forma condensed financial statements, as of December 28,
1997, Sunbeam's aggregate outstanding indebtedness would have been
approximately $2,048 million and Sunbeam's shareholders' equity would have
been approximately $1,198 million, including approximately $2,014 million
of goodwill and other intangible assets. See "UNAUDITED PRO FORMA CONDENSED
FINANCIAL STATEMENTS."
Sunbeam's high degree of leverage could have important
consequences to the stockholders of Sunbeam (including former stockholders
of Coleman), including, but not limited to, the following: (i) Sunbeam's
ability to obtain additional financing for working capital, capital
expenditures, acquisitions or general corporate purposes may be impaired in
the future; (ii) a substantial portion of Sunbeam's cash flow from
operations must be dedicated to the payment of principal and interest on
its indebtedness, thereby reducing the funds available to Sunbeam for its
operations and other purposes, including the payment of dividends; (iii)
Sunbeam may be substantially more leveraged than certain of its
competitors, which may place Sunbeam at a competitive disadvantage; (iv)
Sunbeam may be hindered in its ability to adjust rapidly to changing market
conditions; and (v) Sunbeam's substantial degree of leverage could
adversely affect its results of operations in the event of a downturn in
general economic conditions or its business.
Sunbeam's ability to repay or to refinance its obligations with
respect to its indebtedness will depend on its future financial and
operating performance, which, in turn, will be subject to prevailing
economic and competitive conditions and to financial, business and other
factors, many of which are beyond Sunbeam's control. These factors could
include operating difficulties, increased operating costs, product pricing
pressures, the response of competitors and delays in implementing strategic
projects. Sunbeam's ability to meet its debt service and other obligations
will depend in significant part on the extent to which Sunbeam can
implement its business strategy and successfully integrate the
Acquisitions. There can be no assurance that Sunbeam will be able to
implement its strategy fully, that the anticipated results of its strategy
will be realized or that the Acquisitions will be successfully integrated.
If Sunbeam's cash flow and capital resources are insufficient
to fund its debt service obligations, Sunbeam may be forced to reduce or
delay capital expenditures, sell assets, or seek to obtain additional
equity capital, or to refinance or restructure its debt. There can be no
assurance that Sunbeam's cash flow and capital resources will be sufficient
for payment of principal of, and premium, if any, and interest on, its
indebtedness in the future, or that any such alternative measures would be
successful or would permit Sunbeam to meet its scheduled debt service
obligations. In addition, because Sunbeam's obligations under the New
Credit Facility will bear interest at floating rates, an increase in
interest rates could adversely affect, among other things, Sunbeam's
ability to meet its debt service obligations. Even if Sunbeam is able to
meet its debt service obligations, the additional costs associated with
such increased indebtedness could adversely affect Sunbeam's results of
operations.
RISKS ASSOCIATED WITH THE ACQUISITIONS. Sunbeam faces
significant risks associated with the Acquisitions. Sunbeam must, among
other things, increase the profitability of these companies; realize
synergies from combining these companies with Sunbeam's current operations;
integrate the products manufactured by these companies into its existing
product lines; consolidate duplicate facilities, systems and personnel;
improve the operating efficiencies of such companies; develop new products;
and shorten the product development cycle of the acquired companies. This
process will require substantial attention from Sunbeam's management team.
The diversion of the attention of management from the day-to-day operations
of Sunbeam or difficulties encountered in the integration process could
have an adverse effect on Sunbeam's business, financial condition and
results of operations, which effect could be material. In addition, the
Acquisitions will result in a substantial increase in the size of Sunbeam's
operations, placing challenges on Sunbeam to effectively use its employees,
management, operational and financial resources to manage the expanded
operations of Sunbeam. Failure to use such resources effectively could have
a material adverse effect on Sunbeam. Other potential risks of the
Acquisitions include the presence of unknown liabilities and the incurrence
of significant charges associated with write-downs of the recorded values
of assets acquired or restructurings of the acquired companies.
Accordingly, there can be no assurance that Sunbeam will realize the
desired benefits of the Acquisitions.
DEPENDENCE ON KEY CUSTOMERS. Sunbeam markets its products
through virtually every category of retailer including mass merchandisers,
warehouse clubs, department stores, home centers and hardware stores. Due
to the consolidation of the U.S. retail industry, Sunbeam's customer base
is relatively concentrated with its largest customer Wal-Mart Stores, Inc.
accounting for 21%, and its five largest customers accounting for 36%, of
1997 net sales. Coleman's U.S. and Canadian operations are somewhat less
concentrated and have one significant customer, Wal-Mart Stores, Inc.,
which accounted for approximately 13% of 1997 net revenues. Sunbeam's
customers, including all of its large retail customers, place orders for
products on an as-needed basis and have no long-term supply contracts with
Sunbeam. As a result, Sunbeam relies on its ability to obtain a continuing
flow of new orders from its large, high-volume retailing customers. While
Sunbeam has positioned itself to respond to the challenges of its markets
by pursuing strategic relationships with large high-volume merchandisers,
there can be no assurance that Sunbeam will continue to be able to
successfully meet the needs of its customers. In addition, delays or
cancellations of orders from key customers would likely have an adverse
effect on future financial performance, which effect could be material.
RISKS OF INTERNATIONAL OPERATIONS AND EXPANSION. Sunbeam and
Coleman currently manufacture some products and have sales in countries
whose economies have experienced slow growth (primarily Japan, in the case
of Coleman) or have been unstable or hyperinflationary in recent years
(primarily Mexico and Venezuela, in the case of Sunbeam). The economies of
other foreign countries important to Sunbeam's expansion plans, including
other countries in Latin America and Asia, could suffer similar instability
in the future. Such factors as currency devaluation, new tariffs, changes
in monetary policies, inflation, governmental instability and similar
matters could negatively affect Sunbeam's operations in foreign markets.
Although Sunbeam plans to take advantage of recent economic and currency
fluctuations in certain Asian countries by increasing purchases of products
from such countries at a lower price, there is no guarantee that such
purchasing advantage will be fulfilled or will fully overcome any lost
sales opportunities in those same countries. As a result, the economic
conditions discussed above or any of these circumstances could have an
adverse effect on future financial performance, which effect could be
material.
Sunbeam's goal is to substantially increase the amount of
business it conducts outside North America. If Sunbeam fails to achieve
anticipated sales volume in areas of the world into which Sunbeam currently
expects to expand its sales, such event is likely to have an adverse effect
on Sunbeam's future financial performance, which effect could be material.
Expansion of Sunbeam's sales in foreign regions depends upon many factors,
including economic conditions in foreign countries, the strength of
consumer demand in those countries for products which Sunbeam sells (or
expects to sell in those markets), the strength of competition from other
global or regional consumer product companies and other factors which may
negatively affect Sunbeam's anticipated performance in those markets.
Although the recent financial instability in Asia has not had any material
impact on Sunbeam, Coleman has experienced decreased sales in Korea and, if
such conditions continue and/or worsen, they could negatively impact
Sunbeam's ability to achieve anticipated sales growth in such countries,
the effect of which could be material to Sunbeam's future financial
performance.
RISKS ASSOCIATED WITH NEW PRODUCT DEVELOPMENT. Sunbeam's plans
to increase its revenues will depend on its ability to develop new and
innovative products. Sunbeam anticipates that it will be able to rapidly
develop and introduce a substantial number of new and innovative products
in the future. However, Sunbeam may prove unable to meet its aggressive
schedules for future product development. Failure to develop and
manufacture new products that achieve market acceptance in the amounts and
with the quality required by its customers would likely have an adverse
effect on future financial performance, which effect could be material.
DEPENDENCE ON KEY PERSONNEL. Sunbeam depends heavily on the
services of its senior management, including Albert J. Dunlap, Sunbeam's
Chairman and Chief Executive Officer, Russell A. Kersh, Sunbeam's Vice
Chairman and Chief Financial Officer, and David C. Fannin, Sunbeam's
Executive Vice President, Chief Legal Officer and Secretary. The loss of
any member of Sunbeam's senior management, including Mr. Dunlap, Mr. Kersh
or Mr. Fannin, could have an adverse effect on Sunbeam, which effect could
be material. On February 20, 1998, each of Mr. Dunlap, Mr. Kersh and Mr.
Fannin signed new three-year employment contracts with Sunbeam which
include substantial equity-based compensation. The position of President
and Chief Operating Officer of Sunbeam is currently vacant and Sunbeam is
conducting an active search to fill this position.
ECONOMIC CONDITIONS. Sunbeam's performance is affected by the
strength of the retail economy, primarily in the United States, but also in
Canada, Latin America and Asia and, in connection with the acquisition of
Coleman, Europe. Weakness in consumer confidence and retail outlets
(including the financial weakness or bankruptcy of retail outlets,
especially mass merchants) may adversely impact Sunbeam's future financial
results. In addition, the extended credit terms provided by Sunbeam in
connection with its "early buy" program increase Sunbeam's risk of
collection of related accounts receivable.
COMPETITION. Sunbeam operates in a highly competitive
environment with numerous domestic and foreign competitors which are
financially strong and capable of competing effectively with Sunbeam in the
marketplace. Such competitors may take actions to meet Sunbeam's new
product introductions and other initiatives. Some competitors may be
willing to accept lower margins and to reduce prices to compete with
Sunbeam. As a result, Sunbeam could fail to achieve anticipated sales
increases, to realize anticipated price increases, or otherwise fail to
meet its anticipated goals. Any of such circumstances would likely have an
adverse effect on future financial performance, which effect could be
material. Sunbeam's future success will depend to a significant extent upon
its ability to remain competitive in the areas of price, quality,
marketing, product development, manufacturing, distribution and order
processing. There can be no assurance that Sunbeam will be able to compete
effectively in all such areas in the future.
Sunbeam anticipates realizing price increases from time to time
for certain of its products. Sunbeam operates in a highly competitive
industry, and its ability to realize price increases may be limited due to
competitive pressures. If there is a material failure to realize
anticipated price increases, margins likely will be lower than anticipated
by Sunbeam, and this will likely have an adverse effect on future financial
performance, which effect could be material.
Sunbeam's profitability may be negatively impacted by
under-absorption of manufacturing costs resulting from underutilization of
manufacturing capacity if Sunbeam's sales growth is less than anticipated.
RAW MATERIAL COSTS. A significant portion of the cost of goods
manufactured by Sunbeam in North America is the cost of raw materials
and/or components. Sunbeam has implemented changes in its purchasing
function which have enabled Sunbeam to purchase materials more efficiently
and economically than it has in the past. The future success of Sunbeam's
purchasing initiatives may be affected by many factors beyond Sunbeam's
control, such as commodity pricing generally and higher prices for the
specific materials required by Sunbeam. Although there are numerous
suppliers available for the materials and components sourced by Sunbeam,
any unanticipated change in suppliers could be disruptive and costly to
Sunbeam. In addition, Sunbeam's future initiatives to reduce the cost of
materials simply may not achieve savings in amounts comparable to those
previously obtained by Sunbeam. A significant failure by Sunbeam to
maintain material costs as anticipated would likely have an adverse effect
on anticipated future financial performance, which effect could be
material. In addition, delays or cancellations could adversely affect
results.
DEPENDENCE ON THIRD-PARTY SUPPLIERS AND SERVICE PROVIDERS.
Sunbeam currently manufactures approximately 70% of its products. One of
Sunbeam's goals for 1998 is to source approximately 50% of Sunbeam's parts
and/or products from third parties. Sunbeam's efforts to increase the
outsourcing of its manufacturing operations may result in underutilization
of certain of Sunbeam's plant and equipment as well as certain inventories
of raw materials. Sunbeam intends to dispose of this excess plant and
equipment and raw material inventory and, to the extent that such plant and
equipment and raw material inventory are sold at prices less than their
carrying costs, the resulting loss could have an adverse effect on
Sunbeam's future financial performance. Sunbeam's ability to realize sales
and operating profits at anticipated levels is dependent upon its ability
to timely manufacture, source and deliver products which may be sold for a
profit. Labor difficulties, delays in delivery or pricing of raw materials
and/or sourced products, scheduling and transportation difficulties,
management dislocation and delays in development and manufacture of new
products can negatively affect operating profits. Although Sunbeam will use
its best efforts to select suppliers for sourced products which are
reliable and dependable, Sunbeam's planned increase in the percentage of
sourced products will decrease Sunbeam's immediate control of products and,
if such suppliers fail to deliver products as anticipated, could have an
adverse effect on future financial performance, which effect could be
material.
Sunbeam has entered into various arrangements with third
parties for the provision of back-office administrative services,
previously provided with internal resources, including provision of all
necessary computer systems. Failure of any of these third-party service
providers to perform in accordance with their respective agreements with
Sunbeam could result in disruptions of Sunbeam's normal business operations
with a consequent impact on sales, collections, cash flow and/or
profitability.
SEASONALITY. Sales of certain of Sunbeam's products can be
negatively impacted by unseasonable weather conditions during different
seasons and quarters of the year. For instance, Sunbeam's sales of warming
blankets were negatively impacted in the fourth quarter of 1997 by moderate
temperatures in the northern states and Sunbeam's sales of outdoor grills
were negatively impacted in the first quarter of 1996 by unseasonably cold
temperatures and rainy conditions. Sunbeam has attempted to stabilize
production, marketing and other activities related to seasonal products by
implementing "early buy" programs, pursuant to which customers are granted
incentives for purchasing products in advance of their selling season.
While such programs may shift certain of the risks of lower sales for such
seasonal products to later months of the season or to future quarters, such
programs may also adversely affect anticipated reorder business, and, as a
result, could have a negative impact on future financial performance.
LITIGATION. As a consumer goods manufacturer and distributor,
Sunbeam's results of operations can be negatively impacted by product
liability lawsuits, product recall actions and/or by higher than
anticipated rates of warranty returns or other returns of goods. Certain of
the product lines to be acquired in the Acquisitions may increase Sunbeam's
potential exposure to litigation.
LIMITATIONS ON ABILITY TO PAY DIVIDENDS. The New Credit
Facility limits the payment of dividends unless certain financial ratios
are achieved and certain mandatory prepayments are made to the lenders
under the New Credit Facility. In addition, Sunbeam may in the future issue
additional indebtedness which contains similar limitations.
SPECIAL FACTORS
BACKGROUND OF THE MERGER
In the spring of 1997, as part of a long-term strategic
planning process, Sunbeam management began exploring a possible sale of
Sunbeam or the initiation of one or more major acquisitions. On April 22,
1997, representatives of Morgan Stanley & Co., Incorporated ("Morgan
Stanley") met with Albert J. Dunlap, Chairman of the Board and Chief
Executive Officer of Sunbeam, and Russell A. Kersh, Sunbeam's Vice Chairman
and Chief Financial Officer, to discuss, among other things, the retention
of Morgan Stanley as Sunbeam's financial advisor in connection with a
possible sale of Sunbeam or one or more major acquisitions by Sunbeam.
On September 11, 1997, Morgan Stanley was formally retained by
Sunbeam to assist in connection with a possible sale of Sunbeam, one or
more possible acquisitions by Sunbeam and/or other strategic alternatives.
Thereafter, representatives of Morgan Stanley contacted a number of
companies to ascertain whether any of such companies would be interested in
exploring a possible acquisition of Sunbeam. One of the companies contacted
was Mafco, which Morgan Stanley from time to time advises on a variety of
business and financial matters. Based on Morgan Stanley's initial contacts
with potential acquirors of Sunbeam, Sunbeam's senior management concluded
that it was unlikely that any major consumer products company would be
likely to pursue a possible acquisition of Sunbeam at a price or on terms
that would be acceptable to Sunbeam. Management then directed Morgan
Stanley to shift its focus to one or more possible major acquisitions.
On December 12, 1997, Mr. Kersh, David C. Fannin, Sunbeam's
Executive Vice President, Chief Legal Officer and Secretary, and Peter A.
Langerman, a director of Sunbeam, met with Jerry W. Levin, then Chairman
and Chief Executive Officer of Coleman, Paul E. Shapiro, then Coleman's
General Counsel, and Joseph P. Page, then Executive Vice President and
Chief Financial Officer of Coleman, and discussed Coleman's business and
potential synergies that could result from a combination of Sunbeam and
Coleman.
On December 18, 1997, representatives of Sunbeam, including Mr.
Dunlap, and Michael Price, the President and Chief Executive Officer of
Franklin Mutual Advisors Incorporated, Sunbeam's largest stockholder, met
with Ronald O. Perelman, Mafco's Chairman, Chief Executive Officer and sole
stockholder, and another senior executive of Mafco. Mr. Dunlap suggested a
possible transaction in which Sunbeam would purchase Coleman in a
transaction valued in the range of $18 to $22 per share of Coleman Common
Stock. Mr. Perelman said that such a price range was too low and that he
would not support any transaction in that price range. The meeting ended
promptly thereafter.
On or about January 22, 1998, in an effort to revive a possible
transaction, a representative of Morgan Stanley contacted Mr. Perelman and
indicated that Sunbeam might consider a possible transaction involving both
cash and shares of Sunbeam Common Stock at a price higher than the price
range suggested by Mr. Dunlap at the December 18 meeting. Mr. Perelman
indicated his willingness to discuss such a possible transaction. On
January 23, 1998, representatives of Morgan Stanley met with
representatives of Mafco to begin discussions regarding a possible
transaction between Sunbeam and Coleman. On January 29, 1998,
representatives of Sunbeam and Morgan Stanley met with representatives of
Coleman and Mafco, as well as representatives of Credit Suisse First
Boston. During the meeting, the parties discussed the potential synergies
that might be associated with a business combination of Sunbeam and Coleman
and a preliminary schedule for mutual due diligence. During the week of
February 2, 1998, Morgan Stanley submitted to Mafco an outline of a
possible transaction structure which focused on Sunbeam's acquisition of
Coleman, but did not include a first-step acquisition of Mafco's interest
in Coleman.
On February 6, 1998, representatives of Morgan Stanley met with
representatives of Mafco and Credit Suisse First Boston to discuss a
possible acquisition of Coleman by Sunbeam. At this meeting, Mafco first
raised the possibility of Sunbeam's acquisition of CLN Holdings as the
first step in an acquisition of Coleman. Although the parties had not yet
reached agreement on price or the value of Coleman, the parties began to
discuss the structure of a possible transaction.
On February 13 and February 19, 1998, representatives of
Sunbeam and/or Morgan Stanley participated in conference calls with a
representative of Mafco and discussed the terms of a possible transaction,
including structure and price. Due diligence meetings were held at various
times on and after February 21, 1998 during which representatives of
Sunbeam and Morgan Stanley, as well as Sunbeam's accountants and
consultants, met with representatives of Coleman, Mafco and Credit Suisse
First Boston, as well as Coleman's accountants, to discuss Coleman's
strategic plans and financial projections for fiscal year 1998.
Due diligence meetings were also held on February 23 and 24,
1998 during which representatives of Sunbeam met with representatives of
Coleman, along with representatives of Mafco and Credit Suisse First
Boston, to discuss Sunbeam's long-term strategic plan and financial
projections for fiscal years 1998 through 2000.
On February 24, 1998, Messrs. Kersh and Fannin and
representatives of Morgan Stanley participated in conference calls with
representatives of Mafco to finalize the transaction structure and
negotiate the remaining terms of the transaction. On February 25th and
26th, meetings and conference calls were held between representatives of
Sunbeam and its legal advisors, representatives of Coleman and its legal
advisors, and representatives of Mafco and its legal advisors to negotiate
and finalize the definitive agreements.
On February 25, 1998, the Old Coleman Board met and received
and considered the presentations of the management of Coleman, Credit
Suisse First Boston and Coleman's legal counsel regarding the transaction.
On Friday, February 27, 1998, the respective Boards of
Directors of Sunbeam and Coleman met and approved the Coleman Merger and
the Holdings Merger and the Coleman Merger Agreement and the Holdings
Merger Agreement. Definitive agreements were executed by the parties late
that night and a press release announcing the transactions was issued
before the opening of trading on the NYSE on Monday, March 2.
On February 27, 1998, Coleman Worldwide, as the then holder of
more than 80% of the outstanding Coleman Common Stock, executed a written
consent in lieu of a meeting of stockholders of Coleman approving the
Coleman Merger Agreement and the Coleman Merger. ACCORDINGLY, NO FURTHER
ACTION IS REQUIRED ON THE PART OF THE STOCKHOLDERS OF COLEMAN IN ORDER TO
CONSUMMATE THE COLEMAN MERGER.
COLEMAN'S REASONS FOR THE COLEMAN MERGER AND APPROVAL OF
THE OLD COLEMAN BOARD
At its meetings on February 25 and February 27, 1998, the Old
Coleman Board received and considered the presentations of management of
Coleman, Credit Suisse First Boston and Coleman's legal counsel regarding
the Coleman Merger Agreement and the Coleman Merger. At its February 27
meeting, the Old Coleman Board approved and adopted the Coleman Merger and
approved the Coleman Merger Agreement and the transactions contemplated
thereby. See "- Background of the Merger" above.
In reaching its determination to approve the Coleman Merger,
the Old Coleman Board considered a number of factors. Listed below are the
material factors considered by the Old Coleman Board. In view of the number
and variety of factors considered in connection with its evaluation of the
Coleman Merger, the Old Coleman Board did not consider it practicable to,
nor did it attempt to, quantify or otherwise assign relative weights to the
specific factors considered in reaching its determination. In addition,
individual members of the Old Coleman Board may have given different weight
to the different factors.
Coleman's Business, Condition and Prospects. The Old Coleman
Board reviewed Coleman's business, its current financial condition and
results of operations and its future prospects, including its ability to
maintain its position in the consumer products business at its present
size, and the current and anticipated developments in Coleman's business.
The Old Coleman Board received and reviewed presentations from, and
discussed the terms and conditions of the Coleman Merger Agreement with,
executive officers of Coleman and its financial and legal advisors. The Old
Coleman Board considered Coleman's management's and its financial advisor's
views of recent trends in the business in which Coleman operates, including
recent acquisitions and business combinations.
Terms and Structure of the Transaction. The Old Coleman Board
considered the fact that the Coleman Merger Agreement does not contain any
provisions that either limit the effect of changes in the market price of
the Sunbeam Common Stock prior to the Coleman Effective Time on the value
of the consideration to be received by holders of Coleman Common Stock in
the Coleman Merger or permit Coleman or Sunbeam to terminate the Coleman
Merger Agreement based upon such changes and that, accordingly, the value
of such consideration could change based on the performance of the Sunbeam
Common Stock between the execution of the Coleman Merger Agreement and the
Coleman Effective Time. While recognizing that the absence of such
provisions exposes Coleman's stockholders to market risk, the Old Coleman
Board considered (a) this risk to be mitigated to some extent by the fact
that Coleman's stockholders would be able to participate in any
appreciation in the market value of Sunbeam Common Stock between February
27, 1998 and the Coleman Effective Time and thereafter and (b) information
regarding the trading performance of the Sunbeam Common Stock, the Coleman
Common Stock and the Standard & Poor's 500 Stock Index. The Old Coleman
Board also recognized that, while such limiting provisions might provide
limited protection against declines in the market price of the Sunbeam
Common Stock to be received by Coleman stockholders, they generally would
also limit the benefit to be received by Coleman stockholders from any
appreciation in that price. The Old Coleman Board also considered the
financial impact on the aggregate consideration to be received by Coleman's
stockholders in the Coleman Merger of various scenarios relating to the
market price of the Sunbeam Common Stock.
The Old Coleman Board reviewed the economic terms of the
transaction based upon the closing prices for the Coleman Common Stock and
the Sunbeam Common Stock on February 24 and February 26, the days prior to
each of the meetings of the Old Coleman Board. The Old Coleman Board noted
that, in each case, the Per Share Merger Consideration implied a premium of
approximately 44.2% when the market value of the Per Share Merger
Consideration was compared to the then market price per share of Coleman
Common Stock. The Old Coleman Board also recognized that the Per Share
Merger Consideration was higher than the value implied by the historical
stock market prices of the Coleman Common Stock and Sunbeam Common Stock.
The Old Coleman Board also considered the fact that the
transaction was structured as a two-step acquisition which, among other
things, would enable Sunbeam to acquire control of Coleman as quickly as
possible in order to reduce disruption to Coleman's business.
Opinion of Credit Suisse First Boston. The Old Coleman Board
considered the oral opinion delivered by Credit Suisse First Boston at the
meeting of the Old Coleman Board on February 27, 1998, which was
subsequently confirmed in writing, that, as of such date and based upon and
subject to the matters set forth therein, the Per Share Merger
Consideration was fair from a financial point of view to the Coleman Public
Stockholders. See "- Opinion of Financial Advisor to Coleman." The Credit
Suisse First Boston Opinion is attached hereto as Annex II and is
incorporated herein by reference. Stockholders of Coleman are urged to, and
should, read the Credit Suisse First Boston Opinion in its entirety.
Ability of Coleman's Stockholders to Obtain a Continuing
Interest in Sunbeam. The Old Coleman Board considered that, pursuant to the
terms of the Coleman Merger Agreement, Coleman's stockholders will receive
equity securities of Sunbeam, thus enabling Coleman's stockholders to
participate in the value that may be generated through Sunbeam's
acquisition of Coleman's businesses, as well as the value that may be
generated through Sunbeam's acquisitions of First Alert and Signature
Brands. The Old Coleman Board also noted that the price of the Sunbeam
Common Stock had more than doubled since the time Mr. Dunlap had become
Chief Executive Officer of Sunbeam.
Ownership of Coleman Voting Stock. The Old Coleman Board
considered the fact that, prior to the Coleman Merger, the Coleman Public
Stockholders were stockholders in a company controlled by Mafco, but that,
following the Coleman Merger, they would be stockholders in a public
company without any controlling stockholder.
Tax Treatment. The Old Coleman Board considered the fact that
the Coleman Merger was structured as a taxable transaction for U.S. Federal
income tax purposes and may be taxable under state, local or foreign laws
as well. See "Certain U.S. Federal Income Tax Considerations."
OPINION OF FINANCIAL ADVISOR TO COLEMAN
Credit Suisse First Boston has acted as exclusive financial
advisor to Coleman in connection with the Coleman Merger. Credit Suisse
First Boston was selected by Coleman based on Credit Suisse First Boston's
experience, expertise and familiarity with Coleman and its business. Credit
Suisse First Boston is an internationally recognized investment banking
firm and is regularly engaged in the valuation of businesses and securities
in connection with mergers and acquisitions, leveraged buyouts, negotiated
underwritings, competitive biddings, secondary distributions of listed and
unlisted securities, private placements and valuations for corporate and
other purposes.
On February 27, 1998, Credit Suisse First Boston delivered to
the Old Coleman Board an oral opinion, which was subsequently confirmed in
writing, that, as of such date and based upon and subject to the matters
set forth therein, the Per Share Merger Consideration was fair from a
financial point of view to the Coleman Public Stockholders.
THE FULL TEXT OF THE CREDIT SUISSE FIRST BOSTON OPINION, WHICH
SETS FORTH THE PROCEDURES FOLLOWED, THE ASSUMPTIONS MADE, MATTERS
CONSIDERED AND LIMITATIONS ON THE REVIEW UNDERTAKEN BY CREDIT SUISSE FIRST
BOSTON, IS ATTACHED AS ANNEX II TO THIS INFORMATION STATEMENT/PROSPECTUS
AND IS INCORPORATED HEREIN BY REFERENCE. STOCKHOLDERS OF COLEMAN ARE URGED
TO READ THE CREDIT SUISSE FIRST BOSTON OPINION IN ITS ENTIRETY. THE CREDIT
SUISSE FIRST BOSTON OPINION IS DIRECTED TO THE OLD COLEMAN BOARD AND
RELATES ONLY TO THE FAIRNESS OF THE PER SHARE MERGER CONSIDERATION FROM A
FINANCIAL POINT OF VIEW TO THE COLEMAN PUBLIC STOCKHOLDERS AND DOES NOT
ADDRESS ANY OTHER ASPECT OF THE COLEMAN MERGER. THE SUMMARY OF THE CREDIT
SUISSE FIRST BOSTON OPINION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
THE FULL TEXT THEREOF.
In arriving at its opinion, Credit Suisse First Boston reviewed
certain publicly available business and financial information relating to
Coleman and Sunbeam, as well as the Coleman Merger Agreement and the
Holdings Merger Agreement. Credit Suisse First Boston also reviewed certain
other information, including financial forecasts, provided to it by Coleman
and Sunbeam, and met with the managements of Coleman and Sunbeam to discuss
the business and prospects of Coleman and Sunbeam as well as the business,
operational and strategic benefits and implications of the Holdings Merger
and the Coleman Merger and the synergies and operating cost savings
expected by the managements of Coleman and Sunbeam to be achieved through
the combination of the operations of Coleman and Sunbeam.
Credit Suisse First Boston also considered certain financial
and stock market data of Coleman and Sunbeam, compared that data with
similar data for other publicly held companies in businesses similar to
those of Coleman and Sunbeam and considered the financial terms of certain
other business combinations and other transactions which have recently been
effected. In addition, Credit Suisse First Boston considered such other
information, financial studies, analyses and investigations and financial,
economic and market criteria that it deemed relevant.
In connection with its review, Credit Suisse First Boston did
not assume any responsibility for independent verification of any of the
foregoing information and relied on such information being complete and
accurate in all material respects. With respect to financial forecasts,
Credit Suisse First Boston assumed that they were reasonably prepared on
bases reflecting the best currently available estimates and judgments of
the managements of Coleman and Sunbeam as to the future financial
performance of their respective companies and the synergies and operating
cost savings expected to be achieved through the combination of the
operations of Coleman and Sunbeam. Credit Suisse First Boston did not make
an independent evaluation or appraisal of the assets or liabilities
(contingent or otherwise) of Coleman or Sunbeam, nor was it furnished with
any such evaluations or appraisals. The Credit Suisse First Boston Opinion
is necessarily based upon financial, economic, market and other conditions
as they existed and could be evaluated on the date of its opinion. Credit
Suisse First Boston did not express any opinion as to what the value of the
Sunbeam Common Stock actually will be when issued to Coleman's stockholders
pursuant to the Coleman Merger or the prices at which the Sunbeam Common
Stock will trade subsequent to the Holdings Merger and the Coleman Merger.
In preparing its opinion, Credit Suisse First Boston performed
a variety of financial and comparative analyses. The summary of Credit
Suisse First Boston's analyses set forth below does not purport to be a
complete description of the analyses underlying the Credit Suisse First
Boston Opinion. The preparation of a fairness opinion is a complex analytic
process involving various determinations as to the most appropriate and
relevant methods of financial analyses and the application of those methods
to the particular circumstances, and, therefore, such an opinion is not
readily susceptible to partial analysis or summary description. In arriving
at its opinion, Credit Suisse First Boston made qualitative judgments as to
the significance and relevance of each analysis and factor. Accordingly,
Credit Suisse First Boston believes that its analyses must be considered as
a whole and that selecting portions of its analyses, without considering
all analyses, could create a misleading or incomplete view of the processes
underlying such analyses and the Credit Suisse First Boston Opinion. In
performing its analyses, Credit Suisse First Boston made numerous
assumptions with respect to Coleman, Sunbeam, industry performance, general
business, economic, market and financial conditions and other matters, many
of which are beyond the control of Coleman or Sunbeam. No company,
transaction, or business used in such analyses as a comparison is identical
to Coleman or Sunbeam or the Coleman Merger, nor is an evaluation of the
results of such analyses entirely mathematical; rather, such analyses
involve complex considerations and judgments concerning financial and
operating characteristics and other factors that could affect the
acquisition, public trading, or other values of the companies, business
segments, or transactions being analyzed. The estimates contained in such
analyses and the ranges of valuations and implied exchange ratios resulting
from any particular analysis are not necessarily indicative of actual
values or predictive of future results or values, which may be
significantly more or less favorable than those suggested by such analyses.
In addition, analyses relating to the value of businesses or securities do
not purport to be appraisals or to reflect the prices at which businesses
or securities actually may be sold. Accordingly, such analyses and
estimates are inherently subject to substantial uncertainty. The Credit
Suisse First Boston Opinion and its financial analyses were only one of
many factors considered by the Old Coleman Board in its evaluation of the
Coleman Merger and should not be viewed as determinative of the views of
the Old Coleman Board or management with respect to the Per Share Merger
Consideration or the Coleman Merger.
The following is a summary of the analyses performed by Credit
Suisse First Boston in connection with the preparation of the Credit Suisse
First Boston Opinion.
Comparative Stock Price Performance Analysis. Credit Suisse
First Boston reviewed the per share daily closing prices of Coleman Common
Stock and of Sunbeam Common Stock over the period from January 2, 1997
through February 24, 1998 compared with the performance of the Standard &
Poor's 500 Index. Credit Suisse First Boston also analyzed the implied
exchange ratios based on closing prices of Coleman Common Stock and Sunbeam
Common Stock from January 2, 1997 through February 24,1998.
Discounted Cash Flow Analysis. Credit Suisse First Boston
performed a discounted cash flow analysis for fiscal years 1998 through
2007 for Coleman, to estimate the present value of the stand-alone,
unlevered free cash flows of Coleman, based upon financial projections
provided by Coleman management for fiscal years 1998 through 2001 and
estimates developed in conjunction with and reviewed by Coleman management
for fiscal years 2002 through 2007 (collectively, the "Coleman Base Case").
For purposes of this analysis, unlevered free cash flows were defined as
after-tax operating earnings plus depreciation and amortization and other
non-cash items, less projected capital expenditures and investment in
working capital. Credit Suisse First Boston calculated terminal values by
applying a range of estimated earnings before interest, taxes, depreciation
and amortization ("EBITDA") multiples of 9.5x to 10.5x to the projected
EBITDA of Coleman in fiscal year 2007. The unlevered free cash flows and
terminal values were then discounted to the present using a range of
discount rates of 10.0% to 11.0%, representing an estimated range of the
weighted average cost of capital of Coleman. Based on this analysis, the
Coleman Base Case generated an implied equity value range of $24.78 to
$29.62 per share of Coleman Common Stock.
Credit Suisse First Boston performed a discounted cash flow
analysis for fiscal years 1998 through 2002 for Sunbeam, to estimate the
present value of the stand-alone, unlevered free cash flows of Sunbeam. In
conducting its analysis, Credit Suisse First Boston analyzed two scenarios:
(i) forecasts developed in conjunction with Coleman management based on
equity analyst research (the "Sunbeam Base Case"); and (ii) forecasts based
on projections provided by Sunbeam management for fiscal years 1998 through
2000 and estimates based on equity analyst research for fiscal years 2001
through 2002 (the "Sunbeam Long-Term Strategic Plan Case"). Credit Suisse
First Boston calculated terminal values by applying a range of estimated
EBITDA multiples of 9.5x to 10.5x to the projected EBITDA of Sunbeam in
fiscal year 2002. The unlevered free cash flows and terminal values were
then discounted to the present using a range of discount rates of 11.0% to
12.0%, representing an estimated range of the weighted average cost of
capital of Sunbeam. Based on this analysis, the Sunbeam Base Case generated
an implied equity value range of $40.49 to $45.92 per share of Sunbeam
Common Stock, and the Sunbeam Long-Term Strategic Plan Case generated an
implied equity value range of $45.77 to $51.84 per share of Sunbeam Common
Stock.
Comparable Companies Analysis. To provide contextual data and
comparative market information, Credit Suisse First Boston analyzed the
operating performance of Coleman relative to consumer products companies
whose securities are publicly traded and that are deemed by Credit Suisse
First Boston to be reasonably comparable to Coleman. These companies are
Huffy Corporation, Russell Corporation, The Black and Decker Corporation,
The Stanley Works, Newell Co., Rubbermaid Incorporated and Brunswick
Corporation (the "Coleman Comparable Companies"). Credit Suisse First
Boston compared, among other things, current stock prices as multiples of
1998 projected earnings per share based on equity analyst research, and
adjusted market values (equity market value, plus total debt, preferred
stock and minority interests, less cash and cash equivalents) as multiples
of estimated 1998 revenues and EBITDA based on equity analyst research.
Credit Suisse First Boston determined that the relevant ranges of multiples
for the Coleman Comparable Companies were: (i) with respect to revenues,
1.0x to 1.5x; (ii) with respect to EBITDA, 7.0x to 10.0x; and (iii) with
respect to earnings per share, 13.0x to 18.0x. Credit Suisse First Boston
then calculated imputed enterprise and equity values of Coleman by applying
forecasted revenues, EBITDA and earnings per share for 1998 based on the
Coleman Base Case forecasts to the multiples derived from its analysis of
the Coleman Comparable Companies. This analysis generated an implied equity
value range of $13.27 to $21.31 per share of Coleman Common Stock.
Credit Suisse First Boston also analyzed the operating
performance of Sunbeam relative to consumer products companies whose
securities are publicly traded and that are deemed by Credit Suisse First
Boston to be reasonably comparable to Sunbeam. For Sunbeam, these companies
are Tupperware Corporation, Whirlpool Corporation, The Black and Decker
Corporation, The Stanley Works, Newell Co., Rubbermaid Incorporated and
Brunswick Corporation (the "Sunbeam Comparable Companies"). Credit Suisse
First Boston compared, among other things, current stock prices as
multiples of 1998 projected earnings per share based on equity analyst
research, and adjusted market values as multiples of estimated 1998 EBITDA
based on equity analyst research. Credit Suisse First Boston determined
that the relevant ranges of multiples for the Sunbeam Comparable Companies
were: (i) with respect to EBITDA, 10.0x to 12.0x; and (ii) with respect to
earnings per share, 19.0x to 22.0x. Credit Suisse First Boston then
calculated imputed enterprise and equity values of Sunbeam by applying
forecasted EBITDA and earnings per share for 1998 based on the Sunbeam Base
Case forecasts to the multiples derived from its analysis of the Sunbeam
Comparable Companies. This analysis generated an implied equity value range
of $36.12 to $44.59 per share of Sunbeam Common Stock.
Comparable Transactions Analysis. In conducting its analysis of
Coleman, Credit Suisse First Boston analyzed, among other things, the
implied transaction multiples paid in selected merger and acquisition
transactions involving companies in the consumer products industry. For
Coleman, these transactions included: the acquisition of Duracell
International Inc. by The Gillette Company, the acquisition of Graco Inc.
by Rubbermaid Incorporated, the acquisition of Evenflo & Spalding Holding
Corporation by Kohlberg Kravis Roberts & Co., the acquisition of
Nelson/Weather-Rite, Inc. by Brunswick Corporation, the acquisition of
Cobra Golf, Incorporated by American Brands, Inc., the acquisition of
American Recreation Company by Bell Sports Corporation, and the acquisition
of Adidas International Holding by Sogedim S.A. Credit Suisse First Boston
compared transaction values in these transactions as multiples of revenues
and EBITDA of each acquired company for the latest available twelve-month
period immediately preceding the announcement of the acquisition of such
company. Credit Suisse First Boston determined that the relevant range of
multiples for the acquired consumer products companies were: (i) with
respect to revenues, 1.2x to 1.5x; and (ii) with respect to EBITDA, 10.0x
to 12.0x. Credit Suisse First Boston then calculated imputed enterprise
values of Coleman by applying forecasted revenues and EBITDA for 1998 based
on the Coleman Base Case forecasts to the multiples derived from its
analyses of the acquired companies. This analysis generated an implied
equity value range of $21.31 to $28.35 per share of Coleman Common Stock.
In conducting its analysis of Sunbeam, Credit Suisse First
Boston analyzed, among other things, the implied transaction multiples paid
in selected merger and acquisition transactions involving companies in the
consumer products industry. For Sunbeam, these transactions included: the
acquisition of Raytheon Appliances by Goodman Holding Company, the
acquisition of Duracell International Inc. by The Gillette Company, the
acquisition of Graco Inc. by Rubbermaid Incorporated, the acquisition of
Evenflo & Spalding Holding Corporation by Kohlberg Kravis Roberts & Co.,
the acquisition of Duracraft Corporation by Honeywell Inc., the acquisition
of The Shannon Group by The Manitowoc Company, Inc., the acquisition of
Welbilt Corporation by Berisford PLC and the acquisition of Mr. Coffee,
Inc. by Health O Meter, Inc. Credit Suisse First Boston compared
transaction values in these transactions as multiples of revenues and
EBITDA of each acquired company for the latest available twelve-month
period immediately preceding the announcement of the acquisition of such
company. Credit Suisse First Boston determined that the relevant range of
multiples for the acquired consumer products companies were: (i) with
respect to revenues, 2.0x to 2.5x; and (ii) with respect to EBITDA, 10.0x
to 12.0x. Credit Suisse First Boston then calculated imputed enterprise
values of Sunbeam by applying forecasted revenues and EBITDA for 1998 based
on the Sunbeam Base Case forecasts to the multiples derived from its
analyses of the acquired companies. This analysis generated an implied
equity value range of $34.53 to $42.47 per share of Sunbeam Common Stock.
Contribution Analysis. Credit Suisse First Boston reviewed the
relative contribution of Coleman and Sunbeam to fiscal year 1997 and
forecasted fiscal year 1998 net income and derived therefrom an implied
exchange ratio. Fiscal year 1998 net income for Sunbeam and Coleman was
calculated based on the Coleman Base Case and Sunbeam Base Case forecasts.
This analysis yielded an implied exchange ratio of 0.311x based on 1997 net
income and 0.575x based on forecasted 1998 net income.
Pro Forma Merger Analysis. Based on the Coleman Base Case and
Sunbeam Base Case forecasts, and assuming that certain synergistic pre-tax
cost savings forecast by Sunbeam and Coleman management are realized (in
the aggregate $100 million in fiscal year 1998 and $100 million in fiscal
year 1999), Credit Suisse First Boston analyzed the potential pro forma
effect of the Holdings Merger and the Coleman Merger on Sunbeam's projected
earnings per share for fiscal years 1998 and 1999. This analysis indicated
that the Holdings Merger and the Coleman Merger would be accretive to
Sunbeam's earnings per share in 1998 and 1999. The actual results achieved
by the combined company may vary from projected results, and the variations
may be material.
Miscellaneous. Pursuant to a letter agreement dated December
10, 1997 between Coleman and Credit Suisse First Boston, Coleman has agreed
to pay Credit Suisse First Boston for services rendered thereunder a
financial advisory fee of $250,000 payable upon execution of such letter
and a fee of $3,750,000 payable upon consummation of the Coleman Merger.
Coleman also agreed to reimburse Credit Suisse First Boston for all
reasonable out-of-pocket expenses, including the reasonable fees and
expenses of its legal counsel and any other advisor retained by Credit
Suisse First Boston, resulting from or arising out of the engagement.
Coleman further agreed to indemnify Credit Suisse First Boston and certain
related persons and entities for certain losses, claims, damages or
liabilities (including actions or proceedings in respect thereof) related
to or arising out of, among other things, its engagement as financial
advisor.
In the past, Credit Suisse First Boston has performed certain
investment banking services for Coleman and Mafco and certain of its
affiliates and has received customary fees for such services. In the
ordinary course of its business, Credit Suisse First Boston and its
affiliates may actively trade the debt and equity securities of Coleman,
Mafco and its affiliates and Sunbeam for their own accounts and for the
accounts of customers and, accordingly, may at any time hold a long or
short position in such securities.
SUNBEAM'S REASONS FOR THE COLEMAN MERGER
Following the successful restructuring of Sunbeam, Sunbeam's
management team extended its strategic focus to identify underperforming
companies with strong brand names. Sunbeam intends to capitalize on its
capability in cost containment and operational improvement by acquiring
such companies and their premier brand names, thereby broadening the
Sunbeam product offering spectrum and presenting opportunities to eliminate
redundant or inefficient operations.
Sunbeam is acquiring Coleman primarily due to its strong and
established brand names, the potential opportunity to streamline
operations, the diversification these brand names provide to Sunbeam's
product base and the potential for revenue and operational synergies. In
addition, Sunbeam believes that its existing international geographic
marketing and distribution strengths and those of Coleman will
significantly complement each other. Sunbeam's management team believes
that the acquisition of Coleman will give Sunbeam a platform from which to
capitalize on the fragmentation and potential consolidation of the durable
household consumer products sector.
PURPOSES AND EFFECTS OF THE COLEMAN MERGER
The purpose of the Coleman Merger is to enable Sunbeam to
acquire the entire equity interest in Coleman. In the Holdings Merger,
which was consummated on March 30, 1998, Sunbeam indirectly acquired more
than 80% of the then outstanding shares of Coleman Common Stock. Upon
consummation of the Coleman Merger, Sunbeam will acquire the remaining
equity interest in Coleman, and Coleman will become an indirect wholly
owned subsidiary of Sunbeam.
Coleman and Sunbeam adopted a two-step acquisition structure
for several reasons, including to enable Sunbeam to acquire control of
Coleman as quickly as possible. Alternative transaction structures were
considered by Sunbeam and Coleman, including consummation of the Coleman
Merger without first consummating the Holdings Merger and a direct purchase
by Sunbeam of Coleman Worldwide's equity interest in Coleman prior to
consummation of the Coleman Merger. Sunbeam also considered alternative
types of consideration to be paid to Coleman stockholders, including
preferred stock of Sunbeam and Sunbeam Common Stock without payment of the
cash portion of the Per Share Merger Consideration.
Upon consummation of the Coleman Merger, each outstanding share
of Coleman Common Stock (other than shares held indirectly by Sunbeam and
dissenting shares, if any) will be converted into the right to receive the
Per Share Merger Consideration. As a result of the Coleman Merger, the
Coleman Public Stockholders will cease to hold any direct equity interest
in Coleman, will no longer share in the profits and losses of Coleman, will
not be entitled to receive dividends or other distributions, if any,
declared and paid by Coleman and will not be entitled to vote or otherwise
participate in the corporate governance of Coleman.
As a result of the Holdings Merger and the Coleman Merger,
Sunbeam will have the entire indirect interest in the net book value and
net earnings of Coleman, and Sunbeam will be entitled to all benefits
resulting from that interest, including all income generated by Coleman's
operations, any future increase in Coleman's value and the right to elect
all members of the Coleman board of directors. Similarly, Sunbeam will also
bear the entire risk of losses generated by Coleman's operations and any
decrease in the value of Coleman after the Coleman Merger. The Coleman
Public Stockholders will only have an indirect interest in the net book
value and net earnings of Coleman and future increases, if any, in the
value of Coleman through their holdings of Sunbeam Common Stock to be
received in the Coleman Merger.
Upon consummation of the Coleman Merger, there will no longer
be any publicly held shares of Coleman Common Stock and the Coleman Common
Stock will be delisted from the NYSE and deregistered under the Exchange
Act.
The receipt of the Per Share Merger Consideration by the
Coleman Public Stockholders will be a taxable event to the Coleman Public
Stockholders. For a discussion of the tax consequences of the Coleman
Merger, see "CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS."
SUNBEAM'S PLANS AND PROPOSALS FOR COLEMAN
On May 11, 1998, Sunbeam announced its plans to integrate the
operations of Coleman with those of Sunbeam, First Alert and Signature
Brands. See "SUMMARY - Recent Developments."
At the effective time of the Holdings Merger (the "Holdings
Effective Time"), which occurred on March 30, 1998, all of the members of
the Old Coleman Board resigned from their positions as directors of
Coleman, the number of directors constituting the board of directors of
Coleman was fixed at five, and five individuals designated by Sunbeam were
elected as the directors of Coleman. In addition, Sunbeam designees were
appointed to senior management positions at Coleman.
Following the consummation of the Holdings Merger, Sunbeam
prepaid an aggregate of approximately $960 million of outstanding
indebtedness of Coleman and LAC (as successor to CLN Holdings) with a
portion of the net proceeds of the Offering and borrowings under the New
Credit Facility. In addition, Sunbeam intends to prepay approximately $3
million of outstanding indebtedness of Coleman Worldwide using additional
borrowings under the New Credit Facility. See "SOURCE AND AMOUNT OF FUNDS
AND OTHER CONSIDERATION."
POSITION OF SUNBEAM ON THE FAIRNESS OF THE COLEMAN MERGER
The Sunbeam Board did not make a judgment as to the fairness of
the Coleman Merger to the Coleman Public Stockholders. In reaching its
determination to approve the acquisition of Coleman, the Sunbeam Board only
considered the advantages and fairness of the transaction to Sunbeam and
its stockholders. At the same time, Sunbeam believed that the Coleman
Merger was fair to the Coleman Public Stockholders based on the fact that
the Per Share Merger Consideration was negotiated between unaffiliated
parties and was determined by the Old Coleman Board, after receiving the
Credit Suisse First Boston Opinion, to be fair to the Coleman Public
Stockholders.
OPINION OF FINANCIAL ADVISOR TO SUNBEAM
Morgan Stanley was retained by Sunbeam to assist in connection
with a possible sale of Sunbeam, one or more possible acquisitions by
Sunbeam and/or other strategic alternatives. Morgan Stanley acted as
Sunbeam's financial advisor in connection with the acquisition of Coleman.
Sunbeam retained Morgan Stanley based on its qualifications, expertise and
reputation, as well as upon its prior investment banking relationships with
Sunbeam and its familiarity with Sunbeam and its business.
On February 27, 1998, Morgan Stanley rendered to the Sunbeam
Board an oral opinion (which was later confirmed in writing) to the effect
that, as of such date and based on and subject to certain matters stated
therein, the consideration payable in the Holdings Merger and the Coleman
Merger was fair from a financial point of view to Sunbeam.
Pursuant to the amended engagement letter between Sunbeam and
Morgan Stanley, Sunbeam has agreed to pay Morgan Stanley (i) an exposure
fee equal to 25% of the estimated transaction fee referred to below,
payable upon execution of the Holdings Merger Agreement and the Coleman
Merger Agreement, and (ii) a transaction fee equal to a percentage of the
aggregate value of the consideration payable by Sunbeam in the Holdings
Merger and the Coleman Merger (including the amount of any debt assumed or
repaid by Sunbeam), payable, as to the Holdings Merger, upon its
consummation and, as to the Coleman Merger, upon its consummation. For
purposes of calculating the transaction fee, the value of the Sunbeam
Common Stock issuable in the Holdings Merger and the Coleman Merger will be
the average of the closing sale prices for the Sunbeam Common Stock for the
ten trading days (the "Average Market Price") prior to the consummation of
the Holdings Merger and the Coleman Merger, respectively. Based on the
Average Market Price of the Sunbeam Common Stock prior to the Holdings
Merger and the Average Market Price of the Sunbeam Common Stock prior to
the date of this Information Statement/Prospectus, the aggregate
transaction fee payable in respect of the Holdings Merger and the Coleman
Merger would be $______ million. Any exposure fee paid will be credited
against the transaction fee. Sunbeam has also agreed to reimburse Morgan
Stanley for certain of its expenses, including fees and expenses of its
counsel, and to indemnify Morgan Stanley and certain related parties from
and against certain liabilities and expenses, which may include liabilities
under U.S. Federal securities laws, arising out of its engagement.
THE COLEMAN MERGER
The description of the Coleman Merger and the Coleman Merger
Agreement contained in this Information Statement/Prospectus does not
purport to be complete and is qualified in its entirety by reference to the
Coleman Merger Agreement, a copy of which is attached hereto as Annex I and
incorporated herein by reference.
GENERAL
The Coleman Merger will become effective on the date and at the
time at which a properly executed Certificate of Merger is duly filed with
the Secretary of State of the State of Delaware. It is currently
anticipated that the Certificate of Merger will be filed, and the Coleman
Merger will become effective, on or about __________, 1998, which is the
twenty-first business day following the date of mailing of this Information
Statement/Prospectus to the stockholders of Coleman.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
In considering the approval of the Coleman Merger by the Old
Coleman Board, Coleman stockholders should be aware that certain persons,
including certain former directors and executive officers of Coleman, have
interests in the Coleman Merger that are in addition to those of
stockholders of Coleman generally, as described below.
Coleman Options
Pursuant to the Coleman Merger Agreement, at the effective time
of the Holdings Merger (the "Holdings Effective Time"), which occurred on
March 30, 1998, all then outstanding options to purchase shares of Coleman
Common Stock ("Employee Stock Options") under The Coleman Company, Inc.
1996 Stock Option Plan, The Coleman Company, Inc. 1993 Stock Option Plan
and The Coleman Company, Inc. 1992 Stock Option Plan (collectively, the
"Coleman Option Plans"), became fully vested and exercisable. During the
period between the Holdings Effective Time and the Coleman Effective Time,
Sunbeam is obligated, pursuant to the Coleman Merger Agreement, to cause
Coleman to maintain a broker-dealer cashless exercise procedure for the
exercise of the Employee Stock Options. At the Coleman Effective Time, each
outstanding Employee Stock Option that has not been exercised will be
cancelled and, in settlement thereof, each holder of such unexercised
Employee Stock Option will be paid an amount in cash equal to the product
of (i) the total number of shares of Coleman Common Stock subject to such
Employee Stock Option, multiplied by (ii) the excess of $27.50 over the
exercise price per share of Coleman Common Stock subject to such Employee
Stock Option, less any applicable withholding taxes. Upon consummation of
the Holdings Merger on March 30, 1998, the Old Coleman Board and each of
the principal executive officers of Coleman were replaced by Sunbeam
designees. None of the individuals currently serving as a director or
principal executive officer of Coleman is a holder of any Employee Stock
Options.
Severance Arrangements
The Holdings Merger constituted a "change in control" of
Coleman under the terms of certain Coleman employee benefit plans, and
certain employment, severance, termination, consulting and retirement
agreements to which Coleman is a party. As a result, at the Holdings
Effective Time, Coleman became obligated to pay all amounts provided under
such plans and agreements as a result of such change in control.
Indemnification
The Coleman Merger Agreement provides that all rights to
indemnification existing in favor of any present or former director or
officer of Coleman, as provided in Coleman's Certificate of Incorporation
(the "Coleman Charter"), Coleman's By-laws, as amended (the "Coleman By-
laws"), or indemnification agreements in effect as of February 27, 1998,
will survive the Coleman Merger and continue in full force and effect for a
period of six years after the Coleman Effective Time (and during the period
from the Holdings Effective Time to the Coleman Effective Time), to the
extent such rights are consistent with the DGCL. In addition, Sunbeam
agreed that, from and after the Holdings Effective Time for a period of six
years following the Coleman Effective Time, Sunbeam or the Surviving
Corporation will cause to be maintained a liability insurance policy for
the benefit of Coleman's existing and former directors and officers
providing substantially similar coverage as the policies in effect as of
February 27, 1998, except that neither Sunbeam nor the Surviving
Corporation will be required to pay an annual premium for such insurance in
excess of 200% of the last annual premium paid by Coleman prior to the date
of the Coleman Merger Agreement but in such case will purchase as much
coverage as possible for such amount. See "- Continuation of Existing
Indemnification Rights."
Registration Rights Agreement
The shares of Sunbeam Common Stock issued to Parent Holdings in
the Holdings Merger were not registered under the Securities Act.
Accordingly, in connection with the consummation of the Holdings Merger,
Sunbeam entered into the Registration Rights Agreement with Parent
Holdings, pursuant to which Sunbeam has agreed to provide Parent Holdings
and certain other affiliates of Coleman with certain registration rights.
See "MATERIAL CONTACTS BETWEEN SUNBEAM AND COLEMAN AND ITS AFFILIATES -
Registration Rights Agreement."
CONVERSION OF COLEMAN COMMON STOCK
At the Coleman Effective Time, by virtue of the Coleman Merger
and without any action on the part of any holder of shares of Coleman
Common Stock, each outstanding share of Coleman Common Stock (other than
shares held indirectly by Sunbeam and dissenting shares, if any) will no
longer be outstanding and will automatically be cancelled and retired and
will cease to exist, and each holder of a certificate representing any such
shares of Coleman Common Stock will cease to have any rights with respect
thereto, except the right to receive the Per Share Merger Consideration and
cash in lieu of any fractional shares of Sunbeam Common Stock, to be issued
or paid in consideration therefor upon the surrender of such certificate,
without interest. At the Coleman Effective Time, all shares of Coleman
Common Stock held indirectly by Sunbeam through Coleman Worldwide will
remain outstanding and unchanged as a result of the Coleman Merger. Each
share of Coleman Common Stock, if any, held in the treasury of Coleman, by
any subsidiary of Coleman, by Sunbeam or by any subsidiary of Sunbeam
(other than Coleman Worldwide) immediately prior to the Coleman Effective
Time will be cancelled and retired and cease to exist. At the Coleman
Effective Time, each outstanding share of common stock of CAC will be
cancelled and retired and cease to exist.
EXCHANGE OF COLEMAN COMMON STOCK
The Coleman Merger Agreement provides that the exchange of
shares of Coleman Common Stock in the Coleman Merger will be effected as
follows:
(a) as of the Coleman Effective Time, Sunbeam will deposit, or
will cause to be deposited, with an exchange agent selected by Sunbeam and
reasonably satisfactory to Coleman (the "Exchange Agent"), for the benefit
of the holders of shares of Coleman Common Stock: (i) certificates
representing the number of shares of Sunbeam Common Stock issuable in the
Coleman Merger; and (ii) cash in an amount sufficient to pay the Cash
Portion and cash in lieu of fractional shares of Sunbeam Common Stock
(collectively, the "Exchange Fund");
(b) as soon as reasonably practicable after the Coleman
Effective Time, Sunbeam will cause the Exchange Agent to mail to each
holder of record of a certificate or certificates which, immediately prior
to the Coleman Effective Time, represented shares of Coleman Common Stock
whose shares were converted into the right to receive the Per Share Merger
Consideration (each, a "Certificate" and collectively, the "Certificates"),
a letter of transmittal and instructions for use in effecting the surrender
of the Certificates for shares of Coleman Common Stock;
(c) upon surrender of a Certificate for cancellation to the
Exchange Agent, together with such letter of transmittal, duly executed and
completed in accordance with the instructions thereto, the holder thereof
will be entitled to receive in exchange therefor that portion of the
Exchange Fund which such holder has the right to receive, after giving
effect to any required withholding tax, and the Certificate so surrendered
will forthwith be cancelled;
(d) after the Coleman Effective Time, each outstanding,
unsurrendered Certificate will be deemed to represent only the right to
receive upon such surrender shares of Sunbeam Common Stock and cash, into
which such shares of Coleman Common Stock will have been converted;
however, the holders of outstanding, unsurrendered Certificates after the
Coleman Effective Time will not be entitled to receive any dividends or
distributions with respect to Sunbeam Common Stock with a record date after
the Coleman Effective Time theretofore paid with respect to the shares of
Sunbeam Common Stock until such Certificates are surrendered, although any
such dividends or distributions will accrue and be payable to the holder,
without interest, upon surrender of the Certificate;
(e) any portion of the Exchange Fund which remains
undistributed to the holders of the Coleman Common Stock for six (6) months
after the Coleman Effective Time will be delivered to Sunbeam, upon demand,
and any holders of unsurrendered Certificates may thereafter look only to
Sunbeam, as general creditors, for payment of the Per Share Merger
Consideration. In no event will Sunbeam, the Surviving Corporation or the
Exchange Agent be liable to any holder of unsurrendered Certificates for
any shares of Sunbeam Common Stock and cash that is delivered to a public
official pursuant to applicable escheat laws; and
(f) at the Coleman Effective Time, the stock transfer books of
Coleman will be closed and no transfer of shares of Coleman Common Stock
will thereafter be made; if, after the Coleman Effective Time, Certificates
are presented to the Surviving Corporation, they will be cancelled and
exchanged for the Per Share Merger Consideration applicable thereto.
COLEMAN STOCKHOLDERS SHOULD NOT FORWARD CERTIFICATES TO THE
EXCHANGE AGENT UNTIL THEY RECEIVE LETTERS OF TRANSMITTAL AND INSTRUCTIONS.
NO FRACTIONAL SHARES
No fractional shares of Sunbeam Common Stock will be issued in
the Coleman Merger, and no dividend, stock split or other change in the
capital structure of Sunbeam will relate to any fractional security, and
such fractional interests will not entitle the owner thereof to vote or to
any rights of a security holder. In lieu of any such fractional shares of
Sunbeam Common Stock, each holder of shares of Coleman Common Stock who
would otherwise have been entitled to a fraction of a share of Sunbeam
Common Stock will, in lieu thereof, be paid cash (without interest) in an
amount equal to such fractional part of a share of Sunbeam Common Stock
multiplied by the closing sale price of one share of Sunbeam Common Stock
on the NYSE Composite Transactions Tape on the day of the Coleman Effective
Time, or, if shares of Sunbeam Common Stock are not so traded on such day,
the closing sale price of one such share on the next preceding day on which
such share was traded on the NYSE. Shares of Coleman Common Stock of any
holder represented by two or more Certificates will be aggregated, and in
no event will any holder of Coleman Common Stock be paid an amount of cash
in respect of more than one share of Sunbeam Common Stock.
CONDITIONS
Substantially all the conditions to the parties' obligations to
consummate the Coleman Merger have been, or have been deemed to have been,
satisfied, and the Coleman Merger will be consummated on or about
_________, 1998 as expected, unless prior thereto an action challenging the
Coleman Merger is commenced and a court order prohibiting the Coleman
Merger is entered.
GOVERNMENTAL AND REGULATORY APPROVALS
Consummation of the Holdings Merger was conditioned on
expiration or termination of the applicable waiting period under the HSR
Act. On March 4, 1998, Sunbeam and Ronald O. Perelman, as the then ultimate
parent of Coleman, filed notifications and report forms under the HSR Act
with the FTC and the Antitrust Division relating to the Holdings Merger and
the Coleman Merger. The applicable waiting period under the HSR Act was
terminated on March 27, 1998. However, notwithstanding the termination of
the waiting period under the HSR Act, the FTC, the Antitrust Division, a
state or a private person or entity could seek under federal or state
antitrust laws, among other things, to enjoin or rescind the Holdings
Merger or the Coleman Merger. Although Sunbeam and Coleman believe that the
Holdings Merger and the Coleman Merger do not violate U.S. antitrust laws,
there can be no assurance that if such a challenge is made, it would not be
successful.
In addition to the filings under the HSR Act, Sunbeam and
Coleman filed a pre- merger notification form with the German Federal
Cartel Office relating to the Holdings Merger and the Coleman Merger, which
was approved by the Federal Cartel Office on March 20, 1998. Neither
Sunbeam nor Coleman is aware of any other material approval or other action
by any governmental, administrative or regulatory agency or authority,
domestic or foreign, that would be required in order to consummate the
Coleman Merger.
EMPLOYEE MATTERS
Sunbeam agreed that, from and after the Holdings Effective
Time, it will honor, and cause Coleman to honor, all employment, severance,
termination, consulting and retirement agreements to which Coleman was a
party as of the Holdings Effective Time except that neither Sunbeam nor
Coleman will have any responsibility for Coleman's obligations under the
employment agreements between Coleman and Jerry W. Levin, its former
Chairman and Chief Executive Officer, and Paul E. Shapiro, Coleman's former
General Counsel, except in the case of Mr. Levin for an incentive payment
related to the sale of Coleman Safety & Security Products, Inc. From and
after the Holdings Effective Time, Sunbeam has agreed to cause Coleman to
allow Coleman employees to participate in Sunbeam employee benefit plans on
substantially the same basis as similarly situated Sunbeam employees
(waiving with respect to welfare benefit plans any pre-existing condition
limitations and giving effect, in determining any deductible and maximum
out-of-pocket limitations, to claims incurred and amounts paid by, and
reimbursed to, such employees with respect to similar plans maintained by
Coleman) and, in accordance with the Coleman Merger Agreement, will cause
Coleman to continue its existing employee benefit plans for at least six
months following the Holdings Effective Time. Sunbeam will, or will cause
Coleman to, give Coleman employees full credit for purposes of eligibility
and vesting of benefits and benefit accrual for service with Coleman and
its affiliates prior to the Holdings Effective Time under each employee
benefit plan; so long as such crediting of service does not result in
duplication of benefits. See "THE COLEMAN MERGER - Interests of Certain
Persons in the Coleman Merger."
The Holdings Merger constituted a "change in control" of
Coleman under certain Coleman employee benefit plans and employment,
severance, termination, consulting and retirement agreements. Except as
noted above with respect to Messrs. Levin's and Shapiro's employment
agreements, Sunbeam has agreed to cause Coleman to pay all amounts provided
under such employee benefit plans and agreements as a result of a change in
control of Coleman in accordance with their respective terms and to honor,
and to cause Coleman to honor, all rights, privileges and modifications to
or with respect to any such employee benefit plans of Coleman or agreements
which become effective as a result of such change in control. See "THE
COLEMAN MERGER - Interests of Certain Persons in the Coleman Merger."
Sunbeam will cause Coleman to continue Coleman's Executive
Annual Incentive Policy for the remainder of 1998, and participants therein
will not be eligible for participation in an analogous Sunbeam incentive
plan in respect of 1998. Sunbeam will honor, and will cause Coleman to
honor, Coleman's Executive Severance Policy without any amendment adverse
to participants. As of the ninety-first day following the Holdings
Effective Time, certain of the participants in Coleman's Executive
Severance Policy may voluntarily terminate their employment with Coleman,
which termination will be deemed to be for "Good Reason" under the policy
as a result of the consummation of the Holdings Merger. Sunbeam will
provide severance benefits for employees of Coleman, who are not
participants in Coleman's Executive Severance Policy and who do not have
employment agreements with Coleman, under the Sunbeam severance policy on
substantially the same basis as similarly situated Sunbeam employees.
CONTINUATION OF EXISTING INDEMNIFICATION RIGHTS
For six years after the Coleman Effective Time (and during the
period between the Holdings Effective Time and the Coleman Effective Time),
Sunbeam will, or will cause the Surviving Corporation to, indemnify, defend
and hold harmless any present or former director or officer of Coleman (an
"Indemnified Person") against all losses, claims, damages, liabilities,
costs and expenses (including attorneys' fees and expenses), judgments,
fines, losses and amounts paid in settlement in connection with any actual
or threatened action, suit, claim, proceeding or investigation (each, a
"Claim") (other than in connection with any proceeding (or portion thereof)
involving any Claim initiated by such Indemnified Person against Coleman
unless the initiation of such proceeding (or portion thereof) was
authorized by the Old Coleman Board or unless such proceeding is brought by
an Indemnified Person to enforce the rights described in this paragraph) to
the extent that any such Claim is based on, or arises out of: (i) the fact
that such Indemnified Person is or was a director or officer of Coleman or
is or was serving at the request of Coleman as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise; or (ii) the Coleman Merger Agreement or the Holdings
Merger Agreement or any of the transactions contemplated thereby, in each
case to the extent that any such Claim pertains to any matter or fact
arising, existing or occurring prior to or at the Coleman Effective Time,
regardless of whether such Claim is asserted or claimed prior to, at or
after the Coleman Effective Time, to the full extent permitted under the
DGCL, the Coleman Charter or the Coleman By-laws or any indemnification
agreement in effect at the date of the Coleman Merger Agreement, including
provisions relating to advancement of expenses incurred in the defense of
any such Claim. If any Claim is asserted or made within such period, all
such rights, liabilities and limitations in respect of any such Claim will
continue until disposition thereof. In the event any Indemnified Person
becomes involved in any Claim after the Coleman Effective Time, Sunbeam
will, or will cause the Surviving Corporation to, periodically advance to
such Indemnified Person its legal and other expenses (including the cost of
any investigation and preparation incurred in connection therewith),
subject to the providing by such Indemnified Person of an undertaking to
reimburse all amounts so advanced in the event of a final non-appealable
determination by a court of competent jurisdiction that such Indemnified
Person is not entitled thereto.
Sunbeam and Coleman have also agreed that all rights to
indemnification, and all limitations with respect thereto, existing in
favor of any Indemnified Person, as provided in the Coleman Charter or the
Coleman By-laws and any indemnification agreement in effect at the date of
the Coleman Merger Agreement, will survive the Coleman Merger and will
continue in full force and effect, without any amendment thereto, for a
period of six years from the Coleman Effective Time (and during the period
following the Holdings Effective Time but prior to Coleman Effective Time)
to the extent such rights and limitations are consistent with the DGCL. If
any Claim is asserted or made within such period, all such rights,
liabilities and limitations in respect of any such Claim will continue
until disposition thereof. Any determination required to be made with
respect to whether an Indemnified Person's conduct complies with the
standards set forth under the DGCL, the Coleman Charter or the Coleman
By-laws or any such agreement, as the case may be, will be made by
independent legal counsel selected by such Indemnified Person and
reasonably acceptable to Sunbeam.
Sunbeam has agreed that from and after the Holdings Effective
Time, Sunbeam or the Surviving Corporation will maintain, for a period of
not less than six years after the Coleman Effective Time, a liability
insurance policy for the benefit of Coleman's existing and former directors
and officers providing substantially similar coverage in amounts and on
terms no less advantageous than that currently provided to such existing
and former directors and officers. Neither Sunbeam nor the Surviving
Corporation will be required to pay an annual premium for such insurance in
excess of 200% of the last annual premium paid prior to the date of the
Coleman Merger Agreement, but in such case will purchase as much coverage
as possible for such amount.
ACCOUNTING TREATMENT
The Coleman Merger will be accounted for under the "purchase"
method in accordance with generally accepted accounting principles.
Therefore, the aggregate consideration paid by Sunbeam in the Coleman
Merger will be allocated to Coleman's assets and liabilities based upon
their fair market value with any excess being treated as excess of
investment over net assets acquired. The assets and liabilities and results
of operations of Coleman have been consolidated with the assets and
liabilities and results of operations of Sunbeam since the consummation of
the Holdings Merger.
STOCK EXCHANGE LISTING
The NYSE has approved for listing on the NYSE the shares of
Sunbeam Common Stock to be issued to holders of Coleman Common Stock in the
Coleman Merger, subject to official notice of issuance.
DELISTING AND DEREGISTRATION OF COLEMAN COMMON STOCK
Upon consummation of the Coleman Merger, there will no longer
be any publicly held shares of Coleman Common Stock and the Coleman Common
Stock will be delisted from the NYSE and deregistered under the Exchange
Act.
OWNERSHIP OF COLEMAN COMMON STOCK
At the close of business on _______, 1998, there were
outstanding _____ shares of Coleman Common Stock held by approximately
_______ holders of record. Pursuant to the Holdings Merger, Sunbeam became
the indirect owner of 44,067,520 shares of Coleman Common Stock,
representing approximately 82.2% of the then outstanding shares of Coleman
Common Stock. As a result of subsequent option exercises by employees and
former employees of Coleman, on the day immediately following the Holdings
Effective Time, such shares represented 79.8% of the then outstanding
shares of Coleman Common Stock and represent ______% of the currently
outstanding shares of Coleman Common Stock. The directors of Sunbeam and
the current directors of Coleman, all of whom are Sunbeam designees, may be
deemed to be the beneficial owners of such shares. Aside from such
beneficial ownership, none of the current directors or principal executive
officers of Coleman, each of whom is a Sunbeam designee, owns any shares of
Coleman Common Stock.
Since January 1, 1996, Coleman has effectuated one purchase of
Coleman Common Stock. On March 1, 1996, Coleman purchased 50,000 shares of
Coleman Common Stock (or 100,000 shares, adjusted for the two-for-one stock
split of Coleman Common Stock on June 28, 1996) in the open market at a
purchase price of $46.54 per share ($23.26 per share, as adjusted), or an
aggregate of $2.33 million. On May 23, 1997, Coleman Worldwide commenced an
offer to accept for exchange its Liquid Yield Option(TM) Notes due 2013
("LYONs") for cash at a price equal to their redemption price of $343.61
per $1,000 principal amount at maturity. The LYONs are exchangeable for
shares of Coleman Common Stock at the rate of 15.706 shares for each $1,000
principal amount at maturity of LYONs. The holders of $545,053,000
aggregate principal amount at maturity of LYONs out of the $561,553,000
aggregate principal amount at maturity then outstanding accepted Coleman
Worldwide's offer, which expired on June 20, 1997. On April 20, 1998,
Coleman Worldwide gave notice of its intention to redeem all LYONs
remaining outstanding on May 27, 1998 for cash at their redemption price of
$343.61 per $1,000 principal amount at maturity, unless, prior thereto, the
holders thereof elect to exchange their LYONs for shares of Coleman Common
Stock.
OWNERSHIP INTEREST OF COLEMAN STOCKHOLDERS IN SUNBEAM AFTER
THE COLEMAN MERGER
Based on the number of shares of Sunbeam Common Stock and
Coleman Common Stock outstanding on _______ __, 1998, upon consummation of
the Coleman Merger there will be approximately _______ shares of Sunbeam
Common Stock outstanding, of which the former stockholders of Coleman,
including Mafco and its affiliates, will own approximately __%
(approximately __% on a fully diluted basis assuming the exercise of all
currently outstanding options to purchase shares of Sunbeam Common Stock
and all currently outstanding options to purchase Coleman Common Stock).
EXPENSES
All costs and expenses incurred in connection with the Holdings
Merger and the Coleman Merger will be paid by the party incurring such
expenses.
Sunbeam and Coleman anticipate that certain fees and expenses
will be incurred in connection with the Holdings Merger and the Coleman
Merger including, without limitation, filing fees imposed by the SEC or
other governmental entities in connection with the Registration Statement
and other required filings, fees of counsel, accountants' fees and printing
costs. These expenses are estimated to be as follows:
Financial advisory fees.............................$ 15,250,000
Legal fees and expenses.............................. 4,800,000
Accounting fees and expenses........................ 650,000
Filing fees......................................... 200,000
Printing and mailing................................ 150,000
Miscellaneous....................................... 50,000
------------
TOTAL.........................................$ 21,100,000
============
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following discussion is a summary of the material U.S.
Federal income tax consequences of the Coleman Merger to a Holder of
Coleman Common Stock who holds such shares as a capital asset at the
Coleman Effective Time. The discussion is based on laws, regulations,
rulings and decisions in effect on the date of mailing of this Information
Statement/Prospectus, all of which are subject to change, possibly with
retroactive effect. This discussion does not address all aspects of U.S.
Federal taxation that may be relevant to particular Holders in light of
their personal circumstances or to Holders subject to special treatment
under the Internal Revenue Code of 1986, as amended (the "Code") (including
banks, tax-exempt organizations, insurance companies, dealers in securities
or foreign currency, and Holders who are not U.S. persons (as defined in
section 7701(a)(30) of the Code)). In addition, the discussion does not
address the state, local or foreign tax consequences of the Coleman Merger
arising under the laws of any state, local or foreign jurisdiction.
EACH HOLDER OF COLEMAN COMMON STOCK IS URGED TO CONSULT ITS OWN
TAX ADVISOR WITH RESPECT TO THE PARTICULAR TAX CONSEQUENCES OF THE COLEMAN
MERGER TO SUCH HOLDER.
The receipt of the Per Share Merger Consideration pursuant to
the Coleman Merger will be a taxable transaction for U.S. Federal income
tax purposes and may also be a taxable transaction under applicable state,
local, foreign and other tax laws. In general, for U.S. Federal income tax
purposes, a Holder will recognize gain or loss equal to the difference
between (i) the amount of cash and the fair market value (determined as of
the Coleman Effective Time) of the Sunbeam Common Stock received in
exchange for such Holder's shares of Coleman Common Stock and (ii) the
adjusted tax basis of such shares of Coleman Common Stock. Such gain or
loss will be capital gain or loss if the shares of Coleman Common Stock
have been held by such Holder as a capital asset and will be long-term
capital gain or loss if such shares have been held for more than twelve
months.
APPRAISAL RIGHTS
Under the DGCL, any Coleman stockholder who objects to the
Coleman Merger and does not wish to accept the Per Share Merger
Consideration has the right to dissent from the Coleman Merger and seek an
appraisal by the Court of Chancery of the State of Delaware (the "Court of
Chancery") of, and be paid in cash the "fair value" (exclusive of any
element of value arising from the accomplishment or expectation of the
Coleman Merger) for, the shares of Coleman Common Stock owned by such
stockholder, provided that such stockholder complies with the provisions of
Section 262 of the DGCL. Any shares of Coleman Common Stock for which a
written demand for appraisal is filed and not withdrawn in accordance with
the procedures set forth in Section 262 of the DGCL, except any shares the
holder of which, prior to the Coleman Effective Time, effectively withdraws
or loses the right to appraisal and payment for such shares of Coleman
Common Stock, are hereinafter referred to as "Dissenting Shares."
Holders of record of Coleman Common Stock who comply with the
applicable statutory procedures summarized herein will be entitled to
appraisal rights under Section 262 of the DGCL. A person having a
beneficial interest in shares of Coleman Common Stock held of record in the
name of another person, such as a broker or nominee, must act promptly to
cause the record holder to follow the steps summarized below properly and
in a timely manner to perfect appraisal rights.
THE FOLLOWING DISCUSSION IS NOT A COMPLETE STATEMENT OF THE LAW
PERTAINING TO APPRAISAL RIGHTS UNDER THE DGCL AND IS QUALIFIED IN ITS
ENTIRETY BY THE FULL TEXT OF SECTION 262 OF THE DGCL WHICH IS REPRINTED IN
ITS ENTIRETY AS ANNEX III TO THIS INFORMATION STATEMENT/PROSPECTUS. ALL
REFERENCES IN SECTION 262 OF THE DGCL AND IN THIS SUMMARY TO A
"STOCKHOLDER" OR "HOLDER" ARE TO THE RECORD HOLDERS OF DISSENTING SHARES.
Under Section 262 of the DGCL, when a merger is approved by
written consent in lieu of a meeting pursuant to Section 228 of the DGCL,
as the Coleman Merger was, each constituent corporation, either before the
effective date of the merger or within ten days thereafter, must notify
each holder of any class or series of stock of such constituent corporation
that is entitled to appraisal rights of the approval of the merger and the
availability of appraisal rights for any or all shares of such class or
series of stock, and must include in such notice a copy of Section 262 of
the DGCL.
This Information Statement/Prospectus constitutes such notice
to the stockholders of Coleman and the applicable statutory provisions of
the DGCL are attached to this Information Statement/Prospectus as Annex
III. Any stockholder who wishes to exercise his or her appraisal rights or
who wishes to preserve his or her right to do so should review the
following discussion and Annex III carefully, because failure to timely and
properly comply with the procedures therein specified will result in the
loss of appraisal rights under the DGCL.
A Coleman stockholder wishing to exercise such holder's
appraisal rights must deliver to Coleman, within twenty (20) days after the
date of mailing of this Information Statement/Prospectus, or by _______,
1998, a written demand for appraisal of such holder's Coleman Common Stock.
This demand must reasonably inform Coleman of the identity of the
stockholder and of the stockholder's intent thereby to demand appraisal of
his or her Coleman Common Stock. A holder of Coleman Common Stock wishing
to exercise his or her appraisal rights must be the holder of record of
such Coleman Common Stock on the date the written demand for appraisal is
made and must continue to hold such Coleman Common Stock until the
consummation of the Coleman Merger. Accordingly, a Coleman stockholder who
is the holder of record of Coleman Common Stock on the date the written
demand for appraisal is made, but who thereafter transfers such Coleman
Common Stock prior to consummation of the Coleman Merger, will lose any
right to appraisal in respect of such Coleman Common Stock.
Only a stockholder of record is entitled to assert appraisal
rights for the Coleman Common Stock registered in that holder's name. A
demand for appraisal should be executed by or on behalf of the holder of
record, fully and correctly, as such holder's name appears on such holder's
stock certificates. If the Coleman Common Stock is held of record in a
fiduciary capacity, such as by a trustee, guardian or custodian, execution
of the demand should be made in that capacity, and if the Coleman Common
Stock is held of record by more than one owner as in a joint tenancy or
tenancy in common, the demand should be executed by or on behalf of all
joint owners. An authorized agent, including one or more joint owners, may
execute a demand for appraisal on behalf of a holder of record; however,
the agent must identify the holder of record and expressly disclose the
fact that, in executing the demand, the agent is agent for such holder. A
holder of record such as a broker who holds Coleman Common Stock as nominee
for several beneficial owners may exercise appraisal rights with respect to
the Coleman Common Stock held for one or more beneficial owners while not
exercising such rights with respect to the Coleman Common Stock held for
other beneficial owners; in such case, the written demand should set forth
the number of shares of Coleman Common Stock as to which appraisal is
sought. When no number of shares of Coleman Common Stock is expressly
mentioned, the demand will be presumed to cover all shares of Coleman
Common Stock in brokerage accounts or other nominee forms. Those
stockholders of Coleman whose shares of Coleman Common Stock are held in
brokerage accounts or other nominee forms who wish to exercise appraisal
rights under Section 262 of the DGCL are urged to consult with their
brokers or nominees to determine the appropriate procedures for the making
of a demand for appraisal.
ALL WRITTEN DEMANDS FOR APPRAISAL SHOULD BE SENT OR DELIVERED
TO THE COLEMAN COMPANY, INC., 2111 EAST 37TH STREET NORTH, WICHITA, KANSAS
67219, ATTENTION: DAVID C. FANNIN, SECRETARY.
Within 120 days after the consummation of the Coleman Merger,
but not thereafter, the Surviving Corporation or any stockholder who has
complied with the statutory requirements summarized above may file a
petition in the Delaware Court of Chancery demanding a determination of the
fair value of the Dissenting Shares. Coleman, as the Surviving Corporation,
is under no obligation, and Coleman has no present intention, to file a
petition with respect to the appraisal of the fair value of the Dissenting
Shares. Accordingly, it is the obligation of stockholders wishing to assert
appraisal rights to initiate all necessary action to perfect their
appraisal rights within the time prescribed in Section 262 of the DGCL.
Within 120 days after the consummation of the Coleman Merger,
any stockholder who has complied with the requirements for exercise of
appraisal rights will be entitled, upon written request, to receive from
the Surviving Corporation a statement setting forth the aggregate number of
Dissenting Shares with respect to which demands for appraisal have been
received and the aggregate number of holders of such Dissenting Shares.
Such statements must be mailed within ten (10) days after a written request
therefor has been received by the Surviving Corporation.
If a petition for an appraisal is timely filed, after a hearing
on such petition, the Court of Chancery will determine the stockholders
entitled to appraisal rights and will appraise the "fair value" of their
Dissenting Shares, exclusive of any element of value arising from the
accomplishment or expectation of the Coleman Merger, together with a fair
rate of interest, if any, to be paid upon the amount determined to be the
fair value. Stockholders considering seeking appraisal should be aware that
the fair value of their Dissenting Shares as determined under Section 262
of the DGCL could be more than, the same as or less than the value of the
Per Share Merger Consideration they are entitled to receive pursuant to the
Coleman Merger Agreement if they do not seek appraisal of their shares of
Coleman Common Stock and that investment banking opinions as to fairness
from a financial point of view, such as the Credit Suisse First Boston
Opinion, are not necessarily opinions as to fair value under Section 262 of
the DGCL. The Supreme Court of the State of Delaware has stated that "proof
of value by any techniques or methods which are generally considered
acceptable in the financial community and otherwise admissible in court"
should be considered in the appraisal proceedings.
The Court of Chancery will determine the amount of interest, if
any, to be paid upon the amounts to be received by stockholders whose
Dissenting Shares have been appraised. The costs of the action may be
determined by the Court of Chancery and taxed upon the parties as the Court
of Chancery deems equitable. The Court of Chancery may also order that all
or a portion of the expenses incurred by any stockholder in connection with
an appraisal, including, without limitation, reasonable attorneys' fees and
the fees and expenses of experts utilized in the appraisal proceeding, be
charged pro rata against the value of all of the Dissenting Shares entitled
to appraisal.
Any holder of Coleman Common Stock who has duly demanded an
appraisal in compliance with Section 262 of the DGCL will not, after the
consummation of the Coleman Merger, be entitled to vote the Dissenting
Shares for any purpose or be entitled to the payment of dividends or other
distributions on those Dissenting Shares (except dividends or other
distributions payable to holders of record of shares of Coleman Common
Stock as of a record date prior to the consummation of the Coleman Merger).
If any stockholder who properly demands appraisal of Coleman
Common Stock under Section 262 of the DGCL fails to perfect, or effectively
withdraws or loses, the right to appraisal, as provided in Section 262 of
the DGCL, the shares of Coleman Common Stock of such stockholder will be
converted into the right to receive the Per Share Merger Consideration
pursuant to the Coleman Merger Agreement. A stockholder will fail to
perfect, or effectively lose or withdraw, the right to appraisal if, among
other things, no petition for appraisal is filed within 120 days after the
consummation of the Coleman Merger, or if the stockholder delivers to
Coleman a written withdrawal of the demand for appraisal. Any such attempt
to withdraw an appraisal demand more than sixty (60) days after the
consummation of the Coleman Merger will require the written approval of the
Surviving Corporation.
SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION
The total amount of funds and other consideration required by
Sunbeam to consummate the Coleman Merger and to pay related expenses is
approximately $102,770,728 in cash and 7,199,452 shares of Sunbeam Common
Stock, assuming the exercise of all outstanding Coleman Employee Stock
Options.
Sunbeam expects to obtain the cash portion of the consideration
payable in the Coleman Merger from additional borrowings under the New
Credit Facility. As amended, the New Credit Facility provides for aggregate
borrowings of up to $1,700 million pursuant to (i) a Revolving Credit
Facility in an aggregate principal amount of up to $400 million (the
"Revolving Credit Facility"), (ii) a Tranche A Term Loan in an aggregate
principal amount of up to $800 million (the "Tranche A Term Loan") and
(iii) a Tranche B Term Loan in an aggregate principal amount of up to $500
million (the "Tranche B Term Loan"). The Revolving Credit Facility and the
Tranche A Term Loan mature on March 31, 2005 and the Tranche B Term Loan
matures on September 30, 2006. Interest accrues, at Sunbeam's option, (i)
at the London Interbank Offered Rate ("LIBOR") plus an agreed upon interest
margin which varies depending upon Sunbeam's leverage ratio and whether
such interest rate applies to the Revolving Credit Facility, Tranche A Term
Loan or Tranche B Term Loan or (ii) at the base rate of the administrative
agent (generally the higher of the prime commercial lending rate of the
administrative agent or the Federal Funds Rate plus 1/2 of 1%) plus an
agreed upon interest margin which varies depending upon Sunbeam's leverage
ratio and whether such interest rate applies to the Revolving Credit
Facility, Tranche A Term Loan or Tranche B Term Loan. Borrowings under the
New Credit Facility will be secured by a pledge of the stock of certain of
Sunbeam's subsidiaries and, at the lenders' request, by a security interest
in substantially all of the assets of Sunbeam and its subsidiaries,
including Coleman. In addition, borrowings under the New Credit Facility
will be guaranteed by certain of Sunbeam's wholly owned United States
subsidiaries, including Coleman. The New Credit Facility contains covenants
customary for credit facilities of a similar nature, including limitations
on the ability of Sunbeam and its subsidiaries, including Coleman, to,
among other things, (i) declare dividends or repurchase stock, (ii) prepay,
redeem or repurchase debt, incur liens and engage in sale-leaseback
transactions, (iii) make loans and investments, (iv) incur additional debt,
(v) amend or otherwise alter material agreements, (vi) make capital
expenditures, (vii) engage in mergers, acquisitions and asset sales, (viii)
engage in certain transactions with affiliates and (ix) alter the
businesses they conduct. Sunbeam is also required to comply with certain
financial covenants and ratios.
Sunbeam has made no decision with respect to the repayment or
refinancing of indebtedness incurred or to be incurred under the New Credit
Facility and may repay such indebtedness out of its internally generated
funds or from proceeds of a subsequent financing. Any decisions with
respect to such repayment or refinancing will be made based on a review
from time to time of the advisability of particular transactions, as well
as on prevailing interest rates and financial and economic conditions.
The stock portion of the consideration payable in the Coleman
Merger consists of newly issued shares of Sunbeam Common Stock. The
issuance of the shares of Sunbeam Common Stock in the Coleman Merger is
being registered pursuant to the Registration Statement of which this
Information Statement/Prospectus forms a part.
MATERIAL CONTACTS BETWEEN SUNBEAM AND
COLEMAN AND ITS AFFILIATES
HOLDINGS MERGER AGREEMENT
At the same time Sunbeam entered into the Coleman Merger
Agreement, it entered into the Holdings Merger Agreement with LAC, Parent
Holdings and CLN Holdings, pursuant to which Holdings was merged with and
into LAC on March 30, 1998. Prior to the consummation of the Holdings
Merger, Holdings was an indirect wholly owned subsidiary of Mafco. In the
Holdings Merger, Parent Holdings received 14,099,749 shares of Sunbeam
Common Stock and $159,956,756 in cash, in exchange for its shares of CLN
Holdings. As a result of the Holdings Merger, Holdings became a wholly
owned subsidiary of Sunbeam and Sunbeam became the indirect owner of more
than 80% of the then outstanding shares of Coleman Common Stock.
Pursuant to the Holdings Merger Agreement, upon consummation of
the Holdings Merger, all the members of the Old Coleman Board resigned from
their positions as directors of Coleman, the number of directors
constituting the board of directors of Coleman was fixed at five, and five
designees of Sunbeam were elected as directors of Coleman.
Pursuant to the Holdings Merger Agreement, Parent Holdings has
agreed not to transfer the shares of Sunbeam Common Stock issued to Parent
Holdings in the Holdings Merger (other than to certain affiliates) for a
period of nine months from and after the Holdings Effective Time, except
that Parent Holdings may transfer (i) 25% of the total number of such
shares from and after the date that is three months following the Holdings
Effective Time and (ii) an additional 25% of the total number of such
shares (such that a total of 50% of the total number of such shares will be
transferable from and after the date that is six months following the
Holdings Effective Time).
The Holdings Merger Agreement has been filed as an exhibit to
the Registration Statement and is incorporated herein by reference.
REGISTRATION RIGHTS AGREEMENT
The shares of Sunbeam Common Stock received by Parent Holdings
in the Holdings Merger were not registered under the Securities Act.
Accordingly, Sunbeam entered into the Registration Rights Agreement with
Parent Holdings. Pursuant to the Registration Rights Agreement, subject to
certain limitations on the ability of Parent Holdings to dispose of such
shares contained in the Holdings Merger Agreement, Parent Holdings is
entitled to cause Sunbeam to register for resale under the Securities Act
the shares of Sunbeam Common Stock received by Parent Holdings in the
Holdings Merger.
Sunbeam has also agreed to use reasonable best efforts to
permit any registration statement filed by Sunbeam in connection with the
Registration Rights Agreement to be used by former affiliates of Coleman
for resales of Sunbeam Common Stock received by such affiliates in the
Coleman Merger, provided that any such affiliate seeking to register shares
of Sunbeam Common Stock for resale agrees in writing to be bound by the
terms of the Registration Rights Agreement.
The Registration Rights Agreement has been filed as an exhibit
to the Registration Statement and is incorporated herein by reference.
UNAUDITED PRO FORMA CONDENSED FINANCIAL STATEMENTS
The following unaudited pro forma condensed financial
statements were prepared to illustrate the estimated effects of (i) the
Acquisitions (including the acquisition of the entire equity interest in
Coleman pursuant to the Holdings Merger and the Coleman Merger), accounted
for under the purchase method of accounting, (ii) the borrowing of
approximately $1,298 million under the New Credit Facility, (iii) the
Offering and (iv) the use of the net proceeds from the Offering and the
borrowings under the New Credit Facility as described in the notes to the
unaudited pro forma condensed financial statements (collectively, the "Pro
Forma Transactions"). The unaudited pro forma condensed balance sheet as of
December 28, 1997 gives effect to the Pro Forma Transactions as if they had
occurred on December 28, 1997, the last day of Sunbeam's most recently
completed fiscal year. The unaudited pro forma condensed statement of
operations for the year ended December 28, 1997 gives effect to the Pro
Forma Transactions as if they had occurred as of December 30, 1996, the
first day of Sunbeam's most recently completed fiscal year.
Sunbeam's most recently completed fiscal year ended on December
28, 1997, the most recently completed fiscal years of CLN Holdings and
First Alert ended on December 31, 1997 and the most recently completed
fiscal year of Signature Brands ended on September 28, 1997. The unaudited
pro forma condensed financial statements have been derived from the audited
financial statements of Sunbeam as of and for the year ended December 28,
1997, the audited financial statements of CLN Holdings and First Alert as
of and for the year ended December 31, 1997 and the unaudited financial
statements of Signature Brands as of and for the year ended December 31,
1997. The unaudited statement of operations of Signature Brands for the
year ended December 31, 1997 has been derived from the audited statement of
operations of Signature Brands for the year ended September 28, 1997 and
the unaudited statements of operations of Signature Brands from the
thirteen weeks ended December 31, 1997 and December 31, 1996 in order to
present Signature Brands' operating results on a basis consistent with
Sunbeam's fiscal year.
The unaudited pro forma condensed financial statements were
prepared utilizing the accounting principles of the respective entities as
outlined in each entity's historical financial statements. Certain
reclassifications were made to sales, cost of sales and selling, general
and administrative expenses as reported in the historical financial
statements of CLN Holdings, First Alert and Signature Brands to conform to
the classifications of Sunbeam as follows:
Decrease
(in thousands)
-------------------------------------------------
Selling, General
Sales Cost of Sales and Administrative
----- ------------- ------------------
CLN Holdings........ $ (71,488) $ (63,886) $ (7,602)
First Alert......... (9,902) (4,760) (5,142)
Signature Brands.... (23,171) (3,725) (19,446)
Included in the historical statement of operations of CLN
Holdings are cash and non-cash restructuring and other charges totaling
$36.4 million and related tax benefits of $13.9 million. These costs have
been allocated to cost of goods sold and selling, general and
administration expense in the amounts of $19.7 million and $16.7 million,
respectively. These costs primarily relate to closing and relocating
certain administrative and sales offices, closing several manufacturing
facilities, write-down of inventory and fixed assets, as well as severance
costs. Additionally, the expense of the early extinguishment of debt of
$15.2 million shown as an extraordinary charge on the CLN Holdings
historical statement of operations has been excluded from the unaudited pro
forma condensed statement of operations.
The pro forma adjustments are based upon available information
and certain assumptions that Sunbeam believes are reasonable under the
circumstances. For purposes of developing the unaudited pro forma condensed
financial statements, the assets and liabilities of CLN Holdings, First
Alert and Signature Brands have been recorded at historical cost. The
allocation of purchase price for the Acquisitions will be revised when
additional information concerning asset and liability valuations is
obtained. Adjustments, which could be significant, will be made during the
allocation period based on detailed reviews of the fair values of assets
acquired and liabilities assumed and could result in a substantial increase
in goodwill. The unaudited pro forma condensed financial statements do not
include the effects of a one-time after-tax $30 million first quarter 1998
charge by Sunbeam related to the execution of new employment contracts with
Sunbeam's Chairman and Chief Executive Officer and two other senior
executive officers of Sunbeam as further discussed in Note 14 of the Notes
to Sunbeam's Consolidated Financial Statements for the year ended December
28, 1997 or any adjustments for potential synergies or cost savings as a
result of the Acquisitions.
The unaudited pro forma condensed financial statements should
be read in conjunction with "Management's Discussion and Analysis of
Financial Condition and Results of Operations," the financial statements of
each of Sunbeam, CLN Holdings, First Alert and Signature Brands and the
notes thereto, and the other financial information included elsewhere or
incorporated by reference in this Information Statement/Prospectus. This
unaudited pro forma financial information is provided for informational
purposes only and does not purport to be indicative of the results of
operations or financial position which would have been obtained had the Pro
Forma Transactions been completed on the dates indicated or the financial
condition or results of operations for any future date or period.
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF DECEMBER 28, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
Signature
First Brands CLN
Sunbeam Alert (unaudited) Holdings
------- ----- ----------- --------
<S> <C> <C> <C> <C>
Cash and cash equivalents.. $ 52,378 $ 2,996 $ 4,118 $ 19,362
Receivables, net .......... 295,550 53,678 67,998 179,756
Inventories ............... 256,180 40,285 37,851 236,327
Prepaid expenses and
other current assets .... 53,897 10,680 7,707 47,815
----------- ----------- ----------- -----------
Total current assets ...... 658,005 107,639 117,674 483,260
Property, plant and
equipment, net .......... 240,897 28,181 16,820 175,494
Other intangibles ......... 169,622 6,496 -- --
Goodwill .................. 24,750 22,045 134,921 338,989
Other assets .............. 27,010 -- 5,663 100,126
----------- ----------- ----------- -----------
Total assets .............. $ 1,120,284 $ 164,361 $ 275,078 $ 1,097,869
=========== =========== =========== ===========
Short-term debt and
current portion of
long-term debt .......... $ 668 $ 45,026 $ 5,000 $ 67,233
Other current
liabilities ......... 197,431 33,002 51,494 189,529
----------- ----------- ----------- -----------
Total current liabilities.. 198,099 78,028 56,494 256,762
Long-term debt ............ 194,580 -- 164,060 980,447
Other long-term
liabilities ............. 195,668 4,933 6,539 73,923
Minority interest ......... -- -- -- 43,386
Shareholders' equity ...... 531,937 81,400 47,985 (256,649)
----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity .... $ 1,120,284 $ 164,361 $ 275,078 $ 1,097,869
=========== =========== =========== ===========
</TABLE>
UNAUDITED PRO FORMA CONDENSED BALANCE SHEET
AS OF DECEMBER 28, 1997
(IN THOUSANDS)
<TABLE>
<CAPTION>
Adjustments
for
Acquisitions Adjustments
(before the for Adjustment for
Coleman Disposition Acquisition
Merger), Bank of Coleman of Minority
Borrowings Safety & Interest in the
and Offering Security(a) Pro Forma Coleman Merger Pro Forma
------------- ------------ --------- --------------- ---------
<S> <C> <C> <C> <C> <C>
Cash and cash equivalents.. $ -- $ -- $ 78,854 $ -- $ 78,854
Receivables, net .......... -- (16,335) 580,647 -- 580,647
Inventories ............... -- (17,624) 553,019 -- 553,019
Prepaid expenses and
other current assets .... 46,531 (b) (1,655) 164,975 -- 164,975
----------- ----------- ----------- ----------- -----------
Total current assets ...... 46,531 (35,614) 1,377,495 -- 1,377,495
Property, plant and
equipment, net .......... -- (10,746) 450,646 -- 450,646
Other intangibles ......... (973)(d) -- 175,145 -- 175,145
Goodwill .................. 1,521,784 (e) (37,874) 1,546,534 292,106 (e) 1,838,640
(458,081)(d)
Other assets .............. 52,281 (f) 469 135,033 -- 135,033
(15,121)(d)
(35,395)(c)
----------- ----------- ----------- ----------- -----------
Total assets .............. $ 1,111,026 $ (83,765) $ 3,684,853 $ 292,106 $ 3,976,959
=========== =========== =========== =========== ===========
Short-term debt and
current portion of
long-term debt .......... $ 117,847 (g) $ 80 -- -- --
Other current
liabilities ......... 13,317 (c) 9,010 449,129 -- 449,129
----------- ----------- ----------- ----------- -----------
Total current liabilities.. 131,164 9,090 449,129 -- 449,129
Long-term debt ............ 1,250,050 (g) 89,037 1,946,646 (101,105)(h) 2,047,751
(1,946,646)(h)
Other long-term
liabilities ............. -- -- 281,063 -- 281,063
Minority interest ......... -- -- 43,386 42,150 (i) 1,236
Shareholders' equity ...... (112,902)(j) (14,362) 964,629 (233,151)(k) 1,197,780
(513,372)(k)
80,680 (t)
----------- ----------- ----------- ----------- -----------
Total liabilities and
shareholders' equity .... $(1,111,026) $ 83,765 $ 3,684,853 $ (292,106) $ 3,976,959
=========== =========== =========== =========== ===========
</TABLE>
See notes to unaudited pro forma condensed financial statements.
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
AS OF DECEMBER 28, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Signature
First Brands CLN
Sunbeam Alert (unaudited) Holdings
------- ----- ----------- --------
<S> <C> <C> <C> <C>
Net sales ................. $ 1,168,182 $ 177,039 $ 255,766 $ 1,082,806
Cost of goods sold ........ 837,683 135,731 188,669 776,445
Amortization of goodwill
and intangibles ......... 7,829 704 3,925 14,704
Selling, general and
administrative expenses . 123,227 49,071 44,646 259,033
----------- ----------- ----------- -----------
Operating earnings (loss) . 199,443 (8,467) 18,526 32,624
Interest expense, net
and other expense ....... 10,163 4,593 18,115 94,139
Minority interest in
loss of Coleman ......... -- -- -- (446)
----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before income taxes ..... 189,280 (13,060) 411 (61,069)
Income taxes (benefit) .... 66,152 (5,224) 1,889 (24,162)
----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before extraordinary
items ................... $ 123,128 $ (7,836) $ (1,478) $ (36,907)
=========== =========== =========== ===========
Earnings (loss) per share
of common stock from
continuing operations:
Basic ................. $ 1.45
===========
Diluted ................ $ 1.41
===========
Weighted average common
shares outstanding:
Basic .................. 84,945
===========
Diluted ................ 87,542
===========
</TABLE>
UNAUDITED PRO FORMA CONDENSED STATEMENT OF OPERATIONS
AS OF DECEMBER 28, 1997
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Adjustments
for
Acquisitions Adjustments
(before the for Adjustment for
Coleman Disposition Acquisition
Merger), Bank of Coleman of Minority
Borrowings Safety & Interest in the
and Offering Security(1) Pro Forma Coleman Merger Pro Forma
------------- ------------ --------- --------------- ---------
<S> <C> <C> <C> <C> <C>
Net sales ................. $ -- $ 88,413 $ 2,595,380 $ -- $ 2,595,380
Cost of goods sold ........ -- (59,886) 1,878,642 -- 1,878,642
Amortization of goodwill
and intangibles ......... 38,044 (m) (992) 44,848 7,303 (m) 52,151
(19,366)(n)
Selling, general and
administrative expenses . -- (19,608) 456,369 -- 456,369
----------- ----------- ----------- ----------- -----------
Operating earnings (loss) . 18,678 7,927 215,521 7,303 208,218
Interest expense, net
and other expense ....... 127,480 (o)(p) (4,344) 125,421 6,310 (o)(p) 131,731
(124,725)(q)(i)
Minority interest in
loss of Coleman ......... -- -- (446) 446 (i) --
----------- ----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before income taxes ..... 21,433 3,583 90,546 14,059 76,487
Income taxes (benefit) .... 11,787 (r) (1,362) 49,080 (2,708)(r) 46,372
----------- ----------- ----------- ----------- -----------
Earnings (loss) from
continuing operations
before extraordinary
items ................... $ 33,220 $ 2,221 $ 41,466 $ 11,351 $ 30,115
=========== =========== =========== =========== ===========
Earnings (loss) per share
of common stock from
continuing operations:
Basic ................. $ 0.29
===========
Diluted ................ $ 0.28
===========
Weighted average common
shares outstanding:
Basic .................. 104,381(s)
===========
Diluted ................ 106,978(s)
===========
</TABLE>
See notes to unaudited pro forma condensed financial statements.
NOTES TO UNAUDITED PRO FORMA CONDENSED
FINANCIAL STATEMENTS
(in thousands, except as percentages and as noted)
(a) Represents the elimination of the assets and liabilities related to
the sale of Coleman's wholly owned subsidiary, Coleman Safety &
Security Products, Inc. ("Coleman Safety & Security"), as of December
31, 1997 and reflects the net proceeds from the sale as a reduction
of long-term debt. The sale of this subsidiary was consummated on
March 24, 1998.
(b) Represents estimated realizable tax benefit at 37.6% of (1) the cash
out of stock options in connection with the Acquisitions and (2) the
prepayment penalties on refinanced indebtedness of Sunbeam, Coleman
and Signature Brands.
(c) Represents the elimination of a demand note receivable ($35,395) on
the financial statements of CLN Holdings that was cancelled pursuant
to the Holdings Merger Agreement.
(d) Represents the elimination of the historical goodwill, deferred
financing costs and organizational costs of First Alert, Signature
Brands and CLN Holdings in amounts of $23,018, $139,005 and $312,152,
respectively.
(e) Represents the excess of cost over book value of the net assets
acquired of First Alert, Signature Brands and CLN Holdings and the
minority interest of Coleman in the amounts of $73,457, $181,954,
$1,266,373 and $292,106, respectively. No estimate has been made in
these unaudited pro forma condensed financial statements of the
one-time expenses that will be incurred in the rationalization of the
businesses that will result from the Acquisitions. The amount of
goodwill will change once Sunbeam completes the final allocation of
purchase price.
(f) Represents estimated capitalizable debt issuance costs related to the
New Credit Facility and the Offering.
(g) Represents the repayment of existing indebtedness (before prepayment
premiums) of Sunbeam, CLN Holdings, Signature Brands and First Alert
in the amounts of $195,248, $958,563, $169,060 and $45,026,
respectively.
(h) Represents estimated total new long-term indebtedness of $2,047,800
to fund the Acquisitions, to refinance outstanding indebtedness and
to fund transaction costs. Includes $203,661 in respect of Sunbeam,
$1,239,058 in respect of CLN Holdings, $263,531 in respect of
Signature Brands, $177,896 in respect of First Alert, $101,105 in
respect of the minority interest in Coleman, and $62,500 in
transaction costs. The foregoing amounts include $8,400, $103,200 and
$5,500 of estimated prepayment premiums related to the early
repayment of certain indebtedness of Sunbeam, CLN Holdings and
Signature Brands, respectively. Borrowings of $1,298,000 under the
New Credit Facility are assumed to bear interest at the rate of LIBOR
plus 1.5% to 2.25%, subject to increase or decrease based on Sunbeam's
performance (blended rate of 7.12% at April 24, 1998), and the
Debentures are assumed to accrete at a yield to maturity of 5.0% (or
approximately $2,014,000 principal amount at maturity).
(i) Represents the elimination of the minority interest of Coleman's
equity held by the Coleman Public Stockholders in the Coleman Merger.
Also includes the elimination of the minority interest in Coleman's
loss for the period ended December 31, 1997.
(j) Represents the elimination of the historical equity balances of First
Alert, Signature Brands and CLN Holdings.
(k) Includes the issuance of 14,099,749 and 5,366,721 shares of Sunbeam
Common Stock to a subsidiary of Mafco in the Holdings Merger and to
the Coleman Public Stockholders in the Coleman Merger, respectively,
with a total equity value of $523,600 and $233,100 less a portion of
the estimated transaction costs of approximately $10,200. This equity
value was derived by using the average closing stock price as
reported on the NYSE Composite Transactions Tape for the day before
and day of the public announcement of the acquisition. Additionally,
the shares held by the Mafco subsidiary have been discounted 15% due
to the restrictions on resale of the shares.
(l) Represents the elimination of the 1997 results of operations relating
to the sale of Coleman Safety & Security. The unaudited pro forma
condensed statement of operations reflects the sale of Coleman Safety
& Security as of January 1, 1997. The sale of this subsidiary was
completed on March 24, 1998.
(m) Represents amortization, on a straight-line basis, for goodwill over
a period of forty years. See Note (e).
(n) Represents the reduction in amortization expense resulting from the
elimination of the historical goodwill, deferred financing costs and
organizational costs as discussed in Note (d) above.
(o) Represents interest expense on estimated total borrowings of
$2,047,800 at the assumed rates set forth in Note (h) above in the
aggregate amount of $133,790 ($91,548 related to the New Credit
Facility and $37,504 related to the Debentures). Also includes
amortization of debt issuance costs of $4,738 ($4,240 related to the
New Credit Facility amortized on a straight-line basis over a period
of seven years and $498 related to the Debentures amortized on a
weighted average accreted basis over a twenty-year period).
(p) The interest rate on borrowings under the New Credit Facility may
differ from the assumption set forth in Note (h) above. The effect on
income of a 1/8 percent variance in interest rate is approximately
$1,600 with respect to the borrowings under the New Credit Facility.
(q) Represents the reduction in interest expense resulting from the debt
refinancing as discussed in Note (g) above.
(r) Represents the incremental change in the consolidated entity's
provision for income taxes at 37.6% as a result of the pre-tax
earnings of First Alert, Signature Brands and Coleman, and all pro
forma adjustments as described above.
(s) Represents basic and diluted weighted average shares outstanding of
Sunbeam as of December 28, 1997 plus the additional equity issued in
connection with the Holdings Merger as discussed in Note (k) above.
The incremental shares relating to the Debentures have not been
included, as they would be anti-dilutive. This amount does not
include the additional minority shares outstanding as a result of the
exercise of stock options subsequent to the public announcement of
the Coleman acquisition. These additional shares would have no impact
on pro forma basic and diluted earnings per share shown herein.
(t) Represents prepayment penalties and the write off of related deferred
financing costs, net of tax, on the early retirement of certain
existing Sunbeam and CLN Holdings debt. The expense of early
extinguishment of debt is classified as an extraordinary charge and,
accordingly, has been excluded from the unaudited pro forma condensed
statement of operations. Such extraordinary charge is included on the
unaudited pro forma condensed balance sheet as a reduction of
shareholders' equity.
DESCRIPTION OF SUNBEAM CAPITAL STOCK
The following statements are brief summaries of certain
provisions of Sunbeam's capital stock. The summaries do not purport to be
complete and such statements are qualified in their entirety by reference
to the full text of Sunbeam's Restated Certificate of Incorporation (the
"Sunbeam Charter") and By-laws (the "Sunbeam By-laws"), copies of which
have been filed as exhibits to the Registration Statement and are
incorporated herein by reference.
Sunbeam's authorized capital stock currently consists of
200,000,000 shares of Sunbeam Common Stock, par value $.01 per share, and
2,000,000 shares of preferred stock, par value $.01 per share. At the
upcoming Annual Meeting of Stockholders scheduled for May 12, 1998,
Sunbeam's stockholders are being asked to approve an amendment to the
Sunbeam Charter increasing the total number of authorized shares of Sunbeam
Common Stock from 200,000,000 shares to 500,000,000 shares.
Common Stock
As of __________, 1998, there were ______ shares of Sunbeam
Common Stock outstanding. Each share of Sunbeam Common Stock has one vote
on all matters upon which stockholders are entitled or permitted to vote,
including the election of directors. There are no cumulative voting rights.
Shares of Sunbeam Common Stock would participate ratably in any
distribution of assets in a liquidation, dissolution or winding up of
Sunbeam, subject to prior distribution rights of any shares of preferred
stock then outstanding. The Sunbeam Common Stock has no preemptive rights
or conversion rights nor are there any redemption or sinking fund
provisions applicable to the Sunbeam Common Stock. Holders of Sunbeam
Common Stock are entitled to participate in dividends as and when declared
by the Sunbeam Board out of funds legally available therefor. Sunbeam's
ability to pay cash dividends is subject to certain restrictions. The New
Credit Facility contains limitations on the ability of Sunbeam to pay
dividends.
The transfer agent and registrar for the Sunbeam Common Stock is
The Bank of New York.
Preferred Stock
There are no shares of Sunbeam preferred stock currently
outstanding. The Sunbeam Charter provides that the Sunbeam Board may
authorize the issuance of one or more series of preferred stock having such
rights, including voting, conversion and redemption rights, and such
preferences, including dividend and liquidation preferences, as the Sunbeam
Board may determine without any further action by the stockholders of
Sunbeam.
DESCRIPTION OF COLEMAN CAPITAL STOCK
The following statements are brief summaries of certain
provisions with respect to Coleman's capital stock. The summaries do not
purport to be complete and are qualified in their entirety by reference to
the full text of the Coleman Charter and the Coleman By-Laws, copies of
which have been filed as exhibits to the Registration Statement and are
incorporated herein by reference.
The authorized capital stock of Coleman consists of 100 million
shares of capital stock, 80 million of such shares being Coleman Common
Stock and 20 million of such shares being preferred stock, par value $.01
per share. Of such authorized shares, as of __________, 1998, (i) _________
shares of Coleman Common Stock were issued and outstanding; (ii) _______
shares of Coleman Common Stock were issuable upon exercise of Employee
Stock Options to acquire _________ shares of Coleman Common Stock
outstanding under the Coleman Stock Option Plans (all of which options were
vested); and (iii) no shares of Coleman Preferred Stock were issued or
outstanding. The Coleman Charter authorizes the Coleman Board to provide
for the issuance, from time to time, of shares of preferred stock in
series, to establish from time to time the number of shares to be included
in any such series and to fix the designation, powers, preferences and
rights of the shares of each such series and any qualifications,
limitations or restrictions thereof. Because the Coleman Board has the
power to establish the preferences and rights of the shares of any such
series of preferred stock, it may afford the holders of any preferred stock
preferences, powers and rights (including voting rights) senior to the
rights of the holders of Coleman Common Stock, which could adversely affect
the rights of holders of Coleman Common Stock.
Subject to the rights of holders of any preferred stock then
outstanding, holders of Coleman Common Stock are entitled to receive
dividends as may from time to time be desired by the Coleman Board, subject
to certain limitations under Delaware law. Holders of Coleman Common Stock
are entitled to one vote per share on all matters on which the holders of
Coleman Common Stock are entitled to vote. Because holders of Coleman
Common Stock do not have cumulative voting rights, the holders of a
majority of the shares of Coleman Common Stock represented at a meeting can
elect all of the directors. In the event of liquidation, dissolution or
winding up of Coleman, holders of Coleman Common Stock would be entitled to
share ratably in assets of Coleman available for distribution to the
holders of Coleman Common Stock.
Holders of Coleman Common Stock are not liable for any
liabilities of Coleman. There are no preemptive rights for the Coleman
Common Stock. The outstanding shares of Coleman Common Stock are fully paid
and nonassessable.
American Stock Transfer & Trust Co. acts as transfer agent and
registrar for the Coleman Common Stock.
DIRECTORS AND EXECUTIVE OFFICERS OF SUNBEAM,
CAC AND COLEMAN
The following tables set forth certain information regarding
the directors and executive officers of Sunbeam, CAC and Coleman,
respectively. The name, age, present principal occupation or employment and
five-year employment history of each individual is set forth in each
individual's biography below. The term of office of each of the directors
of Sunbeam, CAC and Coleman will expire after a period of one year from
their previous date of election or at the time each such director's
successor is duly elected and shall have qualified. Unless otherwise
indicated in each individual's biography, the business address of each of
the directors and executive officers is: 1615 South Congress Avenue, Suite
200, Delray Beach, Florida 33445. Each of the directors and executive
officers is a citizen of the United States.
Current Sunbeam Directors and Executive Officers
Name Age Position
---- --- --------
Albert J. Dunlap....... 60 Chairman, Chief Executive Officer and
Director
Russell A. Kersh....... 44 Vice Chairman and Chief Financial Officer
David C. Fannin........ 52 Executive Vice President, Chief Legal
Officer and Secretary
Lee Griffith........... 45 President, Household Products Division
Charles M. Elson....... 38 Director
Howard G. Kristol...... 60 Director
Peter A. Langerman..... 42 Director
William T. Rutter...... 67 Director
Faith Whittlesey....... 59 Director
Current CAC Directors and Executive Officers
Name Age Position
---- --- --------
Albert J. Dunlap....... 60 Chairman and Director
Russell A. Kersh....... 44 President, Chief Financial Officer and
Director
David C. Fannin........ 52 Vice President, General Counsel, Secretary
and Director
Current Coleman Directors and Executive Officers
Name Age Position
---- --- --------
Albert J. Dunlap....... 60 Chairman and Director
Russell A. Kersh....... 44 President, Chief Financial Officer and
Director
David C. Fannin........ 52 Executive Vice President, Chief Legal
Officer, Secretary and Director
Charles M. Elson....... 38 Director
Peter A. Langerman..... 42 Director
Albert J. Dunlap has been Chairman and Chief Executive Officer
of Sunbeam since July 18, 1996. Mr. Dunlap has been President, Chief
Executive Officer and Director of CAC since February 26, 1998. Mr. Dunlap
has been Chairman, Chief Executive Officer and Director of Coleman since
March 30, 1998. From April 1994 to December 1995, he was Chairman and Chief
Executive Officer of Scott Paper Company. From 1991 to 1993, Mr. Dunlap was
the Managing Director and Chief Executive Officer of Consolidated Press
Holdings Limited (an Australian media, chemicals and agricultural
operation).
Russell A. Kersh has been Vice Chairman and Chief Financial
Officer of Sunbeam since February 1, 1998, and has been a Director of
Sunbeam since his appointment on August 6, 1996. He served as Executive
Vice President, Finance and Administration of Sunbeam from July 22, 1996 to
January 1998. Mr. Kersh has been Vice President, Chief Financial Officer
and Director of CAC since February 26, 1998. Mr. Kersh has been Vice
Chairman, Chief Financial Officer and Director of Coleman since March 30,
1998. From June 1994 to December 1995 he was Executive Vice President,
Finance and Administration of Scott Paper Company. Mr. Kersh served as
Chief Operating Officer of Adidas America from January 1993 to May 1994.
David C. Fannin has been Executive Vice President and Secretary
of Sunbeam since January 1994. Mr. Fannin has been Chief Legal Officer of
Sunbeam since April 1998. Mr. Fannin held the position of General Counsel
from January 1994 until April 1998. Mr. Fannin has been Vice President,
General Counsel, Secretary and Director of CAC since February 26, 1998. Mr.
Fannin has been Executive Vice President, Chief Legal Officer, Secretary
and Director of Coleman since March 30, 1998. From 1979 until 1993, he was
a partner in the law firm of Wyatt, Tarrant and Combs.
Lee Griffith has been the President, Household Products
Division, of Sunbeam since April 3, 1998. He held the position of Vice
President, Sales from September 1996. From January 1995 to August 1996, he
was the Chairman, President and Chief Executive Officer of Scott Paper
Limited (Canadian operations) and from 1988 to January 1995, he was
Corporate Vice President of Consumer Business (USA) for Scott Paper
Company.
Charles M. Elson has been a Director of Sunbeam since his
appointment to the Sunbeam Board of Directors on September 25, 1996. Mr.
Elson has been a Director of Coleman since March 30, 1998. Mr. Elson has
been a Professor of Law at Stetson University College of Law since 1990 and
serves as Of Counsel to the law firm of Holland & Knight (since May 1995).
He is also a Member of the American Law Institute and the Advisory Council
and Commission on Director Compensation and Director Professionalism of the
National Association of Corporate Directors. Mr. Elson is Trustee of
Talledega College and a Salvatori Fellow of the Heritage Foundation. Mr.
Elson has served as a Director of Circon Corporation (a medical
manufacturer) since October 1997. Mr. Elson's business address is Stetson
University College of Law, 1401 61st Street South, St. Petersburg, Florida
33707.
Howard G. Kristol has been a Director of Sunbeam since his
appointment on August 6, 1996. Mr. Kristol has been a partner in the law
firm of Reboul, MacMurray, Hewitt, Maynard & Kristol since 1976. Mr.
Kristol's business address is Reboul, MacMurray, Hewitt, Maynard & Kristol,
45 Rockefeller Plaza, New York, New York 10111.
Peter A. Langerman has been a Director of Sunbeam since 1990
and served as the Chairman of the Sunbeam Board of Directors from May 22,
1996 until July 18, 1996. Mr. Langerman has been a Director of Coleman
since March 30, 1998. Since November 1996, Mr. Langerman has been Senior
Vice President and Chief Operating Officer of Franklin Mutual Advisers,
Inc., a registered investment advisor and a wholly owned subsidiary of
Franklin Resources, Inc., a diversified financial services organization.
Mr. Langerman was a Senior Vice President of Heine Securities Corporation,
an investment advisory service company, from 1986 to November 1996, and a
Vice President of Mutual Series Fund from 1988 until its acquisition by
Franklin Resources, Inc. in 1996. He has been a Director of Franklin Mutual
Series Fund, Inc. (previously Mutual Series Fund Inc.) since 1988 and a
Director of Metallurg Inc. (a metals and related materials manufacturer)
since 1997. Mr. Langerman's business address is Franklin Mutual Advisers,
Inc., 51 John F. Kennedy Parkway, Short Hills, New Jersey 07078.
William T. Rutter has been a Director of Sunbeam since his
appointment on April 8, 1997. Mr. Rutter is a Senior Vice
President/Managing Director, Private Banking of First Union National Bank
of Florida, a position he has held since 1986. Mr. Rutter's business
address is First Union National Bank of Florida, Financial Institution,
5353 Town Center Road, Suite 204, Boca Raton, Florida 33468.
Faith Whittlesey has been a Director of Sunbeam since her
appointment in December 1996. Mrs. Whittlesey has served as the Chief
Executive Officer of the American Swiss Foundation, a charitable and
educational foundation, since 1991. She is a member of the Board of
Directors of Valassis Communications, Inc. (a publishing and printing
company). Mrs. Whittlesey's business address is American Swiss Foundation,
Charitable and Educational Foundation, 232 East 66th Street, New York, New
York 10021.
EXPERTS
The Consolidated Financial Statements of Sunbeam and the
consolidated financial statement schedule appearing in Sunbeam's Annual
Report on Form 10-K for the year ended December 28, 1997 have been audited
by Arthur Andersen LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such reports given upon the authority of such
firm as experts in accounting and auditing.
The Consolidated Financial Statements of Coleman appearing in
Coleman's Annual Report (Form 10-K) for the year ended December 31, 1997,
have been audited by Ernst & Young LLP, independent auditors, as set forth
in their report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are incorporated herein
by reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The Consolidated Financial Statements of CLN Holdings and the
consolidated financial statement schedule appearing in CLN Holdings Annual
Report (Form 10-K) for the year ended December 31, 1997, have been audited
by Ernst & Young LLP, independent auditors, as set forth in their report
thereon included therein and incorporated herein by reference. Such
consolidated financial statements and schedule are incorporated herein by
reference in reliance upon such report given upon the authority of such
firm as experts in accounting and auditing.
The Consolidated Financial Statements of First Alert as of
December 31, 1997 and the consolidated financial statement schedule
appearing in First Alert's Annual Report on Form 10-K for the year ended
December 31, 1997 have been audited by Price Waterhouse, LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements
and schedule are incorporated herein by reference in reliance upon such
reports given upon the authority of such firm as experts in accounting and
auditing.
The Consolidated Financial Statements of Signature Brands as of
September 28, 1997 and the consolidated financial statement schedule
appearing in Signature Brands' Annual Report on Form 10-K for the year
ended September 28, 1997 have been audited by KPMG Peat Marwick,
independent auditors, as set forth in their report thereon included therein
and incorporated herein by reference. Such consolidated financial
statements and schedule are incorporated herein by reference in reliance
upon such reports given upon the authority of such firm as experts in
accounting and auditing.
LEGAL OPINIONS
The validity of the shares of Sunbeam Common Stock being
offered hereby is being passed upon for Sunbeam by Janet G. Kelley, Vice
President, General Counsel and Assistant Secretary of Sunbeam. As of
________, 1998, Ms. Kelley beneficially owned 155,100 shares of Sunbeam
Common Stock (all but 100 of which are issuable upon the exercise of stock
options).
ANNEX I
- ------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
among
SUNBEAM CORPORATION
CAMPER ACQUISITION CORP.
and
THE COLEMAN COMPANY, INC.
Dated as of
February 27, 1998
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS............................2
Section 1.1 Definitions................................2
ARTICLE II
THE COMPANY MERGER.........................8
Section 2.1 The Company................................8
Section 2.2 Closing....................................9
Section 2.3 Company Effective Time of the
Company Merger............................9
Section 2.4 Certificate of Incorporation...............9
Section 2.5 By-Laws....................................9
Section 2.6 Directors..................................9
Section 2.7 Officers...................................9
ARTICLE III
CONVERSION OF SHARES.......................10
Section 3.1 Effect on Capital Stock...................10
Section 3.2 Exchange of Certificates
Representing Shares.....................11
Section 3.3 Dividends; Transfer Taxes.................12
Section 3.4 No Fractional Shares......................13
Section 3.5 Termination of Exchange Fund..............13
Section 3.6 Investment of Exchange Fund...............13
Section 3.7 Closing of Company Transfer Books.........13
Section 3.8 Dissenting Shares.........................14
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY..........14
Section 4.1 Organization..............................14
Section 4.2 Capitalization............................15
Section 4.3 Subsidiaries..............................15
Section 4.4 Authority Relative to this Agreement......16
Section 4.5 Consents and Approvals; No Violations.....16
Section 4.6 Reports and Financial Statements..........17
Section 4.7 Absence of Certain Changes or Events......18
Section 4.8 Litigation................................20
Section 4.9 Information in Disclosure Documents and
Registration Statement..................20
Section 4.10 Taxes....................................20
Section 4.11 Compliance with Applicable Law...........21
Section 4.12 Labor Matters............................21
Section 4.13 ERISA Compliance.........................22
Section 4.14 Environmental Matters....................23
Section 4.15 Intellectual Property....................24
Section 4.16 Contracts................................24
Section 4.17 Opinion of Financial Advisor.............24
Section 4.18 Takeover Statute.........................25
Section 4.19 Brokers..................................25
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF
LASER AND MERGER SUB.......................25
Section 5.1 Organization..............................25
Section 5.2 Capitalization............................25
Section 5.3 Merger Sub................................26
Section 5.4 Authority Relative to this Agreement......26
Section 5.5 Consents and Approvals; No Violations.....27
Section 5.6 Reports and Financial Statements..........27
Section 5.7 Absence of Certain Changes or Events......28
Section 5.8 Litigation................................28
Section 5.9 Information in Disclosure Documents and
Registration Statement..................29
Section 5.10 Taxes....................................29
Section 5.11 Compliance with Applicable Law...........29
Section 5.12 Brokers..................................30
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS............30
Section 6.1 Conduct of Business by the Company........30
Section 6.2 Other Actions.............................33
Section 6.3 Advice of Changes.........................33
Section 6.4 Conduct of Business of Merger Sub.........33
Section 6.5 Section 14(f) Notice......................33
ARTICLE VII
ADDITIONAL AGREEMENTS......................34
Section 7.1 Preparation of the Registration
Statement, the Information Statement,
the Schedule 13E-3 and the Section
14(f) Notice............................34
Section 7.2 Access and Information; Confidentiality...34
Section 7.3 Comfort Letters...........................35
Section 7.4 Listing Application.......................35
Section 7.5 Affiliates................................35
Section 7.6 HSR Act; Competition Laws.................36
Section 7.7 Employee Matters..........................36
Section 7.8 Continuance of Existing Indemnification
Rights..................................38
Section 7.9 Expenses..................................40
Section 7.10 Public Announcements......................40
Section 7.11 Reasonable Best Efforts...................40
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER.............41
Section 8.1 Conditions to Each Party's Obligation
to Effect the Company Merger............41
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER................41
Section 9.1 Termination...............................41
Section 9.2 Effect of Termination.....................41
Section 9.3 Amendment.................................41
Section 9.4 Extension; Waiver.........................42
ARTICLE X
GENERAL PROVISIONS........................42
Section 10.1 No Survival of Representations and
Warranties.............................42
Section 10.2 Notices..................................42
Section 10.3 Descriptive Headings.....................43
Section 10.4 Entire Agreement; No Third-Party
Beneficiary............................43
Section 10.5 Interpretation...........................44
Section 10.6 Severability.............................44
Section 10.7 Assignment...............................44
Section 10.8 Disclosure Schedules.....................44
Section 10.9 Governing Law............................45
Section 10.10 Specific Performance.....................45
Section 10.11 Counterparts.............................45
Section 10.12 Certain Terms............................45
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), dated as of
February 27, 1998, among SUNBEAM CORPORATION, a Delaware corporation
("Laser"), CAMPER ACQUISITION CORP. ("Merger Sub"), a Delaware corporation
and a wholly owned subsidiary of Laser, and THE COLEMAN COMPANY, INC., a
Delaware corporation (the "Company").
WHEREAS, the Boards of Directors of Laser, Merger Sub and the
Company deem it advisable and in the best interests of their respective
stockholders that Merger Sub merge with and into the Company (the "Company
Merger"), and such Boards of Directors have approved the Company Merger,
upon the terms and subject to the conditions set forth herein; and
WHEREAS, as a condition to the Company Merger, a newly formed,
wholly owned subsidiary of Laser will merge with and into CLN Holdings Inc.
("Holdings") with Holdings continuing as the surviving corporation and a
wholly owned subsidiary of Laser (the "Holdings Merger") pursuant to an
Agreement and Plan of Merger (the "Holdings Merger Agreement"), dated as of
the date hereof, among Laser, Laser Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Laser, Coleman (Parent)
Holdings Inc., a Delaware corporation ("Parent Holdings"), and Holdings;
and
WHEREAS, the Board of Directors of the Company has approved the
Holdings Merger solely for purposes of rendering Section 203 of the DGCL
inapplicable to the transactions contemplated hereby; and
WHEREAS, Laser, Merger Sub and the Company desire to make
certain representations, warranties, covenants and agreements in connection
with the Company Merger and also to prescribe certain conditions to the
Company Merger.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. As used in this Agreement, the
following terms shall have the following meanings, the definitions to be
applicable to both the singular and plural forms of each term defined to
the extent that such forms of such terms are used in this Agreement.
"Affiliate" shall mean, as to any Person (as hereinafter
defined), any other Person which, directly or indirectly, is in control of,
is controlled by, or is under common control with, such Person. The term
"control" (including, with correlative meanings, the terms "controlled by"
and "under common control with"), as applied to any Person, means the
possession, direct or indirect, of the power to direct or cause the
direction of the management and policies of such Person, whether through
the ownership of voting securities or other ownership interest, by contract
or otherwise.
"Affiliate Agreements" shall mean any Contract, agreement or
understanding between the Company and any of its subsidiaries, on the one
hand, and Worldwide and any of its Affiliates (other than the Company and
its subsidiaries), on the other hand.
"Certificate of Incorporation" shall have the meaning
ascribed to it in Section 2.4.
"Certificate of Merger" shall have the meaning ascribed
to it in Section 2.3.
"Claim" shall have the meaning ascribed to it in Section
7.8(a).
"Closing" shall have the meaning ascribed to it in
Section 2.2.
"Closing Date" shall have the meaning ascribed to it in
Section 2.2.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commonly Controlled Entity" shall have the meaning
ascribed to it in Section 4.13(a).
"Company Balance Sheet Date" shall have the meaning
ascribed to it in Section 4.6(c).
"Company Business Personnel" shall have the meaning
ascribed to it in Section 4.12.
"Company Common Stock" shall mean the common stock, par value
$.01 per share, of the Company.
"Company Disclosure Schedule" shall have the meaning
ascribed to it in the Introduction to Article IV.
"Company Effective Time" shall have the meaning ascribed
to it in Section 2.3.
"Company Licenses" shall have the meaning ascribed to it
in Section 4.11.
"Company Material Adverse Effect" shall have the meaning
ascribed to it in Section 4.1.
"Company Merger" shall have the meaning ascribed to it
in the Recitals.
"Company Plans" shall have the meaning ascribed to it in
Section 4.13(a).
"Company Preferred Stock" shall mean the preferred
stock, par value $.01 per share, of the Company.
"Company Rule 145 Affiliates" shall have the meaning
ascribed to it in Section 7.5.
"Company SEC Reports" shall have the meaning ascribed to
it in Section 4.6(a).
"Company Stock Option Plans" shall mean The Coleman Company,
Inc. 1996 Stock Option Plan, The Coleman Company, Inc. 1993 Stock Option
Plan and The Coleman Company, Inc. 1992 Stock Option Plan.
"Competition Laws" shall mean foreign statutes, rules,
regulations, orders, decrees, administrative and judicial doctrines, and
other foreign Laws that are designed or intended to prohibit, restrict or
regulate actions having the purpose or effect of monopolization, lessening
of competition or restraint of trade.
"Contract" shall mean any note, bond, mortgage, indenture,
license, contract, agreement or other instrument or obligation.
"Conversion Number" shall have the meaning ascribed to it in
Section 3.1(a)(i).
"Credit Suisse First Boston" shall mean Credit Suisse First
Boston Corporation, the Company's financial advisor.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"D&O Insurance" shall have the meaning ascribed to it in
Section 7.8(c).
"Dissenting Shares" shall have the meaning ascribed to
it in Section 3.8.
"Employee Stock Options" shall mean all employee and
non-employee director stock options issued pursuant to the Company Stock
Option Plans.
"Environmental Claim" shall mean any claim, action,
investigation or written notice to the Company or any of its subsidiaries
by any person or entity alleging potential liability (including, without
limitation, potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resource damages, personal injuries,
or penalties) arising out of, based on, or resulting from, (a) the
presence, or release into the environment, of any Hazardous Substance at
any location, whether or not owned or operated by the Company or any of its
subsidiaries or (b) circumstances forming the basis of any violation, or
alleged violation of any applicable Environmental Law.
"Environmental Laws" shall mean all federal, state, local and
foreign Laws and regulations, as in effect and as interpreted as of the
date of this Agreement, relating to pollution or protection of the
environment, including, without limitation, Laws and regulations relating
to emissions, discharges, releases or threatened releases of Hazardous
Substances, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Substances.
"Environmental Permits" shall have the meaning ascribed to it
in Section 4.14(a).
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Exchange Agent" shall have the meaning ascribed to it
in Section 3.2(a).
"Exchange Fund" shall have the meaning ascribed to it in
Section 3.2(a).
"Filed Company SEC Reports" shall have the meaning ascribed to
it in Section 4.6(a).
"Filed Laser SEC Reports" shall have the meaning ascribed to it
in Section 5.6(a).
"GAAP" shall mean United States generally accepted accounting
principles and practices in effect from time to time, consistently applied.
"Governmental Entity" shall mean any court, arbitral tribunal,
administrative agency or commission or other governmental or regulatory
authority or agency.
"Hazardous Substance" shall mean all substances defined as
Oils, Pollutants or Contaminants in the National Oil and Hazardous
Substances Pollution Contingency Plan, 40 C.F.R. ss. 300.5, or defined as
such by, or regulated as such under, any Environmental Law, including any
radon, asbestos and oil and petroleum products, by-products and fractions.
"Holdings" shall have the meaning ascribed to it in the
Recitals.
"Holdings Disclosure Schedule" shall mean the Disclosure
Schedule being delivered by Holdings concurrently with the execution of the
Agreement and Plan of Merger relating to the Holdings Merger.
"Holdings Effective Time" shall mean the date and time on which
the Holdings Merger is effected.
"Holdings Merger" shall have the meaning ascribed to it
in the Recitals.
"HSR Act" shall mean the Hart-Scott-Rodino Antitrust
Improvements Act of 1976.
"Information Statement" shall have the meaning ascribed to it
in Section 4.9.
"Indemnified Person" shall have the meaning ascribed to it in
Section 7.8(a).
"Intellectual Property" shall mean all domestic and foreign
patents, patent applications, written invention disclosures to be filed or
awaiting filing determinations, trademark and service mark applications,
registered trademarks, registered service marks, registered copyrights,
trademarks, service marks and trade names.
"Laser Balance Sheet Date" shall have the meaning ascribed to
it in Section 5.6(c).
"Laser Common Stock" shall mean the common stock, par value
$.01 per share, of Laser.
"Laser Licenses" shall have the meaning ascribed to it
in Section 5.11.
"Laser Material Adverse Effect" shall have the meaning ascribed
to it in Section 5.1.
"Laser Preferred Stock" shall mean the preferred stock, par
value $.01 per share, of Laser.
"Laser SEC Reports" shall have the meaning ascribed to it in
Section 5.6(a).
"Laser Shares" shall mean the shares of Laser Common
Stock to be issued in the Company Merger.
"Laser Stock Option Plans" shall have the meaning ascribed to
it in Section 5.2.
"Laser Stock Options" shall have the meaning ascribed to it in
Section 5.2.
"Laws" shall mean any federal, state, local or foreign law,
statute, ordinance, rule, regulation, order, judgment or decree,
administrative order or decree, administrative or judicial decision, and
any other executive or legislative proclamation.
"Liens" shall mean all pledges, claims, liens, charges,
encumbrances and security interests of any kind or nature whatsoever.
"LYONs" shall mean the Liquid Yield Option(TM) Notes due 2013
of Worldwide.
"Merger Sub Common Stock" shall mean the common stock, par
value $.01 per share, of Merger Sub.
"Morgan Stanley" shall mean Morgan Stanley & Co. Incorporated,
Laser's financial advisor.
"NYSE" shall mean the New York Stock Exchange, Inc.
"PBGC" shall mean the Pension Benefit Guaranty
Corporation.
"Pension Plan" shall have the meaning ascribed to it in
Section 4.13(a).
"Per Share Merger Consideration" shall have the meaning
ascribed to it in Section 3.1(a)(i).
"Person" shall mean an individual, a corporation, a
partnership, an association, a trust or other entity or organization.
"Plans" shall have the meaning ascribed to it in Section
7.7(e).
"Properties" shall have the meaning ascribed to it in
Section 4.14(c).
"Registration Statement" shall have the meaning ascribed to it
in Section 4.9.
"Release" shall mean any release, spill, emission, discharge,
leaking, pumping, injection, deposit, disposal, dispersal, leaching or
migration into the indoor or outdoor environment (including, without
limitation, ambient air, surface water, groundwater and surface or
subsurface strata) or into or out of any property, including the movement
of Hazardous Materials through or in the air, soil, surface water,
groundwater or property.
"Schedule 13E-3" shall have the meaning ascribed to it
in Section 4.9.
"Section 14(f) Notice" shall have the meaning ascribed to it in
Section 4.9.
"Securities Act" shall mean the Securities Act of 1933,
as amended.
"Subsidiary" shall mean, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated,
of which (i) such party or any other subsidiary of such party is a general
partner or (ii) at least 50% of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of
Directors or others performing similar functions with respect to such
corporation or other organization or at least 50% of the value of the
outstanding equity is directly or indirectly owned or controlled by such
party or by any one or more of its subsidiaries, or by such party and one
or more of its subsidiaries.
"Surviving Corporation" shall have the meaning ascribed to it
in Section 2.1.
"Tax" (and, with correlative meaning, "Taxes" and "Taxable")
shall mean (i) any federal, state, local or foreign net income, gross
income, receipts, windfall profit, severance, property, production, sales,
use, license, excise, franchise, employment, payroll, withholding,
alternative or add-on minimum, ad valorem, transfer, stamp, or
environmental tax, or any other tax, custom, duty, governmental fee or
other like assessment or charge of any kind whatsoever, together with any
interest or penalty, addition to tax or additional amount imposed by any
governmental authority; and (ii) any liability of Laser or any Laser
subsidiary or the Company or any of its subsidiaries, as applicable, for
the payment of amounts with respect to payments of a type described in
clause (i) as a result of being a member of an affiliated, consolidated,
combined or unitary group, or as a result of any obligation of Laser or any
Laser subsidiary or the Company or any of its subsidiaries, as the case may
be, under any arrangement to share liability for taxes or indemnify any
other entity or person for taxes.
"Tax Return" shall mean any return, report or statement
required to be filed with respect to any Tax (including any attachments
thereto), including, without limitation, any information return, claim for
refund, amended return or declaration of estimated Tax.
"Welfare Plan" shall have the meaning ascribed to it in
Section 4.13(a).
"Worldwide" shall mean Coleman Worldwide Corporation, a
Delaware corporation and a wholly owned subsidiary of Holdings.
ARTICLE II
THE COMPANY MERGER
Section 2.1 The Company. Upon the terms and subject to the
conditions set forth herein, and in accordance with the DGCL, at the
Company Effective Time, Merger Sub shall be merged with and into the
Company. Following the Company Effective Time, the Company shall continue
as the surviving corporation (the "Surviving Corporation"), and the
separate corporate existence of Merger Sub shall cease. The Company Merger
shall have the effects set forth in Section 259 of the DGCL.
Section 2.2 Closing. The closing of the Company Merger (the
"Closing") will take place at 10:00 a.m. on a date to be specified by the
parties (the "Closing Date"), which shall be no later than the third NYSE
trading day after satisfaction or waiver of the conditions set forth in
Section 8.1, at the offices of Skadden, Arps, Slate, Meagher & Flom LLP,
919 Third Avenue, New York, New York 10022, unless another time, date or
place is agreed to in writing by the parties hereto.
Section 2.3 Company Effective Time of the Company Merger. The
Company Merger shall become effective on the date and at the time at which
a properly executed certificate of merger (the "Certificate of Merger") is
duly filed with the Secretary of State of the State of Delaware. The
Certificate of Merger shall be filed as soon as practicable on or after the
Closing Date. When used in this Agreement, the term "Company Effective
Time" shall mean the date and time on which the Certificate of Merger is so
filed.
Section 2.4 Certificate of Incorporation. From and after the
Company Effective Time, the certificate of incorporation of the Company as
in effect at the Company Effective Time (the "Certificate of
Incorporation") shall be the certificate of incorporation of the Surviving
Corporation until amended as provided by Law and the Certificate of
Incorporation.
Section 2.5 By-Laws. From and after the Company Effective Time,
the by-laws of Merger Sub as in effect at the Company Effective Time shall
be the by-laws of the Surviving Corporation until amended as provided by
the DGCL, the Certificate of Incorporation and the terms thereof.
Section 2.6 Directors. The directors of Merger Sub at the
Company Effective Time shall be the initial directors of the Surviving
Corporation and shall hold office from the Company Effective Time until
their respective successors are duly elected or appointed and qualify in
the manner provided in the Certificate of Incorporation and by-laws of the
Surviving Corporation or as otherwise provided by the DGCL (it being
understood that the directors of the Company shall resign upon the later of
(i) the Holdings Effective Time and (ii) the eleventh (11th) day following
the date on which the Section 14(f) Notice shall have been filed with the
SEC and mailed to all stockholders of record of the Company in accordance
herewith).
Section 2.7 Officers. The officers of the Company at the
Company Effective Time shall be the initial officers of the Surviving
Corporation and shall hold office from the Company Effective Time until
their respective successors are duly elected or appointed and qualifies in
the manner provided in the Certificate of Incorporation and by-laws of the
Surviving Corporation, or as otherwise provided by Law.
ARTICLE III
CONVERSION OF SHARES
Section 3.1 Effect on Capital Stock. At the Company Effective
Time, by virtue of the Company Merger and without any action on the part of
any holder thereof:
(a) Conversion of Company Common Stock.
(i) Subject to Section 3.1(b) hereof, each share of
Company Common Stock issued and outstanding immediately prior to the
Company Effective Time (other than Dissenting Shares and Company
Common Stock to be cancelled in accordance with Section 3.1(c)
hereof) shall be converted into the right to receive (A) 0.5677 (the
"Conversion Number") of a fully paid and nonassessable share of Laser
Common Stock and (B) $6.44 in cash, without interest thereon (the
consideration referred to in this Section 3.1(a) being sometimes
referred to herein as the "Per Share Merger Consideration").
(ii) If, prior to the Company Effective Time, Laser shall
(A) pay a dividend in, subdivide, combine into a smaller number of
shares or issue by reclassification of its shares, any shares of
Laser Common Stock, the Conversion Number shall be adjusted
appropriately or (B) pay a dividend (other than regular quarterly
dividend payments, consistent with past practice), whether in cash or
property, the amount of the cash portion of the Per Share Merger
Consideration shall be appropriately adjusted such that the amount of
cash to be received with respect to each share of Company Common
Stock, or if a dividend shall have been paid in other property, cash
and other property to be received with respect to each share of
Company Common Stock, shall be equal to that which would have been
received in the aggregate with respect to each share of Company
Common Stock (on a per share equivalent basis) had the dividend been
paid following the Company Effective Time at a time when the Laser
Shares to be issued pursuant hereto had been issued to the holders of
the shares of Company Common Stock.
(iii) Each of the shares of Company Common Stock
converted in accordance with paragraph (i) of this Section 3.1(a)
shall no longer be outstanding and shall automatically be cancelled
and retired and shall cease to exist, and each holder of a
certificate representing any such shares of Company Common Stock
shall cease to have any rights with respect thereto, except the right
to receive the Per Share Merger Consideration and cash in lieu of any
fractional share of Laser Common Stock (determined in accordance with
Section 3.4 hereof), to be issued or paid in consideration therefor
upon the surrender of such certificate in accordance with Section 3.2
hereof, without interest.
(b) Company Common Stock Held by Worldwide or Holdings to
Remain Outstanding. Notwithstanding Section 3.1(a) hereof, at the Company
Effective Time all shares of Company Common Stock held by Worldwide or
Holdings shall remain outstanding and unchanged as a result of the Company
Merger.
(c) Cancellation of Treasury Stock and Company Common Stock
Held by Laser and Company Subsidiaries. Each share of Company Common Stock,
if any, held in the treasury of the Company, by any subsidiary of the
Company, by Laser or by any subsidiary of Laser (other than Worldwide or
Holdings) immediately prior to the Company Effective Time shall be
cancelled and retired and cease to exist.
(d) Cancellation of Merger Sub Common Stock. Each share of
Merger Sub Common Stock issued and outstanding immediately prior to the
Company Effective Time shall be cancelled and retired and cease to exist.
Section 3.2 Exchange of Certificates Representing
Shares.
(a) As of the Company Effective Time, Laser shall deposit, or
shall cause to be deposited, with an exchange agent selected by Laser and
reasonably satisfactory to the Company (the "Exchange Agent"), for the
benefit of the holders of shares of Company Common Stock, for exchange in
accordance with this Article III: (i) certificates representing the number
of Laser Shares issuable in the Company Merger to be issued in respect of
all shares of Company Common Stock outstanding immediately prior to the
Company Effective Time and which are to be exchanged pursuant to the
Company Merger (exclusive of shares to remain outstanding pursuant to
Section 3.1(b) hereof or to be canceled pursuant to Section 3.1(c) hereof);
and (ii) cash in an amount sufficient to make any cash payment due under
Sections 3.1(a)(i)(B) and 3.4 hereof (such cash and certificates for Laser
Shares being hereinafter referred to collectively as the "Exchange Fund").
(b) As soon as reasonably practicable after the Company
Effective Time, Laser shall cause the Exchange Agent to mail (or deliver to
its principal office) to each holder of record of a certificate or
certificates representing shares of Company Common Stock (i) a letter of
transmittal which shall specify that delivery shall be effected, and risk
of loss and title to the certificates for shares of Company Common Stock
shall pass, only upon delivery of the certificates for such shares of
Company Common Stock to the Exchange Agent and which shall be in such form
and have such other provisions, including appropriate provisions with
respect to back-up withholding, as Laser may reasonably specify, and (ii)
instructions for use in effecting the surrender of the certificates for
shares of Company Common Stock. Upon surrender of a certificate for shares
of Company Common Stock for cancellation to the Exchange Agent, together
with such letter of transmittal, duly executed and completed in accordance
with the instructions thereto, the holder thereof shall be entitled to
receive in exchange therefor that portion of the Exchange Fund which such
holder has the right to receive pursuant to the provisions of this Article
III, after giving effect to any required withholding Tax, and the
certificate for shares of Company Common Stock so surrendered shall
forthwith be cancelled. No interest will be paid or accrued on the cash
portion of the Exchange Fund. In the event of any transfer of ownership of
shares of Company Common Stock which has not been registered in the
transfer records of the Company, certificates representing the proper
number of shares of Laser Common Stock, if any, and a check in an amount
equal to the proper amount of the cash component, if any, of the Exchange
Fund, will be issued to the transferee of the certificate representing the
transferred shares of Company Common Stock, only upon presentation to the
Exchange Agent of a certificate or certificates representing such shares of
Company Common Stock, accompanied by all documents required to evidence and
effect the prior transfer thereof and to evidence that any applicable stock
transfer Taxes associated with such transfer were paid.
Section 3.3 Dividends; Transfer Taxes. No dividends that are
declared on Laser Common Stock will be paid to persons entitled to receive
certificates representing shares of Laser Common Stock until such persons
surrender their certificates representing shares of Company Common Stock.
Upon such surrender, there shall be paid to the person in whose name the
certificates representing such shares of Laser Common Stock shall be
issued, any dividends which shall have become payable with respect to such
shares of Laser Common Stock between the Company Effective Time and the
time of such surrender. In no event shall the person entitled to receive
such dividends be entitled to receive interest on such dividends. If any
certificates for any shares of Laser Common Stock are to be issued in a
name other than that in which the certificate representing shares of
Company Common Stock surrendered in exchange therefor is registered, it
shall be a condition of such exchange that the person requesting such
exchange shall pay to the Exchange Agent any transfer or other Taxes
required by reason of the issuance of certificates for such shares of Laser
Common Stock in a name other than that of the registered holder of the
certificate surrendered or shall establish to the satisfaction of the
Exchange Agent that such Tax has been paid or is not applicable.
Notwithstanding the foregoing, (i) neither the Exchange Agent nor any party
hereto shall be liable to a holder of shares of Company Common Stock for
any shares of Laser Common Stock or dividends thereon, any cash payments to
be made pursuant to Section 3.1(a)(i)(B) hereof or, in accordance with
Section 3.4 hereof, any cash in lieu of fractional share interests, in each
case, delivered to a public official pursuant to applicable escheat Laws
and (ii) any shares of Laser Common Stock held by the Exchange Agent prior
to surrender of certificates representing shares of Company Common Stock
shall not be deemed issued.
Section 3.4 No Fractional Shares. No certificates or scrip
representing fractional shares of Laser Common Stock shall be issued upon
the surrender for exchange of certificates representing shares of Company
Common Stock pursuant to this Article III, and no dividend, stock split or
other change in the capital structure of Laser shall relate to any
fractional security, and such fractional interests shall not entitle the
owner thereof to vote or to any rights of a security holder. In lieu of any
such fractional shares of Laser Common Stock, each holder of shares of
Company Common Stock who would otherwise have been entitled to a fraction
of a share of Laser Common Stock upon surrender of stock certificates for
exchange pursuant to this Article III will be paid cash upon such surrender
in an amount equal to the product of such fraction multiplied by the
closing sale price of one share of Laser Common Stock on the NYSE on the
day of the Company Effective Time, or, if shares of Laser Common Stock are
not so traded on such day, the closing sale price of one such share on the
next preceding day on which such share was traded on the NYSE. For purposes
of this Section 3.4, shares of Company Common Stock of any holder
represented by two or more certificates shall be aggregated, and in no
event shall any holder be paid an amount of cash pursuant to this Section
3.4 in respect of more than one share of Laser Common Stock.
Section 3.5 Termination of Exchange Fund. Any portion of the
Exchange Fund which remains undistributed to the holders of the Company
Common Stock for six (6) months after the Company Effective Time shall be
delivered to Laser, upon demand, and any holders of the Company Common
Stock who have not theretofore complied with this Article III shall
thereafter look only to Laser for payment of their claim for the shares of
Laser Common Stock and cash and dividends or other distributions, if any,
pursuant to this Article III.
Section 3.6 Investment of Exchange Fund. Without prejudice to
the rights of any holder of Company Common Stock to receive the Per Share
Merger Consideration, the Exchange Agent shall invest any cash included in
the Exchange Fund, as directed by Laser, on a daily basis. Any interest and
other income resulting from such investments shall be paid to Laser.
Section 3.7 Closing of Company Transfer Books. At the Company
Effective Time, the stock transfer books of the Company shall be closed and
no transfer of shares of Company Common Stock shall thereafter be made. If,
after the Company Effective Time, certificates representing shares of
Company Common Stock are presented to the Surviving Corporation, they shall
be cancelled and exchanged for the Per Share Merger Consideration
applicable thereto.
Section 3.8 Dissenting Shares. Each outstanding share of
Company Common Stock as to which a written demand for appraisal is filed in
accordance with Section 262 of the DGCL and not withdrawn, and with respect
to which a consent is not given in favor of the Company Merger shall not be
converted into or represent a right to receive the Per Share Merger
Consideration unless and until the holder thereof shall have failed to
perfect, or shall have effectively withdrawn or lost, the right to
appraisal of and payment for each such share of Company Common Stock under
Section 262, at which time each such share shall be converted into the
right to receive the Per Share Merger Consideration. All such shares of
Company Common Stock as to which such a written demand for appraisal is so
filed and not withdrawn and with respect to which a consent is not given in
favor of the Company Merger, except any such shares of Company Common Stock
the holder of which, prior to the Company Effective Time, shall have
effectively withdrawn or lost such right to appraisal and payment for such
shares of Company Common Stock under Section 262, are herein referred to as
"Dissenting Shares." The Company shall give Laser prompt notice upon
receipt by the Company of any written demands for appraisal rights,
withdrawal of such demands, and any other written communications delivered
to the Company pursuant to Section 262, and the Company shall give Laser
the opportunity, to the extent permitted by Law, to participate in all
negotiations and proceedings with respect to such demands. Except with the
prior written consent of Laser, the Company shall not voluntarily make any
payment with respect to any demands for appraisal rights and shall not
settle or offer to settle any such demands. Each holder of Dissenting
Shares who becomes entitled, pursuant to the provisions of Section 262, to
payment for such shares of Dissenting Shares under the provisions of
Section 262 shall receive payment therefor from the Surviving Corporation
and such shares of Company Common Stock shall be cancelled thereafter.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as otherwise disclosed to Laser in a schedule delivered
to Laser prior to the execution hereof (which schedule shall contain
appropriate references to identify the representations and warranties
herein to which the information in such schedule relates) (the "Company
Disclosure Schedule"), the Company represents and warrants to Laser and
Merger Sub as follows:
Section 4.1 Organization. The Company is a corporation duly
organized, validly existing and in good standing under the Laws of the
State of Delaware and has the corporate power to carry on its business as
it is now being conducted. The Company is duly qualified as a foreign
corporation to do business, and is in good standing, in each jurisdiction
where the character of its properties owned or held under lease or the
nature of its activities makes such qualification necessary, except where
the failure to be so qualified would not individually or in the aggregate
have a material adverse effect on the business, results of operations or
financial condition of the Company and its subsidiaries, taken as a whole
(a "Company Material Adverse Effect").
Section 4.2 Capitalization. The authorized capital stock of the
Company consists of 80,000,000 shares of Company Common Stock and
20,000,000 shares of Company Preferred Stock. As of February 23, 1998, (i)
53,488,170 shares of Company Common Stock were issued and outstanding; (ii)
3,282,930 shares of Company Common Stock were issuable upon exercise of
Employee Stock Options to acquire 3,282,930 shares of Company Common Stock
outstanding under the Company Stock Option Plans (of which options to
acquire 2,399,380 were vested); and (iii) no shares of Company Preferred
Stock were issued or outstanding. As of such date, no shares of Company
Common Stock were held as treasury shares. All of the issued and
outstanding shares of Company Common Stock are validly issued, fully paid
and nonassessable and free of preemptive rights. As of the date hereof,
except as set forth above, there are no shares of capital stock of the
Company issued or outstanding or any options, warrants, subscriptions,
calls, rights, convertible securities or other agreements or commitments
obligating the Company to issue, transfer, sell, redeem, repurchase or
otherwise acquire any shares of its capital stock or securities. There are
no notes, bonds, debentures or other indebtedness of the Company having the
right to vote (or convertible into or exchangeable for securities having
the right to vote) on any matters upon which stockholders of the Company
may vote.
Section 4.3 Subsidiaries. All the outstanding shares of capital
stock of, or other ownership interests in, each of the Company's
subsidiaries have been validly issued and are fully paid and nonassessable
and such shares (other than directors' qualifying shares and similar
interests) are owned directly or indirectly by the Company, free and clear
of all Liens. Except for the capital stock of the Company's subsidiaries
and except as set forth in Section 4.3 of the Company Disclosure Schedule,
the Company does not own, directly or indirectly, any capital stock or
other ownership interest in any corporation, partnership, limited liability
company, joint venture or other entity. Each of the Company's subsidiaries
that is a corporation is a corporation duly organized, validly existing and
in good standing under the Laws of its jurisdiction of incorporation. Each
of the Company's subsidiaries that is a partnership or a limited liability
company is duly formed and validly existing under the Laws of its
jurisdiction of formation. Each of the Company's subsidiaries has the
corporate power or the partnership power, as the case may be, to carry on
its business as it is now being conducted or presently proposed to be
conducted. Each the Company's subsidiaries that is a corporation is duly
qualified as a foreign corporation to do business, and is in good standing,
in each jurisdiction where the character of its properties owned or held
under lease or the nature of its activities makes such qualification
necessary, except where the failure to be so qualified would not
individually or in the aggregate have a Company Material Adverse Effect.
Each of the Company's subsidiaries that is a partnership is duly qualified
as a foreign partnership authorized to do business, and is in good
standing, in each jurisdiction where the character of its properties owned
or held under lease or the nature of its activities makes such
qualification necessary, except where the failure to be so qualified would
not individually or in the aggregate have a Company Material Adverse
Effect. Except as set forth in Section 4.2 hereof, there are no outstanding
options, warrants, subscriptions, calls, rights, convertible securities or
other agreements or commitments obligating the Company or any of its
subsidiaries to issue, transfer or sell any securities of any Company
subsidiary. There are no voting, stockholder or other agreements or
understandings to which the Company or any of the Company's subsidiaries is
a party or is bound with respect to the voting of the capital stock of the
Company or any of the Company's subsidiaries.
Section 4.4 Authority Relative to this Agreement. The Company
has the corporate power and authority to enter into this Agreement and to
perform its obligations hereunder and to consummate the transactions
contemplated hereby. The execution and delivery of this Agreement by the
Company and the consummation by the Company of the transactions
contemplated hereby have been duly authorized by the Board of Directors of
the Company, and no other corporate actions or proceedings on the part of
the Company (including any action on the part of its stockholders) are
necessary to authorize this Agreement or the transactions contemplated
hereby. This Agreement has been duly executed and delivered by the Company
and, assuming the due authorization and valid execution and delivery by
Laser and Merger Sub, constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
subject to bankruptcy, insolvency, reorganization, moratorium or similar
Laws now or hereafter in effect relating to creditors' rights generally and
to general principles of equity.
Section 4.5 Consents and Approvals; No Violations. Except for
applicable requirements of the HSR Act, the Securities Act, the Exchange
Act, Competition Laws and state securities or blue sky Laws, and the filing
and recordation of the Certificate of Merger as required by the DGCL, no
filing with, and no permit, authorization, consent or approval of, any
governmental or regulatory authority is necessary for the consummation by
the Company of the transactions contemplated by this Agreement, except for
such filings, permits, authorizations, consents or approvals the failure of
which to be made or obtained would not individually or in the aggregate
have a Company Material Adverse Effect. Except as set forth in Section 4.5
of the Company Disclosure Schedule, neither the execution and delivery of
this Agreement by the Company, nor the consummation by the Company of the
transactions contemplated hereby, nor compliance by the Company with any of
the provisions hereof, will (a) conflict with or result in any breach of
any provisions of the certificate of incorporation or by-laws of the
Company or the certificate of incorporation or by-laws of any of the
Company's subsidiaries; (b) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default
(or give rise to any right of termination, cancellation or acceleration)
under, any of the terms, conditions or provisions of any material (as
defined for purposes of Form 10-K) Contract to which the Company or any of
the Company's subsidiaries is a party or by which any of them or any of
their properties or assets may be bound; or (c) violate any order, writ,
injunction, decree, statute, rule or regulation applicable to the Company,
any of the Company's subsidiaries or any of their properties or assets,
except in the case of clauses (b) and (c) for violations, breaches or
defaults which would not individually or in the aggregate have a Company
Material Adverse Effect.
Section 4.6 Reports and Financial Statements.
(a) The Company has filed all reports, forms, registrations,
schedules, statements and other documents required to be filed by it with
the SEC since January 1, 1997 (the "Company SEC Reports"). As of their
respective dates, the Company SEC Reports complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Company
SEC Report has been amended, revised or superseded by a later Company SEC
Report filed and publicly available prior to the date of this Agreement (as
amended, revised or superseded by a later Company SEC Report filed and
publicly available prior to the date of this Agreement, the "Filed Company
SEC Reports"), none of the Filed Company SEC Reports, when filed, contained
any untrue statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(b) The consolidated financial statements of the Company
included in the Filed Company SEC Reports complied as to form in all
material respects with the applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto have been
prepared in accordance with GAAP (except, in the case of the unaudited
statements, as permitted by Form 10-Q of the SEC) applied on a consistent
basis during the periods involved (except as may be indicated therein or in
the notes thereto) and fairly present the consolidated financial position
of the Company and its consolidated subsidiaries as of the dates thereof
and the consolidated results of their operations and their consolidated
cash flows for the periods then ended (subject, in the case of the
unaudited statements, to normal year-end audit adjustments and to any other
adjustments described therein).
(c) Except as set forth in the Filed Company SEC Reports and
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most recent
consolidated balance sheet included in the Filed Company SEC Reports (the
"Company Balance Sheet Date"), neither the Company nor any of its
subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be
recognized or disclosed on a consolidated balance sheet of the Company and
its consolidated subsidiaries or in the notes thereto.
Section 4.7 Absence of Certain Changes or Events. Except as set
forth in the Filed Company SEC Reports, since the Company Balance Sheet
Date, the business of the Company and its subsidiaries has been conducted
only in the ordinary course of business consistent with past practice, and
there has not been any event, change or development which individually or
in the aggregate has had or would reasonably be expected to have a Company
Material Adverse Effect or would impair or delay the ability of the Company
to consummate the transactions contemplated by, or to satisfy its
obligations under, this Agreement. Except as set forth in Section 4.7 of
the Company Disclosure Schedule, during the period from the Company Balance
Sheet Date through the date of this Agreement, neither the Company nor any
of its subsidiaries has:
(i) declared, set aside or paid any distributions
(whether in cash, stock or property) with respect to its capital
stock or (y) split, combined, or reclassified any of its capital
stock or issued or authorized the issuance of any other securities in
respect of, in lieu of or in substitution for shares of its capital
stock (other than dividends or stock issuances by a wholly owned
subsidiary of the Company to the Company or another wholly owned
subsidiary of the Company);
(ii) issued, delivered, sold, pledged or otherwise
encumbered any shares of its capital stock, any other voting
securities or any securities convertible into, or any options,
warrants or rights to acquire, any such shares, voting securities or
convertible securities (other than the issuance of Company Common
Stock upon the exercise of Employee Stock Options in accordance with
their terms and issuances by a wholly owned subsidiary of the Company
to the Company or another wholly owned subsidiary of the Company);
(iii) in the case of the Company, amended its
certificate of incorporation or by-laws;
(iv) acquired or agreed to acquire by merging or
consolidating with, or in purchasing a substantial portion of the
assets of, or in any other manner, any business or any corporation,
limited liability company, partnership, association or other business
organization or division thereof material to the Company;
(v) other than in the ordinary course of business, (x)
incurred any indebtedness or (y) made any loans, advances or capital
contributions to, or investments in, any other person (other than the
Company or a subsidiary of the Company), in any case in an amount
material to the Company;
(vi) other than in the ordinary course of business or
consistent with the Company's capital budgets heretofore disclosed to
Laser, made or agreed to make any capital expenditure or capital
expenditures;
(vii) other than in the ordinary course of business, made
any Tax election or settled or compromised any material income Tax
liability;
(viii) except in the ordinary course of business or
except as would not reasonably be expected to have a Company Material
Adverse Effect, entered into any Contracts or amended or terminated
any material Contract or agreement to which the Company or any of its
subsidiaries is a party or waived, released or assigned any material
rights or claims thereunder;
(ix) except as required by Law or contractual obligation
or in the ordinary course of business consistent with past practice,
(a) increased the compensation of any of its employees, (b) entered
into any Contract with any of its employees regarding his or her
employment, compensation or benefits, or (c) adopted any plan,
arrangement or policy which would become a Company Plan or amended
any Company Plan to the extent such adoption or amendment would
create or increase any material liability or obligation on the part
of the Company or its subsidiaries;
(x) entered into any transaction or Contract with, or
(except pursuant to the Affiliate Agreements) made any payment to,
any Affiliate of the Company (other than to the Company's
subsidiaries or its or their officers or directors in the ordinary
course of business consistent with past practice); or
(xi) agreed to do any of the foregoing.
Section 4.8 Litigation. Except as disclosed in the Filed
Company SEC Reports and as set forth in Section 4.8 of the Company
Disclosure Schedule, as of the date hereof, to the Company's knowledge
there is no suit, action, proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company or
any of its subsidiaries that individually or in the aggregate would
reasonably be expected to (i) have a Company Material Adverse Effect
(taking into account any reserve therefor as of the Company Balance Sheet
Date), or (ii) delay in any material respect or prevent the consummation of
any of the transactions contemplated by this Agreement, nor is there any
judgment, order, decree, statute, Law, ordinance, rule or regulation of any
Governmental Entity or arbitrator outstanding against the Company or any of
its subsidiaries having, or which would reasonably be expected to have, any
effect referred to in clause (i) or (ii) above.
Section 4.9 Information in Disclosure Documents and
Registration Statement. None of the information to be supplied by the
Company for inclusion or incorporation by reference in the information
statement to be distributed in connection with the Company Merger (as
amended or supplemented, the "Information Statement") or the related filing
on Schedule 13E-3 (as amended or supplemented, the "Schedule 13E-3") or the
notice to be provided to the Company's stockholders pursuant to Section
14(f) of the Exchange Act (as amended or supplemented, the "Section 14(f)
Notice") or the registration statement on Form S-4 under the Securities Act
for the purpose of registering the shares of Laser Common Stock to be
issued in the Company Merger (as amended or supplemented, the "Registration
Statement") will, in the case of the Registration Statement, at the time it
becomes effective and at the Company Effective Time, contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, or, in the case of the Information Statement, the Schedule
13E-3, the Section 14(f) Notice, at the time of the mailing thereof and, in
the case of the Information Statement, the Schedule 13E-3 at the Company
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, in light of the circumstances under which
they are made, not misleading. The Information Statement, the Schedule
13E-3 and the Section 14(f) Notice will comply as to form in all material
respects with the provisions of the Exchange Act, and the rules and
regulations promulgated thereunder.
Section 4.10 Taxes. Except as would not have a Company Material
Adverse Effect or as set forth in Section 4.10 of the Company Disclosure
Schedule:
(a) Each of the Company and each of its subsidiaries has (i)
filed (or there has been filed on its behalf) with the appropriate
Governmental Entities all Tax Returns required to be filed by it, and all
such Tax Returns are true, correct and complete and (ii) has paid all Taxes
due by it;
(b) there is no action, suit, investigation, audit, claim or
assessment pending or proposed in writing or threatened in writing with
respect to Taxes of the Company or any of its subsidiaries and, to the best
of the Company's knowledge, no basis exists therefor;
(c) there are no Liens for Taxes upon the assets of the Company
or any of its subsidiaries except Liens relating to current Taxes not yet
due;
(d) the United States federal income Tax Returns which include
the Company and the Company's subsidiaries have been examined, and such
examinations have been completed, by the Internal Revenue Service (or the
applicable statutes of limitation for the assessment of federal income
Taxes for such periods have expired) for all periods through and including
1985.
Section 4.11 Compliance with Applicable Law. Except as
disclosed in the Filed Company SEC Reports, the Company and its
subsidiaries have received such certificates, permits, licenses,
franchises, consents, approvals, orders, authorizations and clearances from
appropriate Governmental Entities (the "Company Licenses") as are necessary
to own or lease and operate their respective properties and to conduct
their respective businesses substantially in the manner described in the
Company SEC Reports and as currently owned or leased and conducted, and all
such Company Licenses are valid and in full force and effect, except for
any such certificates, permits, licenses, franchises, consents, approvals,
orders, authorizations and clearances which the failure to have or to be in
full force and effect would not reasonably be expected to have,
individually or in the aggregate, a Company Material Adverse Effect. Except
as disclosed in Filed Company SEC Reports, the Company and the Company's
subsidiaries are in compliance with their respective obligations under the
Company Licenses, with only such exceptions as, individually or in the
aggregate, would not reasonably be expected to have a Company Material
Adverse Effect. Except as disclosed in the Filed Company SEC Reports, the
Company and its subsidiaries are in compliance with all judgments, orders,
decrees, statutes, Laws, ordinances, rules and regulations of any
Governmental Entity applicable to them, except for such noncompliance which
individually or in the aggregate would not have a Company Material Adverse
Effect.
Section 4.12 Labor Matters. Except as disclosed in the Filed
Company SEC Reports, neither the Company nor any of the Company's
subsidiaries has any labor contracts, collective bargaining agreements or
material employment or consulting agreements with any persons employed by
or otherwise performing services primarily for the Company or any of the
Company's subsidiaries (the "Company Business Personnel") or any
representative of any Company Business Personnel. Except as set forth in
the Filed Company SEC Reports, neither the Company nor any of its
subsidiaries has engaged in any unfair labor practice with respect to
Company Business Personnel, and there is no unfair labor practice complaint
pending against the Company or any of its subsidiaries with respect to
Company Business Personnel which, in either such case, would reasonably be
expected to have, individually or in the aggregate, a Company Material
Adverse Effect. Except as set forth in the Filed Company SEC Reports, there
is no material labor strike, dispute, slowdown or stoppage pending or, to
the knowledge of the Company, threatened against the Company or any of its
subsidiaries, and neither the Company nor any of its subsidiaries has
experienced any material primary work stoppage or other material labor
difficulty involving its employees during the last three (3) years.
Section 4.13 ERISA Compliance.
(a) The Company has delivered to Laser or will deliver to Laser
prior to the Company Effective Time each "employee pension benefit plan"
(as defined in Section 3(2) of ERISA) (a "Pension Plan"), each "employee
welfare benefit plan" (as defined in Section 3(1) of ERISA) (a "Welfare
Plan"), each material bonus, stock option, stock purchase, stock ownership,
stock bonus, restricted stock, deferred compensation plan or arrangement
and each other material employee fringe benefit plan or arrangement
maintained, contributed to or required to be maintained or contributed to
by the Company or any of its subsidiaries or any other person or entity
that, together with the Company, is or was treated as a single employer
under Section 414(b), (c), (m) or (o) of the Code (each, a "Commonly
Controlled Entity") which is currently in effect for the benefit of any
current or former directors, officers, employees or independent contractors
of the Company or any of its subsidiaries (collectively, the "Company
Plans"). The Company has delivered to Laser or will deliver to Laser prior
to the Company Effective Time true, complete and correct copies of (x) the
two most recent annual reports on Form 5500 filed with the Internal Revenue
Service with respect to each Company Plan (if any such report was
required), (y) the most recent summary plan description for each Company
Plan for which such summary plan description is required and (z) each
currently effective trust agreement, insurance or group annuity contract
and each other material funding or financing arrangement relating to any
Company Plan.
(b) No Commonly Controlled Entity has incurred any liability
under Title IV of ERISA, other than for contributions not yet due to a
defined benefit pension plan subject to Title IV of ERISA and other than
for the payment of premiums to the PBGC not yet due, and no condition
exists that presents a material risk of incurring any such liability, which
liability, to the extent currently due, has not been fully paid as of the
date hereof and would individually or in the aggregate be reasonably likely
to result in a Company Material Adverse Effect.
(c) Except as set forth in Company SEC reports or in Section
4.13 of the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries has any obligation to provide any welfare benefits to
employees or former employees following termination of employment except
(i) for benefits the cost of which is borne entirely by the employee or
former employee, (ii) as required under Section 4980 of the Code or other
applicable law or (iii) obligations to provide such benefits to Company
employees employed in non-U.S. jurisdictions.
(d) No Commonly Controlled Entity has engaged in a transaction
described in Section 4069 of ERISA that could subject the Company or any of
its subsidiaries or Laser to liability at any time after the date hereof,
which liability would be reasonably likely to result in a Company Material
Adverse Effect.
(e) No Commonly Controlled Entity has withdrawn from any
multiemployer plan where such withdrawal has resulted in any actual or
potential "withdrawal liability" (as defined in Section 4201 of ERISA) that
has not been fully paid, which liability would be reasonably likely to
result in a Company Material Adverse Effect.
(f) Except as set forth in Section 4.13 of the Company
Disclosure Schedule or as specifically provided in this Agreement, the
transactions contemplated by this Agreement will not, either alone or in
connection with another event, cause there to be paid or become payable any
additional benefits or any acceleration of the time of payment or vesting
of any benefits under any Company Plan or under any employment, severance,
termination or compensation agreement to which the Company is a party as of
the Company Effective Time.
Section 4.14 Environmental Matters.
(a) Except as disclosed in the Filed Company SEC Reports, the
Company and its subsidiaries are in compliance with all applicable
Environmental Laws, which compliance includes the possession of permits and
governmental authorizations required under applicable Environmental Laws
("Environmental Permits") and compliance with the terms and conditions
thereof, except where such non-compliance would not result in a Company
Material Adverse Effect.
(b) Except as disclosed in the Filed Company SEC Reports, there
are no Environmental Claims pending or, to the knowledge of the Company,
threatened against the Company or any of its subsidiaries that would
reasonably be expected to result in a Company Material Adverse Effect.
(c) Except as disclosed in the Filed Company SEC Reports, the
properties presently or to the knowledge of the Company formerly owned,
leased or operated by the Company or its subsidiaries (including
groundwater under the properties) (the "Properties") do not contain any
Hazardous Substance other than as permitted under applicable Environmental
Law; provided, however, that with respect to Properties formerly owned,
leased or operated by the Company or its subsidiaries, such representation
is limited to the period prior to the disposition of such Properties by the
Company or its subsidiaries.
(d) Except as disclosed in the Filed Company SEC Reports, to
the knowledge of the Company, no Hazardous Substance has been disposed of
or transported from any of the Properties during the time any such Property
was owned, leased or operated by the Company or any of its subsidiaries,
other than as permitted under applicable Environmental Law and in effect at
the time of such disposal or transportation.
(e) Except as disclosed in the Filed Company SEC Reports, to
the knowledge of the Company, the Company and its subsidiaries have not
become obligated, whether by operation of Law or through contractual
agreement, to indemnify any other person or otherwise to assume liability
for any claim brought pursuant to any Environmental Law which could
reasonably be expected to have a Company Material Adverse Effect.
Section 4.15 Intellectual Property. The Company has previously
delivered to Laser a list, which, to the knowledge of the Company, is true
and correct as of the date hereof in all material respects, of all material
issued patents and registered trademarks of the Company. Except as set
forth in Section 4.15 of the Company Disclosure Schedule, the Company and
its subsidiaries own or have sufficient rights to use all material
Intellectual Property used in connection with the business of the Company
and its subsidiaries as currently conducted. As used in this Section 4.15,
the term "material," when applied to Intellectual Property, means that such
Intellectual Property is used in a significant manner to conduct the
business of the Company and its subsidiaries as it is currently conducted.
Section 4.16 Contracts. Except as set forth in Section 4.16 of
the Company Disclosure Schedule, neither the Company nor any of its
subsidiaries is a party to or bound by any material Contract, other than
(i) the Affiliate Agreements listed in Section 4.10 of the Holdings
Disclosure Schedule, (ii) any Contract filed or incorporated by reference
as an exhibit to any Filed Company SEC Report or (iii) any Contract (other
than the Affiliate Agreements listed in Section 4.10 of the Holdings
Disclosure Schedule) entered into in the ordinary course of business
consistent with past practice.
Section 4.17 Opinion of Financial Advisor. The Board of
Directors of the Company has received the opinion of Credit Suisse First
Boston, dated the date hereof to the effect that the Per Share Merger
Consideration is fair to the holders of shares of Company Common Stock
(other than Worldwide) from a financial point of view.
Section 4.18 Takeover Statute. The Board of Directors of the
Company has approved the Holdings Merger solely for the purpose of
rendering inapplicable, and such approval is sufficient to render
inapplicable, to the Company Merger and the other transactions contemplated
by this Agreement the provisions of Section 203 of the DGCL. To the best of
the Company's knowledge, no other state takeover statute or similar statute
or regulation applies or purports to apply to the Company Merger, this
Agreement or any of the transactions contemplated hereby, and no provision
of the certificate of incorporation or by-laws of the Company or
certificates of incorporation or by-laws (or comparable organizational
documents) of any subsidiary of the Company would, directly or indirectly,
restrict or impair the ability of Laser to vote, or otherwise to exercise
the rights of a stockholder with respect to, shares of capital stock of the
Company or any of its subsidiaries that may be acquired or controlled by
Laser.
Section 4.19 Brokers. No broker, investment banker or other
person, other than Credit Suisse First Boston, the fees and expenses of
which will be paid by the Company (as reflected in an agreement between
Credit Suisse First Boston and the Company, a copy of which has been
furnished to Laser), is entitled to any broker's, finder's or other similar
fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of the Company.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF LASER
AND MERGER SUB
Laser and Merger Sub represent and warrant to the Company as
follows:
Section 5.1 Organization. Laser is a corporation duly
organized, validly existing and in good standing under the Laws of the
State of Delaware and has the corporate power to carry on its business as
it is now being conducted. Laser is duly qualified as a foreign corporation
to do business, and is in good standing, in each jurisdiction where the
character of its properties owned or held under lease or the nature of its
activities makes such qualification necessary, except where the failure to
be so qualified would not individually or in the aggregate have a material
adverse effect on the business, results of operations or financial
condition of Laser and its subsidiaries, taken as a whole (a "Laser
Material Adverse Effect").
Section 5.2 Capitalization. The authorized capital stock of
Laser consists of 200,000,000 shares of Laser Common Stock, and 2,000,000
shares of Laser Preferred Stock. As of February 23, 1998, (i) 85,988,627
shares of Laser Common Stock were issued and outstanding; (ii) 16,129,197
shares of Laser Common Stock were issuable upon exercise of employee and
non-employee stock options (the "Laser Stock Options") outstanding under
all stock option plans of Laser (the "Laser Stock Option Plans") or granted
pursuant to employment agreements; and (iii) no shares of Laser Preferred
Stock were issued and outstanding. As of such date, 4,568,959 shares of
Laser Common Stock were held as treasury shares. All of the issued and
outstanding shares of Laser Common Stock are validly issued, fully paid and
nonassessable and free of preemptive rights. All of the shares of Laser
Common Stock issuable as consideration in the Company Merger at the Company
Effective Time in accordance with this Agreement will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable and free of
preemptive rights. As of such date, except as set forth above, there are no
shares of capital stock of Laser issued or outstanding or, as of such date
or as of the date hereof, except as set forth above, any options, warrants,
subscriptions, calls, rights, convertible securities or other agreements or
commitments obligating Laser to issue, transfer, sell, redeem, repurchase
or otherwise acquire any shares of its capital stock or securities, or the
capital stock or securities of Laser. There are no notes, bonds, debentures
or other indebtedness of Laser having the right to vote (or convertible
into or exchangeable for securities having the right to vote) on any
matters upon which stockholders of Laser may vote.
Section 5.3 Merger Sub. Merger Sub is a corporation duly
organized, validly existing and in good standing under the Laws of the
State of Delaware. Merger Sub is a newly incorporated company formed solely
for purposes of consummating the transactions contemplated by this
Agreement and has engaged in no activity other than as provided in, or
contemplated by, this Agreement. The authorized capital stock of Merger Sub
consists of 1,000 shares of Merger Sub Common Stock, all of which are
validly issued, fully paid and nonassessable and are owned by Laser. Except
as set forth above there are no shares of capital stock of Merger Sub
issued or outstanding or any options, warrants, subscription, calls,
rights, convertible securities or other agreements or commitments
obligating Merger Sub to issue, transfer, sell, redeem, repurchase or
otherwise acquire any shares of its capital stock or securities.
Section 5.4 Authority Relative to this Agreement. Each of Laser
and Merger Sub has the corporate power and authority to enter into this
Agreement and to perform its obligations hereunder and to consummate the
transactions contemplated hereby. The execution and delivery of this
Agreement by Laser and Merger Sub and the consummation by Laser and Merger
Sub of the transactions contemplated hereby have been duly authorized by
the Boards of Directors of Laser and Merger Sub, and no other corporate
action or proceedings on the part of Laser or Merger Sub (including any
action on the part of its stockholders) is necessary to authorize this
Agreement or the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Laser and Merger Sub and, assuming it is a
valid and binding obligation of the Company, constitutes a valid and
binding agreement of Laser and Merger Sub, enforceable against Laser and
Merger Sub in accordance with its terms, except that such enforcement may
be subject to any bankruptcy, insolvency, reorganization, moratorium or
similar Laws now or hereafter in effect relating to creditors' rights
generally and other forms of equitable relief may be subject to equitable
defenses and the discretion of the court before which any proceedings
therefor may be brought.
Section 5.5 Consents and Approvals; No Violations. Except for
applicable requirements of the HSR Act, the Securities Act, the Exchange
Act, Competition Laws, and state securities or blue sky Laws, and the
filing of the Certificate of Merger in such form as required by, and
executed in accordance with the relevant provisions of, the DGCL, no filing
with, and no permit, authorization, consent or approval of, any
governmental or regulatory authority is necessary for the consummation by
Laser or Merger Sub of the transactions contemplated by this Agreement,
except for such filings, permits, authorizations, consents or approvals the
failure of which to be made or obtained would not (i) individually or in
the aggregate have a Laser Material Adverse Effect or (ii) delay in any
material respect or prevent the consummation of any of the transactions
contemplated by this Agreement. Neither the execution and delivery of this
Agreement by Laser or Merger Sub nor the consummation by Laser or Merger
Sub of the transactions contemplated hereby, nor compliance by Laser with
any of the provisions hereof, will (a) conflict with or result in any
breach of any provisions of the certificate of incorporation or by-laws of
Laser or Merger Sub; (b) result in a violation or breach of, or constitute
(with or without due notice or lapse of time or both) a default (or give
rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any material (as defined for
purposes of Form 10-K) Contract to which Laser, Merger Sub or any of their
subsidiaries is a party or by which any of them or any of their properties
or assets may be bound; or (c) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Laser, Merger Sub, any of their
subsidiaries or any of their properties or assets, except, in the case of
clauses (b) and (c), for violations, breaches or defaults which would not
individually or in the aggregate have a Laser Material Adverse Effect.
Section 5.6 Reports and Financial Statements.
(a) Laser has filed all reports, forms, registrations,
schedules, statements and other documents required to be filed by it with
the SEC since January 1, 1997 (the "Laser SEC Reports"). As of their
respective dates, the Laser SEC Reports complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as the
case may be, and the applicable rules and regulations promulgated
thereunder. Except to the extent that information contained in any Laser
SEC Report has been amended, revised or superseded by a later Laser SEC
Report filed and publicly available prior to the date of this Agreement (as
amended, revised or superseded by a later filed Laser SEC Report to the
date of this Agreement, the "Filed Laser SEC Reports"), none of the Filed
Laser SEC Reports, when filed, contained any untrue statement of a material
fact or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(b) The consolidated financial statements of Laser included in
the Filed Laser SEC Reports complied as to form in all material respects
with the applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in
accordance with GAAP (except, in the case of the unaudited statements, as
permitted by Form 10-Q of the SEC) applied on a consistent basis during the
periods involved (except as may be indicated therein or in the notes
thereto) and fairly present the consolidated financial position of Laser
and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and their consolidated cash flows
for the periods then ended (subject, in the case of the unaudited
statements, to normal year-end audit adjustments and to any other
adjustments described therein).
(c) Except as set forth in the Filed Laser SEC Reports and
except for liabilities and obligations incurred in the ordinary course of
business consistent with past practice since the date of the most recent
consolidated balance sheet included in the Filed Laser SEC Reports (the
"Laser Balance Sheet Date"), neither Laser nor any of the Laser
subsidiaries has any material liabilities or obligations of any nature
(whether accrued, absolute, contingent or otherwise) required by GAAP to be
recognized or disclosed on a consolidated balance sheet of Laser and its
consolidated subsidiaries or in the notes thereto.
Section 5.7 Absence of Certain Changes or Events. Except as set
forth in the Filed Laser SEC Reports, since the Laser Balance Sheet Date,
the business of Laser and its subsidiaries has been conducted only in the
ordinary course of business consistent with past practice, and there has
not been any event, change or development which individually or in the
aggregate has had or would reasonably be expected to have a Laser Material
Adverse Effect or would impair or delay the ability of Laser to consummate
the transactions contemplated by, or to satisfy its obligations under, this
Agreement.
Section 5.8 Litigation. Except as disclosed in the Filed Laser
SEC Reports, there is no suit, action, proceeding or investigation pending
or, to the knowledge of Laser, threatened against or affecting Laser or any
of its subsidiaries that individually or in the aggregate would reasonably
be expected to (i) have a Laser Material Adverse Effect (taking into
account any reserve therefor as of the most recent balance sheet included
in the Filed Laser SEC Reports) or (ii) delay in any material respect or
prevent the consummation of any of the transactions contemplated by this
Agreement, nor is there any judgment, order, decree, statute, Law,
ordinance, rule or regulation of any Governmental Entity or arbitrator
outstanding against Laser or any of its subsidiaries having, or which would
reasonably be expected to have, any effect referred to in clause (i) or
(ii) above.
Section 5.9 Information in Disclosure Documents and
Registration Statement. None of the information to be supplied by Laser for
inclusion or incorporation by reference in (a) the Registration Statement
or (b) the Information Statement, the Schedule 13E-3 or the Section 14(f)
Notice will, in the case of the Registration Statement, at the time it
becomes effective and at the Company Effective Time contain any untrue
statement of a material fact or omit to state any material fact required to
be stated therein or necessary to make the statements therein not
misleading, or, in the case of the Information Statement, the Schedule
13E-3 and the Section 14(f) Notice, at the time of the mailing thereof and,
in the case of the Information Statement and the Schedule 13E-3, at the
Company Effective Time, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary
in order to make the statements therein, in light of the circumstances
under which they are made, not misleading. The Registration Statement will
comply as to form in all material respects with the provisions of the
Securities Act and the rules and regulations promulgated thereunder. The
Schedule 13E-3 will comply as to form in all material respects with the
provisions of the Exchange Act and the rules and regulations promulgated
thereunder.
Section 5.10 Taxes.
(a) Laser and its subsidiaries have filed (or there have been
filed on their behalf) with the appropriate governmental authorities all
material Tax Returns required to be filed by them and such Tax Returns are
true, correct and complete in all material respects and disclose all Taxes
required to be paid by them for the periods covered thereby; and
(b) all material Taxes (whether or not shown on any Tax Return)
owed by Laser and its subsidiaries and required to be paid on or before the
Closing Date have been (or will be) timely paid or, in the case of Taxes
which Laser or any of its subsidiaries is presently contesting in good
faith, an adequate reserve has been established for such Taxes in
accordance with GAAP.
Section 5.11 Compliance with Applicable Law. Except as
disclosed in the Filed Laser SEC Reports, Laser and its subsidiaries have
received such certificates, permits, licenses, franchises, consents,
approvals, orders, authorizations and clearances from appropriate
Governmental Entities (the "Laser Licenses") as are necessary to own or
lease and operate their respective properties and to conduct their
respective businesses substantially in the manner described in the Laser
SEC Reports and as currently owned or leased and conducted, and all such
Laser Licenses are valid and in full force and effect, except for any such
certificates, permits, licenses, franchises, consents, approvals,
orders, authorizations and clearances which the failure to have or to be in
full force and effect would not reasonably be expected to have,
individually or in the aggregate, a Laser Material Adverse Effect. Except
as disclosed in the Filed Laser SEC Reports, Laser and its subsidiaries are
in compliance in all material respects with their respective obligations
under the Laser Licenses, with only such exceptions as, individually or in
the aggregate, would not reasonably be expected to have a Laser Material
Adverse Effect. Except as disclosed in the Filed Laser SEC Reports, Laser
and its subsidiaries are in compliance with all judgments, orders, decrees,
statutes, Laws, ordinances, rules and regulations of any Governmental
Entity applicable to them, except for such noncompliance which individually
or in the aggregate would not have a Laser Material Adverse Effect.
Section 5.12 Brokers. No broker, investment banker or other
person, other than Morgan Stanley, the fees and expenses of which will be
paid by Laser (as reflected in an agreement between Morgan Stanley and
Laser) is entitled to any broker's, finder's or other similar fee or
commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Laser.
ARTICLE VI
COVENANTS RELATING TO CONDUCT OF BUSINESS
Section 6.1 Conduct of Business by the Company. During the
period from the date of this Agreement to the Holdings Effective Time,
except as expressly permitted by this Agreement or with the prior written
consent of Laser or as set forth in Section 6.1 of the Company Disclosure
Schedule, the Company shall, and shall cause its subsidiaries to, carry on
the business of the Company and its subsidiaries in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted
and in compliance in all material respects with all applicable Laws and
regulations and, to the extent consistent therewith, use all reasonable
efforts to preserve intact the current business organizations of the
Company and its subsidiaries, and to preserve its relationships with those
persons having business dealings with the Company and its subsidiaries to
the end that the goodwill and ongoing businesses of the Company and its
subsidiaries shall be unimpaired at the Holdings Effective Time. Without
limiting the generality of the foregoing, during the period from the date
of this Agreement to the Holdings Effective Time, the Company agrees as to
itself and its subsidiaries that, except as expressly permitted by this
Agreement or with the prior written consent of Laser or as set forth in
Section 6.1 of the Company Disclosure Schedule:
(i) Neither the Company nor any of its subsidiaries shall
(x) declare, set aside or pay any distributions (whether in cash,
stock or property) with respect to its capital stock or (y) split,
combine, or reclassify any of its capital stock or issue or authorize
the issuance of any other securities in respect of, in lieu of or in
substitution for shares of its capital stock (other than dividends or
stock issuances by a wholly owned subsidiary of the Company to the
Company or another wholly owned subsidiary of the Company);
(ii) Neither the Company nor any of its subsidiaries
shall issue, deliver, sell, pledge or otherwise encumber any shares
of its capital stock, any other voting securities or any securities
convertible into, or any options, warrants or rights to acquire, any
such shares, voting securities or convertible securities (other than
the issuance of Company Common Stock upon the exercise of Employee
Stock Options in accordance with their terms and issuances by a
wholly owned subsidiary of the Company to the Company or another
wholly owned subsidiary of the Company);
(iii) The Company shall not amend its certificate of
incorporation or by-laws;
(iv) Other than as would not be material to the Company,
the Company and its subsidiaries shall not acquire or agree to
acquire (x) by merging or consolidating with, or by purchasing a
substantial portion of the assets of, or in any other manner, any
business or any corporation, limited liability company, partnership,
joint venture, association or other business organization or division
thereof or (y) any assets that individually or in the aggregate are
material to the Company and its subsidiaries;
(v) Other than as would not be material to the Company,
the Company and its subsidiaries shall not sell, lease, license or
otherwise encumber or subject to any Lien or otherwise dispose of any
of the properties or assets of the Company and its subsidiaries,
other than in the ordinary course of business consistent with past
practice or pursuant to existing contractual obligations, if any, set
forth in Section 6.1 of the Company Disclosure Schedule;
(vi) Other than in the ordinary course of business or as
would not be material to the Company, the Company and its
subsidiaries shall not (x) incur any indebtedness or (y) make any
loans, advances or capital contributions to, or investments in, any
other person (other than the Company or a subsidiary of the Company),
other than to officers and employees of the Company and its
subsidiaries for travel, business or relocation expenses in the
ordinary course of business;
(vii) Other than in the ordinary course of business or
consistent with the Company's 1998 capital budget;
(viii) Other than in the ordinary course of business, the
Company and its subsidiaries shall not make any material Tax election
or settle or compromise any material income Tax liability;
(ix) Except in the ordinary course of business or except
as would not reasonably be expected to have a Company Material
Adverse Effect, the Company and its subsidiaries (i) shall not enter
into any Contracts and (ii) shall not modify, amend or terminate any
material Contract or agreement to which the Company or any of its
subsidiaries is, or as of the Company Effective Time will be, a party
or waive, release or assign any material rights or claims thereunder;
(x) Except as required by Law or previously existing
contractual arrangements, in the ordinary course of business
consistent with past practice or as disclosed or otherwise provided
in this Agreement, the Company will not, nor will it permit any of
its subsidiaries to, (a) increase the compensation of any of its
employees, (b) enter into any Contract with any of its employees
regarding his or her employment, compensation or benefits, or (c)
adopt any plan, arrangement or policy which would become a Company
Plan or amend any Company Plan to the extent such adoption or
amendment would create or materially increase any material liability
or obligation on the part of the Company or its subsidiaries;
(xi) The Company and its subsidiaries shall not make any
change to their accounting methods, principles or practices, except
as may be required by GAAP or Regulation S-X promulgated by the SEC
or by Law;
(xii) The Company shall not, and shall not permit any of
its subsidiaries to, create, incur, suffer to exist or assume any
material Lien on any of their assets, except as would not have a
Company Material Adverse Effect or materially impair the Company's
conduct of the business and operations of the Company and its
subsidiaries, as presently conducted;
(xiii) The Company shall not, and shall not permit any of
its subsidiaries to enter into any transaction or contract with, or
(except pursuant to the Affiliate Agreements) make any payment to,
any Affiliate of the Company (other than the Company's subsidiaries
or its or their officers or directors in the ordinary course of
business consistent with past practice); and
(xiv) The Company and its subsidiaries shall not
authorize, or commit or agree to take, any of the foregoing actions.
Section 6.2 Other Actions. During the period from the date
hereof to the Holdings Effective Time, the Company and Laser shall not, and
shall not permit any of their respective subsidiaries to, take any action
that would, or that could reasonably be expected to, result in (i) any of
the representations and warranties of such party set forth in this
Agreement that are qualified as to materiality becoming untrue, (ii) any of
such representations and warranties that are not so qualified becoming
untrue in any material respect or (iii) any of the conditions to the
Company Merger set forth in Article VIII hereof not being satisfied.
Section 6.3 Advice of Changes. Upon obtaining knowledge of any
such occurrence, the Company and Laser shall promptly advise the other
party orally and in writing of (i) any representation or warranty made by
it contained in this Agreement that is qualified as to materiality becoming
untrue or inaccurate in any respect or any such representation or warranty
that is not so qualified becoming untrue or inaccurate in any material
respect, (ii) the failure by it to comply with or satisfy in any material
respect any covenant, condition or agreement to be complied with or
satisfied by it under this Agreement or (iii) any change or event (x)
having, or which, insofar as can reasonably be foreseen, would have, in the
case of Laser, a Laser Material Adverse Effect and, in the case of the
Company, a Company Material Adverse Effect, (y) having, or which, insofar
as can reasonably be foreseen, would have, the effect set forth in clause
(i) above or (z) which has resulted, or which, insofar as can reasonably be
foreseen, would result, in any of the conditions set forth in Article VIII
hereof not being satisfied; provided, however, that no such notification
shall affect the representations, warranties, covenants or agreements of
the parties or the conditions to the obligations of the parties under this
Agreement.
Section 6.4 Conduct of Business of Merger Sub. From the date
hereof to the Company Effective Time, Merger Sub shall not (i) engage in
any activities of any nature, (ii) acquire any assets, or (iii) incur any
indebtedness or assume any liabilities or obligations, in each case, except
as provided in or contemplated by this Agreement.
Section 6.5 Section 14(f) Notice. Promptly after the date
hereof, Laser shall provide to the Company in writing the information with
respect to the Laser Designees (as defined in the Holdings Merger
Agreement) required by Section 14(f) of the Exchange Act and Rule 14f-1 of
the SEC. Promptly after its receipt of such information, the Company shall
file with the SEC and mail to all stockholders of record of the Company the
Section 14(f) Notice.
ARTICLE VII
ADDITIONAL AGREEMENTS
Section 7.1 Preparation of the Registration Statement, the
Information Statement, the Schedule 13E-3 and the Section 14(f) Notice. As
soon as reasonably practicable following the date of this Agreement, Laser
and the Company shall prepare and file with the SEC the Information
Statement and Laser shall prepare and file with the SEC the Registration
Statement, in which the Information Statement will be included as a
prospectus (including the financial statements and pro forma financial
information required to be set forth therein), and the Schedule 13E-3 and
the Section 14(f) Notice. Laser shall use all reasonable best efforts to
have the Registration Statement declared effective under the Securities Act
and the Schedule 13E-3 and the Section 14(f) Notice cleared by the SEC and
mailed as promptly as practicable after such filing. The Company will use
all reasonable best efforts to cause the Information Statement and the
Schedule 13E-3 and the Section 14(f) Notice to be mailed to the Company's
stockholders as promptly as practicable after it has been cleared by the
SEC. Each of Laser and the Company shall also take any action (other than
qualifying to do business in any jurisdiction in which it is not now so
qualified or to file a general consent to service of process) required to
be taken under any applicable state securities Laws in connection with the
issuance of Laser Common Stock in connection with the Company Merger and
the Holdings Merger. The Company shall furnish all information concerning
the Company, its subsidiaries and the holders of the Company Common Stock
and Laser shall furnish all information concerning Laser and its
subsidiaries, in each case, as may be reasonably requested in connection
with any such action.
Section 7.2 Access and Information; Confidentiality. The
Company and Laser shall each afford to the other and to the other's
financial advisors, legal counsel, accountants, consultants and other
representatives full access at all reasonable times throughout the period
prior to the Company Effective Time to all of its books, records,
properties, plants and personnel (provided that all such access shall be on
reasonable advance notice and shall not disrupt normal business operations)
and, during such period, each shall furnish promptly to the other (a) a
copy of each report, schedule and other document filed or received by it
pursuant to the requirements of federal or state securities Laws, and (b)
all other information as such other party may reasonably request, provided
that no investigation pursuant to this Section 7.2 shall affect any
representations or warranties made herein or the conditions to the
obligations of the respective parties to consummate the Company Merger.
Each party and their respective affiliates, representatives and agents
shall hold in confidence all nonpublic information in accordance with the
terms of the Confidentiality Agreements between Laser and the Company dated
February 4, 1998 and February 23, 1998.
Section 7.3 Comfort Letters.
(a) The Company shall use its reasonable best efforts to cause
to be delivered to Laser "comfort" letters of Ernst & Young, LLP, the
Company's independent public accountants, dated the date on which the
Registration Statement shall become effective and as of the date on which
the Information Statement is mailed to the Company's stockholders, and
addressed to Laser and the Company, in form and substance reasonably
satisfactory to Laser and as is reasonably customary in scope and substance
for letters delivered by independent public accountants in connection with
transactions such as those contemplated by this Agreement.
(b) Laser shall use its reasonable best efforts to cause to be
delivered to the Company "comfort" letters of Arthur Andersen, LLP, Laser's
independent public accountants, dated the date on which the Registration
Statement shall become effective and as of the date on which the
Information Statement is mailed to the Company's stockholders, and
addressed to the Company and Laser, in form and substance reasonably
satisfactory to the Company and as is reasonably customary in scope and
substance for letters delivered by independent public accountants in
connection with transactions such as those contemplated by this Agreement.
Section 7.4 Listing Application. Laser shall prepare and submit
to the NYSE a listing application covering the Laser Shares to be issued in
connection with the Company Merger, and shall use its reasonable best
efforts to obtain, prior to the Company Effective Time, approval for the
listing of such Laser Shares, subject to official notice of issuance.
Section 7.5 Affiliates. Prior to the Company Effective Time,
the Company shall cause to be prepared and delivered to Laser a list
(reasonably satisfactory to counsel for Laser) identifying each person who,
at the time the Information Statement is mailed to the Company's
stockholders, may be deemed to be an "affiliate" of the Company, as such
term is used in paragraphs (c) and (d) of Rule 145 under the Securities Act
(the "Company Rule 145 Affiliates"). The Company shall use its reasonable
best efforts to cause such person who is identified as a Company Rule 145
Affiliate in such list to deliver to Laser on or prior to the Company
Effective Time a written agreement, in customary form, that such Company
Rule 145 Affiliate will not (i) sell, pledge, transfer or otherwise dispose
of, or in any other way reduce such Company Rule 145 Affiliate's risk
relative to, any Laser Shares issued to such Company Rule 145 Affiliate in
connection with the Company Merger, except pursuant to an effective
registration statement or in compliance with such Rule 145 or another
exemption from the registration requirements of the Securities Act or (ii)
sell or in any other way reduce such Rule 145 Affiliate's risk relative to
any Laser Shares received in the Company Merger (within the meaning of
Section 201.01 of the SEC's Financial Reporting Release No. 1) during the
period commencing thirty (30) days prior to the Company Effective Time and
ending at such time as the financial results (including combined sales and
net income) covering at least thirty (30) days of post-Merger operations
have been published, except as permitted by Staff Accounting Bulletin No.
76 issued by the SEC.
Section 7.6 HSR Act; Competition Laws. As soon as reasonably
practicable, the Company, Laser and Merger Sub shall make or cause to be
made all filings and submissions under the HSR Act (if applicable) and any
other applicable Competition Laws as may be reasonably required to be made
in connection with this Agreement and the transactions contemplated hereby.
Subject to Section 7.2 hereof, the Company will furnish to Laser and Laser
will furnish to the Company, such information and assistance as the other
may reasonably request in connection with the preparation of any such
filings or submissions. Subject to Section 7.2 hereof, the Company will
provide Laser, and Laser will provide the Company, with copies of all
correspondence, filings or communications (or memoranda setting forth the
substance thereof) between such party or any of its representatives, on the
one hand, and any governmental agency or authority or members of their
respective staffs, on the other hand, with respect to this Agreement and
the transactions contemplated hereby. The Company and Laser shall consult
with one another with respect to any such correspondence, filings or
communications and shall engage in discussions with any Governmental Entity
on a joint basis.
Section 7.7 Employee Matters.
(a) From and after the Holdings Effective Time, Laser shall
honor, and shall cause the Company to honor, all employment, severance,
termination, consulting and retirement agreements to which the Company is a
party as of the Holdings Effective Time; provided, however, that (i)
neither Laser nor the Company shall have any responsibility for the
Company's obligations under that certain employment agreement entered into
as of October 1, 1997, between the Company and Jerry W. Levin (except for
the incentive payment provided for in section 3.2(b) thereof (relating to
the divestiture of Coleman Safety & Security Products, Inc.), which shall
be the responsibility of the Company and paid in accordance with the terms
of section 3.2(b) thereof), and (ii) neither Laser nor the Company shall
have any responsibility for the Company's obligations under that certain
employment agreement entered into as of July 1, 1997, between the Company
and Paul E. Shapiro. Except as provided in the first sentence of Section
7.7(b) or the proviso to this sentence, from and after the Holdings
Effective Time, Laser will cause the Company to allow Company employees to
participate in Laser employee benefit plans on substantially the same basis
as similarly situated Laser employees; provided, however, that Laser will
cause the Company to continue the Company Plans for at least six (6) months
following the Holdings Effective Time. Laser will or will cause the Company
to give Company employees full credit for purposes of eligibility and
vesting of benefits and benefit accrual for service with the Company and
its affiliates prior to the Holdings Effective Time under each Laser
employee benefit plan; provided, however, that no such crediting of service
results in duplication of benefits. With respect to any welfare benefit
plans maintained for the benefit of Company employees from and after the
Holdings Effective Time, Laser shall (i) cause there to be waived any
pre-existing condition limitations and (ii) give effect, in determining any
deductible and maximum out-of-pocket limitations, to claims incurred and
amounts paid by, and amounts reimbursed to, such employees with respect to
similar plans maintained by the Company for such employee's benefit
immediately prior to the Holdings Effective Time. Laser acknowledges that,
for the purposes of certain of such Company Plans and certain of such other
employment, severance, termination, consulting and retirement agreements to
which the Company is currently a party, the consummation of the Holdings
Merger will constitute a "change in control" of the Company (as such term
is defined in such plans and agreements). Laser agrees to cause the
Company, after the Holdings Effective Time, to pay all amounts provided
under such Company Plans and agreements as a result of a change in control
of the Company in accordance with their respective terms and to honor, and
to cause the Company to honor, all rights, privileges and modifications to
or with respect to any such Company Plans or agreements which become
effective as a result of such change in control.
(b) Laser shall cause the Company to continue the Company's
Executive Annual Incentive Policy for the remainder of 1998, and
participants therein shall not be eligible for participation in an
analogous Laser incentive plan in respect of 1998. Laser shall honor, and
shall cause the Company to honor, the Company's Executive Severance Policy
without any amendment adverse to participants. Laser shall provide
severance benefits for employees of the Company, who are not participants
in Company's Executive Severance Policy and who do not have employment
agreements with the Company, under the Laser severance policy on the same
basis as similarly situated Laser employees provided that severance
benefits shall be no less than those set forth on Schedule 7.7(b).
(c) Effective as of the ninety-first (91st) day following the
Holdings Effective Time, the participants in the Executive Severance Policy
set forth on Schedule 7.7(c) may voluntarily terminate their employment,
which termination will be deemed to be for "Good Reason" under the
Executive Severance Policy as a result of the consummation of the Holdings
Merger.
(d) Laser and the Company agree to take all necessary action to
provide that, effective as of the Holdings Effective Time, all outstanding
Employee Stock Options shall be vested and exercisable as of the Holdings
Effective Time, and between the Holdings Effective Time and the Company
Effective Time, Laser shall cause the Company to maintain a broker-dealer
cashless exercise procedure for the exercise of Employee Stock Options.
Laser and the Company agree to take all other actions necessary to provide
for the cancellation, effective at the Company Effective Time, of each
outstanding Employee Stock Option and, in settlement therefor, a payment to
the holder of the Employee Stock Option in cash by Laser or the Company at
the Company Effective Time equal to the product of (i) the total number of
shares of Company Common Stock subject to such Employee Stock Option, and
(ii) the excess of $27.50 over the exercise price per share of Company
Common Stock subject to such Employee Stock Option, less any applicable
withholding taxes.
(e) Laser agrees that, at or prior to the Holdings Effective
Time, Holdings may cause the Company to (i) assume sponsorship of the
pension, retirement, savings, retiree health care and life insurance and
other plans maintained by New Coleman Holdings, Inc. that are reflected in
footnotes 7 and 12 to the 1996 financial statements included in the
Company's 1996 Annual Report on SEC Form 10-K (as such plans may have been
changed in the ordinary course of business since December 31, 1996) (the
"Plans"), and (ii) assume the liabilities and obligations of New Coleman
Holdings, Inc. under the Plans to the extent reflected in such footnotes
(as such liabilities and obligations may have changed in the ordinary
course of business since December 31, 1996). The documents used to effect
such assumption shall be in form and substance reasonably satisfactory to
Parent Holdings and Laser.
Section 7.8 Continuance of Existing Indemnification
Rights.
(a) For six (6) years after the Company Effective Time (and
during the period following the Holdings Effective Time but prior to the
Company Effective Time), Laser shall, or shall cause the Surviving
Corporation to, indemnify, defend and hold harmless any person who is now,
or has been at any time prior to the date hereof, or who becomes prior to
the Company Effective Time, a director or officer of the Company (an
"Indemnified Person") against all losses, claims, damages, liabilities,
costs and expenses (including attorneys' fees and expenses), judgments,
fines, losses and amounts paid in settlement in connection with any actual
or threatened action, suit, claim, proceeding or investigation (each, a
"Claim") to the extent that any such Claim is based on, or arises out of:
(i) the fact that such Indemnified Person is or was a director or officer
of the Company or is or was serving at the request of the Company as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise; or (ii) this Agreement or the
Holdings Merger Agreement or any of the transactions contemplated hereby or
thereby, in each case to the extent that any such Claim pertains to any
matter or fact arising, existing or occurring prior to or at the Company
Effective Time, regardless of whether such Claim is asserted or claimed
prior to, at or after the Company Effective Time, to the full extent
permitted under the DGCL, the Company's certificate of incorporation or
by-laws or any indemnification agreement in effect at the date hereof,
including provisions relating to advancement of expenses incurred in the
defense of any such Claim; provided, however, that neither Laser nor the
Surviving Corporation shall be required to indemnify any Indemnified Person
in connection with any proceeding (or portion thereof) involving any Claim
initiated by such Indemnified Person against the Company unless the
initiation of such proceeding (or portion thereof) was authorized by the
Board of Directors of the Company or unless such proceeding is brought by
an Indemnified Person to enforce rights under this Section 7.8; and
provided further that in the event any Claim is asserted or made within
such period, all such rights, liabilities and limitations in respect of any
such Claim shall continue until disposition thereof. Without limiting the
generality of the preceding sentence, in the event any Indemnified Person
becomes involved in any Claim after the Company Effective Time, Laser
shall, or shall cause the Surviving Corporation to, periodically advance to
such Indemnified Person its legal and other expenses (including the cost of
any investigation and preparation incurred in connection therewith),
subject to the providing by such Indemnified Person of an undertaking to
reimburse all amounts so advanced in the event of a final non-appealable
determination by a court of competent jurisdiction that such Indemnified
Person is not entitled thereto.
(b) Laser and the Company agree that all rights to
indemnification, and all limitations with respect thereto, existing in
favor of any Indemnified Person, as provided in the Company's certificate
of incorporation or by-laws and any indemnification agreement in effect at
the date hereof, shall survive the Holdings Merger and the Company Merger
and shall continue in full force and effect, without any amendment thereto,
for a period of six (6) years from the Company Effective Time (and during
the period following the Holdings Effective Time but prior to the Company
Effective Time) to the extent such rights and limitations are consistent
with the DGCL; provided, however, that in the event any Claim is asserted
or made within such period, all such rights, liabilities and limitations in
respect of any such Claim shall continue until disposition thereof;
provided further that any determination required to be made with respect to
whether an Indemnified Person's conduct complies with the standards set
forth under the DGCL, the Company's certificate of incorporation or by-laws
or any such agreement, as the case may be, shall be made by independent
legal counsel selected by such Indemnified Person and reasonably acceptable
to Laser; and provided further that nothing in this Section 7.8 shall
impair any rights or obligations of any current or former director or
officer of the Company.
(c) Laser or the Surviving Corporation shall use reasonable
best efforts to obtain a liability insurance policy ("D&O Insurance") for
the benefit of the Company's existing and former directors and officers
commencing at the Holdings Effective Time and for a period of not less than
six (6) years after the Company Effective Time providing substantially
similar coverage in amounts and on terms no less advantageous than that
currently provided to such existing and former directors and officers;
provided further that neither Laser nor the Surviving Corporation shall be
required to pay an annual premium for D&O Insurance in excess of 200% of
the last annual premium paid prior to the date hereof, but in such case
shall purchase as much coverage as possible for such amount.
(d) The provisions of this Section 7.8 are intended to be for
the benefit of, and shall be enforceable by, each Indemnified Person, his
or her heirs and his or her personal representatives.
Section 7.9 Expenses. Whether or not the Company Merger is
consummated, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the
party incurring such expenses.
Section 7.10 Public Announcements. Laser and the Company shall
consult with each other before issuing their respective initial press
releases to be issued with respect to the transactions contemplated by this
Agreement and the Holdings Merger.
Section 7.11 Reasonable Best Efforts. Upon the terms and
subject to the conditions set forth in this Agreement, each of the parties
hereto agrees to use its reasonable best efforts to take, or cause to be
taken, all actions, and to do, or cause to be done, and to assist and
cooperate with the other parties in doing, all things necessary, proper or
advisable, to consummate and make effective, in the most expeditious manner
practicable, the Company Merger and the other transactions contemplated by
this Agreement, including, but not limited to: (i) the obtaining of all
necessary actions or nonactions, waivers, consents and approvals from all
Governmental Entities and the making of all necessary registrations and
filings with, and the taking of all other reasonable steps as may be
necessary to obtain an approval or waiver from, or to avoid an action or
proceeding by, any Governmental Entity (including those in connection with
the HSR Act, if applicable); (ii) the obtaining of all necessary consents,
approvals or waivers from persons other than Governmental Entities; (iii)
the defending of any lawsuits or other legal proceedings, whether judicial
or administrative, challenging this Agreement or the consummation of the
transactions contemplated hereby, including seeking to have any stay or
temporary restraining order entered by any court or other Governmental
Entity vacated or reversed; and (iv) the execution and delivery of any
additional instruments necessary to consummate the transactions
contemplated by this Agreement. Notwithstanding the foregoing, nothing in
this Agreement shall be deemed to require any party hereto to enter into
any agreement with any Governmental Entity or to consent to any order,
decree or judgment requiring such party to hold, separate or divest, or to
restrict the dominion or control of such party or any of its Affiliates
over, any of the assets, properties or businesses of such party or its
Affiliates in existence on the date hereof.
ARTICLE VIII
CONDITIONS TO CONSUMMATION OF THE MERGER
Section 8.1 Conditions to Each Party's Obligation to Effect the
Company Merger. The respective obligations of each party to effect the
Company Merger shall be subject to the satisfaction or waiver, to the
extent permitted by Law, at or prior to the Company Effective Time of the
following conditions:
(a) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act and no stop order
suspending the effectiveness of the Registration Statement shall be in
effect and no proceeding for such purpose shall be pending before or
threatened by the SEC; and all applicable time periods required under the
Securities Act and the Exchange Act following the mailing of the
Information Statement to the Company's stockholders shall have lapsed.
(b) The Laser Shares shall have been approved for listing on
the NYSE, subject to official notice of issuance.
(c) No preliminary or permanent injunction or other order by
any federal or state court in the United States of competent jurisdiction
which prohibits the consummation of the Company Merger shall have been
issued and remain in effect.
(d) The Holdings Merger shall have been consummated in
accordance with its terms and the applicable provisions of the DGCL.
ARTICLE IX
TERMINATION, AMENDMENT AND WAIVER
Section 9.1 Termination. This Agreement shall terminate
automatically upon the termination of the Holdings Merger Agreement in
accordance with its terms.
Section 9.2 Effect of Termination. In the event of termination
of this Agreement as provided in Section 9.1 hereof, this Agreement shall
forthwith become void and there shall be no liability on the part of any of
the parties; provided that the provisions of Sections 7.2 and 7.9 and of
this Article IX shall continue and that nothing herein shall relieve any
party from liability for any willful breach hereof.
Section 9.3 Amendment. This Agreement may be amended by the
parties pursuant to a writing adopted by action taken by all of the parties
at any time prior to (but not following) the consummation of the Holdings
Merger. This Agreement may not be amended except by an instrument in
writing signed by all the parties hereto.
Section 9.4 Extension; Waiver. At any time prior to (but not
following) the consummation of the Holdings Merger any party hereto may (a)
extend the time for the performance of any of the obligations or other acts
of the other parties, (b) waive any inaccuracies in the representations and
warranties contained herein or in any document delivered pursuant hereto
and (c) waive compliance with any of the agreements or conditions contained
herein. Any agreement on the part of a party to any such extension or
waiver shall be valid only as against such party and only if set forth in
an instrument in writing signed by such party. The failure of any party to
this Agreement to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of such rights.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 No Survival of Representations and Warranties. No
representations or warranties contained herein shall survive beyond the
Company Effective Time. This Section 10.1 shall not limit any covenant or
agreement of the parties which by its terms contemplates performance after
the Company Effective Time.
Section 10.2 Notices. All notices or other communications
hereunder shall be deemed to have been duly given and made if in writing
and if served by personal delivery upon the party for whom it is intended,
if delivered by registered or certified mail, return receipt requested, or
by a national courier service, or if sent by telecopier; provided that the
telecopy is promptly confirmed by telephone confirmation thereof, to the
person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person:
(a) If to Laser, to:
Sunbeam Corporation
1615 South Congress Avenue
Suite 200
Delray Beach, Florida 33445
Facsimile: (561) 243-2191
Attention: David C. Fannin, Esq.
with a copy to:
Skadden, Arps, Slate, Meagher & Flom LLP
One Rodney Square
Wilmington, Delaware 19801
Facsimile: (302) 651-3001
Attention: Richard L. Easton, Esq.
(b) If to the Company, to:
CLN Holdings Inc.
5900 North Andrews Avenue, Suite #700-A
Fort Lauderdale, Florida 33309
Facsimile: (954) 772-3352
Attention: General Counsel
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Facsimile: (212) 403-2000
Attention: Adam O. Emmerich, Esq.
Any such notification shall be deemed delivered (i) upon receipt, if
delivered personally, (ii) on the next business day, if sent by national
courier service for next business day delivery or (iii) the business day
received, if sent by telecopier.
Section 10.3 Descriptive Headings. The headings contained in
this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
Section 10.4 Entire Agreement; No Third-Party Beneficiary. This
Agreement (including the Exhibits, Disclosure Schedules and other documents
and instruments referred to herein) (a) constitutes the entire agreement
and supersedes all other prior agreements and understandings, both written
and oral, among the parties or any of them, with respect to the subject
matter hereof; (b) except for the provisions of Sections 7.7(c) and 7.8
hereof, is not intended to confer upon any other person any rights or
remedies hereunder.
Section 10.5 Interpretation. When a reference is made in this
Agreement to an Article, Section or Annex, such reference shall be to an
Article or Section of, or an Annex to, this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words
"without limitation". The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
The phrase "made available" in this Agreement shall mean that the
information referred to has been made available if requested by the party
to whom such information is to be made available. All terms defined in this
Agreement shall have the defined meanings used in any certificate or other
document made or delivered pursuant hereto unless otherwise defined
therein. The definitions contained in this Agreement are applicable to the
singular as well as the plural forms of such terms and to the masculine as
well as to the feminine and neuter genders of such term. Any agreement,
instrument or statute defined or referred to herein or in any agreement or
instrument that is referred to herein means such agreement, instrument or
statute as from time to time amended, modified or supplemented, including
(in the case of agreements or instruments) by waiver or consent and (in the
case of statutes) by succession of comparable successor statutes and
references to all attachments thereto and instruments incorporated therein.
References to a person are also to its permitted successors and assigns
and, in the case of an individual, to his heirs and estate, as applicable.
Section 10.6 Severability. If any provision of this Agreement
or the application thereof to any person or circumstance is determined by a
court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to
persons or circumstances other than those as to which it has been held
invalid or unenforceable, shall remain in full force and effect and shall
in no way be affected, impaired or invalidated thereby. Upon any such
determination, the parties shall negotiate in good faith in an effort to
agree upon a suitable and equitable substitute provision to effect original
intent of the parties.
Section 10.7 Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned, in
whole or in part, by operation of Law or otherwise by any of the parties
without the prior written consent of the other parties. Any assignment in
violation of the preceding sentence shall be void. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and
be enforceable by, the parties and their respective successors and assigns.
Section 10.8 Disclosure Schedules. Matters reflected on the
Company Disclosure Schedule are not necessarily limited to matters required
by this Agreement to be reflected therein and the inclusion of such matters
shall not be deemed an admission that such matters were required to be
reflected on the Company Disclosure Schedule. Such additional matters are
set forth for informational purposes only and do not necessarily include
other matters of a similar nature. Capitalized terms used in the Company
Disclosure Schedule but not otherwise defined therein shall have the
respective meanings assigned to such terms in this Agreement.
Section 10.9 Governing Law. This Agreement shall be governed by
and construed in accordance with the Laws of the State of Delaware without
giving effect to the provisions thereof relating to conflicts of Law.
Section 10.10 Specific Performance. The parties hereto agree
that irreparable damage would occur in the event any of the provisions of
this Agreement were not performed in accordance with the terms hereof and
that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at Law or equity.
Section 10.11 Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original
but all of which shall constitute one and the same agreement.
Section 10.12 Certain Terms. As used herein, (i) the term
"material adverse effect" (including as used in any definition), with
respect to any Person, shall exclude any change, event, effect or
circumstance (a) arising in connection with the announcement or performance
of the transactions contemplated by this Agreement or the Holdings Merger
Agreement and (b) affecting the United States economy generally or such
Person's industries generally; and (ii) "to the knowledge of the Company"
shall mean to the actual knowledge of Paul E. Shapiro, Jerry W. Levin and
Steven R. Isko.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed on its behalf by its officers thereunto duly
authorized, all as of the date first above written.
SUNBEAM CORPORATION
By: /s/ Russell A. Kersh
_____________________________
Name: Russell A. Kersh
Title: Executive Vice President
CAMPER ACQUISITION CORP.
By: /s/ Russell A. Kersh
_____________________________
Name: Russell A. Kersh
Title: President
THE COLEMAN COMPANY, INC.
By: /s/ Paul E. Shapiro
____________________________
Name: Paul E. Shapiro
Title: Executive Vice President
ANNEX II
[LETTERHEAD OF CREDIT SUISSE FIRST BOSTON CORPORATION]
February 27, 1998
Board of Directors
The Coleman Company, Inc.
625 Madison Avenue
New York, NY 10022
Members of the Board:
You have asked us to advise you with respect to the fairness from
a financial point of view to the stockholders of The Coleman Company, Inc.
(the "Company"), other than Coleman Worldwide Corporation ("Worldwide") and
its affiliates, of the Consideration (as hereinafter defined) to be
received by such stockholders pursuant to the terms of an agreement and
plan of merger dated as of February 27, 1998 (the "Company Merger
Agreement") among Sunbeam Corporation (the "Acquiror"), Camper Acquisition
Corp., a newly formed, wholly owned subsidiary of the Acquiror ("Merger
Sub"), and the Company. The Company Merger Agreement provides, among other
things, for the merger (the "Company Merger") of Merger Sub with and into
the Company, whereby each outstanding share of common stock, par value
$0.01 per share, of the Company (the "Company Common Stock") (other than
shares of Company Common Stock held by the Company, the Acquiror or their
respective subsidiaries (other than Worldwide or Holdings (as defined
below)), and other than Dissenting Shares (as defined in the Company Merger
Agreement)) will be converted into the right to receive (1) 0.5677 shares
(the "Share Consideration") of common stock, par value $0.01 per share, of
the Acquiror (the "Acquiror Common Stock") and (2) $6.44 in cash, without
interest thereon (the "Cash Consideration" and, together with the Share
Consideration, the "Consideration"). In connection with the Company
Merger, the Acquiror, Laser Acquisition Corp., a newly formed, wholly owned
subsidiary of the Acquiror ("Sunbeam Merger Sub"), Coleman (Parent)
Holdings Inc. ("Parent Holdings") and CLN Holdings Inc., a wholly owned
subsidiary of Parent Holdings ("Holdings"), will also enter into an
agreement and plan of merger dated as of February 27, 1998 (the "Holdings
Merger Agreement"), which provides, among other things, for the merger (the
"Holdings Merger" and, together with the Company Merger, the "Mergers") of
Sunbeam Merger Sub with and into Holdings, whereby the outstanding shares
of common stock, par value $1.00, of Holdings (the "Holdings Common Stock")
will be converted into the right to receive (1) 14,099,749 shares of
Acquiror Common Stock and (2) $159,956,756 in cash, without interest
thereon. The Company Merger is subject to and conditioned upon, among
other things, consummation of the Holdings Merger.
In arriving at our opinion, we have reviewed certain publicly
available business and financial information relating to the Company and
the Acquiror, as well as the Company Merger Agreement and the Holdings
Merger Agreement. We have also reviewed certain other information,
including financial forecasts, provided to us by the Company and the
Acquiror, and have met with the managements of the Company and the Acquiror
to discuss the business and prospects of the Company and the Acquiror as
well as the business, operational and strategic benefits and implications
of the Mergers and the synergies and operating cost savings expected by the
managements of the Company and the Acquiror to be achieved through the
combination of the operations of the Company and the Acquiror.
We have also considered certain financial and stock market data
of the Company and the Acquiror, and we have compared that data with
similar data for other publicly held companies in businesses similar to the
Company and the Acquiror and we have considered the financial terms of
certain other business combinations and other transactions that have
recently been effected. We also considered such other information,
financial studies, analyses and investigations and financial, economic and
market criteria which we deemed relevant.
In connection with our review, we have not assumed any responsibility
for independent verification of any of the foregoing information
and have relied on its being complete and accurate in all material
respects. With respect to the financial forecasts, we have
assumed that they have been reasonably prepared on bases reflecting the
best currently available estimates and judgments of the managements of the
Company and the Acquiror as to the future financial performance of their
respective companies and the synergies and operating cost savings expected
to be achieved through the combination of the operations of the Company and
the Acquiror. In addition, we have not been requested to make, and have
not made, an independent evaluation or appraisal of the assets or
liabilities (contingent or otherwise) of the Company or the Acquiror, nor
have we been furnished with any such evaluations or appraisals. Our
opinion is necessarily based upon financial, economic, market and other
conditions as they exist and can be evaluated on the date hereof. We are
not expressing any opinion as to what the actual value of the shares of
Acquiror Common Stock will be when issued to the Company's stockholders
pursuant to the Company Merger or the prices at which such shares of
Acquiror Common Stock will trade subsequent to the Mergers.
We have acted as financial advisor to the Company in connection
with the Mergers and will receive a fee for our services, a significant
portion of which is contingent upon the consummation of the Mergers.
In the past we have performed certain investment banking services
for the Company and the parent of Parent Holdings and certain of its
affiliates and have received customary fees for such services.
In the ordinary course of our business, we and our affiliates may
actively trade the debt and equity securities of the Company, its
affiliates and the Acquiror for our and such affiliates' own accounts and
for the accounts of customers and, accordingly, may at any time hold a long
or short position in such securities.
It is understood that this letter is for the information of the
Board of Directors of the Company in connection with its consideration of
the Mergers, does not constitute a recommendation to any stockholder with
respect to the Company Merger and is not to be quoted or referred to, in
whole or in part, in any registration statement, prospectus or proxy
statement, or in any other document used in connection with the offering or
sale of securities, nor shall this letter be used for any other purposes,
without our prior written consent.
Based upon and subject to the foregoing, it is our opinion that,
as of the date hereof, the Consideration is fair from a financial point of
view to the stockholders of the Company (other than Worldwide and its
affiliates).
Very truly yours,
CREDIT SUISSE FIRST BOSTON CORPORATION
ANNEX III
262 APPRAISAL RIGHTS. (a) Any stockholder of a corporation of
this State who holds shares of stock on the date of the making of a demand
pursuant to subsection (d) of this section with respect to such shares, who
continuously holds such shares through the effective date of the merger or
consolidation, who has otherwise complied with subsection (d) of this
section and who has neither voted in favor of the merger or consolidation
nor consented thereto in writing pursuant to Section 228 of this title shall
be entitled to an appraisal by the Court of Chancery of the fair value of
the stockholder's shares of stock under the circumstances described in
subsections (b) and (c) of this section. As used in this section, the word
"stockholder" means a holder of record of stock in a stock corporation and
also a member of record of a nonstock corporation; the words "stock" and
"share" mean and include what is ordinarily meant by those words and also
membership or membership interest of a member of a nonstock corporation;
and the words "depository receipt" mean a receipt or other instrument
issued by a depository representing an interest in one or more shares, or
fractions thereof, solely of stock of a corporation, which stock is
deposited with the depository.
(b) Appraisal rights shall be available for the shares of any
class or series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to Section 251 (other than a merger
effected pursuant to Section 251(g) of this title), Section 252, Section
254, Section 257, Section 258, Section 263, or Section 264 of this title:
(1) Provided, however, that no appraisal rights under this
section shall be available for the shares of any class or series of stock,
which stock, or depository receipts in respect thereof, at the record date
fixed to determine the stockholders entitled to receive notice of and to
vote at the meeting of stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities exchange or
designated as a national market system security on an interdealer quotation
system by the National Association of Securities Dealers, Inc. or (ii) held
of record by more than 2,000 holders; and further provided that no
appraisal rights shall be available for any shares of stock of the
constituent corporation surviving a merger if the merger did not require
for its approval the vote of the stockholders of the surviving corporation
as provided in subsection (f) of Section 251 of this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of any class or
series of stock of a constituent corporation if the holders thereof are
required by the terms of an agreement of merger or consolidation pursuant
to Sections 251, 252, 254, 257, 258, 263 and 264 of this title to accept
for such stock anything except:
a. Shares of stock of the corporation surviving or resulting
from such merger or consolidation, or depository receipts in respect
thereof;
b. Shares of stock of any other corporation, or depository
receipts in respect thereof, which shares of stock or depository receipts
at the effective date of the merger or consolidation will be either listed
on a national securities exchange or designated as a national market system
security on an interdealer quotation system by the National Association of
Securities Dealers, Inc. or held of record by more than 2,000 holders;
c. Cash in lieu of fractional shares or fractional depository
receipts described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock, depository receipts
and cash in lieu of fractional shares or fractional depository receipts
described in the foregoing subparagraphs a., b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware
corporation party to a merger effected under Section 253 of this title is not
owned by the parent corporation immediately prior to the merger, appraisal
rights shall be available for the shares of the subsidiary Delaware
corporation.
(c) Any corporation may provide in its certificate of
incorporation that appraisal rights under this section shall be available
for the shares of any class or series of its stock as a result of an
amendment to its certificate of incorporation, any merger or consolidation
in which the corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the certificate of
incorporation contains such a provision, the procedures of this section,
including those set forth in subsections (d) and (e) of this section, shall
apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal
rights are provided under this section is to be submitted for approval at a
meeting of stockholders, the corporation, not less than 20 days prior to
the meeting, shall notify each of its stockholders who was such on the
record date for such meeting with respect to shares for which appraisal
rights are available pursuant to subsections (b) or (c) hereof that
appraisal rights are available for any or all of the shares of the
constituent corporations, and shall include in such notice a copy of this
section. Each stockholder electing to demand the appraisal of his shares
shall deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his shares.
Such demand will be sufficient if it reasonably informs the corporation of
the identity of the stockholder and that the stockholder intends thereby to
demand the appraisal of his shares. A proxy or vote against the merger or
consolidation shall not constitute such a demand. A stockholder electing
to take such action must do so by a separate written demand as herein
provided. Within 10 days after the effective date of such merger or
consolidation, the surviving or resulting corporation shall notify each
stockholder of each constituent corporation who has complied with this
subsection and has not voted in favor of or consented to the merger or
consolidation of the date that the merger or consolidation has become
effective; or
(2) If the merger or consolidation was approved pursuant to
Section 228 or Section 253 of this title, each constituent corporation,
either before the effective date of the merger or consolidation or within
ten days thereafter, shall notify each of the holders of any class or
series of stock of such constituent corporation who are entitled to
appraisal rights of the approval of the merger or consolidation and that
appraisal rights are available for any or all shares of such class or
series of stock of such constituent corporation, and shall include in
such notice a copy of this section; provided that, if the notice is given
on or after the effective date of the merger or consolidation, such notice
shall be given by the surviving or resulting corporation to all such
holders of any class or series of stock of a constituent corporation that
are entitled to appraisal rights. Such notice may, and, if given on or
after the effective date of the merger or consolidation, shall, also notify
such stockholders of the effective date of the merger or consolidation.
Any stockholder entitled to appraisal rights may, within 20 days after the
date of mailing of such notice, demand in writing from the surviving or
resulting corporation the appraisal of such holder's shares. Such demand
will be sufficient if it reasonably informs the corporation of the identity
of the stockholder and that the stockholder intends thereby to demand the
appraisal of such holder's shares. If such notice did not notify
stockholders of the effective date of the merger or consolidation, either
(i) each such constituent corporation shall send a second notice before the
effective date of the merger or consolidation notifying each of the holders
of any class or series of stock of such constituent corporation that are
entitled to appraisal rights of the effective date of the merger or
consolidation or (ii) the surviving or resulting corporation shall send
such a second notice to all such holders on or within 10 days after such
effective date; provided, however, that if such second notice is sent more
than 20 days following the sending of the first notice, such second notice
need only be sent to each stockholder who is entitled to appraisal rights
and who has demanded appraisal of such holder's shares in accordance with
this subsection. An affidavit of the secretary or assistant secretary or
of the transfer agent of the corporation that is required to give either
notice that such notice has been given shall, in the absence of fraud, be
prima facie evidence of the facts stated therein. For purposes of
determining the stockholders entitled to receive either notice, each
constituent corporation may fix, in advance, a record date that shall be
not more than 10 days prior to the date the notice is given, provided, that
if the notice is given on or after the effective date of the merger or
consolidation, the record date shall be such effective date. If no record
date is fixed and the notice is given prior to the effective date, the
record date shall be the close of business on the day next preceding the
day on which the notice is given.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any stockholder
who has complied with subsections (a) and (d) hereof and who is otherwise
entitled to appraisal rights, may file a petition in the Court of Chancery
demanding a determination of the value of the stock of all such
stockholders. Notwithstanding the foregoing, at any time within 60 days
after the effective date of the merger or consolidation, any stockholder
shall have the right to withdraw his demand for appraisal and to accept the
terms offered upon the merger or consolidation. Within 120 days after the
effective date of the merger or consolidation, any stockholder who has
complied with the requirements of subsections (a) and (d) hereof, upon
written request, shall be entitled to receive from the corporation
surviving the merger or resulting from the consolidation a statement
setting forth the aggregate number of shares not voted in favor of the
merger or consolidation and with respect to which demands for appraisal
have been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10 days
after his written request for such a statement is received by the surviving
or resulting corporation or within 10 days after expiration of the period
for delivery of demands for appraisal under subsection (d) hereof,
whichever is later.
(f) Upon the filing of any such petition by a stockholder,
service of a copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in the
office of the Register in Chancery in which the petition was filed a duly
verified list containing the names and addresses of all stockholders who
have demanded payment for their shares and with whom agreements as to the
value of their shares have not been reached by the surviving or resulting
corporation. If the petition shall be filed by the surviving or resulting
corporation, the petition shall be accompanied by such a duly verified
list. The Register in Chancery, if so ordered by the Court, shall give
notice of the time and place fixed for the hearing of such petition by
registered or certified mail to the surviving or resulting corporation and
to the stockholders shown on the list at the addresses therein stated.
Such notice shall also be given by 1 or more publications at least 1 week
before the day of the hearing, in a newspaper of general circulation
published in the City of Wilmington, Delaware or such publication as the
Court deems advisable. The forms of the notices by mail and by publication
shall be approved by the Court, and the costs thereof shall be borne by the
surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine
the stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders who
have demanded an appraisal for their shares and who hold stock represented
by certificates to submit their certificates of stock to the Register in
Chancery for notation thereon of the pendency of the appraisal proceedings;
and if any stockholder fails to comply with such direction, the Court may
dismiss the proceedings as to such stockholder.
(h) After determining the stockholders entitled to an appraisal,
the Court shall appraise the shares, determining their fair value exclusive
of any element of value arising from the accomplishment or expectation of
the merger or consolidation, together with a fair rate of interest, if any,
to be paid upon the amount determined to be the fair value. In determining
such fair value, the Court shall take into account all relevant factors.
In determining the fair rate of interest, the Court may consider all
relevant factors, including the rate of interest which the surviving or
resulting corporation would have had to pay to borrow money during the
pendency of the proceeding. Upon application by the surviving or resulting
corporation or by any stockholder entitled to participate in the appraisal
proceeding, the Court may, in its discretion, permit discovery or other
pretrial proceedings and may proceed to trial upon the appraisal prior to
the final determination of the stockholder entitled to an appraisal. Any
stockholder whose name appears on the list filed by the surviving or
resulting corporation pursuant to subsection (f) of this section and who
has submitted his certificates of stock to the Register in Chancery, if
such is required, may participate fully in all proceedings until it is
finally determined that he is not entitled to appraisal rights under this
section.
(i) The Court shall direct the payment of the fair value of the
shares, together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be simple
or compound, as the Court may direct. Payment shall be so made to each
such stockholder, in the case of holders of uncertificated stock forthwith,
and the case of holders of shares represented by certificates upon the
surrender to the corporation of the certificates representing such stock.
The Court's decree may be enforced as other decrees in the Court of
Chancery may be enforced, whether such surviving or resulting corporation
be a corporation of this State or of any state.
(j) The costs of the proceeding may be determined by the Court
and taxed upon the parties as the Court deems equitable in the
circumstances. Upon application of a stockholder, the Court may order all
or a portion of the expenses incurred by any stockholder in connection with
the appraisal proceeding, including, without limitation, reasonable
attorney's fees and the fees and expenses of experts, to be charged pro
rata against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or
consolidation, no stockholder who has demanded his appraisal rights as
provided in subsection (d) of this section shall be entitled to vote such
stock for any purpose or to receive payment of dividends or other
distributions on the stock (except dividends or other distributions payable
to stockholders of record at a date which is prior to the effective date of
the merger or consolidation); provided, however, that if no petition for an
appraisal shall be filed within the time provided in subsection (e) of this
section, or if such stockholder shall deliver to the surviving or resulting
corporation a written withdrawal of his demand for an appraisal and an
acceptance of the merger or consolidation, either within 60 days after the
effective date of the merger or consolidation as provided in subsection (e)
of this section or thereafter with the written approval of the corporation,
then the right of such stockholder to an appraisal shall cease.
Notwithstanding the foregoing, no appraisal proceeding in the Court of
Chancery shall be dismissed as to any stockholder without the approval of
the Court, and such approval may be conditioned upon such terms as the
Court deems just.
(l) The shares of the surviving or resulting corporation to
which the shares of such objecting stockholders would have been converted
had they assented to the merger or consolidation shall have the status of
authorized and unissued shares of the surviving or resulting corporation.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law (the
"DGCL") permits a Delaware corporation to indemnify officers, directors,
employees and agents for actions taken in good faith and in a manner they
reasonably believed to be in, or not opposed to, the best interests of the
corporation, and with respect to any criminal action, which they had no
reasonable cause to believe was unlawful. The DGCL provides that a
corporation may pay expenses (including attorneys' fees) incurred by an
officer or director in defending any civil, criminal, administrative or
investigative action (upon receipt of a written undertaking to reimburse
the corporation if indemnification is not appropriate), and must reimburse
a successful defendant for expenses, including attorneys' fees, actually
and reasonably incurred, and permits a corporation to purchase and maintain
liability insurance for its directors and officers. The DGCL provides that
indemnification may be made for any Claim, issue or matter as to which a
person has been adjudged by a court of competent jurisdiction, after
exhaustion of all appeals therefrom, to be liable to the corporation,
unless and only to the extent a court determines that the person is
entitled to indemnity for such expenses as the court deems proper.
The Sunbeam By-laws provide that every person will be
indemnified against any and all judgments, fines, amounts paid in settling
or otherwise disposing of threatened, pending or completed actions, suits
or proceedings, whether by fact that he is or was a director or officer of
Sunbeam or is or was serving at the request of Sunbeam as a director or
officer of another corporation. Expenses so incurred by any such person
defending or investigating a threatened or pending civil or criminal action
or proceeding shall at his request be paid by Sunbeam in advance of the
final disposition of such action or proceeding upon receipt of an
undertaking by or on behalf of such director or officer to repay such
amount if it shall ultimately be determined that such person is not
entitled to be indemnified by Sunbeam.
The DGCL permits a Delaware corporation to include a provision
in its certificate of incorporation eliminating or limiting the personal
liability of a director to the corporation or its stockholders for monetary
damages for a breach of the director's fiduciary duty as a director, except
for liability (i) for any breach of the Director's duty of loyalty to the
corporation or its stockholders, (ii) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the DGCL, which concerns unlawful payments
of dividends, stock purchases or redemptions or (iv) for any transaction
from which the director derived an improper personal benefit. The Sunbeam
Charter contains provisions limiting the liability of Sunbeam's directors
to the fullest extent currently permitted by the DGCL for monetary damages
for breach of their fiduciary duty as directors. While these provisions
provide directors with protection from awards for monetary damages for
breaches of their duty of care, they do not eliminate such duty.
Accordingly, these provisions will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a
director's breach of his or her duty of care.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) The following is a list of Exhibits included as part of this
Registration Statement. Sunbeam agrees to furnish supplementally a copy of
any omitted schedule to the SEC upon request. Items marked with an asterisk
are filed herewith.
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Merger, dated as of February 27, 1998,
among Sunbeam Corporation, Camper Acquisition Corp. and The
Coleman Company, Inc. (previously filed as Exhibit 10.u to
the Annual Report on Form 10-K of Sunbeam Corporation for the
fiscal year ended December 28, 1997 (the "Sunbeam Annual
Report"), filed with the SEC on March 6, 1998, and
incorporated herein by reference).
2.2 Agreement and Plan of Merger, dated as of February 27, 1998,
among Sunbeam Corporation, Laser Acquisition Corp., CLN
Holdings Inc. and Coleman (Parent) Holdings Inc. (previously
filed as Exhibit 10.t to the Sunbeam Annual Report, filed
with the SEC on March 6, 1998, and incorporated herein by
reference).
3.1 Restated Certificate of Incorporation of Sunbeam, filed with
the Secretary of State of Delaware on July 11, 1996
(previously filed as Exhibit 3.a to the Quarterly Report of
Sunbeam Corporation on Form 10-Q for the quarter ended June
30, 1996, filed with the SEC on August 6, 1996, and
incorporated herein by reference).
3.2 By-laws of Sunbeam (previously filed as Exhibit 3.b to the
Quarterly Report of Sunbeam Corporation on Form 10-Q for the
quarter ended September 29, 1996, filed with the SEC on
October 29, 1996, and incorporated herein by reference).
5.1* Opinion of Janet G. Kelley, Vice President, General Counsel
and Assistant Secretary of Sunbeam Corporation, regarding the
legality of the securities being registered.
10.1 Registration Rights Agreement, dated as of March 29, 1998,
between Sunbeam Corporation and Coleman (Parent) Holdings
Inc. (previously filed as Exhibit 10.1 to Sunbeam's Current
Report on Form 8-K reporting events occurring on March 30,
1998 and April 3, 1998, filed with the SEC on April 13, 1998,
and incorporated herein by reference).
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Price Waterhouse LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of KPMG Peat Marwick LLP.
23.5* Consent of Credit Suisse First Boston Corporation.
23.6* Consent of Janet G. Kelley, Vice President, General Counsel
and Assistant Secretary of Sunbeam Corporation (included in
Opinion filed as Exhibit 5.1).
24.1* Powers of Attorney (included on the signature page of this
Registration Statement).
* Filed herewith.
ITEM 22. UNDERTAKINGS
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the Registration Statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and the
offering of such securities at the time shall be deemed to be the initial
bona fide offering thereof.
(c) (1) The undersigned Registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this Registration Statement,
by any person or party who is deemed to be an underwriter within the
meaning of Rule 145(c), the issuer undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(2) The Registrant undertakes that every prospectus: (i) that is
filed pursuant to the paragraph immediately preceding, or (ii) that
purports to meet the requirements of section 10(a)(3) of the Securities Act
and is used in connection with an offering of securities subject to Rule
415, will be filed as a part of an amendment to the Registration Statement
and will not be used until such amendment is effective, and that, for
purposes of determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that, in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the Registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of
such issue.
(e) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
Information Statement/Prospectus pursuant to Items 4, 10(b), 11, or 13 of
this Form S-4, within one business day of receipt of such request, and to
send the incorporated documents by first-class mail or other equally prompt
means. This includes information contained in documents filed subsequent to
the effective date of the registration statement through the date of
responding to the request.
(f) The undersigned Registrant hereby undertakes to supply by means
of a post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of
and included in the Registration Statement when it became effective.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Delray Beach, State of Florida, on this 11th day of May, 1998.
SUNBEAM CORPORATION
By: /s/ David C. Fannin
---------------------------------
David C. Fannin
Executive Vice President,
Chief Legal Officer and
Secretary
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Russell A. Kersh and David
C. Fannin, and each of them, each with full power to act without the other,
his true and lawful attorneys-in-fact and agents, each with full power of
substitution and resubstitution, for such person and in his name, place and
stead, in any and all capacities, to sign any or all further amendments or
supplements (including post-effective amendments) to this Registration
Statement on Form S-4 and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto each of said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing
requisite and necessary to be done in and about the premises, as fully as
to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that each of said attorneys-in-fact and
agents, or his substitutes, may lawfully do or cause to be done by virtue
thereof.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated below.
Signature Title Date
--------- ----- -----
/s/ Albert J. Dunlap Chairman of the Board and May 11, 1998
- ------------------------- Chief Executive Officer
Albert J. Dunlap
/s/ Charles M. Elson Director May 11, 1998
- -------------------------
Charles M. Elson
/s/ Russell A. Kersh Vice Chairman and Chief May 11, 1998
- ------------------------- Financial Officer
Russell A. Kersh
/s/ Howard G. Kristol Director May 11, 1998
- -------------------------
Howard G. Kristol
/s/ Peter A. Langerman Director May 11, 1998
- -------------------------
Peter A. Langerman
/s/ William T. Rutter Director May 11, 1998
- ------------------------
William T. Rutter
/s/ Faith Whittlesey Director May 11, 1998
- ------------------------
Faith Whittlesey
/s/ Robert J. Gluck Vice President, Controller May 11, 1998
- ------------------------ (Principal Accounting
Robert J. Gluck Officer)
EXHIBIT INDEX
The following exhibits are filed with this report or are
incorporated by reference to previously filed material.
Exhibit No. Description
- ----------- -----------
2.1 Agreement and Plan of Merger, dated as of February 27, 1998,
among Sunbeam Corporation, Camper Acquisition Corp. and The
Coleman Company, Inc. (previously filed as Exhibit 10.u to
the Annual Report on Form 10-K of Sunbeam Corporation for the
fiscal year ended December 28, 1997 (the "Sunbeam Annual
Report"), filed with the SEC on March 6, 1998, and
incorporated herein by reference).
2.2 Agreement and Plan of Merger, dated as of February 27, 1998,
among Sunbeam Corporation, Laser Acquisition Corp. CLN
Holdings Inc. and Coleman (Parent) Holdings Inc. (previously
filed as Exhibit 10.t to the Sunbeam Annual Report, filed
with the SEC on March 6, 1998, and incorporated herein by
reference).
3.1 Restated Certificate of Incorporation of Sunbeam, filed with
the Secretary of State of Delaware on July 11, 1996
(previously filed as Exhibit 3.a to the Quarterly Report of
Sunbeam Corporation on Form 10-Q for the quarter ended June
30, 1996, filed with the SEC on August 6, 1996, and
incorporated herein by reference).
3.2 By-laws of Sunbeam (previously filed as Exhibit 3.b to the
Quarterly Report of Sunbeam Corporation on Form 10-Q for the
quarter ended September 29, 1996, filed with the SEC on
October 29, 1996, and incorporated herein by reference).
5.1* Opinion of Janet G. Kelley, Vice President, General Counsel
and Assistant Secretary of Sunbeam Corporation, regarding the
legality of the securities being registered.
10.1 Registration Rights Agreement, dated as of March 29, 1998,
between Sunbeam Corporation and Coleman (Parent) Holdings
Inc. (previously filed as Exhibit 10.1 to Sunbeam's Current
Report on Form 8-K reporting events occurring on March 30,
1998 and April 3, 1998, filed with the SEC on April 13, 1998,
and incorporated herein by reference).
23.1* Consent of Arthur Andersen LLP.
23.2* Consent of Price Waterhouse LLP.
23.3* Consent of Ernst & Young LLP.
23.4* Consent of KPMG Peat Marwick LLP.
23.5* Consent of Credit Suisse First Boston Corporation.
23.6* Consent of Janet G. Kelley, Vice President, General Counsel
and Assistant Secretary of Sunbeam Corporation (included in
Opinion filed as Exhibit 5.1).
24.1* Powers of Attorney (included on the signature page of this
Registration Statement).
* Filed herewith.
EXHIBIT 5.1
[LETTERHEAD OF JANET G. KELLEY -- SUNBEAM CORPORATION]
Re: Sunbeam Corporation
Registration Statement on Form S-4
Ladies and Gentlemen:
I am the Vice President, General Counsel and Assistant Secretary
of Sunbeam Corporation, a Delaware corporation ("Sunbeam"), and am
rendering this opinion in connection with the preparation of a Registration
Statement on Form S-4 (the "Registration Statement") filed by Sunbeam with
the Securities and Exchange Commission (the "Commission") under the
Securities Act of 1933, as amended (the "Securities Act"). The
Registration Statement relates to the issuance of shares of Common Stock,
par value $.01 per share, of Sunbeam ("Sunbeam Common Stock") in exchange
for shares of Common Stock, par value $.01 per share ("Coleman Common
Stock"), of The Coleman Company, Inc., a Delaware corporation ("Coleman"),
in the merger (the "Coleman Merger") of Camper Acquisition Corp., a
Delaware corporation and a wholly owned subsidiary of Sunbeam ("CAC"), with
and into Coleman pursuant to the Agreement and Plan of Merger, dated as of
February 27, 1998, among Sunbeam, CAC and Coleman (the "Coleman Merger
Agreement"). The shares of Sunbeam Common Stock to be issued in the
Coleman Merger and registered pursuant to the Registration Statement are
hereinafter collectively referred to as the "Shares."
This opinion is being rendered in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the Securities Act.
Capitalized terms used and not otherwise defined herein have the respective
meanings ascribed to such terms in the Coleman Merger Agreement.
In connection with this opinion, I have examined originals or
copies, certified or otherwise identified to my satisfaction, of (a) the
Registration Statement; (b) the Coleman Merger Agreement; (c) a specimen
certificate representing the Shares; (d) the Restated Certificate of
Incorporation and By-laws of Sunbeam, each as presently in effect; and (e)
certain resolutions of the Board of Directors of Sunbeam relating to the
approval of the Coleman Merger, the issuance of the Shares in connection
therewith and related matters. I have also examined originals or copies,
certified or otherwise identified to my satisfaction, of such other
documents, certificates and records as I have deemed necessary or
appropriate as a basis for the opinions set forth herein.
In my examination, I have assumed the legal capacity of all
natural persons, the genuineness of all signatures, the authenticity of all
documents submitted to me as originals, the conformity to original
documents of all documents submitted to me as certified, facsimile,
conformed or photostatic copies and the authenticity of the originals of
such copies. In making my examination of documents executed by parties
other than Sunbeam or CAC, I have assumed that all such parties had the
power, corporate or other, to enter into and perform their obligations
thereunder and have also assumed the due authorization by all requisite
action, corporate or other, and execution and delivery by such parties of
such documents and the validity and binding effect of such documents on
such parties. As to any facts material to the opinions expressed herein
which I did not independently establish or verify, I have relied upon the
oral or written statements and representations of officers and other
representatives of Sunbeam and others.
I am admitted to the bar of the Commonwealth of Kentucky, and
express no opinion as to the laws of any other jurisdiction except the
General Corporation Law of the State of Delaware.
Based upon and subject to the foregoing, I am of the opinion that
the issuance of the Shares has been duly authorized and, when (i) the
Coleman Merger becomes effective and (ii) certificates representing the
Shares in the form of the specimen certificates examined by me have been
duly executed and delivered in exchange for shares of Coleman Common Stock
as provided in the Coleman Merger Agreement, the Shares will be validly
issued, fully paid and nonassessable.
This opinion is solely for your benefit in connection with the
transactions contemplated by the Coleman Merger Agreement and, except as
set forth in the following sentence, may not be used, circulated, quoted or
otherwise referred to by any other person or entity or for any other
purpose without my express written permission. I hereby consent to the
filing of this opinion with the Commission as an exhibit to the
Registration Statement. I also hereby consent to the references to me
contained in the Registration Statement under the caption "LEGAL OPINIONS."
In giving this consent, I do not thereby admit that I am included in the
category of persons whose consent is required under Section 7 of the
Securities Act or the rules and regulations of the Commission.
Very truly yours,
/s/ Janet G. Kelley
Janet G. Kelley
Vice President, General Counsel
and Assistant Secretary
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
As independent certified public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report
dated January 28, 1998, except with respect to the matters discussed in
Note 14, as to which the date is March 2, 1998, included in Sunbeam
Corporation's Form 10-K for the year ended December 31, 1997 and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Fort Lauderdale, Florida
May 7, 1998
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of Sunbeam
Corporation of our report dated March 13, 1998, appearing on page F-2 of
First Alert, Inc.'s Annual Report on Form 10-K for the year ended December
31, 1997. We also consent to the incorporation by reference of our report
on the Financial Statement Schedule, appearing on page 37 of such Annual
Report on Form 10-K. We also consent to the reference to us under the
heading "EXPERTS" in such Prospectus.
Price Waterhouse LLP
Chicago, Illinois
May 7, 1998
EXHIBIT 23.3
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "EXPERTS" in the
Registration Statement (Form S-4) and related Prospectus of Sunbeam
Corporation for the registration of 7,211,823 shares of its common stock
to be filed on or about May 11, 1998, and to the incorporation by
reference therein of our reports each dated February 18, 1998, with
respect to the consolidated financial statements and schedule of CLN
Holdings, Inc. and The Coleman Company, Inc. included in their Annual
Reports (Form 10-K) for the years ended December 31, 1997, 1996, and 1995,
filed with the Securities and Exchange Commission.
ERNST & YOUNG LLP
Wichita, Kansas
May 7, 1998
EXHIBIT 23.4
The Board of Directors
Signature Brands USA, Inc. and subsidiary
We consent to the incorporation by reference in the registration statement
on Form S-4 of Sunbeam Corporation of our report dated December 9, 1997,
except as to paragraph 6 of Note 8, which is as of December 24, 1997,
relating to the consolidated balance sheets of Signature Brands USA, Inc.
and subsidiary as of September 28, 1997 and September 29, 1996, and the
related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the three-year period ended September
28, 1997, and all related schedules, which report appears in the September
28, 1997 annual report on Form 10-K of Signature Brands USA, Inc. and
subsidiary.
/s/ KPMG Peat Marwick LLP
May 7, 1998
EXHIBIT 23.5
May 11, 1998
Board of Directors
The Coleman Company, Inc.
625 Madison Avenue
New York, NY 10022
Members of the Board:
We hereby consent to the inclusion of (i) our opinion letter, dated
February 27, 1998, to the Board of Directors of The Coleman Company, Inc.
(the "Company") as Annex II of the Information Statement/Prospectus
contained in the Registration Statement of Sunbeam Corporation on Form S-4
(the "Registration Statement") relating to the proposed merger involving
the Company and Sunbeam Corporation, and (ii) references made to our firm
and such opinion in the Registration Statement on the inside front cover of
the Information Statement/Prospectus and under the captions entitled
"SUMMARY - The Merger - Opinion of Coleman's Financial Advisor," "SPECIAL
FACTORS - Background of the Merger," "SPECIAL FACTORS - Coleman's Reasons
for the Coleman Merger and Approval of the Old Coleman Board of Directors,"
"SPECIAL FACTORS - Opinion of Financial Advisor to Coleman" and "SPECIAL
FACTORS - Position of Sunbeam on the Fairness of the Coleman Merger." In
giving such consent, we do not admit that we come within the category of
persons whose consent is required under, nor do we admit that we are
"experts" for purposes of, the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
CREDIT SUISSE FIRST BOSTON CORPORATION
