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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): March 24, 2000
WESTPOINT STEVENS INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-21496 36-3498354
(Commission File Numbers) (I.R.S. Employer Identification Nos.)
507 WEST TENTH STREET 31833
WEST POINT, GEORGIA
(Address of Principal Executive Offices) (Zip Code)
(706) 645-4000
(Registrants' Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On March 24, 2000, WestPoint Stevens Inc. released a press release
announcing that its Board of Directors had approved and adopted a plan
of recapitalization (the "Plan of Recapitalization"), pursuant to which
outstanding shares of WestPoint's Common Stock, par value $0.01 per
share (the "Shares"), held by all stockholders, other than WestPoint's
Chief Executive Officer, President, Chief Financial Officer, other
senior managers and their affiliates and certain other stockholders
(collectively, the "Exchanging Stockholders"), will be reclassified as
and converted into one share of Series B Participating Preferred Stock,
par value $0.01 per share, of WestPoint (the "Series B Preferred
Stock"). Promptly following the reclassification, WestPoint will redeem
all outstanding shares of Series B Preferred Stock on the basis of one
share of Series B Preferred Stock for $22.00 in cash.
In addition, prior to the reclassification of WestPoint's capital
stock, the Shares held by the Exchanging Stockholders will be exchanged
for shares of Series A Participating Preferred Stock, par value $0.01
per share, of WestPoint (the "Series A Preferred Stock"). Pursuant to
the Plan of Recapitalization, each outstanding share of Series A
Preferred Stock will be reclassified as and converted into one share of
Common Stock, par value $0.01 per share, of WestPoint. Following the
consummation of the Plan of Recapitalization, Holcombe T. Green, Jr.,
the Company's Chief Executive Officer, and his affiliates are expected
to continue to beneficially own approximately 38% of the voting stock
of WestPoint.
Consummation of the Plan of Recapitalization is subject to, among other
things, stockholders' approval (including, in addition to the approval
required by law, the approval of 60% of the "disinterested
stockholders" voting in person or by proxy) and the negotiation of
agreements relating to the equity and debt financing necessary to pay
the redemption price, refinance outstanding bank indebtedness, provide
for sufficient working capital and pay all related fees and expenses.
WestPoint's senior notes due 2005 and 2008 will remain outstanding.
WestPoint is in the process of evaluating commitment letters received
from various prospective equity and debt financing sources.
The foregoing summary is qualified by the copy of the Plan of
Recapitalization attached hereto as Exhibit 2.1 and the Press Release
attached hereto as Exhibit 99.1, each of which is incorporated herein
by reference.
Item 7. Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
Not Applicable
(b) Pro Forma Financial Information
Not Applicable
(c) Exhibits
Exhibit No. Exhibit
----------- -------
2.1 Plan of Recapitalization dated as of March 24, 2000
99.1 Press Release dated March 24, 2000
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WESTPOINT STEVENS INC.
(Registrant)
By: /s/ Christopher N. Zodrow
------------------------------
Date: March 27, 2000 Christopher N. Zodrow
Vice President and Secretary
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EXHIBIT INDEX
Exhibit No. Exhibit
- ----------- -------
2.1 Plan of Recapitalization dated as of March 24, 2000
99.1 Press Release dated March 24, 2000
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Exhibit 2.1
PLAN OF RECAPITALIZATION
PLAN OF RECAPITALIZATION, dated as of March 24, 2000 (the "Plan"),
adopted by the Board of Directors of WestPoint Stevens Inc., a Delaware
corporation (the "Corporation").
RECITALS
WHEREAS, the Board of Directors of the Corporation (the "Board of
Directors") has reviewed and considered the financial presentation and written
opinion of each of Merrill Lynch & Co. and Banc of America Securities LLC
(collectively, the "Financial Advisors") to the effect that the Redemption
Amount (as defined below) is fair as of the date of such opinions, from a
financial point of view, to the stockholders of the Corporation (other than the
Exchanging Stockholders (as defined below));
WHEREAS, the Board of Directors has determined that the Plan is
advisable and in the best interests of the holders of Common Stock, par value
$.01 per share, of the Corporation (the "Shares"), other than the Exchanging
Stockholders (as defined below);
WHEREAS, the Board of Directors intends to submit the Plan to the
holders of Shares for approval and recommends that such holders approve the
Plan; and
WHEREAS, in connection with the Plan, the Board of Directors approved
and authorized the Corporation to permit certain holders of Shares who have
executed, or prior to the filing of the First Charter Amendment (defined below)
will execute, an agreement in favor of the Corporation pursuant to which each
such holder agrees to exchange the Shares as to which such holder is the
registered owner for shares of a series of preferred stock to be designated by
the Board of Directors as the Series A Participating Preferred Stock, par value
$.01 per share, of the Corporation (the "Series A Preferred Stock") (such
exchange of shares hereinafter referred to as the "Stock Exchange"; and the
holders making the Stock Exchange hereinafter referred to as the "Exchanging
Stockholders"); and
WHEREAS, the Corporation has received certain commitment letters
relating to the debt and equity financing required to fund the Plan.
NOW THEREFORE, the Board of Directors has adopted and approved the
Plan, as follows:
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ARTICLE I
THE RECLASSIFICATION AND RELATED MATTERS
1.01 The Reclassification.
(a) Subject to the terms and conditions of the Plan, at the Effective
Time (as defined in Section 1.01(b) hereof), the capital stock of the
Corporation will be reclassified (the "Reclassification") in accordance with
Section 1.02 hereof and the provisions of the General Corporation Law of the
State of Delaware (the "GCL").
(b) The Reclassification shall become effective upon the filing of a
Certificate of Amendment to Certificate of Incorporation (substantially in the
form of Exhibit B attached hereto) with the Secretary of State of Delaware (the
"Second Charter Amendment") in accordance with the provisions of Section 242 of
the GCL or at such subsequent time as shall be specified in the Second Charter
Amendment. The Second Charter Amendment shall be filed at the time of the
Closing (as defined in Section 1.06 hereof) following the filing of the First
Charter Amendment (as defined in Section 2.01 hereof) and the consummation of
the Stock Exchange. The date and time when the Reclassification shall become
effective is hereinafter referred to as the "Effective Time."
1.02 Reclassification of the Corporation's Capital Stock. At the
Effective Time:
(a) Each Share then outstanding shall, without any action on the part
of the holder thereof, be reclassified as, and converted into one validly
issued, fully paid and nonassessable share of Series B Participating Preferred
Stock, par value $.01 per share, of the Corporation (the "Series B Preferred
Stock"), the terms of which are set forth in the First Charter Amendment.
(b) Each share of Series A Preferred Stock then outstanding shall,
without any action on the part of the holder thereof, be reclassified as, and
converted into one validly issued, fully paid and nonassessable share of Common
Stock, par value $.01 per share, of the Corporation (the "New Shares").
1.03 Redemption of Series B Preferred Stock. Immediately following the
Reclassification, the Corporation shall redeem (to the extent of funds legally
available therefor) all outstanding shares of Series B Preferred Stock in
accordance with their terms for $22.00 in cash for each share of Series B
Preferred Stock (the "Redemption Amount").
1.04 Exchange.
(a) Upon surrender in accordance with Section 1.05 hereof of a
certificate or certificates formerly representing Shares, the holder thereof
shall be entitled to receive in exchange for each Share formerly represented
thereby in accordance with Sections 1.02(a) and 1.03 hereof, the Redemption
Amount.
(b) Upon surrender in accordance with Section 1.05 hereof of a
certificate or certificates formerly representing shares of Series A Preferred
Stock, the holder thereof shall be entitled to receive in exchange for each
share of Series A Preferred Stock formerly represented thereby in accordance
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with Section 1.02(b) hereof a certificate or certificates representing the same
number of New Shares.
(c) The Redemption Amount to which former holders of Shares are
entitled pursuant to this Plan, and the New Shares to which holders of shares of
Series A Preferred Stock are entitled pursuant to this Plan, are hereinafter
sometimes referred to as the "Reclassification Consideration." No interest shall
be paid or accrued on any portion of the Reclassification Consideration payable
upon the surrender of any Certificates as provided herein.
1.05 Payment.
(a) Immediately prior to the Effective Time, the Board of Directors
shall select a bank or trust company to act as paying agent (the "Paying Agent")
for the payment of the Reclassification Consideration as set forth in this
Article I. Immediately after the Effective Time, the Corporation shall deposit
or cause to be deposited with or for the account of the Paying Agent, (i) for
the benefit of persons holding Shares immediately prior to the Effective Time,
cash (in immediately available funds) in an aggregate amount equal to the
product of the Redemption Amount and the number of Shares outstanding
immediately prior to the Effective Time, and (ii) for the benefit of persons
holding shares of Series A Preferred Stock immediately prior to the Effective
Time, a certificate or certificates representing a number of New Shares equal to
the number of shares of Series A Preferred Stock outstanding immediately prior
to the Effective Time. The Reclassification Consideration shall not be used for
any purpose other than as set forth in this Article I. The Paying Agent may
invest the cash deposited with it in such manner as the Corporation directs in
writing; provided that substantially all of such investments be in obligations
of or guaranteed by the United States of America, in commercial paper
obligations receiving the highest rating from either Moody's Investors Service,
Inc. or Standard & Poor's Corporation, in certificates of deposit, bank
repurchase agreements or bankers' acceptances of commercial banks with capital
exceeding $1,000,000,000, or in money market funds which are invested solely in
any of the foregoing (collectively, "Permitted Investments"); provided, further,
that the maturities of Permitted Investments shall be such as to permit the
Paying Agent to make prompt payment of such cash to the Corporation's former
stockholders entitled thereto. Any and all interest earned on or resulting from,
or other income produced by, Permitted Investments shall be payable to and
turned over to the Corporation. The Corporation shall replace any monies lost
through any investment made at its direction pursuant to this Section 1.05(a).
Any portion of the Reclassification Consideration remaining with the Paying
Agent on the 90th day after the date of the Effective Time shall be released and
delivered by the Paying Agent to the Corporation, after which time persons
entitled thereto may only look to the Corporation for payment thereof.
Notwithstanding the foregoing, the Corporation shall not be liable to any holder
of Shares or shares of any series of the Corporation's Preferred Stock for any
amount paid to a public official pursuant to applicable abandoned property,
escheat or similar laws. Any amounts remaining unclaimed by such holders three
years after the Effective Time (or such earlier date immediately prior to such
time as such amounts would otherwise escheat to or become property of any
governmental entity) shall, to the extent permitted by applicable law, become
the property of the Corporation, free and clear of any claims or interest of any
person previously entitled thereto.
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(b) As soon as practicable after the Effective Time, the Corporation
shall cause the Paying Agent to mail a notice and letter of transmittal form
(which shall specify that delivery shall be effectuated, and risk of loss and
title to the Certificates (as defined below) shall pass only upon delivery of
the Certificates to the Paying Agent and shall be in such form and have such
other provisions as the Corporation may specify) to each holder of a certificate
or certificates formerly representing Shares referred to in Section 1.04(a) or
1.04(b) hereof advising such holder of the effectiveness of the Reclassification
and the procedure for surrendering to the Paying Agent such certificate or
certificates for exchange into the Reclassification Consideration. Upon the
surrender of the certificates described in this Section 1.05(b) (the
"Certificates") to the Paying Agent together with and in accordance with the
appropriate transmittal forms, the holder thereof shall be entitled to receive
in exchange therefor, and the Paying Agent shall as promptly as practicable
deliver to such holder, the Reclassification Consideration payable in respect of
such Certificates. Until surrendered as contemplated by this Article I, each
such Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive, upon such surrender of the Certificates,
the Reclassification Consideration.
(c) If the Reclassification Consideration (or any portion thereof) is
to be delivered to a person other than the person in whose name the
Certificate(s) surrendered in exchange therefor are registered in the transfer
records of the Corporation, it shall be a condition to such delivery that the
Certificate(s) so surrendered shall be properly endorsed or accompanied by
appropriate stock powers (and the signature thereto must be guaranteed) and
otherwise in proper form for transfer, that such transfer otherwise be proper
and that the person requesting such transfer pay to the Paying Agent any
transfer or other taxes payable by reason of the foregoing or establish to the
satisfaction of the Paying Agent that such taxes have been paid or are not
required to be paid.
(d) If any Certificates shall have been lost, stolen or destroyed,
upon the making of an affidavit of that fact by the person claiming such
Certificate to be lost, stolen or destroyed, the Corporation will deliver in
exchange for such lost, stolen or destroyed Certificate, the Reclassification
Consideration. When authorizing such delivery of the Reclassification
Consideration, the Corporation may, in its discretion and as a condition
precedent to the delivery thereof, require the owner of such lost, stolen or
destroyed Certificate to give the Corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the Corporation
with respect to the Certificate alleged to have been lost, stolen or destroyed.
The affidavit and any indemnity that may be required hereunder shall be
delivered to the Paying Agent, who shall be responsible for making payment of
the applicable Reclassification Consideration for such lost, stolen or destroyed
Certificate(s) pursuant to the terms hereof.
(e) The Corporation and the Paying Agent shall be entitled to deduct
and withhold from the consideration otherwise payable pursuant to this Plan to
any holder of Certificates such amounts as the Corporation or the Paying Agent
is required to deduct and withhold with respect to the making of such payment
under the Internal Revenue Code of 1986, as amended, or any provision of state,
local or foreign tax law. To the extent that amounts are so withheld by the
Corporation or the Paying Agent, such withheld amount shall be treated for all
purposes of the Plan as having been paid to the holder of the Certificates in
respect of which such deduction and withholding was made by the Corporation or
the Paying Agent.
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(f) All Redemption Amounts paid upon the surrender of Certificates
formerly representing the Shares in accordance with the terms of this Article I
shall be deemed to have been paid in full satisfaction of all rights pertaining
to such Shares, and there shall be no further registration of transfers on the
stock transfer books of the Corporation of such Shares which were immediately
outstanding prior to the Effective Time. If after the Effective Time, the
Certificates representing such Shares are presented to the Corporation for any
reason, they shall be redeemed, canceled and exchanged as provided in this
Article I.
1.06 Closing. The closing of the transactions contemplated by this Plan (the
"Closing") shall take place (a) at the offices of the Corporation, 1185 Avenue
of the Americas, 13th Floor, New York, New York 10036, at 10:00 A.M., local
time, on the later of (i) the day of the meeting of the Corporation's
stockholders to be held for the purpose of voting on the adoption of this Plan
or (ii) the day on which the last of the conditions set forth in Article III
hereof is fulfilled or (subject to the applicable law) waived, or (b) at such
other time and place and on such other date as the Board of Directors shall fix
(the "Closing Date").
ARTICLE II
ADDITIONAL ACTIONS OF THE CORPORATION UNDER THIS PLAN OF RECAPITALIZATION
2.01 First Charter Amendment. At the time of the Closing and prior to the filing
of the Second Charter Amendment, the Corporation shall file a Certificate of
Amendment to Certificate of Incorporation (substantially in the form of Exhibit
A attached hereto) with the Secretary of State of Delaware (the "First Charter
Amendment"), which shall become effective in accordance with Section 242 of the
GCL.
2.02 Options, Etc. The Board of Directors (or, if appropriate, any committee
thereof) shall adopt appropriate resolutions and take all other actions
necessary to provide that, upon the effectiveness of the First Charter
Amendment, the vesting of all options to purchase Shares (each such option, a
"Stock Option") outstanding under the Corporation's Omnibus Stock Incentive
Plan, and any other stock option, shares of stock earned but not vested under
the Corporation's 1995 Key Employee Stock Bonus Plan or other equity awards
under any other compensation plan or arrangement of the Corporation or other
agreement (collectively, the "Stock Plans"), shall be accelerated. Thereupon all
Stock Options, notwithstanding any terms or conditions to the contrary, will
become immediately exercisable. To the extent any Stock Option held by any
person other than an Exchanging Stockholder is not exercised prior to the
Effective Time, such Stock Option shall be canceled and thereafter represent the
right to receive an amount in cash determined by multiplying (i) the excess, if
any, of the Redemption Amount over the per share exercise price of such option
by (ii) the number of Shares such holder could have purchased had such holder
exercised such options in full immediately prior to the Effective Time, such
amount, subject to any required withholding taxes. To the extent any Stock
Option held by any Exchanging Stockholder is not exercised prior to the
Effective Time, such Stock Option shall represent the right to purchase a number
of New Shares equal to the number of Shares such Exchanging Stockholder was
entitled to purchase under such Stock Option. Notwithstanding anything herein to
the contrary, to the extent the exercise price of any Stock Option held by any
person equals or exceeds the Redemption Amount, such Stock Option shall be
canceled without any payment required thereunder. The Corporation shall use its
best efforts to take such action as is necessary to effect the provisions of
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this Section 2.02 and to obtain all necessary consents or acknowledgements of
the holders of Stock Options to the cancellation of all such options as provided
hereinabove. Upon the effectiveness of the First Charter Amendment, those Shares
covered by bonus awards where vesting was accelerated by virtue of this Section
2.02 will be delivered and, unless exchanged for shares of Series A Preferred
Stock, shall be treated as outstanding Shares subject to the terms of the Plan.
2.03 Stock Exchange. The Corporation shall effect the Stock Exchange subsequent
to the effectiveness of the First Charter Amendment and prior to the filing of
the Second Charter Amendment.
2.04 Other Actions. The Corporation shall use its reasonable best efforts to
take such other actions as it, in its sole discretion, deems necessary or
advisable (including the amendment or repayment of any indebtedness or issuance
of other securities of the Corporation and the amendment of any of the
Corporation's existing employee benefit plans) in connection with the
consummation of the Plan and the transactions contemplated hereby.
ARTICLE III
CONDITIONS PRECEDENT
3.01 Conditions Precedent to Consummation of the Recapitalization. The
consummation of the transactions contemplated by the Plan (collectively, the
"Recapitalization") is subject to the satisfaction or (subject to applicable
law) waiver by the Board of Directors at or prior to the Closing Date of each of
the following conditions:
(a) Approval of Stockholders. The approval of the Plan and all
actions contemplated by the Plan (including the First Charter Amendment and the
Second Charter Amendment) that require the approval of the Corporation's
stockholders shall have been obtained in accordance with the GCL and the
Corporation's Certificate of Incorporation. Further, the Corporation shall have
obtained the affirmative vote of the holders of sixty percent (60%) of the
issued and outstanding Shares held by the Disinterested Stockholders voting in
person or by proxy at the stockholders' meeting to adopt this Plan and the
transactions contemplated hereby. For purposes of the Plan, the term
"Disinterested Stockholders" means all the stockholders of the Corporation other
than the Exchanging Stockholders or any Affiliates thereof. For purposes of this
Plan, the term "Affiliate" of a Person means a Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, the first-mentioned Person, and with respect to a
natural person shall include any child, stepchild, grandchild, parent,
stepparent, spouse, sibling, mother-in-law, father-in-law, son-in-law,
daughter-in-law, brother-in-law or sister-in-law, and shall include adoptive
relationships. "Control" (including the terms "controlled," "controlled by" and
"under common control with") means the possession, directly or indirectly or as
a trustee of a Person, of the power to direct or cause the direction of the
management or policies of a Person, whether through executor, or otherwise. The
term "Person" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, Governmental Entity (as defined
below) or other entity.
(b) Financing. The Corporation shall have entered into, at or prior
to the time of the mailing of the Proxy Statement (as defined in Section 3.01(g)
below), definitive agreements upon terms and conditions satisfactory to the
Board of Directors entitling the Corporation to receive, and the Corporation
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shall have received, at or prior to the Effective Time, cash proceeds (the
"Financing") in an aggregate the amount sufficient to pay the aggregate amount
of the cash portion of the Reclassification Consideration as contemplated by
Article I and other cash payments contemplated by the Plan and the transactions
contemplated hereby; to refinance any indebtedness or other obligations of the
Corporation, the payment of which may be accelerated by virtue of the
consummation of this Plan or any of the transactions contemplated hereby; to pay
all fees and expenses in connection with the Recapitalization; and to provide
sufficient funds to satisfy the Corporation's working capital requirements; and
all conditions to the availability of funds under such agreements shall have
been satisfied or waived.
(c) Receipt of Licenses, Permits and Consents. The Corporation shall
have received evidence, in form and substance reasonably satisfactory to it,
that such licenses, permits, consents, approvals, authorizations, qualifications
and orders of governmental authorities and parties to contracts with the
Corporation and its subsidiaries as are necessary for consummation of the
Recapitalization have been obtained and are in full force and effect (other than
those which, if not obtained, would not have a material adverse effect on (i)
the Recapitalization, (ii) the financial condition, results of operations or
businesses of the Corporation and its subsidiaries taken as a whole or (iii) the
continuation of the operations and businesses of the Corporation and its
subsidiaries after the consummation of the Recapitalization).
(d) Injunction. No restraining order or injunction issued by any
court of competent jurisdiction shall be in effect prohibiting the consummation
of this Plan or any of the transactions contemplated hereby.
(e) Actions, Proceedings, Certifications and Opinions. All actions,
proceedings, instruments and documents required to carry out the transactions
contemplated by, or incidental to, the Plan and all other related legal matters
shall have been satisfactory to the Corporation. Without limiting the foregoing,
the Corporation shall have received (i) such certifications, representations and
agreements from the Exchanging Stockholders and the parties providing the equity
component of the Financing and (ii) such opinions and/or advice of counsel to
the Corporation, in each case as the Board of Directors shall have requested.
(f) Valuation Report. The Board of Directors shall have received from
an independent valuation firm selected by the Board of Directors a written
valuation or other report with respect to the Corporation's assets and
liabilities in form and substance satisfactory to the Board of Directors and
such other information, opinions, reports or statements as the Board of
Directors shall require supporting the conclusions and shall have concluded that
as of and immediately after the Effective Time, after giving effect to any
changes in the assets and liabilities of the Corporation as a result of this
Plan and after giving effect to the financing necessary to consummate the Plan
and the transactions contemplated hereby and to pay related fees and expenses,
the Corporation will not (i) be insolvent (either because its financial
condition is such that the sum of its debts is greater than the fair value of
its assets or because the fair saleable value of its assets is less than the
amount required to pay its probable liability on its existing debts as they
mature), (ii) have unreasonably small capital with which to engage in its
business, (iii) have incurred debts beyond its ability to pay as they become
due, or (iv) be without a sufficient surplus (net assets minus capital) to
consummate the Reclassification and the redemption of the Series B Preferred
Stock without violation of Section 160 of the GCL.
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(g) Fairness Opinion. The Board of Directors shall have received on
or prior to the submission of the Plan to the stockholders of the Corporation
for their approval, the written opinion of each of the Financial Advisors, or
such other nationally recognized investment banking firm as the Board of
Directors may designate, in form and substance satisfactory to the Board of
Directors, to the effect that, as of on or about the date of the proxy statement
delivered to holders of Shares in connection with seeking to obtain stockholder
approval of the Plan (the "Proxy Statement"), the Redemption Amount deliverable
to holders of Shares (other than the Exchanging Stockholders) pursuant to this
Plan is fair, from a financial point of view, to such holders.
(h) HSR and Other Approvals. The applicable waiting period (and any
extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, with respect to the actions contemplated by the Plan shall
have expired or been terminated and all other material authorizations, consents,
orders or approvals of, or regulations, declarations or filings with, or
expirations of applicable waiting periods imposed by, any Governmental Entity
(including, without limitation, any foreign antitrust filing) necessary for the
consummation of the transactions contemplated hereby, shall have been obtained
or filed or shall have occurred. The term "Governmental Entity" means any court,
arbitral tribunal, administrative agency or commission or other governmental or
regulatory authority or administrative agency or commission, whether federal,
state, local or foreign.
ARTICLE IV
MISCELLANEOUS
4.01 Termination and Abandonment. The Plan may be terminated and the
transactions contemplated hereby may be abandoned by the Board of Directors at
any time prior to the consummation of the Stock Exchange (which shall occur on
the Closing Date only after the satisfaction or (subject to applicable law)
waiver of the conditions set forth in Section 3.01 of the Plan), notwithstanding
approval thereof by the stockholders of the Corporation.
4.02 Amendment and Modification. Subject to applicable law, the provisions of
the Plan (including the exhibits attached hereto) may be amended or waived in
any respect by the Board of Directors at any time prior to the consummation of
the Stock Exchange; provided that after the approval of this Plan by the
stockholders of the Corporation, no such amendment or waiver shall, without the
further approval of such stockholders (x) modify the First Charter Amendment or
Second Charter Amendment, or (y) change the kind or reduce the amount of the
Reclassification Consideration to be delivered in respect of each Share and each
share of Series A Preferred Stock pursuant to Sections 1.02(a), 1.02(b) and 1.03
hereof. The good faith determination by the Board of Directors that an amendment
to the Plan complies with this Section 4.02 shall be conclusive on all holders
of Shares or shares of any series of Preferred Stock.
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EXHIBIT A
TO
PLAN OF RECAPITALIZATION
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION
OF
WESTPOINT STEVENS INC.
I, Holcombe T. Green, Jr., Chairman of the Board of Directors and
Chief Executive Officer of WestPoint Stevens Inc. (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "GCL"), in accordance with the
provisions of Section 242 thereof, DO HEREBY CERTIFY:
That the following amendment was adopted in accordance with the
provisions of Sections 242 of the GCL:
Article FOURTH is amended by deleting said Article in its entirety
and substituting the following in lieu thereof:
FOURTH: (a) Authorized Capital Stock. The Company is
authorized to issue two classes of capital stock to be designated,
respectively, "Common Stock" and "Preferred Stock." The total number
of shares of capital stock that the Company is authorized to issue is
three hundred million (300,000,000), two hundred million
(200,000,000) shares of which shall be Common Stock (the "Common
Stock"), and one hundred million (100,000,000) shares of which shall
be Preferred Stock (the "Preferred Stock,"). The Common Stock shall
have a par value of one cent ($.01) per share and the Preferred Stock
shall have a par value of one cent ($.01) per share. ______________
__________________ of the authorized shares of Preferred Stock are
hereby designated "Series A Participating Preferred Stock" (the
"Series A Preferred Stock"), and __________________________________
shares of Preferred Stock are hereby designated "Series B
Participating Preferred Stock" (the "Series B Preferred Stock").
(b) Participating Preferred Stock. The rights, preferences,
privileges, restrictions and other matters relating to the Series A
Preferred Stock and the Series B Preferred Stock (collectively the
"Participating Preferred Stock") are as follows:
(1) Dividends and Distributions.
(A) Subject to the prior and superior rights of the
holders of shares of any series of preferred stock of the Corporation
ranking prior and superior to the shares of the Participating
Preferred Stock, in preference to the holders of Common Stock and of
any other junior stock of the Corporation, shall be entitled to
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receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, quarterly dividends payable
on March 31, June 30, September 30 and December 31 of each year (each
such date being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share of the Participating Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to the
greater of (1) $0.02 per quarter or (2) (subject to adjustment as
hereinafter set forth) the aggregate per share amount of all cash
dividends, non-cash dividends or other distributions, if any, on
shares of the Common Stock other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common
Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date
or, with respect to the first Quarterly Dividend Payment Date, since
the first issuance of any share or fraction of a share of such series
of the Preferred Stock. In the event the Corporation shall, at any
time after the Effective Time as defined in the Corporation's Plan of
Recapitalization dated as of March 24, 2000 (the "Plan"), declare or
pay any dividend on Common Stock payable in shares of Common Stock,
or effect a subdivision or combination of the outstanding shares of
Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then in each such case the
amount to which holders of the Participating Preferred Stock were
entitled immediately prior to such event pursuant to clause (2) of
the immediately preceding sentence shall be adjusted by multiplying
such amount by a fraction the numerator off which is the number of
shares of Common Stock outstanding immediately prior to such event
and the denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Participating Preferred Stock as provided in
paragraph (A) of this Section (1) immediately after it declares a
dividend or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the
next subsequent Quarterly Dividend Payment Date (or, with respect to
the first Quarterly Dividend Payment Date, the period between the
first issuance of any share or fraction of a share of the Preferred
Stock and such first Quarterly Dividend Payment Date), a dividend of
$.02 per share on the Preferred Stock shall nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be
cumulative on outstanding shares of the Participating Preferred Stock
from the Quarterly Dividend Payment Date next preceding the date of
issue of such shares of the Participating Preferred Stock, unless the
date of issue of such shares is on or prior to the record date for
the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such
shares, or unless the date of issue is a Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to accrue
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and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall not bear interest. Dividends paid on
shares of the Participating Preferred Stock in an amount less than
the total amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share basis
among all shares of the Participating Preferred Stock at the time
outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of the Participating Preferred
Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall not be more than 60 days
prior to the date fixed for the payment thereof.
(2) Voting Rights. The holders of shares of the
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment
hereinafter set forth, each share of Participating Preferred Stock
shall entitle the holder thereof to one vote on all matters submitted
to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time declare or pay any dividend on Common
Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares
of Common Stock, then in each such case the number of votes per share
to which holders of shares of Participating Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law,
the holders of shares of Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(C) Except as set forth herein, holders of
Participating Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein)
for taking any corporate action.
(3) Certain Restrictions.
(A) Whenever quarterly dividends or other dividends
or distributions payable on the Participating Preferred Stock as
provided in Section (1) are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on outstanding shares of the Participating Preferred Stock
shall have been paid in full, the Corporation shall not:
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<PAGE>
(i) declare or pay dividends on, or make any
other distributions on, any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the
Participating Preferred Stock;
(ii) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or winding
up) with the Participating Preferred Stock, except dividends paid
ratably on shares of the Participating Preferred Stock and all other
stock ranking on a parity therewith on which dividends are payable or
in arrears in proportion to the total amounts to which the holders of
all such shares are then entitled;
(iii) redeem, purchase or otherwise acquire
for value any shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the Participating
Preferred Stock provided that the Corporation may at any time redeem,
purchase or otherwise acquire shares of any such junior stock in
exchange for shares of any stock of the Corporation ranking junior
(as to dividends and upon dissolution, liquidation or winding up) to
the Participating Preferred Stock; or
(iv) purchase or otherwise acquire for value
any shares of stock ranking on a parity with the Participating
Preferred Stock except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors)
to all holders of such shares (including the Participating Preferred
Stock) upon such terms as the Board of Directors, after consideration
of the respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine in
good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for value any
shares of the capital stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 3, purchase or otherwise
acquire such shares at such time and in such manner.
(4) Reacquired Shares. Any shares of Participating
Preferred Stock purchased or otherwise acquired by the Corporation in
any manner whatsoever (including by redemption or reclassification)
shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their retirement become
authorized but unissued shares of preferred stock without designation
as to series and may be reissued as part of a new series of preferred
stock to be created by resolution or resolutions of the Board of
Directors or as otherwise permitted under the GCL.
(5) Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no
distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
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<PAGE>
dissolution or winding up) to the Participating Preferred Stock
unless, prior thereto, the holders of shares of Participating
Preferred Stock shall have received $22.00 per share, plus an amount
equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, provided that
the holders of shares of Participating Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the
provision for adjustment hereinafter set forth, not less than the
aggregate amount to be distributed per share to holders of Common
Stock, or (2) to the holders of stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with the
Participating Preferred Stock, except distributions made ratably on
the Participating Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding
shares of Common Stock (be reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Participating
Preferred Stock were entitled immediately prior to such event under
the proviso in clause (1) of the preceding sentence shall be adjusted
by multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately after
such event and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior to such event.
(6) Consolidation or Merger. In case the Corporation
shall enter into any consolidation or merger in which the shares of
Common Stock are exchanged for or changed into other securities
and/or cash or any other property, then in any such case the shares
of Participating Preferred Stock then outstanding shall at the same
time be similarly exchanged for or changed into an amount per share
(subject to the provision for adjustment hereinafter set forth) equal
to the aggregate amount of securities and/or cash or any other
property, as the case may be, for which or into which each share of
Common Stock is exchanged or changed. In the event the Corporation
shall at any time after the Effective Time (as defined in the Plan)
declare or pay any dividend on Common Stock payable in shares of
Common Stock, or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount set forth in the preceding sentence with
respect to the exchange or change of shares of Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
(7) Rank. The Participating Preferred Stock shall rank
pari passu with any other series of Preferred Stock and shall rank
senior to the Common Stock, in each case as to payment of dividends
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<PAGE>
and distribution of assets upon liquidation, dissolution or winding
up.
(8) Redemption. Each outstanding share of Series B
Preferred Stock may be redeemed at the option only of the Corporation
in whole, but not in part, at any time, without notice, at a
redemption price (the "Redemption Price") of $22.00 in cash. At the
time of redemption specified in the resolution of the Board of
Directors authorizing such redemption, the rights of the holders of
the Series B Preferred Stock redeemed shall cease, except for the
right to receive the Redemption Price, without interest.
Notwithstanding any provision contained herein to the contrary, no
accrued dividends will be paid on the shares of Series B Preferred
Stock upon redemption.
(c) Blank Check Preferred Stock. The Preferred Stock may be
issued from time to time in one or more series. The Board of
Directors is hereby authorized, within the limitations and
restrictions stated in this Certificate of Incorporation, to fix or
alter the dividend rights, dividend rate, conversion rights, voting
rights, rights and terms of redemption (including sinking fund
provisions), the redemption price or prices, the liquidation
preferences of any wholly unissued series of Preferred Stock, and the
number of shares constituting any such series and the designation
thereof, or any of them; and to increase or decrease the number of
shares of any series subsequent to the issue of shares of that series
shall be so decreased, the shares constituting such decrease shall
resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series. The
authority of the Board of Directors with respect to each such series
will include, without limiting the generality of the foregoing, the
determination of any or all of the following:
(1) The number of shares of any series and the
designation to distinguish the shares of such series from the shares
of all other series;
(2) Whether dividends, if any, will be cumulative or
noncumulative, the dividend rate of such series, and the dates and
preferences of dividends on such series;
(3) The right or obligation, if any, of the Company to
redeem shares of the particular series of Preferred Stock and, if
redeemable, the price, terms, conditions and manner of such
redemption;
(4) The special and relative rights and preferences, if
any, and the amount or amounts per share, which the shares of such
series of Preferred Stock shall be entitled to receive upon any
voluntary or involuntary liquidation, dissolution or winding up of
the Company or in the event of any merger or consolidation of or sale
of assets by the Company;
(5) The right, if any, of the holders of such series of
Preferred Stock to convert the same into, or exchange the same for,
shares of any other class or series of stock of the Company, and the
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<PAGE>
terms and conditions of such conversion or exchange, including the
price or prices or the rate or rates of conversion or exchange and
the terms of adjustment, if any;
(6) The terms of any sinking fund or redemption or
repurchase or purchase account, if any; the obligation, if any, of
the Company to retire, redeem, repurchase or purchase shares of such
series pursuant to such fund or account; and the terms and conditions
of such obligation;
(7) The voting powers, if any, and whether such voting
powers are full or limited in such series;
(8) Limitations, if any, on the issuance of additional
shares of such series or any shares of any other class or series of
stock of the Company or other entity; and
(9) Such other preferences, powers, and special,
participating, optional, relative or other rights, and the
qualifications, limitations and restrictions thereof, as the Board of
Directors shall determine;
all as may be determined from time to time by the Board and stated in
the resolution or resolutions providing for the issuance of such
Preferred Stock (collectively, a "Preferred Stock Designation").
(d) Common Stock. The holders of the Common Stock will be
entitled to one vote on each matter submitted to a vote at a meeting
of stockholders for each share of Common Stock held of record by such
holder as of the record date for such meeting and shall be entitled
to all other statutory rights as provided for by law under the GCL.
IN WITNESS WHEREOF, Holcombe T. Green, Jr., the Chairman of the
Board and Chief Executive Officer of the Corporation, has signed this
Certificate of Amendment to Certificate of Incorporation this _____ day
of ____________, 2000.
WESTPOINT STEVENS INC.
By:
--------------------------------------
Holcombe T. Green, Jr.
Chairman of the Board and
Chief Executive Officer
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EXHIBIT B
TO
PLAN OF RECAPITALIZATION
CERTIFICATE OF AMENDMENT TO
CERTIFICATE OF INCORPORATION OF
WESTPOINT STEVENS INC.
I, Holcombe T. Green, Jr., Chairman of the Board of Directors and
Chief Executive Officer of WestPoint Stevens Inc. (the "Corporation"), a
corporation organized and existing under and by virtue of the General
Corporation Law of the State of Delaware (the "GCL"), in accordance with the
provisions of Section 242 thereof, DO HEREBY CERTIFY:
That the following amendment was adopted in accordance with the
provisions of Section 242 of the GCL:
Article FOURTH is amended by adding the following at the end
thereof:
(e) Reclassification. Effective upon the filing with the
Secretary of the State of the State of Delaware of the Certificate of
Amendment to Certificate of Incorporation, including this paragraph
(e): (i) each outstanding share of Common Stock, par value $.01 per
share, of the Corporation shall, without any action on the part of
the holder thereof, be reclassified as, and converted into, one
validly issued, fully paid and nonassessable share of Series B
Participating Preferred Stock, par value $.01 per share, of the
Corporation, and (ii) each share of Series A Participating Preferred
Stock, par value $.01 per share, of the Corporation shall, without
any action on the part of the holder thereof, be reclassified as, and
converted into one validly issued, fully paid and nonassessable share
of Common Stock, par value $.01 per share of the Corporation.
IN WITNESS WHEREOF, Holcombe T. Green, Jr., the Chairman of the Board
of Directors and Chief Executive Officer of the Corporation, has signed this
Certificate of Amendment to Certificate of Incorporation this _____ day of
____________, 2000.
WESTPOINT STEVENS INC.
By:
---------------------------------
Holcombe T. Green, Jr.
Chairman of the Board and
Chief Executive Officer
B-1
Exhibit 99.1
Contact: David C. Meek Media Contact: Toni M. Cauble
Chief Financial Officer Vice President - Public Relations
706.645.4322 706.645.4879
WESTPOINT STEVENS INC. ANNOUNCES PROPOSED RECAPITALIZATION
WEST POINT, GEORGIA (March 24, 2000) - WestPoint Stevens Inc. (NYSE:WXS) today
announced that its Board of Directors has approved and adopted a plan of
recapitalization pursuant to which shares of common stock held by all
stockholders, other than the Company's Chief Executive Officer, President, Chief
Financial Officer, other senior managers and their affiliates and certain other
stockholders, will be reclassified into a new series of stock that will be
redeemed for $22.00 per share in cash in the recapitalization. Consummation of
the plan of recapitalization is subject to, among other things, stockholders'
approval and the negotiation of agreements relating to the equity and debt
financing necessary to pay the redemption price, refinance outstanding bank
indebtedness, provide for sufficient working capital and pay all related fees
and expenses. The Company's senior notes due 2005 and 2008 will remain
outstanding. The Company is in the process of evaluating commitment letters
received from various prospective equity and debt financing sources.
WestPoint Stevens Inc. is a home fashions consumer products marketing company
with a comprehensive line of Company-owned and licensed brands for the bedroom
and bathroom. The Company is vertically integrated and is the nation's leading
manufacturer and marketer of bed linens, towels, comforters and other
accessories that are sold in retail outlets throughout the world. WestPoint
Stevens' home fashions and consumer products are marketed under the well-known
brand names of GRAND PATRICIAN, PATRICIAN, MARTEX, UTICA, STEVENS, LADY
PEPPERELL and VELLUX, and under licensed brands including RALPH LAUREN HOME
COLLECTION, SANDERSON, ESPRIT, JOE BOXER and SERTA PERFECT SLEEPER. WestPoint
Stevens can be found on the World Wide Web at www.westpointstevens.com.
Safe Harbor Statement: Except for historical information contained herein, the
matters set forth in this press release are forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and are
subject to the safe harbor provisions of that Act. The forward-looking
statements set forth above involve a number of risks and uncertainties that
could cause actual results to differ materially from any such statements. These
risks and uncertainties, and assumptions concerning the Company's future
operations and performance, could prove inaccurate and, therefore, there can be
no assurance that the forward-looking statements will prove to be accurate.
-END-
