Bruce R. Zirinsky Murray Drabkin
CADWALADER, WICKERSHAM & TAFT HOPKINS & SUTTER
100 Maiden Lane 888 Sixteenth Street, N.W.
New York, New York 10038 Washington, D.C. 20006
Telephone (212) 504-6000 Telephone (202) 835-8000
Mark C. Ellenberg Stephen E. Garcia
Peter M. Dodson HOPKINS & SUTTER
Steven J. Heim Three First National Plaza
CADWALADER, WICKERSHAM & TAFT Chicago, Illinois 60602
1201 F Street, N.W., Suite 1100 Telephone (312) 558-6600
Washington, D.C. 20004
Telephone (202) 862-2200
Steven J. McCardell (2144) Herschel J. Saperstein (A2861)
LEBOEUF, LAMB GREENE Weston L. Harris (A1387)
& MACRAE L.L.P. RAY QUINNEY & NEBEKER
136 South Main Street, #1000 79 South Main Street, Suite 500
Salt Lake City, Utah 84101 Salt Lake City, Utah 84124
Telephone (801) 320-6700 Telephone: (801) 323-3333
Telephone (801) 320-6700
Attorneys for the Debtor and Debtor in Attorneys for the Official Committee
Possession of Bondholders
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IN THE UNITED STATES BANKRUPTCY COURT
DISTRICT OF UTAH, CENTRAL DIVISION
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In re:
)
GENEVA STEEL COMPANY, ) Bankruptcy Case No. 99-21130 GEC
) (Chapter 11)
)
Debtor and Debtor in Possession. )
Tax ID # 93-0942346 )
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THIRD AMENDED PLAN OF REORGANIZATION
------------------------------------
JOINTLY PROPOSED BY GENEVA STEEL COMPANY
----------------------------------------
AND THE OFFICIAL COMMITTEE OF BONDHOLDERS, AS MODIFIED
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<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I. - DEFINITIONS....................................................
ARTICLE II. - ADMINISTRATIVE EXPENSES AND TAX CLAIMS........................
2.01 Compensation and Expenses of Professional Persons..................
2.02 Bar Date for Administrative Claims.................................
(a) Pre-Confirmation Date Claims and Expenses..........................
(b) Substantial Contribution Compensation and Expenses Bar Date........
(c) Effect of Failure to Timely File Claim or Request for Payment......
2.03 Priority Tax Claims................................................
2.04 Payment of Allowed Administrative Expenses.........................
2.05 Treatment of Congress Financial Claim..............................
ARTICLE III. - CLASSIFICATION OF CLAIMS AND INTERESTS.......................
3.02 Class One Claims...................................................
3.03 Class Two Claims...................................................
3.04 Class Three Claims.................................................
3.05 Class Four Claims..................................................
3.06 Class Four A Claims................................................
3.07 Class Five Interests...............................................
3.08 Class Six Interests................................................
ARTICLE IV. - TREATMENT OF CLAIMS NOT IMPAIRED UNDER THE PLAN...............
4.01 Class One Claims - Priority Claims.................................
4.02 Class Two Claims - Secured Claims..................................
4.03 Unimpaired Claims..................................................
ARTICLE V. - TREATMENT OF CLAIMS AND INTERESTS..............................
5.01 Class Three Claims - Unsecured Claims..............................
5.02 Class Four - Convenience Class.....................................
5.03 Class Four A - Subordinated Unsecured Claims.......................
5.04 Class Five - Old Preferred Stock...................................
5.05 Class Six - Old Common Stock Interests.............................
5.06 Impaired Claims and Interests......................................
ARTICLE VI. - MEANS FOR IMPLEMENTATION OF THE PLAN..........................
6.01 Continuation of Business...........................................
6.02 Formation of Holding Company and Issuance of New Common Stock......
6.03 Restructuring of Geneva............................................
6.04 Issuance and Terms of New Common Stock.............................
6.05 Issuance and Terms of New Preferred Stock..........................
6.06 Holding Company Subsidiaries.......................................
6.07 Exit Capital.......................................................
6.08 Procedures for Exercise of Equity Rights...........................
6.09 Designation of Initial Directors and Officers......................
6.10 Employment, Retirement, Indemnification and Other Agreements.......
6.11 Emergence Bonus....................................................
6.12 Management Incentive Compensation..................................
(a) Incentive Compensation.............................................
(b) Severance Protection...............................................
ARTICLE VII. - PROVISIONS GOVERNING DISTRIBUTIONS...........................
7.01 Distributions for Claims Allowed as of the Effective Date..........
7.02 Distributions by the Disbursing and Exchange Agent and the
Indenture........................................................
7.03 Compensation and Reimbursement of the Indenture Trustee for
Services Related to Distributions Pursuant to the Plan...........
7.04 Distribution Record Date...........................................
7.05 Surrender of Notes or Instruments..................................
7.06 Surrender of the 11.25% Senior Notes and 9.5% Senior Notes.........
7.07 Unclaimed Cash or New Common Stock.................................
7.08 Fractional Shares..................................................
7.09 Distribution Dates.................................................
7.10 Tax Provisions.....................................................
7.11 Cancellation of Indentures.........................................
ARTICLE VIII. - CONDITIONS TO THE EFFECTIVE DATE............................
8.01 Conditions to Confirmation.........................................
8.02 Conditions to the Effective Date...................................
8.03 Waiver.............................................................
ARTICLE IX. - EFFECTS OF PLAN CONFIRMATION..................................
9.01 Discharge..........................................................
9.02 Post-Effective Date Effect of Instruments and other Evidence of
Claims...........................................................
9.03 Injunctions and Stays..............................................
ARTICLE X. - TREATMENT OF EXECUTORY CONTRACTS...............................
10.01 Executory Contracts and Unexpired Leases...........................
10.02 Union Contract.....................................................
10.03 Bar Date for Rejected Executory Contracts and Unexpired Leases.....
ARTICLE XI. - PROVISIONS FOR RESOLVING AND TREATING CLAIMS...............
11.01 Objection Deadline.................................................
11.02 Prosecution of Objections..........................................
11.03 No Distributions Pending Allowance.................................
11.04 Distributions After Allowance......................................
11.05 Future Distributions of New Common Stock...........................
ARTICLE XII. - RETENTION OF JURISDICTION....................................
12.01 General Retention of Jurisdiction..................................
12.02 Specific Retention of Jurisdiction.................................
12.03 Abstention and Election............................................
ARTICLE XIII. - MISCELLANEOUS...............................................
13.01 Revocation.........................................................
13.02 Reservation of Rights..............................................
13.03 Debtor Claims......................................................
13.04 Survival of Certain Corporate Indemnification Obligations..........
13.05 Modification of Plan...............................................
13.06 Releases by Recipients of Cash and New Common Stock................
13.07 Limitation of Liability and Related Indemnity......................
13.08 Notices............................................................
13.09 Notice of Effective Date...........................................
13.10 Unsecured Creditors' Committee.....................................
13.11 Bondholders' Committee.............................................
13.12 Trustee Fees.......................................................
13.13 Final Decree.......................................................
13.14 Headings...........................................................
13.15 Severability.......................................................
13.16 Successors and Assigns.............................................
<PAGE>
Geneva Steel Company and the Official Committee of Bondholders
hereby propose the following plan of reorganization for the Debtor pursuant to
Chapter 11 of the Bankruptcy Code 11 U.S.C.ss.ss. 1101 et. seq.
ARTICLE I.- DEFINITIONS
-----------------------
1.01 Scope of Definitions. For purposes of this plan of
reorganization, except as expressly otherwise provided or unless the context
otherwise requires, all capitalized terms not otherwise defined shall have the
meanings assigned to them in this Article I. Whenever the context requires, such
terms shall include the plural number as well as the singular and the female
gender as well as the masculine.
1.02 Administrative Bar Date. "Administrative Bar Date" means and
refers to the deadline, 60 days after the Effective Date, established in Section
2.02 for the filing of (i) applications for compensation or expense
reimbursement by Professional Persons or other Persons claiming to have made a
substantial contribution to the Debtor's Case and (ii) Claims for any other
Administrative Expenses (other than for Claims of Administrative Expenses
incurred in the ordinary course of business and Claims under 28 U.S.C. ss.
1930).
1.03 Administrative Expense. "Administrative Expense" means and
refers to a Claim for payment of an administrative expense of the kind specified
in section 503(b) of the Code and referred to in section 507(a)(1) of the Code,
including, without limitation, the actual, necessary costs and expenses of
preserving the Debtor's estate and operating the business of the Debtor,
including wages, salaries, and commissions for services rendered after the
commencement of the Debtor's Case, compensation for legal and other services,
and reimbursement of expenses awarded under section 330(a) of the Code, and all
fees and charges assessed against the Debtor's estate under chapter 123 of Title
28 of the United States Code; provided; however, that Administrative Expense
shall not include any interest earned on a Secured Claim during the period from
the Petition Date through the Effective Date.
1.04 AFCO Claim. "AFCO Claim" means and refers to any Claim of AFCO
Credit Corporation arising after the Petition Date relating to that certain
insurance financing approved by Order of the Court.
1.05 Allowed Claim. "Allowed Claim" means and refers to the amount
of a Claim for which (I)(A) no proof of claim is filed that is listed by the
Debtor in its Schedules as not disputed, contingent, or unliquidated, or (B) if
a proof of claim has been filed (i) the amount of the Claim as set forth on the
proof of claim if no objection has been interposed within any period of
limitation fixed by the Code or the rules or orders of the Court, or (ii) if an
objection has been interposed, (x) the amount determined by a Final Order of the
Court with respect to such Claim or (y) the amount set forth in the Plan as the
allowed amount of such Claim, and (II) the obligation to make payment on such
Claim has not been assumed by a third party.
1.06 Allowed Priority Claim. "Allowed Priority Claim" means and
refers to any Priority Claim that is or has become an Allowed Claim.
1.07 Allowed Priority Tax Claim. "Allowed Priority Tax Claims" means
and refers to a Priority Tax Claim that is or has become an Allowed Claim.
1.08 Allowed Secured Claim. "Allowed Secured Claim" means and refers
to a Secured Claim against a Debtor that is or has become an Allowed Claim,
other than the Claims of Congress Financial.
1.09 Allowed Unsecured Claim. "Allowed Unsecured Claim" means and
refers to an Unsecured Claim that is or has become an Allowed Claim.
1.10 Beneficial Holder. "Beneficial Holder" means and refers to any
Person who holds an economic interest in any of the Senior Notes, including
those Persons who do not hold legal or record title to the Senior Notes.
1.11 Bondholders' Committee. "Bondholders' Committee" means and
refers to the first reconstituted official bondholders' committee appointed in
the Debtor's Case.
1.12 Business Day. "Business Day" means and refers to any day except
Saturday, Sunday, and any other day on which commercial banks in Salt Lake City,
Utah are authorized by law to close.
1.13 Cause. "Cause" means and refers to circumstances where the
subject employee (i) is convicted of a felony, a crime of moral turpitude or any
crime involving the Reorganized Debtor (or the relevant entity) (other than
pursuant to actions taken at the direction or with the approval of the relevant
entity's board of directors or governing body), (ii) is found by reasonable
determination of the relevant entity, made in good faith, to have engaged in (a)
willful misconduct, (b) willful or gross neglect, (c) fraud, (d)
misappropriation or (e) embezzlement in the performance of his duties or (iii)
willfully and repeatedly fails to discharge his duties as an employee of the
relevant entity.
1.14 Change in Control. "Change in Control" means and refers to a
change in control of the Reorganized Debtor or the Holding Company, as such term
is defined in Term Loan Agreement among Geneva as Borrower and Lenders Party
thereto and Citicorp USA, Inc. as Administrative Agent.
1.15 Chapter 11. "Chapter 11" means and refers to chapter 11 of the
Code.
1.16 Claim. "Claim" means and refers to any claim against the Debtor
as defined in section 101(5) of the Code whether or not asserted.
1.17 Claimant. "Claimant" means and refers to the holder of a Claim.
1.18 Class. "Class" means and refers to a class of Claims or
Interests described in Article III of the Plan.
1.19 Class A New Preferred Stock. "Class A New Preferred Stock"
means and refers to the class A New Preferred Stock to be issued by the Holding
Company, as more fully described in Section 6.05 herein.
1.20 Code. "Code" means and refers to Title 1 of the Bankruptcy
Reform Act of 1978, Public Law 95-598, codified in Title 11 of the United States
Code, as amended, 11 U.S.C.ss.ss. 101 et. seq. -- ---
1.21 Confirmation Date. "Confirmation Date" means and refers to the
date of entry of the Confirmation Order.
1.22 Confirmation Order. "Confirmation Order" has the meaning
ascribed to that term in Section 8.01 of the Plan.
1.23 Congress Financial. "Congress Financial" means and refers to
Congress Financial Corporation, the debtor-in-possession lender approved by
order of the Court on February 19, 1999 to issue a revolving credit line not in
excess of $125,000,000 at any given time secured by a lien on the inventory,
accounts receivable and property of the Debtor.
1.24 Congress Financial Claim. "Congress Financial Claim" means and
refers to any and all Claims held by Congress Financial against Geneva for
post-petition debts arising from its role as the debtor-in-possession lender.
1.25 Court. "Court" means and refers to the United States Bankruptcy
Court for the District of Utah and any court having competent jurisdiction to
hear appeals or certiorari proceedings therefrom, or any successor thereto that
may be established by any act of Congress, or otherwise, and which has competent
jurisdiction over the Debtor's Case or the Plan.
1.26 Debtor. "Debtor" means and refers to Geneva Steel Company
whether as debtor or as debtor-in-possession.
1.27 Debtor's Case. "Debtor's Case" means and refers to the
above-captioned Bankruptcy Case, No. 99-21130 (Chapter 11) pending before the
Court.
1.28 Disallowed Claim. "Disallowed Claim" means and refers to any
Claim or portion thereof that has been disallowed pursuant to a Final Order of
the Court.
1.29 Disbursing and Exchange Agent. "Disbursing and Exchange Agent"
means and refers to the Person designated by the Plan Proponents to act as the
disbursing and exchange agent pursuant to the terms of the Plan.
1.30 Disputed Claim. "Disputed Claim" means and refers to any Claim
against the Debtor that is not an Allowed Claim, but which has not been
disallowed by a Final Order of the Court.
1.31 Distribution Record Date. "Distribution Record Date" means and
refers to the close of business on the Confirmation Date.
1.32 Effective Date. "Effective Date" means and refers to the date
upon which each of the conditions in Section 8.02 has been satisfied.
1.33 Emergence Bonus. "Emergence Bonus" means and refers to a bonus
established in the Employee Retention Plan Order to be paid to certain
executives and managers of the Debtor if such Persons are employed by the
Reorganized Debtor on the Effective Date of the Plan.
1.34 Employee Retention Plan Order. "Employee Retention Plan Order"
means and refers to the order of the Court entered September 17, 1999
establishing an emergence bonus and severance package provisions for certain
executives and management of the Debtor.
1.35 11.125% Senior Notes. "11.125% Senior Notes" means and refers
to the notes issued in March 1993 pursuant to an Indenture by and between Geneva
and Bankers Trust Company as Trustee, which are due in March 2001 and which
shall be Allowed Unsecured Claims in the aggregate amount of $140,715,468.75
pursuant to the Plan.
1.36 11.125% Senior Noteholders. "11.125% Senior Noteholders" means
and refers to those Persons who on the Distribution Record Date are the holders
of record of the 11.125% Senior Notes.
1.37 Equity Right. "Equity Right" means and refers to certificated,
transferable rights, exercisable to purchase shares of Class A New Preferred
Stock at the Equity Rights Exercise Price per share, which rights shall be
issued to holders of Allowed Class Three Claims pursuant to section 5.01 of the
Plan.
1.38 Equity Rights Determination Date. "Equity Rights Determination
Date" means and refers to the five (5) business days following the Equity Rights
Expiration Date.
1.39 Equity Rights Exercise Period. "Equity Rights Exercise Period"
means and refers to the period from the Effective Date through the Equity Rights
Expiration Date.
1.40 Equity Rights Exercise Price. "Equity Rights Exercise Price"
means and refers to the price paid per share of Class A New Preferred Stock,
equal to $10.80 per share.
1.41 Equity Rights Expiration Date. "Equity Rights Expiration Date"
means and refers to the date that is forty-five days after the Effective Date,
unless such date is extended by the Holding Company.
1.42 Executive. "Executive" means and refers to each of Joseph A.
Cannon, Ken C. Johnsen, Tim Clark, Carl E. Ramnitz, Dennis Wanlass and Marcus
Phillips.
1.43 Exercise Instructions. "Exercise Instructions" means and refers
to the instructions sent by the Disbursing and Exchange Agent with regard to the
Equity Rights, as set forth in subsection 6.08(e) of the Plan.
1.44 Exercise Notice. "Exercise Notice" has the meaning ascribed to
that term in subsection 6.08(e) of the Plan.
1.45 Exit Facility. "Exit Facility" means and refers to the
revolving credit facility and term loan, collectively, to be extended to the
Reorganized Debtor as a means of implementing the Plan and described in Section
6.07 of the Plan.
1.46 Final Order. "Final Order" means and refers to an order or
judgment which finally concludes a matter such that it may be appealed as of
right and the operation of which has not been stayed.
1.47 Geneva. "Geneva" means and refers to Geneva Steel Company prior
to the commencement of the case.
1.48 Holding Company. "Holding Company" means and refers to a new
holding company to be organized on or prior to the Effective Date under the laws
of the State of Delaware for the purpose of holding (i) all of the ownership of
the Reorganized Debtor, (ii) all of the capital stock of the Williams Farm
Property Subsidiary established pursuant to Section 6.06(a) of the Plan, (iii)
all of the capital stock of the Iron Ore Mines Subsidiary established pursuant
to Section 6.06(b) of the Plan, (iv) all of the capital stock of the Vineyard
Iron Company pursuant to Section 6.06(c) of the Plan, and (v) all of the capital
stock of Vineyard Management Company.
1.49 Holding Company By-Laws. "Holding Company By-Laws" means and
refers to by-laws for the Holding Company.
1.50 Holding Company Certificate of Incorporation. "Holding Company
Certificate of Incorporation" means and refers to certificate of incorporation
for the Holding Company.
1.51 Indenture. "Indenture" means and refers to one of the two
Indentures executed between Bankers Trust Company and Geneva with respect to the
9.5% Senior Notes and the 11.125% Senior Notes.
1.52 Indenture Trustee. "Indenture Trustee" means and refers to
Bankers Trust Company, as Indenture Trustee for the Senior Notes.
1.53 Indenture Trustee Charging Lien. "Indenture Trustee Charging
Lien" means and refers to any lien or other priority in payment available to the
Indenture Trustee pursuant to the Indentures against distributions to be made to
the holders of Claims under or evidenced by the Senior Notes for payment of any
fees, costs or disbursements incurred by the Indenture Trustee, to the extent
not otherwise paid pursuant to applicable provisions of the Plan.
1.54 Interest. "Interest" means and refers to an equity interest in
the Debtor, including the Old Common Stock and the Old Preferred Stock, an
option to purchase such stock or any unpaid dividends on the Old Common Stock or
Old Preferred Stock.
1.55 Interest Holder. "Interest Holder" means and refers
collectively to any Person holding an Interest in the Debtor.
1.56 Iron Ore Mines. "Iron Ore Mines" means and refers to the Iron
Ore Mines owned by the Debtor on the Petition Date and described more fully in
the Schedules.
1.57 Iron Ore Mines Subsidiary. "Iron Ore Mines Subsidiary" means
and refers to the Delaware corporation or limited liability company formed
pursuant to Section 6.06(b) of the Plan to hold the Iron Ore Mines.
1.58 New Common Stock. "New Common Stock" means and refers to new
common stock of Holding Company issued pursuant to the Plan.
1.59 New Preferred Stock. "New Preferred Stock" means and refers to
new Class A preferred stock of Holding Company issued pursuant to the Plan as
described in Section 6.05 herein.
1.60 New Subsidiary Stock. "New Subsidiary Stock" means and refers
to the new common stock or any other ownership interest of the Reorganized
Debtor issued to Holding Company pursuant to the Plan.
1.61 9.5% Senior Notes. "9.5% Senior Notes" means and refers to the
Notes issued in January 1994 pursuant to an Indenture by and between Geneva and
Bankers Trust Company as successor Trustee and which are due in January 2004 and
which shall be Allowed Unsecured Claims in the aggregate amount of
$199,918,078.26 pursuant to the Plan.
1.62 9.5% Senior Noteholders. "9.5% Senior Noteholders" means and
refers to those Persons who on the Distribution Record Date are the holders of
record of the 9.5% Senior Notes.
1.63 Noteholders. "Noteholders" means and refers collectively to the
11.125% Senior Noteholders and the 9.5% Senior Noteholders.
1.64 Old Class A Common Stock. "Old Class A Common Stock" means and
refers to the Class A common stock issued by Geneva.
1.65 Old Class A Common Stock Holder. "Old Class A Common Stock
Holder" means and refers to those Persons who on the Distribution Record Date
are the holders of record of the Old Class A Common Stock.
1.66 Old Class B Common Stock. "Old Class B Common Stock" means and
refers to the Class B common stock issued by Geneva that was not publicly
traded, but could be converted to Class A common stock at a ratio of 10 shares
to 1 share.
1.67 Old Class B Common Stock Holder. "Old Class B Common Stock
Holder" means and refers to those Persons who on the Distribution Record Date
are the holders of record of the Old Class B Common Stock.
1.68 Old Common Stock. "Old Common Stock" means and refers to the
Old Class A Common Stock and the Old Class B Common Stock.
1.69 Old Preferred Stock. "Old Preferred Stock" means and refers to
the preferred stock issued by Geneva.
1.70 Person. "Person" means and refers to an individual,
corporation, partnership, limited liability company, joint venture, association,
joint stock company, trust, estate, unincorporated organization, government (or
agency or political subdivision thereof) or other entity.
1.71 Petition Date. "Petition Date" means and refers to February 1,
1999.
1.72 Plan. "Plan" means and refers to this third amended plan of
reorganization, as modified (including all annexes thereto), as it may be
modified or amended from time to time.
1.73 Plan Proponents. "Plan Proponents" means and refers to the
Debtor and the Bondholders' Committee in their capacity as proponents of the
Plan, provided, however, that such term shall mean and refer only to the
Reorganized Debtor after the Bondholders' Committee is dissolved pursuant to the
Plan.
1.74 Priority Claim. "Priority Claim" means and refers to a Claim
entitled to priority in payment pursuant to section 507(a) of the Code other
than a Claim entitled to priority in payment pursuant to sections 507(a)(1),
507(a)(2), or 507(a)(8) of the Code.
1.75 Priority Tax Claim. "Priority Tax Claim" means and refers to a
Claim of a governmental unit entitled to priority under section 507(a)(8) of the
Code. Priority Tax Claims shall include only such Claims for penalties that are
related to a Claim specified in section 507(a)(8) and that seek compensation for
actual pecuniary loss.
1.76 Professional Persons. "Professional Persons" means and refers
to all attorneys, accountants, financial advisors, investment bankers,
appraisers, consultants, and other professionals retained or to be compensated
pursuant to an order of the Court entered under sections 327, 328, 330, 331,
503(b) or 1103 of the Code.
1.77 Record Holder. "Record Holder" means and refers to any Person
that holds legal or record title to any of the Senior Notes, whether or not such
Person also holds an economic interest in such Senior Notes.
1.78 Reorganized Debtor. "Reorganized Debtor" means and refers to
the Debtor after the Effective Date, after the Debtor's merger into a
newly-formed Delaware limited liability company as described more fully in
Section 6.03.
1.79 Schedules. "Schedules" means and refers the Debtor's Statements
of Assets, Liabilities, and Financial Affairs filed with the Court on or about
March 8, 1999, as such may be amended from time to time in accordance with Rule
1009 of the Federal Rules of Bankruptcy Procedure.
1.80 Scottish Power Claim. "Scottish Power Claim" means and refers
to any Claim of Scottish Power arising after the Petition Date relating to the
purchase money financing provided to the Debtor, pursuant to an Order of this
Court, for the acquisition of substation equipment.
1.81 Secured Claim. "Secured Claim" means and refers to a Claim
other than the Congress Financial Claim, the AFCO Claim and the Scottish Power
Claim, to the extent such Claim is secured by a valid lien, security interest,
or other interest in property in which a Debtor has an interest, that has been
perfected properly as required by applicable law, but only to the extent of the
value of the Debtor's interest in such property, determined in accordance with
section 506(a) of the Code.
1.82 Senior Notes. " Senior Notes" means and refers collectively to
the 11.125% Senior Notes and the 9.5% Senior Notes.
1.83 Stand-By Commitments. "Stand-By Commitments" means and refers
to the commitments of the Stand-By Purchasers to exercise all Equity Rights not
otherwise exercised by the holders of Allowed Class Three Claims.
1.84 Stand-By Purchasers. "Stand-By Purchasers" means and refers to
Albert Fried & Co. and certain of the funds and/or discretionary accounts
managed by Loomis Sayles & Co., Inc.
1.85 Termination. "Termination" means and refers to either (i) a
discharge, (ii) a reduction in compensation, (iii) the assignment of the
Executive to any duties inconsistent in any material respect to the Executive's
position (including status, offices, title and reporting requirements),
authority, duties or responsibilities or (iv) requiring the Executive to be
based at any office or location that is more than 75 miles from Vineyard, Utah.
1.86 Union. "Union" means and refers to the United Steelworkers of
America, which represents the majority of Debtor's non-managerial employees in
collective bargaining with Debtor.
1.87 Union Contract. "Union Contract" means and refers to the
collective bargaining agreement dated May 1, 1998 between the Union and the
Debtor.
1.88 Unsecured Claim. "Unsecured Claim" means a Claim other than a
Claim for payment of an Administrative Expense, a Priority Claim, a Priority Tax
Claim, the Congress Financial Claim, a Secured Claim, the Scottish Power Claim,
the AFCO Claim, or an Interest.
1.89 Unsecured Creditors' Committee. "Unsecured Creditors'
Committee" means and refers to the second reconstituted Official Unsecured
Creditors' Committee established in the Debtor's Case.
1.90 Vineyard Iron Company. "Vineyard Iron Company" means and refers
to the Delaware corporate entity known as the Vineyard Iron Company which was
wholly-owned by the Debtor on the Petition Date and shall be a wholly-owned
subsidiary of the Holding Company upon the Effective Date.
1.91 Voting Deadline. "Voting Deadline" means and refers to the
deadline established by Court Order for the submission of votes to accept or
reject this Plan.
1.92 Voting Procedures Order. "Voting Procedures Order" means and
refers to that certain Order approved by the Court at a hearing on or about the
date the hearing on the approval of the Disclosure Statement is held,
establishing certain voting procedures for the holders of the Senior Notes.
1.93 Voting Record Date. "Voting Record Date" means and refers to
the date established by Order of the Court whereby the Record Holders and
Beneficial Holders on such date become obligated to follow the procedures
established in the Voting Procedure Order.
1.94 Williams Farm Property. "Williams Farm Property" means and
refers to the 76 acres of real property located between 1200 - 1400 North Geneva
Road & I15, Orem, Utah.
1.95 Williams Farm Property Subsidiary. "Williams Farm Property
Subsidiary" means and refers to the Delaware corporation formed pursuant to
Section 6.06(a) of the Plan to hold the Williams Farm Property.
ARTICLE II.- ADMINISTRATIVE EXPENSES AND TAX CLAIMS
---------------------------------------------------
2.01 Compensation and Expenses of Professional Persons. Compensation
and reimbursement of expenses of Professional Persons relating to services
performed after the Petition Date, but provided prior to the Effective Date, to
the extent such compensation and expense reimbursement has not been paid prior
to the Effective Date and is not a Disallowed Claim, shall be subject to
allowance by the Court, upon notice and application. The compensation and
expense reimbursements of Professional Persons shall be paid in full within 10
Business Days after the entry of a Final Order allowing such compensation and
expense reimbursements.
2.02 Bar Date for Administrative Claims.
(a) Pre-Confirmation Date Claims and Expenses. All
applications for final compensation of Professional Persons for services
rendered and reimbursement of expenses incurred on or before the Effective Date
and all other requests for payment of administrative costs and expenses incurred
on or before the Effective Date under section 507(a)(1) or 507(b) of the Code
(except for Claims for Administrative Expenses incurred in the ordinary course
of business and Claims under 28 U.S.C. ss. 1930) shall be filed no later than 60
days after the Effective Date or shall forever be barred from recovery.
(b) Substantial Contribution Compensation and Expenses Bar
Date. Any Person who requests compensation or expense reimbursement for making a
substantial contribution in the Debtor's Case pursuant to section 503(b)(3), (4)
and (5) of the Code must file an application with the clerk of the Court, no
later than 60 days after the Effective Date, and serve such application on the
Plan Proponents and as otherwise required by the Court and the Code or be
forever barred from seeking such compensation or expense reimbursement.
(c) Effect of Failure to Timely File Claim or Request for
Payment. Any request for payment of an Administrative Claim that is not filed by
the applicable deadline set forth in this section 2.02 shall forever be barred.
Under no circumstances will the applicable deadlines set forth above be extended
by order of the Court or otherwise. Any holders of Claims for Administrative
Expenses who are required to file a Claim or request for payment of such Claims
or expense reimbursements and who do not file such Claims or requests for
expense reimbursements by the applicable Administrative Bar Date shall be
forever barred from asserting such Claims or expense reimbursements against the
Debtor, the Reorganized Debtor, any property of the Debtor or Reorganized Debtor
or any distributions under the Plan.
2.03 Priority Tax Claims. At the option of the Plan Proponents, each
holder of a Priority Tax Claim shall receive cash equal to the unpaid portion of
such Priority Tax Claim on or as soon as practicable after the later of: (i) the
Effective Date, and (ii) the date on which such Claim becomes an Allowed
Priority Tax Claim; provided, however, that at the option of the Plan
Proponents, the Reorganized Debtor may pay Allowed Priority Tax Claims over a
period not exceeding six (6) years after the date of the assessment of the
Priority Tax Claim as provided in subsection 1129(a)(9)(C) of the Bankruptcy
Code.
If the Plan Proponents elect this option as to any Priority Tax
Claim, then the payment of such Allowed Priority Tax Claim shall be made in
equal semiannual installments with the first installment due on the latest of:
(i) the Effective Date, (ii) 30 calendar days after the date on which an order
allowing such Priority Tax Claim becomes a Final Order, and (iii) such other
time as may be agreed to by the holder of such Priority Tax Claim and the Plan
Proponents. Each installment shall include simple interest on the unpaid portion
of such Allowed Priority Tax Claim, without penalty of any kind, at the
statutory rate of interest provided for such taxes under applicable
nonbankruptcy law; provided, however, that the Plan Proponents shall reserve the
right to pay any Allowed Priority Tax Claim, or any remaining balance of such
Allowed Priority Tax Claim, in full, at any time on or after the Effective Date,
without premium or penalty. The Priority Tax Claim of the State of Utah shall be
paid over the foregoing six year period with an annual rate of interest of 6% as
provided by statute.
2.04 Payment of Allowed Administrative Expenses. Holders of Allowed
Claims for Administrative Expenses (other than the Congress Financial Claim,
compensation and reimbursement for Professional Persons and Priority Tax Claims)
shall be paid in full in cash as soon as practicable after the Effective Date or
upon such other terms as have been agreed upon with such Claimant.
Administrative Expenses that represent liabilities incurred in the ordinary
course of business during the Debtor's Case (including the AFCO Claim and the
Scottish Power Claim) shall be paid by the Reorganized Debtor in accordance with
their terms.
2.05 Treatment of Congress Financial Claim. On the Effective Date,
all obligations of the Debtor with respect to the Congress Financial Claim shall
be paid in cash or otherwise satisfied in full. Upon compliance with the
foregoing sentence, all liens and security interests granted to Congress
Financial to secure such obligations shall be deemed cancelled and shall be of
no further force and effect. Prior to the Effective Date, upon request of the
Debtor, Congress Financial shall give notice to the Plan Proponents of what it
believes will be the total amount of the Congress Financial Claim on the
Effective Date. If either of the Plan Proponents dispute the amount submitted by
Congress Financial as the Congress Financial Claim as of the Effective Date, the
Court shall determine the amount of the Congress Financial Claim as of the
Effective Date.
ARTICLE III.- CLASSIFICATION OF CLAIMS AND INTERESTS
----------------------------------------------------
3.01 All Claims against and Interests in the Debtor (other than
those certain Claims constituting Administrative Expenses, Priority Tax Claims
or the Congress Financial Claim as described in Article II above) are divided
into the following classes for all purposes, including voting, confirmation and
distribution pursuant to the Plan.
3.02 Class One Claims. Class One consists of all Allowed Priority
Claims.
3.03 Class Two Claims. Class Two consists of all Allowed Secured
Claim.
3.04 Class Three Claims. Class Three consists of Allowed Unsecured
Claims in an amount greater than $5,000 that do not elect to be treated as a
Class Four Claimant. Notwithstanding that the Indenture Trustee has submitted a
single Claim for amounts relating to the 11.125% Senior Notes and a single Claim
for amounts related to the 9.5% Senior Notes, under each Indenture, the
Indenture Trustee may not vote on behalf of any of the Noteholders for purposes
of voting to accept or reject the Plan. Rather, each Record Holder of a Note on
the Voting Record Date established by the Court shall submit a ballot in
accordance with the Voting Procedures Order.
3.05 Class Four Claims. Class Four consists of all Allowed Unsecured
Claims in an amount equal to or less than $5,000 and any Allowed Unsecured
Claims in an amount in excess of $5,000, the holders of which elect to reduce
their Claim to $5,000 prior to the Voting Deadline by completing the appropriate
space on their ballot to accept or reject the Plan. The Noteholders do not have
a right to elect Class Four treatment because the Noteholders' Claims originate
from a single obligation, the Indentures pertaining to the Senior Notes.
3.06 Class Four A Claim. Class Four A consists of claims
subordinated pursuant to sections 510(b) or 510(c) of the Code, including the
claim of Richard Allen for fraud in connection with the purchase or sale of 9.5%
Senior Notes and 11.25% Senior Notes.
3.07 Class Five Interests. Class Five consists of allowed Old
Preferred Stock Interests.
3.08 Class Six Interests. Class Six consists of allowed Old Common
Stock Interests.
ARTICLE IV.- TREATMENT OF CLAIMS NOT IMPAIRED UNDER THE PLAN
------------------------------------------------------------
4.01 Class One Claims - Priority Claims. In complete settlement,
satisfaction and discharge of its Claim(s), a Person holding a Claim in Class
One will receive a cash payment equal to the amount of such Allowed Priority
Claim on or within 10 Business Days after the later of: (i) the Effective Date
and (ii) the date upon which such Person becomes the holder of such Allowed
Priority Claim, or as otherwise agreed by such Person and the Reorganized
Debtor.
4.02 Class Two Claims - Secured Claims. Each Allowed Secured Claim
will be dealt with as though a separate class and will receive treatment in
complete settlement, satisfaction and discharge of its Claims as follows:
(a) under arrangements approved by the Court after notice and
a hearing, the following creditors Secured Claims have been satisfied or
released: Westcon, Inc. (lien released, no claim filed); Mannesmann Pipe & Steel
(claim settled and paid under arrangements for wind up of contract and payment
from the settlement of the Ex-L Tube Claim); United States Internal Revenue
Service (claim paid via offset against Debtor's 1998 overpayment claimed on Form
1120, U.S. Corporation Income Tax Return); and ITEQ Storage Systems (claim
settled and to be paid prior to confirmation of the Plan).
(b) the Plan will leave unaltered the legal, equitable, and
contractual rights pertaining to the Allowed Secured Claims of the following
creditors: Mitsui & Co. (USA), Inc.; Oxbow Carbon and Minerals, Inc.; Scott
Specialty Gasses; and State of Utah Division of Oil, Gas & Mining; and
(c) each holder of the following Allowed Secured Claims will
be paid in full in cash on the later of (i) the Effective Date and (ii) the date
such Claim becomes an Allowed Secured Claim: A&K Railroad Materials and Global
Materials f/k/a Mid-South Terminal. 4.03 Unimpaired Claims. By virtue of the
foregoing provisions of this Article IV, the Claims in Classes One and Two are
unimpaired under the Plan and the holders of such Claims are not entitled to
cast ballots to accept or reject the Plan.
ARTICLE V.- TREATMENT OF CLAIMS AND INTERESTS IMPAIRED UNDER THE PLAN
---------------------------------------------------------------------
5.01 Class Three Claims - Unsecured Claims. As soon as practicable
after the later of (i) the Effective Date or (ii) the date on which a Claim
becomes an Allowed Unsecured Claim, each Person holding an Allowed Unsecured
Claim in an amount greater than $5,000.00 that does not make the election
provided in section 5.02 of the Plan shall be treated as follows:
(a) Each Person holding an Allowed Unsecured Claim, without
regard to when such claim becomes an Allowed Claim, shall receive in complete
settlement, satisfaction and discharge of its Allowed Unsecured Claim a pro rata
portion of approximately 7,085,276 shares of the New Common Stock in the
following manner: (i) each Person that has an Allowed Unsecured Claim on the
Confirmation Date shall receive on the Effective Date the number of shares of
New Common Stock that is equal to (a) the dollar amount of its Allowed Claim
multiplied by (b) a fraction with a numerator of 7,085,276 and the denominator
that equals the sum of (x) the aggregate dollar amount of all the Class Three
Allowed Unsecured Claims on the Confirmation Date plus (y) an estimate of the
dollar value that the Court will later allow by Final Order with respect to all
Class Three Unsecured Claims that are Disputed Claims as of the Confirmation
Date (the "Share Dollar Ratio") and (ii) each Person whose Disputed Claims as of
the Confirmation Date becomes an Allowed Unsecured Claim in excess of $5,000
after the Confirmation Date shall receive the number of shares of the New Common
Stock that is equal to the amount of such Allowed Claim multiplied by the Share
Dollar Ratio.
(b) Each Person holding a Class Three Allowed Unsecured Claim
on the Confirmation Date shall receive a pro rata portion of Equity Rights to
subscribe for an aggregate of 2,315,000 shares of $25 million of Class A New
Preferred Stock based on the dollar amount of such Allowed Claim.
5.02 Class Four - Convenience Class. As soon as practicable after
the later of (i) the Effective Date or (ii) the date on which a Claim becomes an
Allowed Unsecured Claim, distributions shall be made as follows: (a) each Person
holding an Allowed Unsecured Claim, that is not a Noteholder Claim, in an amount
equal to or less than $5,000 shall receive in complete settlement, satisfaction
and discharge of its Claim, a cash payment equal to 40% of such Allowed
Unsecured Claim and (b) each Person holding an Allowed Unsecured Claim in excess
of $5,000, that is not a Noteholder Claim, that elects by the Voting Deadline by
so indicating on the claimant's ballot in a space to be provided therefor, to
surrender such Allowed Unsecured Claim, shall receive a cash payment of $2,000
in full in exchange of such Claim. Once an election to surrender an Allowed
Unsecured Claim is made, the election shall become irrevocable and the Person
who made such an election may not seek treatment or vote as a member of Class
Three. All Allowed Unsecured Claimants that elect to surrender their Class Three
Claims for distribution as a Class Four Claimant are members of Class Four for
voting and distribution purposes.
5.03 Class Four A - Subordinated Unsecured Claims. Persons holding
subordinated Unsecured Claims shall not receive any distributions under the Plan
or retain any property on account of such claims.
5.04 Class Five - Old Preferred Stock. Persons holding allowed Old
Preferred Stock Interests shall not receive any distributions under the Plan.
5.05 Class Six - Old Common Stock Interests. Persons holding allowed
Old Common Stock Interests shall not receive any distributions under the Plan.
5.06 Impaired Claims and Interests. By virtue of the foregoing
provisions of Article V, the Claims in Classes Three and Four are impaired under
the Plan and are entitled to cast ballots to accept or reject the Plan. Also by
virtue of the foregoing provisions of Article V, the Interests in Classes Five
and Six will not receive or retain any property under the Plan, are deemed to
not accept the Plan pursuant to U.S.C. ss. 1126 (g), and shall not be solicited
or have any right to cast ballots to accept or reject the Plan.
ARTICLE VI.- MEANS FOR IMPLEMENTATION OF THE PLAN
-------------------------------------------------
6.01 Continuation of Business. After the Effective Date, the
Reorganized Debtor shall continue to operate its business subject to its
obligations under the Plan, with all powers of a limited liability company,
allowed under applicable state law, without prejudice to any right to alter or
terminate such existence (whether by merger or otherwise) under such applicable
law. Except as otherwise expressly provided in the Plan, on the Effective Date
the Reorganized Debtor will be vested with all of the property of the estate
free and clear of all Claims, liens, encumbrances, charges and other interests
of creditors and equity security holders, and may operate its business free of
any restrictions imposed by the Code or by the Court.
6.02 Formation of Holding Company and Issuance of New Common Stock.
Immediately before or on the Effective Date, the Debtor shall create two
wholly-owned subsidiaries, the Holding Company and an interim corporation (the
"Interim Corporation"), by filing certificates of incorporation with the
Secretary of State of Delaware in accordance with Section 103 of the Delaware
General Corporation Law. The Holding Company certificate of incorporation will,
among other things, provide (to the extent necessary to effectuate the terms of
the Plan) for (i) the authorization of 40,000,000 shares of the New Common
Stock, (ii) the authorization of New Preferred Stock in two classes, and (iii)
the prohibition of the issuance of non-voting equity securities.
6.03 Restructuring of Geneva. Immediately before or on the Effective
Date, the Holding Company shall create a wholly-owned limited liability company
subsidiary by filing a Certificate of Organization with the Secretary of State
of Delaware (the "New LLC"). On the Effective Date, Geneva shall merge into the
Interim Corporation, with the Interim Corporation being the surviving entity.
The Old Common Stock and Old Preferred Stock shall be cancelled pursuant to the
Plan, and shares of the Interim Corporation shall be issued to Class Three
Claimants that hold Allowed Claims. Immediately thereafter, the Interim
Corporation, then the sole shareholder of Holding Company, shall merge into the
New LLC with the New LLC surviving (the "Reorganized Debtor"). In connection
with the merger, shares of the Interim Corporation shall be cancelled and
converted into the right to receive shares of the New Common Stock.
6.04 Issuance and Terms of New Common Stock. On the Effective Date,
in connection with the merger, Holding Company will issue approximately
6,898,137 shares of New Common Stock to Class Three Claimants that hold Allowed
Claims as of the Confirmation Date in accordance with the terms and conditions
of the Plan. Holding Company anticipates issuing an additional 187,139 shares of
New Common Stock to holders of Disputed Claims on the Confirmation Date as such
Claims are resolved. In addition, the Holding Company will issue (i) shares of
New Common Stock to certain executives in partial satisfaction of the Emergence
Bonus established pursuant to the Employee Retention Program, and (ii) .69% of
the New Common Stock to the Stand-By Purchasers in consideration for the
Stand-By Commitment. The Holding Company shall also issue options to purchase 5%
of New Common Stock as part of management's compensation. The provisions of the
New Common Stock shall be set forth in the certificate of incorporation of
Holding Company and are summarized below:
(a) Authorization and Issuance. The New Common Stock shall
have the characteristics described below. Holding Company shall be authorized to
issue up to 40,000,000 shares of New Common Stock.
(b) Par Value. The New Common Stock shall have $.01 par value
per share.
(c) Rights. The New Common Stock shall have such rights with
respect to dividends, liquidation, voting and other matters as set forth in the
Holding Company Certificate of Incorporation.
(d) Securities Act Exemption. The issuance of New Common Stock
pursuant to the Plan shall be exempt from registration under the Securities Act
of 1933, as amended (the "Securities Act") pursuant to Section 1145 of the Code.
(e) Stock Exchange Listing. Holding Company shall use its best
efforts to cause the New Common Stock to be accepted for listing on a
nationally-recognized stock exchange as soon as practical after the Effective
Date.
(f) Registration of Securities Issued Pursuant to the Plan.
Holding Company will undertake to use its best efforts to register the New
Common Stock under the Securities Act to permit resales by Persons receiving
such securities pursuant to the Plan who are deemed to be "underwriters" with
respect to such securities, as defined in Section 1145(b)(1)(D) of the Code and
in any event will file, at the expense of Holding Company, a registration
statement with the Securities and Exchange Commission for any such securities as
promptly as practicable after requested by any such Person. On the Effective
Date, Holding Company and the Reorganized Debtor shall enter into a Registration
Rights Agreement containing normal and customary terms with any Person deemed to
be an underwriter of the New Common Stock.
6.05 Issuance and Terms of New Preferred Stock. On the Effective
Date, Holding Company will be authorized to issue blank check new preferred
stock and Class A New Preferred Stock. The Holding Company shall only issue up
to 2,315,000 shares of Class A Preferred Stock. The provisions of the New
Preferred Stock shall be set forth in the Holding Company Certificate of
Incorporation. The Class A terms are summarized below:
(a) Equity Rights Offering. Shares in Class A shall be issued
to those persons participating in the Equity Rights offering.
(b) Mandatory Conversion. On the 5th anniversary of the
Effective Date, each share of Class A New Preferred Stock shall be converted
into one share of New Common Stock.
(c) Conversion option. Each share of Class A New Preferred
Stock may be converted into one share the New Common Stock at any time, in whole
or in part at the options of the respective holders of the Class A New Preferred
Stock.
(d) Dividend Rights. The Class A Preferred Stock will have a
12% dividend per annum, of which 8% will be payable in cash and 4% will be
payable in New Common Stock. To the extent that any portion of the 8% cash
dividend is not permitted by the terms and conditions governing the New Term
Loan and New Revolver or to the extent that funds are not otherwise legally
available, such amount will be satisfied by the issuance of New Common Stock
equal to, on a pro rata basis, 1.85% of the issued and outstanding New Common
Stock of the Holding Company on a fully diluted basis. The remaining 4% dividend
on the Class A New Preferred Stock will be satisfied through the issuance of
shares of New Common Stock, based on the average market price for such common
shares during the 30-day trading period immediately preceding the record date
for the dividend.
(e) Liquidation Preference. The face amount of the Class A New
Preferred Stock on the Effective Date plus accrued and unpaid dividends through
the date of such determination.
(f) Securities Act Exemption. The issuance of Class A New
Preferred Stock pursuant to the Plan shall be exempt from registration under the
Securities Act pursuant to Section 1145 of the Code.
(g) Stock Exchange Listing. The Reorganized Debtor shall use
its best efforts to cause the Class A New Preferred Stock to be accepted for
listing on a nationally-recognized stock exchange as soon as practical after the
Effective Date.
(h) Registration of Class A New Preferred Stock. Holding
Company will undertake to use its best efforts to register the Class A New
Preferred Stock under the Securities Act to permit resales by Persons receiving
such securities pursuant to the Plan who are deemed to be "underwriters" with
respect to such securities, as defined in Section 1145(b)(1)(D) of the Code and
in any event will file a registration statement with the Securities and Exchange
Commission for any such securities as promptly as practicable after requested by
any such Person. On the Effective Date, the Holding Company shall enter into a
Registration Rights Agreement containing normal and customary terms with any
Person deemed to be an underwriter of the Class A New Preferred Stock.
6.06 Holding Company Subsidiaries. On the Effective Date, the
following actions shall be taken:
(a) The Reorganized Debtor shall form the Williams Farm
Property Subsidiary and transfer ownership of the Williams Farm Property to the
Williams Farm Property Subsidiary. After such transfer, the Reorganized Debtor
will distribute ownership of the Williams Farm Property Subsidiary to the
Holding Company. The organizational documents for the Williams Farm Subsidiary
will, among other things, provide for the prohibition of the issuance of
non-voting equity securities.
(b) The Reorganized Debtor shall form the Iron Ore Mines
Subsidiary and transfer ownership of the Iron Ore Mines to the Iron Ore Mines
Subsidiary. After such transfer, the Reorganized Debtor will distribute
ownership of the Iron Ore Mines subsidiary to the Holding Company. The
organizational documents for the Iron Ore Mines Subsidiary will, among other
things, provide for the prohibition of the issuance of non-voting equity
securities.
(c) The Reorganized Debtor shall transfer or distribute
ownership of all of the outstanding capital stock of Vineyard Iron Company and
the Vineyard Management Company to the Holding Company.
6.07 Exit Capital. The Reorganized Debtor shall enter into the Exit
Facility to obtain the funds necessary to repay the Congress Financial Claim,
make other payments required to be made on the Effective Date and conduct its
post-reorganization business. The Exit Facility will be comprised of two loans,
as follows:
(a) Term Loan. The Term Loan shall be in the amount of
$110,000,000 and shall have the substantially the terms set forth in the loan
and security agreement and related documents which will be filed with the Court
at or before the hearing on confirmation of the Plan. The United States
government will guarantee 85% of the New Term Loan under the Emergency Steel
Loan Guaranty Act. The New Term Loan will be further secured by substantially
all of Geneva's operating assets (excluding inventory, accounts receivables,
certain equipment and related intangibles). The New Term Loan matures in
September 2005 and bears an interest rate of approximately LIBOR plus 2.9%
(blended).
(b) New Revolver. The New Revolver shall be in the amount of
up to $125,000,000 and shall have substantially the terms set forth in the
credit agreement and related documents which will be filed with the Court at or
before the hearing on confirmation of the Plan.
6.08 Procedures for Exercise of Equity Rights.
THE EXERCISE OF EQUITY RIGHTS IS OPTIONAL AND NOT MANDATORY. PRIOR
TO EXERCISING ANY SUCH RIGHTS, ELIGIBLE HOLDERS ARE ADVISED TO
CONSULT WITH THEIR FINANCIAL AND LEGAL ADVISORS.
(a) A total of 2,315,000 Equity Rights will be distributed to
holders of Class Three Allowed Unsecured Claims as of the Confirmation Date.
Each Equity Right may be exercised by the holder thereof at any time during the
Equity Rights Exercise Period to purchase one share of the Class A New Preferred
Stock at the price of $10.80 per share (the exercise of any Equity Rights in
such manner being referred to as a "Primary Exercise"). Although a holder of
Equity Rights may exercise all or any portion of such holder's Equity Rights
pursuant to a Primary Exercise, all such Equity Rights that are to be exercised
by such holder pursuant to a Primary Exercise shall be exercised concurrently.
Any holder of Equity Rights that seeks to exercise all of such holder's Equity
Rights pursuant to a Primary Exercise may also seek to exercise an additional
number of Equity Rights not to exceed the difference that results from
subtracting (i) the number of Equity Rights sought to be exercised by such
holder pursuant to a Primary Exercise from (ii) the number of Equity Rights
issued under the Plan (the exercise of any Equity Rights in such manner being
referred to as an "Oversubscription Exercise"). Any exercise of Equity Rights
pursuant to a Primary Exercise or an Oversubscription Exercise will be
irrevocable. Any exercise of Equity Rights pursuant to an Oversubscription
Exercise will be subject to prorationing as described in clause (d) below in the
event that the total number of Equity Rights sought to be exercised pursuant to
Primary Exercises and Oversubscription Exercises exceeds the number of Equity
Rights issued under the Plan.
(b) In order for any Primary Exercise (and any related
Oversubscription Exercise) of Equity Rights to be valid and effective, the
holder of Equity Rights seeking to effect such Primary Exercise must have been
the holder of an Allowed Class Three Claim in respect of which the Equity Rights
subject to such Primary Exercise were issued pursuant to Section 3.03 of the
Plan, or a transferee of the Equity Rights of such a holder, and must deliver to
the Disbursing and Exchange Agent prior to the Equity Rights Expiration Date a
properly completed and duly authorized Exercise Notice which (i) indicates the
number of Equity Rights sought to be exercised pursuant to a Primary Exercise
and the number, if any, of Equity Rights sought to be exercised pursuant to an
Oversubscription Exercise and (ii) is accompanied by a certified check or bank
draft drawn upon a United States bank or wire transfer in an amount equal to the
sum of (a) the product of the Equity Rights Exercise Price and the number of
Equity Rights sought to be exercised pursuant to a Primary Exercise and (b) the
product of the Equity Rights Exercise Price and the number, if any, of Equity
Rights sought to be exercised pursuant to an Oversubscription Exercise. The
foregoing items will not be deemed to have been timely delivered to the
Disbursing and Exchange Agent (and thus the attempted exercise of Equity Rights
pursuant to a Primary Exercise and/or an Oversubscription Exercise will not be
valid or effective) unless they are actually received by the Disbursing and
Exchange Agent at the address specified therefor in the Exercise Instructions
accompanying the form of Exercise Notice to be provided pursuant to clause (e)
below prior to the Equity Rights Expiration Date and are completed and executed
in conformity with the Exercise Instructions.
(c) On or before the Equity Rights Determination Date, the
Disbursing and Exchange Agent will mail to each holder of Equity Rights that has
sought to exercise Equity Rights in a Primary Exercise and/or an
Oversubscription Exercise a written statement specifying the number of Equity
Rights that were validly and effectively exercised by such holder (after giving
effect, if applicable, to prorationing pursuant to clause (d) below of Equity
Rights sought to be exercised by such holder pursuant to an Oversubscription
Exercise), together with (i) if applicable, the amount being refunded (without
interest) in respect of the Equity Rights Exercise Price relating to any Equity
Rights that were not validly and effectively exercised by such holder as a
result of untimeliness, noncompliance with the requirements specified herein or
in the Exercise Instructions, prorationing pursuant to class (d) below or
otherwise and (ii) stock certificates representing the shares of Class A New
Preferred Stock so purchased. No fractional shares of stock will be delivered
upon the exercise of any Equity Right.
(d) In the event that the total number of Equity Rights sought
to be exercised pursuant to Primary Exercises and Oversubscription Exercises
exceeds the number of Equity Rights issued under the Plan, (i) all Equity Rights
that shall have otherwise been validly and effectively exercised pursuant to
Primary Exercises shall be deemed to have been validly and effectively exercised
and (ii) the number of Equity Rights that shall be deemed to have been validly
and effectively exercised by any holder of Equity Rights pursuant to an
Oversubscription Exercise (assuming that all other requirements for valid and
effective exercise shall have been satisfied) shall be determined by (a)
multiplying the aggregate number of Equity Rights that were not validly and
effectively exercised pursuant to Primary Exercises by a fraction, the numerator
of which will be the number of Equity Rights issued under the Plan to such
holder and the denominator of which shall be the number of Equity Rights issued
under the Plan to all holders of Equity Rights who shall have exercised Equity
Rights pursuant to Oversubscription Exercise and (b) eliminating any resulting
fractions. If the prorationing pursuant to the immediately preceding sentence
would otherwise result in any holder being deemed to have validly and
effectively exercised a greater number of Equity Rights than such holder sought
to exercise pursuant to its Oversubscription Exercise, then such holder will be
deemed to have validly and effectively exercised only that number of Equity
Rights which such holder sought to exercise pursuant to its Oversubscription
Exercise and any remaining Equity Rights not otherwise deemed to have been
validly and effectively exercised will be deemed to have been validly and
effectively exercised by other holders of Equity Rights that have made
Oversubscription Exercises on the basis set forth in the immediately preceding
sentence. This prorationing process will be repeated as necessary until all
Equity Rights shall have been deemed to have been validly and effectively
exercised by such holders.
(e) In order to facilitate the exercise of Equity Rights, the
Disbursing and Exchange Agent will mail on or as promptly as is practicable
after the Effective Date to each Holder of Allowed Class Three Claims a form of
the Exercise Notice (an "Exercise Notice") together with the Exercise
Instructions (which will include instructions for the proper completion and due
execution of the Exercise Notice and timely delivery thereof, together with
payment of the Equity Rights Exercise Price to the Exchange Agent and may
specify other requirements relating to the valid and effective exercise of
Equity Rights). All determinations as to proper completion, due execution,
timeliness, eligibility, prorationing and other matters affecting the validity
or effectiveness of any attempted exercise of any Equity Rights shall be made by
the Disbursing and Exchange Agent, whose determination shall be final and
binding. The Disbursing and Exchange Agent in its sole discretion may waive any
defect or irregularity, or permit a defect or irregularity to be corrected
within such time as it may determine or reject the purported exercise of any
Equity Right subject to any such defect or irregularity. Deliveries required to
be received by the Disbursing and Exchange Agent in connection with a purported
exercise of Equity Rights will not be deemed to have been so received or
accepted until actual receipt thereof by the Disbursing and Exchange Agent shall
have occurred and any defects or irregularities shall have been waived or cured
within such time as the Disbursing and Exchange Agent may determine in its sole
discretion. Neither the Debtor nor the Disbursing and Exchange Agent shall have
any obligation to give notice to any holder of an Equity Right of any defect or
irregularity in connection with any purported exercise thereof or incur any
liability as a result of any failure to give any such notice.
(f) In the event that the total number of Equity Rights sought
to be exercised pursuant to Primary Exercises and Oversubscription Exercises is
less than the number of Equity Rights under the Plan, the Stand-By Purchasers
shall exercise all remaining Equity Rights pursuant to the terms and conditions
of the Stand-By Commitment. The Stand-By Commitment is attached as Exhibit 1.
Notwithstanding anything in the forgoing to the contrary, Albert Fried & Co. LP
shall be released from its obligations under its Stand-By Commitment and the
Debtor shall be released from its obligation to pay Albert Fried & Co. a
stand-by commitment fee in the event that Albert Fried & Co. LP funds what is
commonly referred to as the "tranche c" portion of the New Term Loan.
(g) The Stand-By Purchasers shall receive as a fee, payable on
the Effective Date, .69% of the New Common Stock, on a fully diluted basis.
6.09 Designation of Initial Directors and Officers. The existing
senior officers of the Debtor shall serve initially in their current capacities
after the Effective Date. On the Effective Date, the term of the current board
of directors of Geneva shall expire. The certificate of incorporation for the
Holding Company and the organizational documents of the Reorganized Debtor shall
provide that the board of directors (or board of managers in the case of a
limited liability company) be comprised of the same ten persons. The following
proposed directors have been identified: Class I directors: (1) R. J. Shopf
(Chief Restructuring Officer, Babcox & Wilcox, New Orleans, La.); (2) Frank T.
MacInnis (current Chairman of Emcor Group, Inc., Norwalk, Connecticut); and (3)
Murray Drabkin (Partner, Hopkins & Sutter, Washington, D.C.). Class II
directors: (1) Ken C. Johnsen (Executive Vice-President and General Counsel,
Geneva Steel Company); (2) Albert Fried, Jr. (Albert Fried & Co., LLP, New York
City); (3) A. Stanley West (Cleveland-Cliffs Iron Company, Cleveland, Ohio); and
(4) John LaMaccia (former CEO of CellNet Data Systems). Class III directors: (1)
Joseph A. Cannon (Chief Executive Officer, Geneva Steel Company); (2) Donald R.
Shepard (former Chairman and Chief Executive Officer, Loomis Sayles & Co., L.P.,
Rancho Santa Fe, California); and (3) Michael T. Yonker (former President and
Chief Executive Officer, Portec, Inc., Oakbrook, Illinois). Joseph A. Cannon
shall serve as the initial chairman of the board of the Holding Company. The
directors (or managers) in Class I shall serve as directors (or managers) for an
initial period terminating on the date of the first annual shareholder (or
member) meeting that is held at least one year after the Effective Date, when at
such time the positions in Class I are subject to election for a term of 3
years. The directors (or managers) in Class II shall serve as directors (or
managers) for an initial period terminating on the date of the second annual
shareholder (or member) meeting that is held at least two years after the
Effective Date, when at such time the positions in Class II are subject to
election for a term of 3 years. Finally, the directors (or managers) in Class
III shall serve as directors (or managers) for an initial period terminating on
the date of the third annual shareholder (or member) meeting that is held at
least three years after the Effective Date, when at such time the positions in
Class III are subject to election for a term of 3 years. The organizational
documents for the subsidiaries of the Holding Company other than the Reorganized
Debtor shall provide that the directors or managers shall be a subset of the
same ten persons who are directors of the Holding Company.
6.10 Employment, Retirement, Indemnification and Other Agreements.
To the extent that the Debtor has in place as of the Effective Date or this plan
provides for employment, retirement, indemnification, and other agreements with
their respective active directors, officers, and employees who will continue in
such capacities after the Effective Date, or retirement income plans, welfare
benefit plans and other plans for such Persons, such agreements, programs, and
plans shall remain in place after the Effective Date and the Reorganized Debtor
shall continue to honor such agreements, programs and plans. However, subject to
Section 6.12 of the Plan, as of the Effective Date, the Reorganized Debtor shall
have the authority to terminate, amend or enter into employment, retirement,
indemnification and other agreements with its active directors, officers, and
employees and to terminate, amend, or implement retirement income plans, welfare
benefit plans and other plans for active employees. Such agreements and plans
may include equity, bonus and other incentive plans and other plans for which
officers, and other employees of the Reorganized Debtor may be eligible to
participate.
6.11 Emergence Bonus. The Reorganized Debtor shall pay the Emergence
Bonus consistent with the terms of the Employee Retention Plan Order.
6.12 Management Incentive Compensation. (a) Incentive Compensation.
On the Effective Date, options to purchase 5% of the New Common Stock, on a
fully-diluted basis (including adjustment for the issuance of the New Preferred
Stock pursuant to the rights offering), will be granted to the management team
as follows: Joseph A. Cannon - 1.9%, Ken C. Johnsen 1.4%, Tim Clark - .6%, Carl
E. Ramnitz - .4%, Dennis Wanlass - .4%, and Marcus Phillips - .3%. The options
are in addition to the shares of New Common Stock granted pursuant to the
Emergence Bonus. The options will vest as follows: 25% on the Effective Date and
25% on each of the first, second and third anniversaries of the Effective Date.
The options will mature on the 10th anniversary of their vesting. The vesting of
options shall accelerate upon the death or disability of the grantee, a Change
of Control of the Holding Company or the Reorganized Geneva, or the Termination
of the grantee's employment with either the Holding Company or the Reorganized
Debtor other than for Cause. The exercise price of the options will be the lower
of (a) the average closing price of the New Common Stock for the first 30 days
following the Effective Date or (b) $15.43 per share.
(b) Severance Protection. If on or before the later of the
first anniversary of the Effective Date or fourteen months following the
Confirmation Date, either Joseph A. Cannon or Ken C. Johnsen are Terminated
other than for Cause, either expressly or constructively, or there is a Change
in Control of either the Holding Company or the Reorganized Debtor, then the
affected individual's options shall vest immediately and they shall be paid, as
soon as practicable but in no event later than 30 days, a cash payment equal to
one year's salary and they shall have all employee benefits continued for two
years from the date the termination became effective. The right to receive
benefits is subject to reduction to the extent the terminated individual obtains
new employment which provides such benefits. All officers shall become eligible
for participation in the existing severance program for nonunion employees,
provided that any such severance benefits would be reduced by benefits received
under another severance benefit provided by the Reorganized Debtor. The Boards
of Directors of the Holding Company and the management committee of the
Reorganized Debtor shall address, as each may choose, severance protection for
Joseph A. Cannon and Ken C. Johnsen beyond the first anniversary of the
Effective Date and for all other officers from and after the Effective Date.
ARTICLE VII.- PROVISIONS GOVERNING DISTRIBUTIONS
------------------------------------------------
7.01 Distributions for Claims Allowed as of the Effective Date. (a)
Except as otherwise provided in this Article VII, or as may be ordered by the
Court, distributions to be made on the Effective Date on account of Claims that
are allowed as of the Effective Date shall be made as of the Effective Date.
Distributions shall be deemed made as of the Effective Date if made on the
Effective Date or as promptly thereafter as practicable, but in any event no
later than 20 days after the later of Effective Date or the receipt of any
instruments required to be surrendered in connection with such distribution.
(b) From and after the Effective Date, cash to be distributed
on the Effective Date on account of Claims allowed as of the Confirmation Date
shall be held pending distribution in trust in segregated accounts in the name
of the Disbursing and Exchange Agent for the benefit of the holders of such
Claims. The Disbursing and Exchange Agent shall invest such cash in a manner
consistent with Reorganized Debtor's investment and deposit guidelines.
Distributions of cash on account of each Claim allowed as of the Confirmation
Date shall not include interest from such investment of cash. New Common Stock
to be issued and distributed pursuant to the Plan shall be issued as of the
Confirmation Date regardless of the date on which they are actually distributed.
7.02 Distributions by the Disbursing and Exchange Agent and the
Indenture Trustee.
(a) All distributions of New Common Stock, Class A New
Preferred Stock and cash shall be made by the Disbursing and Exchange Agent as
required under the Plan, except for distributions of New Common Stock to the
Noteholder Claimants on account of their Claims under the Indentures, which
shall be made by the Indenture Trustee pursuant to Section 7.02(b) below. The
Disbursing and Exchange Agent may employ or contract with other entities to
assist in or make the distributions required by the Plan with the consent of the
Plan Proponents. Each Disbursing and Exchange Agent shall serve without bond,
and each Person that is employed by the Disbursing and Exchange Agent to assist
in or make the distributions required by the Plan shall receive, without further
Court approval, reasonable compensation for distribution services rendered
pursuant to the Plan and reimbursement of reasonable out-of-pocket expenses
incurred in connection with such services from the Reorganized Debtor on terms
acceptable to the Plan Proponents.
(b) Indenture Trustee
(i) Any individual proof of claim by a Noteholder on
account of a Claim under or evidenced by a Note, with respect to which Note a
proof of claim has been deemed filed or filed by the Indenture Trustee will be
disallowed. Instead, one Claim will be allowed in the name of the Indenture
Trustee on behalf of the holders of the Senior Notes. All distributions provided
for the Plan on account of the Senior Notes may be made to the Indenture
Trustee, for further distribution to registered holders of the Senior Notes. Any
such distribution shall be made pursuant to the applicable Indenture and shall
be subject to the terms of any Indenture Trustee Charging Lien.
(ii) Notwithstanding the provisions in Section 7.11
below regarding the rejection or cancellation of the Indentures, the Indentures
shall continue in effect to the extent necessary to allow the Indenture Trustee
to receive and make distributions pursuant to the Plan on account of the Senior
Notes and to maintain the validity of Indenture Trustee Charging Lien. Any
actions taken by the Indenture Trustee that are not for these purposes shall be
null and void as against Debtor and the Reorganized Debtor, and the Reorganized
Debtor shall have no obligations to the Indenture Trustee for any fees, costs or
expenses incurred in connection with any such unauthorized actions or actions to
enforce Indenture Trustee Charging Lien.
(iii) Subject to any modification of the Plan pursuant
to Section 13.05 below, the Plan Proponents consent to the Court's entry of an
order or orders granting allowance of compensation for the reasonable fees and
expenses of the Indenture Trustee and its professionals, to the extent incurred
or accrued in connection with the Case and irrespective of whether such fees and
expenses were incurred or accrued before or after the Petition Date, and as
determined in accordance with the standard for allowance and payment of such
charges under the respective Indenture (and not with reference to any
"substantial contribution" or other standard applicable under Bankruptcy Code
section 503(b)(3),(4) or (5) or otherwise); provided, however, that such an
order shall be entered only upon notice and application by the Indenture
Trustee.
7.03 Compensation and Reimbursement of the Indenture Trustee for
Services Related to Distributions Pursuant to the Plan. The Indenture Trustee,
for providing services related to distributions pursuant to the Plan to holders
of Senior Notes, shall receive, from the Reorganized Debtor, without further
Court approval, reasonable compensation for such services and reimbursement of
reasonable out-of-pocket expenses incurred in connection with such services.
These payments shall be made on terms agreed upon with the Plan Proponents, and
shall be in addition to distributions made to any Indenture Trustee on account
of any Allowed Claims or on account of any claims secured by an Indenture
Trustee Charging Lien.
7.04 Distribution Record Date. As of the Distribution Record Date,
the transfer registers for the Senior Notes, the Old Preferred Stock and the Old
Common Stock maintained by the Debtor, the Indenture Trustee or their respective
agents, shall be closed. Moreover, the Disbursing Agent, the Indenture Trustee
and their respective agents shall have no obligation to recognize the transfer
of any Senior Notes, Old Preferred Stock or Old Common Stock occurring after the
Distribution Record Date, and shall be entitled for all purposes relating to the
Plan to recognize and deal only with those holders of record as of the close of
business on the Distribution Record Date.
7.05 Surrender of Notes or Instruments. (a) Except as provided below
for lost, stolen, mutilated or destroyed notes or instruments, each holder of an
Allowed Claim evidenced by a note or instrument (other than holders of an
Allowed Claim based on the 11.125% Senior Notes or 9.5% Senior Notes) shall
tender such note or instrument to the Disbursing and Exchange Agent in
accordance with written instructions to be provided to such holders by the
Disbursing and Exchange Agent as promptly as practicable following the Effective
Date. Such instructions shall specify that delivery of the notes and instruments
will be effected, and risk of loss and title thereto will pass, only upon proper
delivery of such notes and instruments with a letter of transmittal in
accordance with such instructions. All surrendered notes and instruments shall
be marked as canceled and delivered to the Reorganized Debtor. Except as set
forth in the Plan, no distribution under the Plan shall be made to or on behalf
of any holder of a Claim evidenced by a note or instrument, unless and until
such note or instrument is received or the non-availability of such note or
instrument is established to the satisfaction of the Reorganized Debtor.
(b) In addition to any requirements under any notes or
instruments (other than the Senior Notes) or the certificate of incorporation
and by-laws of the Debtor, any holder of a Claim evidenced by a note or
instrument (other than holders of the 11.125% Senior Notes and 9.5% Senior
Notes) that has been lost, stolen, mutilated or destroyed shall, in lieu of
surrendering such note or instrument, deliver to the Disbursing and Exchange
Agent: (a) evidence satisfactory to the Disbursing and Exchange Agent of the
loss, theft, mutilation or destruction; and (b) such security or indemnity as
may be required by the Disbursing and Exchange Agent to hold the Disbursing and
Exchange Agent harmless from any damages, liabilities or costs incurred in
treating such individual as a holder of a Claim evidenced by such note or
instrument.
7.06 Surrender of the 11.25% Senior Notes and 9.5% Senior Notes.
Each holder of a Claim against the Debtor evidenced by an 11.125% Note or a 9.5%
Note shall surrender said Note to the Indenture Trustee pursuant to their
respective Indenture.
7.07 Unclaimed Cash or New Common Stock. If any Person entitled to
receive cash, New Common Stock or Class A New Preferred Stock directly from the
Debtor or the Holding Company, as applicable, under the Plan cannot be located
upon the Effective Date, but such Person is located within two years of the
Confirmation Date, any such cash and any such New Common Stock, together with
any dividends payable thereon, will be paid or distributed to such Person. If
such Person cannot be located within two years of the Confirmation Date, any
such cash and any such New Common Stock and accrued dividends thereon will
become property of and shall be released to the Reorganized Debtor or the
Holding Company, as applicable; provided, however, that nothing in the Plan
shall require the Reorganized Debtor to attempt to locate any such Person beyond
attempting to communicate with that Person at his last known address or the last
known address of his attorney of record.
7.08 Fractional Shares. Any other provision of the Plan
notwithstanding, distribution of shares of the New Common Stock and Class A New
Preferred Stock shall be made only in full shares. No fractional shares shall be
distributed even though the relevant calculation may arrive at a number of
shares to be distributed to a particular Claimant that includes a fractional
amount. When any calculation calls for a distribution of a fractional share, the
actual number of shares distributed shall be rounded down to the nearest whole
number if the fraction is less than or equal to 0.50 and rounded up to the
nearest whole number if the fraction is greater than 0.50. For the purpose of
this section 7.08, the determination of whether fractional shares exist shall be
made by examining the distributions as if made to the Beneficial Holders rather
than the Record Holders.
7.09 Distribution Dates. Whenever any distribution of cash or New
Common Stock to be made under the Plan is due on a day other than a Business
Day, such distribution will instead be made, without interest, on the next
Business Day.
7.10 Tax Provisions. Pursuant to section 1146(c) of the Bankruptcy
Code, the issuance, transfer or other exchange of a security, or the making or
delivery of an instrument or transfer under the Plan shall not be taxed under
any state or local law imposing a stamp tax, transfer tax or similar tax or fee.
7.11 Cancellation of Indentures. On the Effective Date, the
Indentures shall, except as provided in Section 7.02(b) be deemed canceled,
terminated and of no further force or effect. Notwithstanding the foregoing or
any other provision of the Plan, such cancellation of the Indentures shall not
impair rights and duties under the respective Indentures as between the
Indenture Trustee, and the beneficiaries of the trust created thereby, or as
between the Indenture Trustee and the Debtor, as set forth in the respective
Indentures, including, inter alia, the right of the Indenture Trustee to enforce
the Indenture Trustee Charging Lien pursuant to the respective Indentures. The
Senior Notes shall not be canceled other than pursuant to Section 7.06 of the
Plan and, until such cancellation, such Senior Notes shall be evidence of the
entitlement of the holder thereof to receive distributions of property from the
Debtor, the Reorganized Debtor or Holding Company, as applicable, pursuant to
the Plan.
ARTICLE VIII.- CONDITIONS TO THE EFFECTIVE DATE
-----------------------------------------------
8.01 Conditions to Confirmation. The Plan shall be null and void and
have no force or effective unless the Court shall have entered an order
confirming the Plan in accordance with Chapter 11 (the "Confirmation Order"),
which order shall be a Final Order and which order shall:
(a) except as otherwise provided in the Plan, discharge the
Debtor and its successors in interest, effective on the Effective Date, from any
Claim and any "debt" (as the term is defined in section 101(12) of the Code) and
the Debtor's liability in respect thereof is extinguished completely, whether
reduced to judgment or not, liquidated or non-liquidated, contingent or
non-contingent, asserted or unasserted, fixed or not, matured or unmatured,
disputed or undisputed, legal or equitable, known or unknown, that arose from
any agreement of the Debtor entered into or obligation of a Debtor prior to the
Confirmation Date or from any conduct of the Debtor prior to the Confirmation
Date, including, without limitation, all interest, if any, on any such Claim or
debt, whether such interest accrued before or after the date of commencement of
the Debtor's Case, and from any liability of a kind specified in sections
502(g), 502(h) and 502(i) of the Code, whether or not a proof of claim is filed
or deemed filed under section 501 of the Code, such Claim is allowed under
section 502 of the Code, or the holder of such Claim has accepted the Plan;
(b) limit the Debtor's liability for any Claim to the amounts
that the Debtor is required to pay pursuant to the Plan;
(c) declare that the provisions of the Confirmation Order
shall not be severable and are mutually dependent;
(d) declare that the recordation of any mortgages shall be
free from any and all transfer tax;
(e) declare that the recordation of the transfer of the
Williams Farm Property to the Williams Farm Property Subsidiary and the transfer
of the Iron Ore Mines to the Iron Ore Mines Subsidiary shall be free from any
and all recordation and transfer taxes;
(f) approve and authorize the transfer of all the outstanding
ownership interests in Vineyard Management Company and Vineyard Iron Company,
from the Reorganized Debtor to the Holding Company;
(g) approve and authorize the new Exit Facility in
substantially the form filed with the Court and authorize the Reorganized Debtor
to execute such other documents as the Exit Facility Lenders may reasonably
require to effectuate the treatment afforded such lenders under the Exit
Facility, including the creation of any liens in favor of such lender granted
thereby; and
(h) declare that the Plan Proponents have solicited
acceptances of the Plan in good faith and in compliance with the Code, and that
the Debtor and each of its affiliates, agents, directors, officers, employees,
advisors and attorneys have participated in good faith and in compliance with
the applicable provisions of the Code in the offer, issuance, sale and purchase
of securities offered or sold under the Plan, and therefore are not liable for
the violation of any applicable law, rule or regulation governing the
solicitation of votes on the Plan or the offer, issuance, sale and purchase of
securities under the Plan.
(i) declare that the issuance of the New Common Stock, New
Preferred Stock, New Subsidiary Stock, Equity Rights and the equity securities
of the Williams Farm Subsidiary and the Iron Ore Subsidiary under the Plan are
exempt from any and all federal and state security registration requirement.
8.02 Conditions to the Effective Date. The occurrence of the
Effective Date shall be subject to the satisfaction or the waiver by the Plan
Proponents of the following conditions: (a) The Confirmation Order shall be
entered and shall be a Final Order; (b) The Holding Company shall have tendered
a registration rights agreement containing normal and customary terms to any
person deemed to be an underwriter of the New Common Stock. (c) The closing of
the Exit Facility.
8.03 Waiver. The Plan Proponents may waive any of the requirements
contained in this Article VIII, at any time without formal action and without
leave of Court.
ARTICLE IX. - EFFECTS OF PLAN CONFIRMATION
------------------------------------------
9.01 Discharge. Except as otherwise expressly provided in the Plan,
the confirmation of the Plan shall discharge the Debtor effective on the
Effective Date from any Claim and any "debt" as that term is defined in Section
101(12) of the Code, and the Debtor's liability in respect thereof is
extinguished completely, whether reduced to judgment or not, liquidated or
non-liquidated, contingent or non-contingent, asserted or unasserted, fixed or
not, matured or unmatured, disputed or undisputed, legal or equitable, known or
unknown, that arose from any agreement of the Debtor entered into or obligation
of the Debtor prior to the Confirmation Date or from any conduct of the Debtor
prior to the Confirmation Date, including, without limitation, all interest, if
any, on any such Claim or debt, whether such interest accrued before or after
the date of commencement of the Debtor's Case, and from any liability of a kind
specified in sections 502(g), 502(h) and 502(i) of the Code, whether or not a
proof of claim is filed or deemed filed under section 501 of the Code, such
Claim is allowed under section 502 of the Code, or the holder of such Claim has
accepted the Plan; provided, however, that all claims relating to the Geneva
Steel Union Employee Defined Benefit Plan (the "Geneva Pension Plan"), including
contingent claims of the Pension Benefit Guaranty Corporation, shall be
unaffected by confirmation of the Plan, and no claims relating to the Geneva
Pension Plan shall be deemed to have been discharged.
9.02 Post-Effective Date Effect of Instruments and other Evidence of
Claims. Senior Notes and other evidences of Claims against the Debtor shall, as
of the Effective Date, represent only the right to participate in the
distributions contemplated by the Plan and the documents executed in furtherance
thereof.
9.03 Injunctions and Stays. Unless otherwise provided, all
injunctions or stays provided for in the case pursuant to section 105 or 362 of
the Code or otherwise extant on the Confirmation Date shall remain in full force
and effect until the Effective Date. In addition the following injunctions shall
be imposed:
(a) Injunction Related to Discharged Claims and Terminated
Interests. Except as provided in the Plan or the Confirmation Order, as of the
Confirmation Date, all entities that have held, currently hold or may hold a
Claim or other debt or liability that is discharged or an Interest or other
right of an equity security holder that is terminated pursuant to the terms of
the Plan are permanently enjoined from taking any of the following actions
against the Debtor, Interim Corporation, Reorganized Debtor, Holding Company,
Williams Farm Subsidiary, Iron Ore Mines Subsidiary, Vineyard Iron Company,
Vineyard Management Company, CPICOR Management L.L.C. or their respective
property on account of any such discharged Claims, debts or liabilities or
terminated Interests or rights (i) commencing or continuing, in any manner or in
any place, any action or other proceeding; (ii) enforcing, attaching, collecting
or recovering in any manner any judgment, award, decree or order; (iii)
creating, perfecting or enforcing any lien or encumbrance; (iv) asserting a
setoff, right of subrogation or recoupment of any kind against any debt,
liability or obligation due to the Debtor, Reorganized Debtor, Interim
Corporation, Holding Company, Williams Farm Subsidiary, Iron Ore Mines
Subsidiary, Vineyard Iron Company, Vineyard Management Company, CPICOR
Management L.L.C. and (v) commencing or continuing any action, in any manner or
in any place, that does not comply with or is inconsistent with the provisions
of the Plan; provided, however, that nothing in this Section 9.03(a) shall
affect obligations of Vineyard Iron Company, Vineyard Management Company, or
CPICOR Management L.L.C., including obligations as to which Vineyard Iron
Company, Vineyard Management Company, or CPICOR Management L.L.C. are jointly or
severally liable with the Debtor.
(b) Deemed Consent. By accepting distributions pursuant to the
Plan, each holder of an Allowed Claim receiving distributions pursuant to the
Plan shall be deemed to have specifically consented to the injunctions set forth
in this Section 9.03.
ARTICLE X.- TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
-----------------------------------------------------------------
10.01 Executory Contracts and Unexpired Leases. On the Confirmation
Date, all executory contracts and unexpired leases of the Debtor will be assumed
in accordance with the provisions of sections 365 and 1123 of the Code,
provided, however, that any and all executory contracts and unexpired leases
that are the subject of a motion to reject filed at or before the hearing on
confirmation of the Plan, as to which the Court has issued or subsequently
issues an Order approving the rejection of such executory contract or unexpired
lease shall be deemed rejected pursuant to the provisions of sections 365 and
1123 of the Code.
10.02 Union Contract. All obligations for the payment of retirement
benefits as defined in section 1114 of the Code under the Union Contract shall
be assumed and continue without modification.
10.03 Bar Date for Rejected Executory Contracts and Unexpired
Leases. Any Claims arising out of the rejection of executory contracts or
unexpired leases must be filed with the Court within 30 days after the
Confirmation Date or be forever barred. All such Claims for which proof of
Claims are filed will be treated as Class Three or Four Unsecured Claims, as
appropriate.
ARTICLE XI.- PROVISIONS FOR RESOLVING AND TREATING CLAIMS
---------------------------------------------------------
11.01 Objection Deadline. As soon as practicable, but in no event
later than six months after the entry of the Confirmation Order, unless
otherwise ordered by the Bankruptcy Court, all objections to Claims shall be
filed with the Bankruptcy Court and served upon the holders of each of the
Claims to which objections are made.
11.02 Prosecution of Objections. After the date of entry of the
Confirmation Order, only the Debtor and the Reorganized Debtor shall have
authority to file objections, litigate to judgment, settle, or withdraw
objections to Disputed Claims.
11.03 No Distributions Pending Allowance. No payments or
distributions shall be made with respect to any Claim to the extent it is a
Disputed Claim unless and until the Disputed Claim becomes an Allowed Claim. In
addition, no payments or distributions shall be made on account of a Claim to
the extent that such Claim has been disallowed, released, withdrawn, waived,
settled or otherwise satisfied or paid as of the Confirmation Date, including,
without limitation, payments by third party guarantors, sureties, or insurers
whether governmental or non-governmental. No payments or distributions on
account of a Claim shall be made when the payment of such Claim has been assumed
by a third party.
11.04 Distributions After Allowance. Payments and distributions to
each holder of a Disputed Claim, to the extent that such Claim ultimately
becomes an Allowed Claim, shall be made in accordance with the provisions of the
Plan governing the Class of Claims to which the respective holder belongs. As
soon as practicable after the date that the order or judgment of the Court
allowing such Claim becomes a Final Order, any cash or New Common Stock that
would have been distributed on or about the Effective Date had such Disputed
Claim been an Allowed Claim shall be distributed, together with any dividends or
other distributions made on account of such Claim, to the holder of such Claim
in the amount established by the Final Order.
11.05 Future Distributions of New Common Stock. Any of the New
Common Stock to be distributed pursuant to section 5.01 of the Plan remaining
after the initial distribution on the Effective Date shall be held in reserve
pending the final determination of all the Disputed Claims. As each Disputed
Claim is resolved, any Disputed Claim that becomes in any part an Allowed
Unsecured Claim shall receive a distribution of New Common Stock in accordance
with the ratio established by section 5.01 of the Plan.
ARTICLE XII.- RETENTION OF JURISDICTION
---------------------------------------
12.01 General Retention of Jurisdiction. The Court shall retain
jurisdiction of the Debtor's Case pursuant to and for the purposes set forth in
sections 1127(b) and 1141 through 1146 of the Code to enforce the provisions of
the Plan and to ensure that the intent and purposes of the Plan are carried out
and given effect.
12.02 Specific Retention of Jurisdiction. The Court shall retain
jurisdiction for the following purposes:
(a) To consider any modification or amendment to the Plan; and
(b) To hear and determine:
(i) The classification, allowance, disallowance of
Claims and Interests, and any objections thereto, to the extent consistent with
the Plan;
(ii) All controversies, suits, and disputes, if any, as
may arise in connection with the interpretation or enforcement of the Plan;
(iii) All controversies, suits, and disputes, if any, as
may arise with respect to the period prior to the Effective Date between (a) any
Claimant or Interest Holder and (b) the Debtor;
(iv) All claims or causes of action which may exist on
behalf of the Debtor arising prior to the Effective Date whether or not the
subject of an action pending as of the Effective Date, to the extent consistent
with the Plan;
(v) Applications for the allowance of compensation to
Professional Persons;
(vi) The validity and/or priority of any liens on, or
ownership or other interests in, the Debtor or property of the Debtor, to the
extent consistent with the Plan;
(vii) Any and all applications, adversary proceedings,
contested and/or litigated matters pending on the Effective Date;
(viii) All controversies as provided for in the
Confirmation Order;
(ix) Proceedings to estimate Claims for the purpose of
allowance;
(x) Any proceedings pursuant to sections 542 through 553
of the Code, to the extent consistent with the Plan;
(xi) All proceedings to enforce performance of the Plan
against any Person; and
(xii) All proceedings regarding the assumption,
rejection, or termination of executory contracts or unexpired leases of the
Debtor.
12.03 Abstention and Election. If the Court abstains from
exercising, or declines to exercise jurisdiction, or is otherwise without
jurisdiction over any matter set forth in this Article XII, or if the Debtor or
the Reorganized Debtor elects to bring an action or proceeding in any other
forum, this Article XII shall have no effect upon and shall not control,
prohibit or limit the exercise of jurisdiction by any other court, public
authority or commission having jurisdiction over such matters.
ARTICLE XIII.- MISCELLANEOUS
----------------------------
13.01 Revocation. Each of the Plan Proponents, reserves the right to
revoke and withdraw the Plan at any time prior to the Confirmation Date.
13.02 Reservation of Rights. Neither the filing of the Plan nor any
statement or provision contained herein, nor the taking of any action by the
Debtor, the Unsecured Creditors' Committee, the Bondholders' Committee, a
Claimant or an Interest Holder with respect to the Plan shall be or be deemed to
be an admission or a waiver of any rights prior to the Effective Date. In the
event that the Confirmation Date does not occur, or that the Plan does not
become effective, no statement contained herein may be used or relied upon in
any manner in any suit, action, proceeding, or controversy, within or outside of
the Debtor's Case against the Plan Proponents.
13.03 Debtor Claims. All claims of the Debtor which are not
liquidated as of the Effective date or released pursuant to the Plan shall be
assigned to the Reorganized Debtor. The proceeds of such claims shall become
funds of the Reorganized Debtor and shall, accordingly, be available to pay
Claims under the Plan or for any other bona fide corporate purpose, as the
Reorganized Debtor may determine.
13.04 Survival of Certain Corporate Indemnification Obligations. Any
obligation or rights of the Debtor to indemnify its officers, directors, agents,
employees, representatives and others pursuant to its articles of incorporation,
bylaws or applicable statutes (including Utah Business Corporation Act ss. ss.
16-10a-901 to 16-10a-909) in respect of any Claims, demands, suits, causes of
action, or proceedings, based upon any act or omission related to service with,
for, or on behalf of the Debtor at any time prior to the Confirmation Date, will
not be discharged or impaired by confirmation or consummation of the Plan, but
will survive unaffected by the reorganization contemplated by the Plan. All
claims indemnifiable by Geneva against individuals currently serving as the
Debtor's officers, directors, agents, employees, representatives and others
which, pursuant to this paragraph 13.04 of the Plan, survive unaffected by the
reorganization contemplated by the Plan shall be filed on or before 30 days
following the Effective Date or be forever barred.
13.05 Modification of Plan. The Plan Proponents reserve the right,
in accordance with the Code, to amend or modify the Plan prior to the entry of
the Confirmation Order. After entry of the Confirmation Order, the Plan
Proponents may, upon order of this Court, amend or modify the Plan in accordance
with section 1127(b) of the Code, remedy any defect or omission, or reconcile
any inconsistency in the Plan, as may be necessary to carry out the purpose and
intent of the Plan.
13.06 Intentionally omitted.
13.07 Limitation of Liability and Related Indemnity. (a) To the
fullest extent permitted by law, the Plan Proponents, and their respective
present and former stockholders, members, directors, officers, and employees,
shall neither have nor incur any liability to any entity for any act taken or
omitted to be taken in connection with or related to the formulation,
preparation, dissemination, solicitation, implementation, confirmation or
consummation of the Plan, the Disclosure Statement, the Confirmation Order or
any contract, instrument, release or other agreement or document created or
entered into, or any other act taken or omitted to be taken in connection with
the Plan, the Disclosure Statement, the solicitation of acceptances of the Plan,
or the Confirmation Order, and the offer, issuance, sale or purchase of any
securities under the Plan; provided, however, that the provisions of this
Section 13.07 shall have no effect on the liability of any Plan Proponents and
their respective present and former stockholders, members, directors, officers,
and employees, that would otherwise result from any such act or omission to the
extent that such act or omission is determined in a Final Order to have
constituted gross negligence or willful misconduct; and provided further that
this provision does not release a Stand-By purchaser from any liability arising
from the failure to perform in accordance with the terms of this plan or either
Stand-By Commitment.
(b) To the fullest extent permitted by law, the Reorganized
Debtor shall indemnify each Plan Proponent and their respective present and
former stockholders, members, directors, officers, and employees, against, and
hold each Plan Proponent harmless from, and reimburse each Plan Proponent for,
any and all losses, costs, expenses (including attorneys' fees and expenses),
liabilities and damages sustained by a Plan Proponent arising from any liability
disclaimed in this Section 13.07.
13.08 Notices. All notices or requests in connection with the Plan
shall be in writing and will be deemed to have been given when received by mail
addressed to: Geneva Steel Company, P.O. Box 2500 Provo, Utah 84603, Attn. Legal
Department, with copies to: Cadwalader, Wickersham & Taft, 1201 F. Street, N.W.,
Suite 1100, Washington, D.C. 20004, Attention: Peter M. Dodson; Leboeuf, Lamb,
Greene & MacRae, 136 South Main Street, Suite 1000, Salt Lake City, Utah 84101,
Attn. Steven J. McCardell; Hopkins & Sutter, Three First National Plaza,
Chicago, IL. 60602, Attention: Stephen E. Garcia; and Ray, Quinney & Nebeker, 79
South Main Street, Suite 500, Salt Lake City, Utah 84145 Attn. Weston Harris.
All notices and requests to Persons holding any Claim or Interest in any Class
shall be sent to them at their last known address or to the last known address
of their attorney of record. The Debtor and any holder of a Claim or Interest
may designate in writing any other address for purposes of this Section 13.08,
which designation will be effective upon receipt.
13.09 Notice of Effective Date. The Reorganized Debtor shall give
notice of the occurrence of the Effective Date to all parties that have appeared
in the Debtor's Case
13.10 Unsecured Creditors' Committee. On the Effective Date, the
duties of the Unsecured Creditors' Committee will terminate, except with respect
to an appeal of the Confirmation Order or an appeal of an order entered in the
Case prior to the Effective Date, fee applications, and any matters related to
the proposed modification of the Plan. The Reorganized Debtor, without further
Court approval, shall pay the reasonable costs, fees and expenses of the
Unsecured Creditors' Committee in the ordinary course in connection with such
services rendered after the Effective Date.
13.11 Bondholders' Committee. The Bondholders' Committee shall
continue in existence for a period of six months after the Effective Date. The
Reorganized Debtor, without further Court approval, shall pay the reasonable
costs, fees and expenses of the Bondholders' Committee in the ordinary course in
connection with such services rendered after the Effective Date.
13.12 Trustee Fees. Pursuant to 28 U.S.C. ss. 1930, as amended
January 27, 1996, quarterly fees to the U.S. Trustee are due for each quarter a
case remains under Chapter 11 of the Code until such time as a final decree has
been entered. Prior to confirmation of the Plan the Debtor shall pay to the U.S.
Trustee's Office all quarterly fees as they become payable. On the Effective
Date of the Plan, any accrued and unpaid fees due to the U.S. Trustee though the
Confirmation Date shall be paid. Thereafter, the Reorganized Debtor shall pay
the quarterly fees due the U.S. Trustee's Office while the case remains under
the confirmed Plan until such time as a final decree is entered by the Court.
Further, the Debtor shall file disbursement status reports post-confirmation.
13.13 Final Decree. A final decree closing the case shall be entered
on or before two years after the Confirmation Date.
13.14 Headings. The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any way
affect the provisions of the Plan.
13.15 Severability. Each provision of the Plan shall be considered
severable and if for any reason the Court determines that any provision of the
Plan is not confirmable, such a determination shall not affect the (i)
confirmability of the Plan if the objectionable provision is withdrawn from the
Plan and (ii) ability to modify the Plan to satisfy the confirmation
requirements of section 1129 of the Code.
13.16 Successors and Assigns. The rights, benefits and obligations
of any Person named or referred to in the Plan will be binding upon, and will
inure to the benefit of the heir, executor, administrator, successor, or assign
of such Person.
[remainder of page intentionally left blank]
<PAGE>
Dated: November 21, 2000 RESPECTFULLY SUBMITTED
GENEVA STEEL COMPANY
As Debtor-in-Possession
By: /s/ Joseph A. Cannon
-------------------------------
Joseph A. Cannon
Chairman of the Board and Chief
Executive Officer
/s/ Steven J. McCardell
----------------------------------
Ralph R. Mabey (2036)
Steven J. McCardell (2144)
LEBOEUF, LAMB GREENE
& MACRAE L.L.P.
136 South Main Street #1000
Salt Lake City, Utah 84101
Telephone (801) 320-6700
and
Bruce R. Zirinsky
Mark C. Ellenberg
Peter M. Dodson
CADWALADER, WICKERSHAM & TAFT
1201 F. Street, N.W.
Washington, D.C. 20004
Telephone: (202) 862-2200
and
100 Maiden Lane
New York, New York 10038
Telephone: (212) 504-6000
Attorneys for the Debtor and Debtor in
Possession
<PAGE>
OFFICIAL COMMITTEE OF BONDHOLDERS
By: /s/ Albert Fried, Jr.
-------------------------------
Chair
Weston L. Harris
RAY, QUINNEY & NEBEKER
79 South Main Street
P.O. Box 45385
Salt Lake City, Utah 84145-0385
Telephone: (801) 532-1500
and
/s/ Stephen E. Garcia
----------------------------------
Murray Drabkin
Stephen E. Garcia
HOPKINS & SUTTER
Three First National Plaza
Suite 4300
Chicago, Illinois 60602
Telephone: (312) 558-6600
Attorneys for the Official Committee of
Bondholders
<PAGE>
PLAN EXHIBIT 1
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Stand-By Commitment
-------------------
