SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 14, 1996
KEENE CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 0-18434 13-2596288
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
757 THIRD AVENUE, NEW YORK, N.Y. 10017
(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code (212) 486-3200
N/A
(Former name or former address, if change since last report.)
<PAGE>
Item 3. Bankruptcy or Receivership
(b) On June 14, 1996, an order was entered by United States Bankruptcy Judge
Stuart M. Bernstein and United States District Court Judge Michael B. Mukasey of
the Southern District of New York confirming Keene Corporation's Fourth Amended
Plan of Reorganization (the "Plan"). On December 3, 1993, Keene Corporation
filed a voluntary petition for relief under Chapter 11 of Title 11 of the United
States Code in the United State Bankruptcy Court for the Southern District of
New York (Case No. 93B46090).
The Plan classifies Claims and Interests separately and provides different
treatment for different classes of Claims and Interests in accordance with the
Bankruptcy Code. As described more fully below, the Plan provides, separately
for each class, either that Claims are unimpaired or that holders of Claims and
Interests will receive various types of consideration or no consideration,
thereby giving effect to the different rights of the holders of Claims and
Interests of each class. Under the Plan, the Debtor will distribute Cash, two
classes of New Common Stock (collectively, the 'Reorganization Securities') and
certain other assets. Generally, the classification of creditors and
shareholders are as set forth below. Estimates included in the following
discussion are based on the Debtor's books and records, and are subject to
change.
A. CLASSIFICATION AND TREATMENT
1. Unclassified Claims
The Bankruptcy Code provides that certain types of Claims are entitled to
priority in payment and need not be classified, and generally describes the
manner in which certain of these Claims are to be paid. In particular, sections
1123(a)(1) and 524(g)(5) of the Bankruptcy Code provide that Administrative
Expense Claims, Tax Claims and Demands need not be classified. The treatment and
payment provisions for these unclassified Claims and Demands are reflected in
the Plan as follows:
(a) Administrative Expense Claims
Administrative Expense Claims' are Claims constituting a cost or expense of
administration of the Chapter 11 Case allowed under section 503(b) of the
Bankruptcy Code. Such Claims include any actual and necessary costs and expenses
of preserving the estate of the Debtor, any actual and necessary costs and
expenses of operating the business of the Debtor, any indebtedness or
obligations incurred or assumed by the Debtor in connection with the conduct of
its business, the acquisition or lease of property, including without limitation
Cure Claims, or the rendition of services, any allowance of compensation and
reimbursement of expenses to the extent allowed by a Final Order under sections
330 or 503(b) of the Bankruptcy Code and fees or charges assessed against the
estate of the Debtor under section 1930 of chapter 123 of title 28 of the United
States Code.
Pursuant to the Plan, Administrative Expense Claims, including Fee Claims,
will be paid in full, in Cash, on the later of the Effective Date or the date
such Administrative Expense Claim becomes Allowed, or as soon thereafter as is
practicable. Allowed Administrative Expense Claims representing obligations
incurred in the ordinary course of business by the Debtor (including amounts
owed to vendors that have sold goods or furnished services to the Debtor since
the Petition Date and excluding Fee Claims) shall be paid in full or performed
by either the Debtor, New Keene or the Creditors' Trust, as the case may be,
when due in the ordinary course of business and in accordance with the terms and
conditions of the particular agreements governing such obligations.
<PAGE>
Aside from those Administrative Expense Claims that will be paid in the
ordinary course of business, the Debtor estimates that, on the Effective Date,
it will have aggregate unpaid Allowed Administrative Expense Claims in the
following amounts:
NATURE OF CLAIMS ESTIMATED AMOUNT
- -------------------------------------------------------------------------------
Fee Claims 1................................................... $7,137,000
Cure Claims.................................................... $ 1,000
Miscellaneous Administrative Expenses 2........................ $ 913,000
TOTAL:......................................................... $8,051,000
All payments to professionals for compensation and reimbursement of
expenses and all payments to reimburse expenses of members of the Committee will
be made in accordance with the procedures established by the Bankruptcy Code,
the Bankruptcy Rules, and the Court relating to the payment of interim and final
compensation and expenses. The Court will review and determine all requests for
compensation and reimbursement of expenses.
In addition, section 503(b) of the Bankruptcy Code provides for payment of
compensation to creditors, and other persons making a 'substantial contribution'
to a reorganization case and to attorneys for and other professional advisers to
such persons. The amounts, if any, that may be sought by entities for such
compensation are not known by the Debtor at this time. Requests for compensation
must be approved by the Court after a hearing on notice at which the Debtor and
other parties in interest may participate and, if appropriate, object to the
allowance of any compensation and reimbursement of expenses.
The Debtor shall make an appropriate reserve for the payment of all Fee
Claims based on Compensation Estimates submitted by professionals prior to the
hearing on confirmation of the Plan; provided, however, that to the extent such
reserve is insufficient to satisfy an Allowed Fee Claim, the difference shall be
paid by the Creditors' Trust.
Because certain Administrative Expense Claims may be Allowed after the
Effective Date, the Plan provides that New Keene shall retain, and not transfer
to the Creditors' Trust, a sufficient amount of funds to satisfy any and all
Administrative Expense Claims that may become Ultimately Allowed Claims.
(b) Tax Claims
'Tax Claims' are those Claims for taxes entitled to priority in payment
under section 507(a)(8) of the Bankruptcy Code. Sixteen separate proofs of claim
have been filed against the Debtor on behalf of eight different governmental
units, including the Internal Revenue Service, asserting Tax Claims in the
approximate total amount of $737,500. Such claims seek payment on account of
federal income tax liability, FUTA and FICA liability, franchise and excise tax
liability and tax liabilities owing to various local authorities, including the
States of Delaware, Massachusetts, New Jersey and Louisiana. Negotiations
between these taxing authorities and the Debtor have resulted in the withdrawal
to date of a substantial number of these Tax Claims. Tax Claims have been
withdrawn by the Internal Revenue Service, the Illinois Department of Revenue,
the New Jersey Department of Taxation, and the New York City Department of
Finance in an aggregate amount of approximately $703,613. The Debtor's analysis
of the remaining Tax Claims and its books and records indicates that its
liability for Tax Claims should not exceed approximately $25,000.
Each holder of an Allowed Tax Claim shall be paid the full amount of its
Allowed Tax Claim in Cash on the later of the Effective Date or the date such
Tax Claim becomes Allowed, or as soon thereafter as is practicable.
(c) Demands
As required by Section 524(g) of the Bankruptcy Code, the Plan provides for
the treatment of future asbestos claims or 'Demands,' which it identifies as
present or future demands for payments that were not Claims during the Chapter
11 Case, that arise out of the same or similar conduct or events that gave rise
to the Asbestos-Related Claims and that are to be paid by the Creditors' Trust.
Under the Plan, all Demands will be fully satisfied as against the Debtor
on the Effective Date by virtue of the transfer of the Creditors' Trust
Distribution to the Creditors' Trust for the benefit of all holders of
Asbestos-Related Claims and Demands pursuant to the terms and conditions of the
Creditors' Trust Documents. All Demands shall be channeled to the Creditors'
Trust
- ------------------
1 The Fee Claims consist of those amounts previously authorized and 'heldback'
by the Bankruptcy Court by Order dated March 28, 1994, May 13, 1994, July 28,
1994, October 4, 1994, November 17, 1994, March 24, 1995, July 19, 1995 and
November 17, 1995 in the aggregate amount of approximately $2.704 million and
an estimate of professional fees and expenses from October 1, 1995 through
and including the assumed June 30, 1996 Effective Date. Fee Claims do not
include, however, (i) the Debtor's payment of fees and expenses of
professionals authorized, but not 'heldback', by the Court, which aggregate
approximately $8.561 million from the Petition Date through September 30,
1995, and (ii) amounts temporarily disallowed by the Court, which aggregate
approximately $205,000 and are subject to resubmission by certain
professionals.
2 The Miscellaneous Administrative Expenses include the estimated amount of
$413,000, the maximum Administrative Expense Claim which the landlord of the
New York Lease may assert pursuant to the stipulation approved by the Court
on May 5, 1995, subject to any objections, defenses or motions the Debtor or
the Committee may have with respect thereto.
<PAGE>
and paid pursuant to the terms, provisions and procedures set forth in the
Creditors' Trust Documents. The sole recourse of the holder of a Demand shall be
against the Creditors' Trust, and, pursuant to the Permanent Channeling
Injunction, all actions for the purpose of, directly or indirectly, collecting,
Demands from, among others, New Keene (or its assets and properties)--other than
actions brought to enforce any right or obligation under the Plan, any Exhibits
to the Plan or the Disclosure Statement, or any other agreement or instrument
between the Debtor or New Keene and the Creditors' Trust--are expressly
prohibited and permanently and forever enjoined. For a description of the
Permanent Channeling Injunction, see Section E.18., entitled, 'The Plan of
Reorganization--Other Provisions of the Plan--Permanent Channeling Injunction.'
Because the holders of Demands are unknown and therefore unidentifiable,
they are not able to vote to accept or reject the Plan. The Legal Representative
was appointed to represent their interests in the Chapter 11 Case.
2. Classified Claims and Interests
The Plan divides the remaining Claims against and Interests in the Debtor
into various classes pursuant to section 1122 of the Bankruptcy Code. Set forth
below is a description of the general classes of Claims against and Interests in
the Debtor and their treatment under the Plan. A Claim or Interest is classified
in a particular class only to the extent that the Claim or Interest qualifies
within the description of the class and is classified in a different class to
the extent that the Claim or Interest qualifies within the description of that
different class.
(a) Priority Claims (Class 1 Claims). Class 1 under the Plan consists
of all Priority Claims. 'Priority Claims' consist of those Claims which, if
Allowed, are entitled to priority in right of payment under section 507(a)
of the Bankruptcy Code, excluding Administrative Expense Claims and Tax
Claims, but including certain Claims for accrued employee compensation,
including vacation, severance and sick leave pay earned within 90 days
prior to the Petition Date to the extent of $2,000 for each employee, and
certain Claims for contributions on account of the employee Pension Plan
arising from services rendered within one hundred eighty (180) days prior
to the Petition Date, but only for each such plan to the extent of (x) the
number of employees covered by such plan multiplied by $2,000, less (y) the
aggregate amount paid to such employees from the estate for wages,
salaries, or commissions.
Because the Debtor obtained an order from the Court that allowed the Debtor
to satisfy its employee benefit obligations during the pendency of the Chapter
11 Case, the Debtor believes that no unpaid Priority Claims exist.
To the extent any such Claims do exist, each holder of an Allowed Class 1
Claim, unless such holder agrees to accept less favorable treatment by
settlement or otherwise, shall receive, on the Effective Date, the Allowed
Amount of its Priority Claim in Cash.
Because the holders of Class 1 Claims are unimpaired, they are conclusively
presumed to have accepted the Plan and solicitation of acceptances from such
holders is not required under the Bankruptcy Code.
(b) Bonded Judgment Claims (Class 2A Claims). Class 2A under the Plan
consists of all Bonded Judgment Claims. 'Bonded Judgment Claims' consist of
those Claims against the Debtor arising by virtue of judgments rendered
against the Debtor prior to the Petition Date in connection with which the
holder thereof became the beneficiary of a supersedeas bond posted on
behalf of, or a funded escrow account established by, the Debtor.Due to
certain settlements entered into by the Debtor and certain holders of
Bonded Judgment Claims subsequent to the Petition Date, the Debtor was able
to settle certain of such Claims for less than the total amount claimed by
the holder of such Claim. The Debtor estimates that unresolved Bonded
Judgment Claims total approximately $2 million in the aggregate. If not
settled the Debtor believes that these Claims will be satisfied by
permitting the holders of Bonded Judgment Claims to realize on the
supersedeas bonds posted on the Debtor's behalf by Acstar Insurance
Company, Lumbermen's Mutual Casualty Company, Amwest Surety Insurance
Company and St. Paul Fire & Marine Insurance Company (collectively, the
'Sureties') or to access certain escrow accounts, subject to the Appeal
Rights.
Unless the holder of an Allowed Class 2A Claim agrees to accept less
favorable treatment by settlement or otherwise, the holder of an Allowed Class
2A Claim shall, subject to the Appeal Rights, be entitled to payment from the
proceeds of the supersedeas bond or escrow account securing its Claim. The
Appeal Rights are those rights granted to the Creditors' Trust under the Plan to
appeal or otherwise challenge the finality of any judgment rendered prior to the
Petition Date and any payment rights which may accrue upon such successful
appeal or challenge. To the extent that the Allowed Amount of any Class 2A Claim
exceeds the value of the supersedeas bond or escrow account securing such Claim,
such excess shall be treated as an Asbestos-Related Personal Injury Claim or an
Asbestos In Buildings Claim.
<PAGE>
Because the holders of Class 2A Claims are unimpaired, they are
conclusively presumed to have accepted the Plan and solicitation of acceptances
from such holders is not required under the Bankruptcy Code.
(c) Secured Claims (Class 2B Claims). Class 2B under the Plan consists
of all Secured Claims. 'Secured Claims' consist of any Claims, other than
Bonded Judgment Claims, secured by a valid and unavoidable lien on or
security interest in property of the Debtor pursuant to section 506(a) of
the Bankruptcy Code, but only to the extent of the value as of the
Confirmation Date of such lien or security interest as determined by Final
Order of the Court or as agreed to by the Debtor and the holder of such
Claim.
Pursuant to section 506(b) of the Bankruptcy Code, any Secured Claim that
is secured by property the value of which is greater than the amount of such
Claim is entitled to the payment of interest on such Secured Claim and any
reasonable fees, costs or charges provided for under the agreement under which
such Secured claim arose.
Secured Claims include the Claims of Sureties on account of supersedeas bonds
issued and certain related claims filed by the Bank and Shawmut Bank Connecticut
('Shawmut'). Prior to the Petition Date, each of the Sureties issued supersedeas
bonds in connection with appeals of asbestos-related judgments taken by Keene.
These four Sureties filed proofs of claim as putative secured creditors in the
aggregate amount of $31,860,523.84. The proofs of claim assert liability for the
amount of the bond and for costs, including legal fees. The Debtor believes,
however, that none of the Sureties have Allowed Claims against the estate. In
fact, the Debtor believes that the Sureties owe the return of funds to the
Debtor's estate in the aggregate amount of approximately $3.3 million as of
December 31, 1995.
In addition, the Bank and Shawmut each filed proofs of claim on account of
secured letters of credit issued on behalf of the Debtor to collateralize such
supersedeas bonds. Such proofs of claim assert Secured Claims in the amounts of
over $34.6 million and $7.3 million, respectively. Because the Debtor entered
into certain stipulations with each of the Bank and Shawmut permitting them to
access the collateral securing the supersedeas bonds as such bonds were paid,
the Debtor believes that the Secured Claims of the Bank and Shawmut will be
unimpaired or expunged.
Unless the holder of an Allowed Class 2B Claim agrees to accept less
favorable treatment by settlement or otherwise, (i) the legal, equitable and
contractual rights of such holder of an Allowed Class 2B Claim shall remain
unaltered; (ii) the holder of such Allowed Class 2B Claim shall receive the full
amount of its Allowed Class 2B Claim in Cash on the Effective Date; (iii) the
holder of such Allowed Class 2B Claim shall have released to it the collateral
securing its Claim; or (iv) the Debtor shall provide such other treatment that
will render the Allowed Class 2B Claim unimpaired pursuant to section 1124 of
the Bankruptcy Code. To the extent that the Allowed Amount of any such Claim
exceeds the value of the collateral securing such Claim, such excess shall be
treated as a General Unsecured Claim.
Because the holders of Class 2B Claims are unimpaired, they are
conclusively presumed to have accepted the Plan and solicitation of acceptances
from such holders is not required under the Bankruptcy Code.
(d) Convenience Claims (Class 3 Claims). Class 3 under the Plan
consists of all Convenience Claims. 'Convenience Claims' are those Claims
that otherwise would be classified in Class 6, but which are either (i) in
an amount less than or equal to $1,000.00 or (ii) on the Ballot, have been
reduced voluntarily to $1,000.00 by the holders of such Claims. In
calculating the amount of Claims held by a holder of more than one Claim,
all Allowed Claims held by such holder will be aggregated and treated as
one Claim. For example, a creditor that holds six Claims each in the amount
of $500.00 will be treated as having one Claim in the amount of $3,000.00
and would not be entitled to treatment under Class 3 unless such holder
voluntarily reduced such Claim to $1,000.00.
An analysis of the Debtor's books and records and Claims register reveals
that there are 89 Claims asserted against the Debtor in the amount of $1,000 or
less totalling approximately $27,000.00 in the aggregate. In addition, given the
Debtor's estimate that holders of General Unsecured Claims will receive a
dividend of approximately $.40 to $.45 on the dollar, the Debtor anticipates
that holders of Claims in the amount of $2,000 or less will elect to convert
such Claims to Convenience Claims. This conversion would add additional
liability on account of Class 3 Claims. Accordingly, the Debtor estimates that
Plan Payments on account of Claims in Class 3 could total approximately
$31,000.00, in the aggregate.
Unless the holder of a Convenience Claim agrees to receive less favorable
treatment by settlement or otherwise, on the Effective Date, each holder of an
Allowed Convenience Claim shall receive the full amount of its Allowed
Convenience Claim in Cash up to and including the amount of $1,000.
Because the holders of Class 3 Claims are unimpaired, they are conclusively
presumed to have accepted the Plan and solicitation of acceptances from such
holders is not required under the Bankruptcy Code.
<PAGE>
(e) Asbestos-Related Claims (Class 4 Claims). Class 4 under the Plan
consists of all Asbestos-Related Claims against the Debtor.
'Asbestos-Related Claims' consist of all Asbestos-Related Personal Injury
Claims, Asbestos In Buildings Claims, Asbestos-Related Personal Injury
Contribution Claims and Asbestos-Related Building Contribution Claims.
Included in this class are the Claims of the Center for Claims Resolution
and co-defendant Claims for indemnity and contribution, a number of which
were filed in connection with the Transactions Claims, as well as in
connection with other actions. As of the Petition Date, approximately
108,000 lawsuits on account of Asbestos-Related Claims were pending against
Keene.
The holders of Claims in Class 4A consist of the holders of
Asbestos-Related Personal Injury Claims and Asbestos-Related Personal Injury
Contribution Claims. Claims in Class 4A include the claims of Entities, such as
co-defendants or the Center for Claims Resolution, seeking to recover against
the Debtor for judgments or settlements paid on account of Asbestos-Related
Personal Injury Claims. The holders of Claims in Class 4B consist of the holders
of Asbestos In Buildings Claims and Asbestos-Related Building Contribution
Claims. Claims in Class 4B include the claims of Entities, such as
co-defendants, seeking to recover against the Debtor for judgments or
settlements paid on account of Asbestos In Building Claims.
Under the Plan, all Asbestos-Related Claims shall be fully discharged
against the Debtor by virtue of the transfer of the Creditors' Trust
Distribution to the Creditors' Trust for the benefit of all holders of
Asbestos-Related Claims and Demands pursuant to the terms and conditions of the
Creditors' Trust Documents. To that end, all Asbestos-Related Claims shall be
channeled to the Creditors' Trust and paid pursuant to the terms, provisions,
and procedures set forth in the Creditors' Trust Documents. The sole recourse of
the holder of an Asbestos-Related Claim shall be against the Creditors' Trust,
and, pursuant to the Permanent Channeling Injunction, all Entities shall be
permanently and forever enjoined from taking any actions for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on, or
with respect to any Asbestos-Related Claims from, among others, New Keene (or
its assets and properties), other than actions brought to enforce any right or
obligation under the Plan, any Exhibits to the Plan or the Disclosure Statement,
or any other agreement or instrument between the Debtor or New Keene and the
Creditors' Trust. For a description of the Permanent Channeling Injunction, see
Section E.18., entitled, 'The Plan of Reorganization--Other Provisions of the
Plan--Permanent Channeling Injunction.
While the Debtor has not conducted a formal analysis in this Chapter 11
Case of the projected value of present and future asbestos-related personal
injury liabilities it faces, it is at least arguably relevant that Keene
submitted evidence in the Limited Fund Action that, in its view, the current
civil justice system's inappropriate valuation of nonmeritorious claims would
likely result in quantifying its present and future asbestos-related liabilities
in the range of $600 million to $700 million. In the course of the asbestos
litigation up to the time Keene filed for Chapter 11, Keene and its insurers had
paid out over $500 million to settle asbestos claims (including defense costs)
and to pay judgments against Keene after jury trials and, in some cases, after
affirmance of judgments by appellate courts. In the view of the Committee, the
civil justice system functioned appropriately in assessing liability against
Keene and determining the amount due asbestos victims. It should be noted,
however, that estimates of present and future asbestos liabilities have been
undertaken in a number of other asbestos-related Chapter 11 cases and
reorganization proceedings. For example, the bankruptcy court in the Chapter 11
case of Eagle-Picher Industries, Inc., while dealing with a universe of
potential claims that may not be identical to the claims faced by Keene,
recently estimated that particular company's asbestos-related personal injury
claims at $2.5 billion, an amount exceeding by $1 billion the estimate
negotiated among the debtors, the future claims representative and the official
injury claimants' committee. See In re Eagle-Picher Industries, Inc.,189 B.R.
681 (Bankr. S.D. Ohio 1995).
Because the holders of Class 4 Claims are impaired, they are entitled to
vote to accept or reject the Plan.
Pursuant to the Voting Procedures Order, each holder of an Asbestos-Related
Claim shall vote such Claim in the amount of $1.00. If a class proof of claim
was filed by the representative of a class that has been certified or
conditionally certified in a pending federal court action, such representative
shall be entitled to one vote in the amount of $1.00 on behalf of its class, and
the votes of individual class members shall not be solicited (except to the
extent that such members filed individual proofs of claim). In addition to the
conditions to confirmation that are required by the Bankruptcy Code, the Plan
imposes other conditions to confirmation that are required to preserve the
effectiveness of the Permanent Channeling Injunction. See Section E.18.,
entitled, 'The Plan of Reorganization--Other Provisions of the Plan--Permanent
Channeling Injunction.' Among those Plan-imposed conditions to confirmation is
the requirement that at least 75% of the holders of Class 4 Claims (consisting
of Class 4A and 4B in the aggregate) that vote on the Plan vote in favor of the
Plan.
(f) Transactions Stipulation Claims (Class 5 Claims). Class 5 under
the Plan consists of all Transactions Stipulation Claims against the
Debtor. On the Effective Date, all Transactions Stipulation Claims shall be
fully satisfied and discharged as against the Debtor pursuant to the
benefits of the Transactions Stipulation.
<PAGE>
Because the holders of Class 5 Claims are unimpaired pursuant to the
Transactions Stipulation, they are conclusively presumed to have accepted the
Plan and solicitation of acceptances from such holders is not required under the
Bankruptcy Code.
(g) General Unsecured Claims (Class 6 Claims). Class 6 consists of all
General Unsecured Claims. 'General Unsecured Claims' are those Claims
against the Debtor that are not otherwise classified and treated under the
Plan. Unless the holder of a Class 6 Claim agrees to receive less favorable
treatment by settlement or otherwise, and unless such holder has elected to
be treated as an Allowed Convenience Claim in Class 3, each holder of an
Allowed Class 6 Claim shall receive, on the Effective Date, Cash equal to
such holder's pro rata share from a pool of available funds totalling
$250,000 in the aggregate.
After taking into account the General Unsecured Claims that may elect to be
treated as Convenience Claims, the Debtor estimates that, as of the Effective
Date, the total amount of Allowed Class 6 Claims shall be approximately $550,000
in the aggregate.
Because holders of Class 6 Claims are impaired, they are entitled to vote
to accept or reject the Plan.
(h) Common Stock Interests in Keene (Class 7 Common Stock Interests).
Class 7 consists of all Common Stock Interests in Keene. 'Common Stock
Interests' consist of any equity interests in the Debtor represented by
shares of Old Common Stock and any Claim against the Debtor arising from
rescission of a purchase or sale of a security of the Debtor or of an
affiliate of the Debtor, for damages arising from the purchase or sale of
such a security, or for reimbursement or contribution allowed under section
502 of the Bankruptcy Code on account of such a Claim. At present, there
are 10,441,960 shares of Old Common Stock issued and outstanding, held by
2,604 shareholders of record, including current and former
employees.
Each holder of an Allowed Class 7 Common Stock Interest shall receive its
pro rata share of the Class 7 Equity Distribution. The Class 7 Equity
Distribution is 49% of the issued shares of New Common Stock, to take the form
of 980,000 shares of Class A New Common Stock. Based on the number of shares of
Old Common Stock currently outstanding, the holder of an Allowed Class 7 Equity
Interest holding 1,000 shares of Old Common Stock can expect to receive
approximately 94 shares of Class A New Common Stock on the Effective Date.
Because the holders of Class 7 Common Stock Interests are impaired, they
are entitled to vote to accept or reject the Plan.
(i) Other Interests in Keene (Class 8 Other Interests). Class 8 under
the Plan consists of all Other Interests in Keene. 'Other Interests'
consist of any equity interests in the Debtor, other than those represented
by Old Common Stock, including, without limitation, any rights granted
pursuant to the Rights Agreement dated as of June 1990 between Keene
Corporation and the Bank, as rights agent, or any other options, warrants,
calls, subscriptions, or other similar rights or other agreements,
commitments or outstanding securities obligating the Debtor to issue,
transfer or sell any shares of capital stock of the Debtor.
Holders of Other Interests will not receive or retain any distribution or
property pursuant to the Plan. On the Effective Date, all certificates or other
documents that evidence ownership of Other Interests shall be canceled ,
annulled or extinguished and shall be null and void. The holders of Other
Interests are impaired; they are deemed to have rejected the Plan and are not
entitled to vote thereon.
3. Distributions
(a) Timing. Except with respect to undeliverable distributions and
unclaimed property and Disputed Claims and Interests, as set forth in Sections
15.7 and 16.4 of the Plan, respectively, payments and distributions on account
of Allowed Claims, Demands and Allowed Common Stock Interests, and the transfers
of the Creditors' Trust Distribution and the Causes of Action shall be made on
the Effective Date or as soon thereafter as is reasonably practicable (but in no
event later than ten (10) Business Days after the Effective Date).
(b) Tables Explaining Distributions. The nature and magnitude of the
distributions to the creditors and shareholders of the Debtor provided for in
the Plan are based generally on the value of the Debtor's assets and the
relative priorities of the Claims against and Interests in the Debtor. The
following tables set forth a quick reference guide to the classification and
treatment of Allowed Claims against and Allowed Interests in the Debtor.
Table A provides a reference guide to the classification of estimated
Allowed Claims against and Allowed Interests in the Debtor assuming consummation
of the Plan. Table B sets forth the projected property distributions under the
Plan of Cash and Reorganization Securities of New Keene or other treatment under
the Plan of each Class. The Allowed Claims/Interests set forth in Table A are
estimates. In addition, values as of the Effective Date presented in Tables A
and B are estimates. Furthermore, estimates of value at the Effective Date
presented in Tables A and B, as well as throughout this Disclosure Statement,
are based upon an assumed Effective Date of June 30, 1996. No assurance can be
given that holders of Claims or Interests will receive the distributions
estimated in these tables.
<PAGE>
<TABLE>
TABLE A 3
REFERENCE GUIDE TO CLASSIFICATION OF CLAIMS
AGAINST AND INTERESTS IN THE DEBTOR
<CAPTION>
APPROXIMATE AMOUNT OF ESTIMATE OF
BRIEF FILED CLAIMS/INTERESTS OR ALLOWED
CLASS DESCRIPTION SCHEDULED LIABILITIES CLAIMS/INTERESTS
- -------------------- ----------------------- ------------------------- ----------------
<S> <C> <C> <C>
Class 1 Claims Priority Claims $0 $0
Class 2A Claims Bonded Judgment $2,000,000 N/A 4
Claims
Class 2B Claims Secured Claims $73,660,523 $32,000,000
Class 3 Claims Convenience Claims $27,000 $30,993
Class 4 Claims Asbestos-Related Claims N/A 5 N/A
Class 5 Claims Transactions Unliquidated and N/A
Stipulation Claims contingent 6
Class 6 Claims General Unsecured $57,734,351 An amount not
Claims expected to
exceed $550,000
Class 7 Common Common Stock $616,388 N/A
Stock Interests Interests
Class 8 Other Other Interests N/A N/A
Interests
<CAPTION>
GENERAL
DESCRIPTION OF
CLASS CLASS
- -------------------- ----------------------------------------
<S> <C>
Class1 Claims Any Claims, other than Administrative Claims and
Tax Claims, accorded priority in right of payment pursuant
to section 507(a) of the Bankruptcy Code.
Class 2A Claims Any Claims arising by virtue of
prepetition judgments rendered against
the Debtor supported by supersedeas bonds or escrow
accounts issued on behalf of, or established by, the
Debtor.
Class 2B Claims Any Secured Claims, other than Bonded
Judgment Claims, secured by a valid and
unavoidable lien on or security interest
in property of the Debtor, to the extent
of the value of such lien or security
interest as of the Confirmation Date,
determined in accordance with section
506(a) of the Bankruptcy Code.
Class 3 Claims Any General Unsecured Claims totalling $1,000 or
less or which the holder thereof voluntarily agrees to
reduce to $1,000.
Class 4 Claims All Asbestos-Related Claims.
Class 5 Claims All Transactions Stipulation Claims
Class 6 Claims Any Claim that is not an Administrative
Expense Claim, a Tax Claim, a Priority Claim, a Secured
Claim, a Convenience Claim, an Asbestos-Related Claim, or
a Transactions Stipulation Claim.
Class 7 Common Holders of Old Common Stock.
Stock Interests
Class 8 Other Holders of Other Interests.
Interests
<FN>
- ------------------
3 This table excludes Demands and asserted Administrative Expense Claims and
Tax Claims in the amounts of $8,051,000 and $737,499, respectively. The
Debtor believes that Allowed Administrative Expense Claims and Allowed Tax
Claims will not exceed $8,051,000 and $25,000, respectively.
4 Unless resolved, holders of Bonded Judgment Claims shall, subject to the
Appeal Rights, be entitled to payment from the proceeds of the supersedeas
bond or escrow account securing their respective Claim.
5 The holders of Asbestos In Buildings Claims and Asbestos-Related Personal
Injury Claims were not required to file proofs of Claim on or before the
General Claims Bar Date. Nevertheless, Keene received in excess of 800 proofs
of Asbestos In Buildings Claims and Asbestos-Related Personal Injury Claims
asserting in the aggregate approximately $520 million, of a total of 1,167
proofs of Asbestos-Related Claims asserting in the aggregate in excess of
$8.46 billion. All Asbestos-Related Claims are dealt with under the Plan,
which provides for the channeling of such Claims to the Creditors' Trust
where such Claims and unclassified Demands will be assertable solely against
the Creditors' Trust pursuant to the Permanent Channeling Injunction.
6 Pursuant to the terms of the Transactions Stipulation, all Transactions
Stipulation Claims are dealt with solely under the Plan, which provides that
such Claims will be assertable solely against the Creditors' Trust.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE B
PROJECTED PROPERTY DISTRIBUTIONS UNDER THE PLAN
THE HOLDER OF A: IN THE ALLOWED AMOUNT OF:
- ---------------------------------------------------- -------------------------
<S> <C>
Class 1 Claim (Priority Claim) $ 1,000
Class 2A Claim (Bonded Judgment Claim) $ 1,000
Class 2B Claim (Secured Claim) $ 1,000
Class 3 Claim (Convenience Claim) $ 1,000
Class 4 Claim (Asbestos-Related Claim) $ 1,000
Class 5 Claim (Transactions Stipulation Claim) N/A
Class 6 Claim (General Unsecured Claim) $10,000
Class 7 Common Stock Interest (Common Stock Interest N/A
in Keene)
Class 8 Other Interest (Other Interest in Keene) N/A
<CAPTION>
THE HOLDER OF A: WILL RECEIVE: 7
- ---------------------------------------------------- ----------------------------------------------------
<S> <C>
Class 1 Claim (Priority Claim) $1,000 in cash
Class 2A Claim (Bonded Judgment Claim) Release of associated bond/escrowed funds, subject
to Appeal Rights
Class 2B Claim (Secured Claim) $1,000 in cash, release of collateral or other
unimpaired treatment
Class 3 Claim (Convenience Claim) $1,000 in cash
Class 4 Claim (Asbestos-Related Claim) Class 4 (together with holders of unclassified
Demands) to receive the benefit of the Creditors'
Trust Distribution.
Class 5 Claim (Transactions Stipulation Claim) Class 5 to receive the benefits of the Transactions
Stipulation
Class 6 Claim (General Unsecured Claim) Estimated dividend of $4,000 to $4,500, representing
its pro rata share of a $250,000 Class 6 Cash Pool
Class 7 Common Stock Interest (Common Stock Interest Pro rata share of 49% of the issued shares of New
in Keene) Common Stock, consisting of an aggregate of 980,000
shares of Class A New Common Stock
Class 8 Other Interest (Other Interest in Keene) Interest to be canceled
<FN>
- ------------------
7 Amounts shown are estimates and actual amounts may vary. Adjustments will be
made under Section 15.6 of the Plan for rounding of fractional payments and
fractional shares.
</FN>
</TABLE>
<PAGE>
B. FORMATION OF NEW ENTITIES
1. New Keene.
(a) Creation of New Keene. On the Effective Date, Reinhold will be
merged into and with Keene, with Keene being the surviving corporation.
Pursuant to the merger, all of the issued and outstanding capital stock of
Reinhold shall be cancelled. Keene, as the surviving corporation of the
merger, shall be renamed Reinhold Industries, Inc. The Certificate of
Merger shall be filed with the Secretary of State of the State of Delaware
on the Effective Date. New Keene shall succeed to the Debtor's positive tax
attributes. New Keene will issue two (2) classes of New Common Stock
pursuant to the terms of the Plan. See Section V.C., entitled, 'The Plan of
Reorganization--Reorganization Securities.'
(b) Business Objective of New Keene. The business strategy of New
Keene is to center its operations around Reinhold, and to grow Reinhold to
be a leading independent supplier of superior engineered composite products
to both defense-related and commercial customers.
(c) New Keene Line of Credit. Pursuant to the terms of the New Keene
Credit Facility, New Keene may make draws on a line of credit made
available by the Creditors' Trust up to a maximum amount of $1.5 million at
any time over a two year period following the Effective Date. New Keene's
obligations thereunder must be paid in full on the third anniversary of the
Effective Date.
2. The Creditors' Trust.
The Creditors' Trust shall be established on the Effective Date in
accordance with the terms of the Creditors' Trust Documents and shall be a
designated settlement fund or a qualified settlement fund within the meaning of
section 468B of the Internal Revenue Code and the regulations issued by the
Internal Revenue Service pursuant to such statute.
The Creditors' Trust will obtain certain significant assets of the Debtor,
including (i) the Creditors' Trust Equity Distribution, consisting of 1,020,000
shares of Class B New Common Stock or 51% of the issued and outstanding shares
of New Common Stock, (ii) the Creditors' Trust Cash Distribution; (iii) the
Causes of Action, (which include the Rights to Payment, the Appeal Rights, and
the benefits of the Coleman Injunction), (iv) the rights granted under the
Registration Rights Agreement, and (v) the rights granted under the Share
Authorization Agreement; provided, however, that the Creditors' Trust
Distribution specifically excludes the distribution to holders of Class 7 Common
Stock Interests, the Plan Payments, the Plan Estimates and the reasonable costs
and expenses associated with the making of the Plan Payments and the prosecution
of objections to Claims and Interests; provided, further, however, that the
Creditors' Trust Distribution shall include any amounts subsequently payable to
the Creditors' Trust pursuant to Sections 15.7(b), 16.4 and 16.5(b) of the Plan.
All distributions to be made to the Creditors' Trust shall be made to the
Trustees of the Creditors' Trust for the benefit of holders of Asbestos-Related
Claims and Demands, all in accordance with applicable laws, including without
limitation the laws governing trusts.
(a) Assets. Annexed hereto as Appendix E is an estimate of the value
of certain of the assets projected to be transferred to the Creditors'
Trust. Set forth below is a description of the assets to be transferred to
the Creditors' Trust.
(i) Creditors' Trust Cash Distribution. On the Effective Date, the
Creditors' Trust will receive all Available Cash of the Debtor less the
total of (i) the aggregate amount of all Plan Payments, (ii) the
aggregate amount reserved for all Plan Estimates, and (iii) the
reasonable costs and expenses associated with the making of the Plan
Payments and the prosecution of objections to certain Claims and
Interests. The Debtor estimates that the Creditors' Trust Cash
Distribution will be approximately $22,700,000.
(ii) Creditors' Trust Equity Distribution. On the Effective Date,
the Creditors' Trust shall receive 51% of the issued and outstanding
shares of New Common Stock of New Keene consisting of 1,020,000 shares
of Class B New Common Stock. This allocation of New Common Stock shall
entitle the Creditors' Trust to the right to 51% of the outstanding
shares of New Common Stock of New Keene. See Section V.C., entitled,
'The Plan of Reorganization-- Reorganization Securities.'
(iii) The Causes of Action, Including the Rights to Payment. On the
Effective Date, all of the Debtor's right, title and interest in and to
the Causes of Action, including the Rights to Payment, shall be
transferred to the Creditors' Trust. All distributions to be made to the
Creditors' Trust shall be made to the Trustees, all in accordance with
applicable laws, including without limitation the laws governing trusts.
The Rights to Payment arise from Keene's claim to tax refunds for
taxable years prior to the Effective Date and its assertion of the
Manville Trust Claim and claims against Midland and
<PAGE>
Integrity. New Keene and the Creditors' Trust will enter into such
agreements as are reasonable and necessary to provide the Creditors'
Trust with the assurance that it will be paid such tax refunds as soon
as practicably possible.
(iv) Rights Granted Pursuant to the Share Authorization Agreement.
On the Effective Date, New Keene and the Creditors' Trust shall enter
into the Share Authorization Agreement which shall provide that New
Keene may not authorize or issue any additional shares of Class A New
Common Stock without the consent of the Creditors' Trust. Such rights
shall remain effective until such time as the number of shares of New
Common Stock held by the Creditors' Trust is less than ten percent (10%)
of the total number of shares of New Common Stock then outstanding.
(v) Rights Granted Pursuant to the Registration Rights Agreement.
On the Effective Date, the Creditors' Trust shall receive the right to
seek registration of its Class B New Common Stock as Class A New Common
Stock. For a more complete discussion of the Registration Rights
Agreement see Section D., entitled, 'The Plan of
Reorganization--Registration Rights.'
(vi) Other Assets. On the Effective Date, the Creditors' Trust will
receive all other property of the Debtor not otherwise distributed
pursuant to the terms of the Plan. Such assets include the Debtor's
books and records, accounts and demand interest receivable, equipment
and any other noncash assets not otherwise distributed pursuant to the
terms of the Plan. The Debtor estimates that the book value of such
assets on the Effective Date will be approximately $3,694,000.
(b) Assumption of Liabilities. In consideration of the receipt of the
Creditors' Trust Distribution, the Creditors' Trust will assume all
liability and responsibility for all Asbestos-Related Claims, Demands and
Transactions Stipulation Claims. New Keene shall have no financial or other
responsibilities for or in connection with such Claims or Demands.
(c) New Keene Line of Credit. On the Effective Date, the Creditors'
Trust and New Keene shall enter into the New Keene Credit Facility pursuant
to which the Creditors' Trust shall make available to New Keene a $1.5
million line of credit.
(d) Administration. The Creditors' Trust, initially, shall be
administered by three (3) independent Trustees selected by the Committee
and the Legal Representative (one of whom shall be the managing trustee)
and disclosed by such parties on or prior to the date of the Confirmation
Hearing. To qualify as independent, such Trustees shall have no affiliation
with the Debtor, shall not be holders of Asbestos-Related Claims or Demands
and shall not represent, and shall not have personally represented, in
connection with an Asbestos-Related Claim or Demand, any Entity who asserts
or who has asserted an Asbestos-Related Claim or Demand. Each Trustee shall
serve for three years or until the earlier of such person's death,
incapacity, resignation or removal. Thereafter, one Trustee selected by the
two other Trustees, with the consent of the Trust Advisory Committee (the
'TAC'), shall serve until the termination of the Creditors' Trust or until
such Trustee's death, incapacity, resignation or removal. All successor
Trustees shall be appointed in accordance with the terms and conditions
contained in the Creditors' Trust Documents. In addition, the Trustees
shall seek the advice and consent of the TAC to certain of their actions,
all as set forth in the Creditors' Trust Agreement. In any instance where
the TAC fails to consent to actions proposed by the Trustees, the Trustees
shall have the right to seek a ruling from the Court. For a discussion of
the TAC, see Section B.3., entitled, 'The Plan of
Reorganization--Formation of New Entities--The Trust Advisory Committee.'
It is currently contemplated that the three individuals who have been
selected, pending Court approval, as Consultants to aid in the confirmation and
consummation of the Plan--Richard A. Lippe, Archie R. Dykes and John J.
Robbins--shall serve as the three initial Trustees. The parties all believe that
these three individuals are qualified to act as the initial Trustees of the
Creditors' Trust and that their role as Consultants in the Chapter 11 Case does
not impair their qualifications to serve as such Trustees.
Payment of the fees and expenses of the Trustees, the TAC and their
respective advisors shall be the sole responsibility of the Creditors' Trust.
The managing Trustee is to be compensated at an annual salary of $50,000 and
each other Trustee is to receive an annual compensation of $30,000. Each Trustee
is also entitled to $1,000 per diem for meetings of the Creditors' Trust and
other business of the Creditors' Trust.
In addition, the Creditors'Trust shall have the obligation to pay professional
fees and costs associated with the prosecution of objections to Claims and
Interests upon the submission of reasonably detailed invoices. The Debtor is not
able to accurately predict the fees and costs that may be associated with the
prosecution of these objections. However, based on conversations with the
Committee and the Legal Representative, the Debtor believes that New Keene and
the Creditors' Trust will likely solicit prospective counsel, including the
Debtor's current counsel, to undertake finalization of the claims objection
project on a capped fee retainer that will likely not exceed $250,000. See,
Section E.7., entitled 'The Plan of Reorganization--Other Provisions of the
Plan--Treatment of Disputed Claims and Disputed Interests'.
Mr. Bailey, the former President of Keene and a defendant in the
Transactions Lawsuit and the Bailey Lawsuit, takes the position that the costs
and expenses of administering the Creditors' Trust, including the costs
associated with the TAC and any professionals it may retain, are unwarranted.
Mr. Bailey asserts that the lawsuits that have been filed against him have no
merit and that creditors would, therefore, be better served if the money that
might otherwise be spent prosecuting these actions were, instead
<PAGE>
distributed to them directly. Mr Bailey contends that many of the costs that may
be incurred for legal advisory services have been undisclosed and are likely to
be paid to entities that have a conflict of interest. Each of the Debtor, the
Committee and the Legal Representative strongly disagree with Mr. Bailey's
contentions.
(e) Prosecution of the Causes of Action and Litigation Fund. The
Trustees shall decide whether to prosecute the Causes of Action and shall
make determinations about choice of counsel, funding and the like. The
Trustees, with the advice and consent of the TAC, shall promptly establish
a reserve for the costs and expenses of such prosecution of the Causes of
Action, which sum is to be maintained as a separate fund until the
Transactions Lawsuit and the Bairnco NOL Action are resolved. The Committee
and the Legal Representative believe that a reserve of $7.5 million should
be required for these purposes. Keene takes no position on the propriety of
the recommendation of the Committee and the Legal Representative concerning
the size of the reserve. The Debtor believes that the Trustees should take
into consideration the findings and conclusions of the Transactions Claims
Examiner in determining the size of the reserve. In addition, the Trustees
will set aside reserves for other anticipated expenses of the Creditors'
Trust, which reserves will not be available for distribution. The Trustees
shall obtain the consent of the TAC to any settlement of the Transactions
Lawsuit or the Bairnco NOL Action and their prosecution of the Transactions
Lawsuit shall be subject to the Transactions Stipulation.
Mr. Bailey, Keene's former President and a named defendant in the
Transactions Lawsuit, contends that the TAC's consent rights, as provided for
above, improperly interfere with the independence of the Creditors' Trustees.
Mr. Bailey also contests the size of the litigation reserve suggested by the
Committee. Further, Mr. Bailey construes the Transactions Claims Examiner's
Report as questioning the ultimate value which may be recovered from prosecution
of the Transactions Lawsuit. Mr. Bailey also cites the Report for the
proposition that any such claims should be prosecuted by professionals whose
compensation should be fixed on a 'value added' basis.
Neither the Debtor, the Committee nor the Legal Representative believe that
the conclusions or recommendations in the Report are, in any way, inconsistent
with the Plan's treatment of the Transactions Lawsuit.
The Debtor believes that the consent rights afforded the TAC should not
interfere with the proper discharge of the Trustee's duties and that Mr.
Bailey's objections to the suggested size of the litigation reserve may be
motivated by his posture as a defendant in this litigation. Mr. Bailey
vehemently disputes these contentions.
(f) Asbestos-Related Claims Resolution and Distribution Procedures.
(i) Allocations between 'Personal Injury' and 'Property Damage
Claims' and Demands. 8 The Creditors' Trust Agreement divides the assets
and potential assets of the Creditors' Trust, after being reduced to
Cash, net of expenses, ('Available Cash') as follows:
o First $100 million--92 1/2% Personal Injury, 7 1/2% Property
Damage;
o $100 million--$150 million--90% Personal Injury, 10% Property
Damage;
o Amounts over $150 million--87 1/2% Personal Injury, 12 1/2%
Property Damage.
(ii) Processing and Payment of Personal Injury Claims and Demands.
The Creditors' Trust has set forth a list of scheduled values
('Scheduled Values') for particular asbestos diseases and the criteria
for any claimant to qualify for the Scheduled Value. If a claimant
disagrees with the Creditors' Trust's proposed Scheduled Value, he may
seek to have the Creditors' Trust alter its determination. Such claimant
may use the tort system if he fails to reach agreement with the
Creditors' Trust. However, any award in the tort system in excess of the
Scheduled Value will not be paid until all claimants have received
payments equal to 85% of their Scheduled Value.
Claimants will receive payments based upon the payment percentage ('Payment
Percentage') of the Scheduled Values. In order to determine the Payment
Percentage and to ensure equality of treatment between Asbestos-Related Claims
and Demands, the Creditors' Trust will periodically--at the time of proposed
distributions--perform a valuation of Asbestos-Related Claims and Demands and
the value of the Creditors' Trust assets, excluding the Causes of Action. The
resulting percentage will be the Payment Percentage. Should subsequent
evaluations lead to a higher Payment Percentage-- if there is a significant
recovery from the Causes of Action, including the Transactions
Lawsuit--claimants may receive an additional payment.
Because of limited resources and to save undue expense, the Creditors'
Trust will make payments periodically. The first such payment will be made when
the Creditors' Trust has $30 million of Available Cash. Subsequent payments will
be made only when the Creditors' Trust has adequate Available Cash to make such
payments. It is unlikely that a second payment will be made until there is a
resolution of the Transactions Lawsuit and the Creditors' Trust has disposed of
its interest in New Keene.
- ------------------
8 For purposes of this subsection and subsections (ii) and (iii), 'personal
injury' refers to Asbestos-Related Personal Injury Claims and
Asbestos-Related Personal Injury Contribution Claims and 'property damage'
refers to Asbestos In Buildings Claims and Asbestos-Related Building
Contribution Claims.
<PAGE>
Claims will be paid in the order of settlement and processed in the order
of presentation from two funds, Pool A and Pool B. Pool A will be used to pay
claimants as described above until all claimants have received 85% of their
Scheduled Value. No monies will be used from Pool B until such criteria have
been met. The rights of co-defendants vis a vis claimants will not be effected
by the Creditors' Trust and will be governed by applicable local law. Claims for
contribution or indemnity will be resolved by the Creditors' Trust but any
payment for such claims can only be made from Pool B. Legal fees to attorneys
for claimants will be limited to the lower of any contract between such claimant
and counsel or 25% of the payments actually made by the Creditors' Trust.
(iii) Processing and Payment of Property Damage Claims and Demands.
Holders of property damage claims will have their Claims evaluated in
accordance with the Property Damage Claims Resolution Procedures and
will receive payment based upon their pro rata share of funds available
to property damage claimants.
(g) Binding Effect. The Creditors' Trust binds not only present
Asbestos Claimants, but also binds any and all holders of Demands that may,
in the future, assert asbestos claims against the Debtor or New Keene. All
claimants dealt with under the Creditors' Trust shall have their Claims or
Demands administered in accordance with the terms of the Creditors' Trust
Documents.
3. The Role of the Trust Advisory Committee.
The Plan provides that the Committee shall appoint the TAC to consult with
and advise the Trustees of the Creditors' Trust. To that end, the TAC will
assist the Trustees in the implementation of the Creditors' Trust and the
procedures thereunder, including the development of payment rules, forms and
procedures, releases and time frames. The Trustees must obtain the TAC's consent
to (i) implement material changes in any claims resolution procedures; (ii)
dismiss, settle or abandon the Transactions Lawsuit and the Bairnco NOL Lawsuit;
(iii) associate with another claims facility; (iv) establish a reserve for the
costs and expenses of the prosecution of the Causes of Action; (v) amend any
provision of the Creditors' Trust Agreement; (vi) affect termination of the
Creditors' Trust under certain specified conditions; and (vii) select a
successor Trustee during the Trustees' initial three-year term.
Upon the formation of the Creditors' Trust, the TAC will consist of three
individuals who will serve for an initial three-year term, subject to any
member's early death, incapacity, removal or resignation. After the expiration
of the initial term, the chairperson of the TAC, plus one other TAC member, will
serve until the termination of the Creditors' Trust or his or her death,
incapacity, removal or resignation and, in such event, the remaining member
shall serve as the sole TAC member. The TAC chairperson is to be compensated at
an annual salary of $25,000 and each other TAC member shall receive annual
compensation of $20,000. Each member and the chairperson is also entitled to
$1,000 per diem for meetings of the TAC and other business of the Creditors'
Trust. In addition, all properly documented, reasonable out-of-pocket costs and
expenses incurred by each of the TAC members in connection with the performance
of their duties will be reimbursed by the Creditors' Trust. Each TAC member is
to be indemnified except for his or her gross negligence or willful misconduct.
The TAC may retain the services of attorneys, accountants, valuation experts and
other professionals necessary to the performance of its duties.
The Committee has designated its member representatives Stanley J. Levy,
Perry Weitz and Charles Vihon as the initial members of the TAC.
Copies of the Creditors' Trust Documents are attached to the Plan as
Exhibits D and E.
C. REORGANIZATION SECURITIES
On or prior to the Effective Date, the Debtor shall have filed with the
Secretary of State of the State of Delaware, the Amended and Restated
Certificate of Incorporation and shall have adopted the Amended and Restated
By-laws establishing the two classes of New Common Stock. It is contemplated
that the Reorganization Securities shall be issued pursuant to section 1145 of
the Bankruptcy Code and shall be exempt from the registration requirements of
the Securities Act of 1933, as amended (the 'Securities Act') pursuant to the
exemption contained in section 1145 (a)(1) of the Bankruptcy Code. The
Reorganization Securities shall be registered under the Securities and Exchange
Act of 1934 and, pursuant thereto, New Keene shall file the required periodic
reports with the Securities and Exchange Commission. The certificate of
incorporation and by-laws of Keene shall be superseded, amended and restated as
set forth in the Amended and Restated Certificate of Incorporation and the
Amended and Restated By-laws, copies of which are attached to the Plan as
Exhibits A and B, respectively, each of which shall be in full force and effect
on the Effective Date.
1. Terms of Reorganization Securities. The Amended and Restated Certificate
of Incorporation will (a) prohibit the issuance of nonvoting equity securities
in accordance with section 1123(a)(6) of the Bankruptcy Code, (b) authorize the
cancellation of the Old Common Stock and the creation of 2,500,000 shares of New
Common Stock to be distributed as set forth below with 1,480,000 shares to be
designated as Class A New Common Stock and 1,020,000 shares to be designated as
Class B New Common Stock, and (c) provide certain restrictions on the transfer
of New Common Stock, as more fully described in Section
<PAGE>
C.1.(b) below, entitled, 'The Plan of Reorganization--Reorganization
Securities--Terms of New Securities--Restrictions on Transfer.'
(a) Description of New Common Stock. On the Effective Date, New Keene
shall issue 2,000,000 shares of New Common Stock, of which 1,020,000 shares
of Class B New Common Stock shall be issued to the Trustees of the
Creditors' Trust, 980,000 shares of Class A New Common Stock shall be
issued to holders of Class 7 Common Stock Interests, and 500,000 shares of
Class A New Common Stock shall be reserved for future issuance subject to
the written consent of the Creditors' Trust pursuant to the Share
Authorization Agreement; provided, however, that the consent of the
Creditors' Trust for additional authorizations or issuances of New Common
Stock shall be required until such time that the Creditors' Trust owns less
that ten percent (10%) of the aggregate number of shares of New Common
Stock then outstanding. New Keene may declare dividends to the holders of
New Common Stock, and may pay such dividends in cash, property or stock of
New Keene, as such dividends from time to time may be declared by the Board
of Directors out of the legally available assets or funds of New Keene.
Except as set forth below, each share of New Common Stock, regardless of
class, shall entitle the holder thereof to one vote on account of such
share. Holders of Class A New Common Stock, voting as a class, are entitled
to elect one director. The holder of Class B New Common Stock, voting as a
class, is entitled to elect two directors, until such time as the Class B
New Common Stock represents less than twenty-five percent (25%) (but
greater than ten percent (10%)) of the aggregate number of shares of New
Common Stock then outstanding, in which event, the holder of the Class B
New Common Stock, voting as a class, shall be entitled to elect one
director and the holders of the Class A New Common Stock, voting as a
class, shall be entitled to elect two directors. In addition, at such time
as the Class B New Common Stock shall represent less than ten percent (10%)
of the aggregate shares of New Common Stock then outstanding, all the
shares of the Class B New Common Stock shall convert to Class A New Common
Stock. At such time, the holders of Class A New Common Stock shall be
entitled to elect all such directors. The affirmative vote of a majority of
the holders of New Common Stock shall be required to authorize the
following: (i) any amendment to the Amended and Restated Certificate of
Incorporation; provided, however, that in no event shall holders of Class A
New Common Stock or Class B New Common Stock authorize an amendment which
shall adversely affect class voting rights without the consent of the
holders of the other class of New Common Stock; (ii) any amendment to the
Amended and Restated By-laws upon which holders of New Common Stock are
entitled to vote; provided, however, that in no event shall holders of
Class A New Common Stock or Class B New Common Stock authorize an amendment
which shall adversely affect class voting rights without the consent of the
holders of the other class of New Common Stock; (iii) any merger or
consolidation of New Keene with another Entity upon which holders of Common
Stock are entitled to vote; and (iv) any sale of assets or plan of
dissolution of New Keene upon which holders of New Common Stock are
entitled to vote.
Class B New Common Stock may be held only by the Creditors' Trust. Class B
New Common Stock shall convert into Class A New Common Stock upon the earlier
of: (i) the sale, transfer or other disposition of the Class B New Common Stock
by the Creditors' Trust; (ii) the time that the shares of Class B New Common
Stock held by the Creditors' Trust are less than ten percent (10%) of the total
aggregate shares of New Common Stock then outstanding; or (iii) ten (10) years
from the Effective Date.
In order to preserve the Debtor's net operating losses, the Amended and
Restated Certificate of Incorporation shall provide that, for a period of
twenty-five (25) months following the Effective Date, unless all members of the
Board of Directors otherwise approve, New Keene will treat as null and void the
acquisition of New Common Stock by any person who is, or would thereby become,
the owner of four and three-quarters percent (4.75%) or more of the outstanding
shares of New Common Stock (within the meaning of the applicable regulations
under section 382 of the Internal Revenue Code). The New Common Stock
certificates will contain a legend setting forth this restriction, as described
in Section C.1.(b), entitled, 'The Plan of Reorganization-- Reorganization
Securities--Terms of New Securities-- Restrictions on Transfer.' New Keene will
use its best efforts to have the New Common Stock listed on a recognized
exchange.
(b) Restrictions on Transfer. The transferability of New Common Stock
will be restricted in order to preserve the Debtor's net operating losses
after the Effective Date, as described below.
Specifically, the Amended and Restated Certificate of Incorporation shall
contain restrictions on the transfer of (i) shares of New Common Stock and (ii)
other rights or options to purchase stock of New Keene (collectively,
'Restricted Securities'). The restrictions are being implemented to permit the
continued utilization of the Debtor's net operating losses to which New Keene is
or may be entitled.
All certificates reflecting Restricted Securities issued by New Keene on or
after the Effective Date shall bear a conspicuous legend in substantially the
following form:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO
RESTRICTION PURSUANT TO THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF NEW KEENE WHICH RESTRICTION IS SUMMARIZED ON THE BACK
OF THIS CERTIFICATE.
<PAGE>
(c) Certain Transfers Void. The Amended and Restated Certificate of
Incorporation shall provide that, at any time during the twenty-five (25)
month period after the Effective Date, any attempted sale, purchase,
transfer, assignment, conveyance, pledge or other disposition (including,
without limitation, distributions from the Creditors' Trust to holders of
Asbestos-Related Claims and Demands) of any share or shares of Restricted
Securities (a 'Transfer') to any person or entity or group of persons or
entities acting in concert (a 'Transferee') who directly or indirectly owns
or is treated as owning (within the meaning of the attribution rules
applicable under section 382 of the Internal Revenue Code) ('Owns') four
and three quarters percent (4.75%) or more of any class of Restricted
Securities or, after giving effect to the Transfer, would directly or
indirectly Own more than four and three quarters percent (4.75%) of the
outstanding shares of any class of Restricted Securities, shall be void ab
initio and shall not be effective to Transfer any of such shares to the
extent the Transfer increases the Transferee's direct or indirect ownership
of the Restricted Securities above four and three quarters percent (4.75%)
of the total outstanding shares of such class of Restricted Securities.
(d) Treatment of Prohibited Transfers. No employee or agent of New
Keene shall record any Transfer prohibited by the foregoing rules (a
'Prohibited Transfer'), and the purported Transferee shall not be
recognized as a shareholder of New Keene for any purpose whatsoever
regarding the Certificate or other evidence of ownership of Restricted
Securities that are the subject of the Prohibited Transfer (the 'Prohibited
Securities'). Until the Prohibited Securities are acquired by another
person in a Transfer that is not a Prohibited Transfer, the purported
Transferee shall not be entitled with respect to such Prohibited Securities
to any rights of shareholders of New Keene, including, without limitation,
the right to vote such Prohibited Securities and to receive dividend
distributions, whether liquidating or otherwise, on account thereof, if
any. Once the Prohibited Securities have been acquired in a transfer that
is not a Prohibited Transfer, the Restricted Securities shall cease to be
Prohibited Securities.
D. REGISTRATION RIGHTS.
As of the Effective Date, New Keene and the Creditors' Trust shall enter
into a registration rights agreement, substantially in the form attached to the
Plan as Exhibit G (the 'Registration Rights Agreement'), granting the Creditors'
Trust certain rights to register the Class A New Common Stock. The registration
rights granted pursuant to the Registration Rights Agreement shall be
exercisable no earlier than two (2) years from the Effective Date.
1. Registration on Request. New Keene will grant to the Creditors' Trust
demand registration rights to register the Reorganization Securities held by it
as Class A New Common Stock not earlier than 2 years from the Effective Date;
provided, however, that New Keene shall not be obligated to effect more than two
demand registrations and not more than one demand in any given twelve (12) month
period. Upon a demand request, New Keene must use reasonable diligence to effect
and maintain the registration under the Securities Act for not more than ninety
(90) days. A registration of Class A New Common Stock requested by the
Creditors' Trust pursuant to Section 2.1 of the Registration Rights Agreement
will be deemed to have been effected if a registration statement with respect to
the sale of such securities becomes effective under the Securities Act and is
not withdrawn or suspended whether or not the Class A New Common Stock covered
by such registration statement has been sold thereunder. Other securities may be
included in any such registration statement subject to standard cut-back
restrictions.
2. Incidental Registration. If New Keene proposes to register any of its
securities (other than securities to be issued pursuant to an employee
compensation program or dividend reinvestment plan or securities issued in a
merger, recapitaliza-tion, consolidation, acquisition or similar transaction),
it shall provide the Creditors' Trust with notice of such intention and the
opportunity to register any of its Class B New Common Stock for sale as Class A
New Common Stock in such registration. New Keene must use reasonable diligence
to effect the registration of any such New Common Stock that it has been so
requested to register by the Creditors' Trust. In addition, prior to the
effective date of the registration statement relating to New Keene's proposed
registration, New Keene may decide for any reason to cancel such registration
(in which case New Keene shall have no obligation to register any New Common
Stock of the Creditors' Trust or to delay such registration other than as
described above).
3. Piggyback Rights. The Creditors' Trust shall have unlimited piggyback
rights; provided, however, that in no event may the Creditors' Trust demand
registration of a number of shares of New Common Stock that exceeds the number
of shares that New Keene is seeking to register and, in the event that any
underwriter may require New Keene and the Creditors' Trust to reduce the number
of shares of New Common Stock then being registered, such reduction shall be
applied first against the shares that the Creditors' Trust is seeking to be
registered.
4. Underwritten Offerings; Holdback Agreements. If any demand registration
shall be in connection with an underwritten public offering, the underwriters
shall be selected by the mutual agreement of New Keene and the Creditors' Trust.
At the request of such underwriters, New Keene must use its reasonable efforts
to enter into an underwriting agreement with such underwriters. If any
registration of New Common Stock is in connection with an underwritten public
offering, the Creditors' Trust agrees not to effect any public sale or
distribution of any New Common Stock or any other equity security of New Keene
or any security convertible into or exchangeable or exercisable for any equity
security of New Keene (in each case, other than as part of such underwritten
public offering) during the 120-day period beginning on, the effective date of
such registration statement.
<PAGE>
5. Indemnification; Expenses; Assignment. The Registration Rights Agreement
contains customary indemnification provisions providing for New Keene to
indemnify the Creditors' Trust and any underwriter with respect to misstatements
or omissions in any registration statement or prospectus relating to an offering
of New Common Stock by the Creditors' Trust. Additionally, as a condition to
registering any New Common Stock of the Creditors' Trust, in any registration,
the Creditors' Trust will be required to indemnify New Keene and any
underwriters with respect to misstatements or omissions of a material fact in
any registration statement or prospectus relating to the offering of such New
Common Stock made in reliance upon and in conformity with written information
furnished by or on behalf of the Creditors' Trust. New Keene will pay all
registration fees and expenses in connection with any registration effected
under the Registration Rights Agreement, including the cost of counsel and
accountants retained by New Keene in connection with such registration, except
that the Creditors' Trust will pay the fees and expenses of its own counsel and
accountants, if any, as well as underwriters' fees and expenses and underwriting
discounts and commissions and transfer taxes incurred by the Creditors' Trust
with respect to its New Common Stock being registered.
E. OTHER PROVISIONS OF THE PLAN.
1. Transfer of Causes of Action. On the Effective Date, the Debtor shall
transfer to the Creditors' Trust the Causes of Action. Under sections 544, 545,
547, 548, 549, 550, 551 and 553 of the Bankruptcy Code, a debtor in possession
has certain powers to recover money or other assets for the benefit of the
debtor's estate, eliminate security interests in estate property, or eliminate
debt incurred by the estate (the 'Avoiding Power Provisions'). Under the Plan,
all the Causes of Action, including any proceedings under the Avoiding Power
Provisions and any and all claims and causes of action arising under federal,
state or other applicable law, shall remain assets of the Debtor's estate and,
on the Effective Date, shall be transferred to the Creditors' Trust whereupon
the Creditors' Trust shall obtain title to and have the exclusive right to and
may commence, enforce, prosecute, manage and/or settle against any Entity all
such Causes of Action, including those covered by the Coleman Injunction;
provided, however, that the estate shall not commence and the Creditors' Trust
shall not be permitted to commence any actions under the Avoiding Power
Provisions or any theory of law or equity to recover from recipients funds paid
in connection with, or relating to, the MIC Program, the 1992 Employee Retention
Program, the Advisory Board or the Stock Dividends or to commence any recovery
action relating to the Indemnity Payments against the Debtor's officers and
directors except as otherwise asserted in the Bailey Lawsuit; provided, further,
however, that, to the extent provided therein, the prosecution of the
Transactions Lawsuit by the Creditors' Trust shall be subject to the
Transactions Stipulation.
The Debtor is not able to estimate, with any degree of certainty, the
value, if any, of the Causes of Action; nor is the Debtor able to predict the
costs that the Creditors' Trust may incur to prosecute and/or collect on the
Causes of Action. Finally, the Debtor cannot predict the likely time frame in
which the Causes of Action may be resolved.
2. Retiree Benefits. The Plan, as required for confirmation under section
1129(a)(13) of the Bankruptcy Code, provides that on and after the Effective
Date, New Keene, as the contributing sponsor, within the meaning of ERISA, of
the Keene Pension Plan, will continue and maintain the Pension Plan and will
comply with all funding and other requirements of ERISA. The Plan provides for
the satisfaction of the Other Retiree Benefits in the manner described therein.
3. Record Date. As of the close of business on the Record Date, the
transfer ledger of Old Common Stock shall be closed to all stock transactions
and the Debtor shall not be obligated to recognize any transfer of Old Common
Stock occurring thereafter. For all purposes relating to the Plan, the Debtor
shall recognize and notify only those holders of record stated on the transfer
ledger on the Record Date.
4. Time and Manner of Payments. Solely for the purposes of making
distributions required by the terms of the Plan, on the Effective Date, an
amount of funds approximately equal to the aggregate amount of the Plan Payments
and the Plan Estimates shall be transferred to New Keene and maintained in
separate interest bearing accounts. Except as otherwise provided in the Plan,
all payments and distributions on account of Allowed Claims and Allowed
Interests and the transfers to New Keene and the Creditors' Trust shall be made
by the Debtor or New Keene on the Effective Date or as soon thereafter as
reasonably practicable, but in no event later than ten Business Days thereafter.
Whenever any payment or other distribution to be made pursuant to the terms of
the Plan is due on a day other than a Business Day, such payment or distribution
will instead be made, without the payment of additional interest thereon, on the
next Business Day and shall be deemed to have been completed as of the required
date. The Debtor has the option to make any Cash payment required by the terms
of the Plan by check, by wire transfer or as otherwise required by any
applicable agreements.
5. Setoffs. For purposes of determining the Allowed Amount of each Claim
on which a distribution shall be made, the Debtor or New Keene, as the case may
be, may, but shall not be required to, set off against any Claim, any claims of
any nature whatsoever the Debtor may have against the claimant, but neither the
failure to do so nor the allowance of any Claim hereunder shall constitute a
waiver or release by the Debtor, New Keene or the Creditors' Trust of any such
claim the Debtor may have against any such claimant.
<PAGE>
6. Fractional Shares or Other Distributions. No fractional shares of New
Common Stock will be issued. Whenever any distribution of a fraction of a share
of New Common Stock would otherwise be called for, the actual distribution shall
reflect a rounding down of such fraction to the nearest whole number of shares.
Any shares of New Common Stock remaining due to the rounding of such shares
shall be held by New Keene as Treasury Stock.
In addition, no cash in fractions of cents will be paid. Whenever any
payment of a fraction of a cent would otherwise be called for, the actual
payment shall reflect a rounding of such fraction to the nearest whole cent,
with one-half cent and above being rounded up to the nearest whole cent.
7. Treatment of Disputed Claims and Disputed Interests. The Debtor's
procedure for resolving Disputed Claims and Disputed Interests applies to all
Claims against and Interests in the Debtor other than Asbestos In Buildings
Claims, Asbestos-Related Personal Injury Claims, Transactions Stipulation
Claims, and Bonded Judgment Claims, which shall be addressed exclusively by the
Creditors' Trust. Unless otherwise ordered by the Court, the Debtor, the
Committee and the Legal Representative (each, an 'Objecting Party') will have
the sole right, except with respect to the applications for the allowance of
compensation and reimbursement of expenses of professionals under section 330 of
the Bankruptcy Code and, except with respect to certain Asbestos-Related Claims,
Transactions Stipulation Claims, and Bonded Judgment Claims, to (i) object to
the allowance of any Claim or Interest with respect to which the liability is
disputed in whole or in part, or (ii) move to estimate any Claim pursuant to
section 502(c) of the Bankruptcy Code on or before the Confirmation Date, or
such later date as the Court may fix. Objections to Asbestos-Related Claims
(other than Asbestos-Related Building Contribution Claims and Asbestos-Related
Personal Injury Contribution Claims), and Bonded Judgment Claims shall be
addressed exclusively by the Creditors' Trust.
The Objecting Party shall litigate the merits of each Disputed Claim and
each Disputed Interest until determined by a Final Order and shall litigate the
amount at which a Disputed Claim shall be estimated. Subject to the approval of
the Court, the Objecting Party may compromise and settle any objection to any
Claim or Interest.
Payments or other distributions shall be made on account of a Disputed
Claim or a Disputed Interest within thirty (30) days after the date that such
Disputed Claim or Disputed Interest becomes an Ultimately Allowed Claim or an
Ultimately Allowed Interest; provided, however, that no payments or other
distributions shall be made on account of any disputed Class 6 Claim until
thirty (30) days after the date that the last Disputed Class 6 Claim challenged
by an Objecting Party, becomes an Ultimately Allowed Claim or is disallowed.
Holders of Disputed Claims or Disputed Interests that become Ultimately Allowed
Claims or Ultimately Allowed Interests shall be bound, obligated and governed in
all respects by the provisions of the Plan. Upon disallowance of a Disputed
Claim or Disputed Interest, the consideration reserved for such Claim (together
with interest accrued thereon) or Interest shall vest with the Creditors' Trust
(other than a Disputed Class 6 Claim or Disputed Class 7 Interest, in which case
the consideration reserved on account of such Claim or Interest shall be
redistributed to the members of such class).
On or as soon as practicable after the Effective Date, New Keene shall
reserve for the account of each holder of a Disputed Claim or Disputed Interest,
(i) that property which would otherwise be distributable to such holder on such
date in accordance with the Plan were such Disputed Claim or Disputed Interest
an Allowed Claim or an Allowed Interest, as applicable, on such date or (ii)
such other property as such holder and New Keene may agree. If applicable, New
Keene shall place property reserved in an interest bearing escrow fund (which
need not be segregated, but for which separate book entries shall be kept by New
Keene) for each class to be established and maintained by New Keene pending
resolution of such Disputed Claims or Disputed Interests. Cash held in any
reserve established for Disputed Claims (the 'Disputed Claims Reserve') shall be
invested in a manner consistent with the requirements of section 345 of the
Bankruptcy Code or any order of the Court. Any voting rights of Class A New
Common Stock held in reserve on account of a Disputed Interest shall, until such
securities are released from such reserve, be deemed voted in identical
proportions to all other Class A New Common Stock that shall have voted.
Any Disputed Claims Reserve shall be terminated by New Keene once all
distributions and other dispositions of Cash and/or Class A New Common Stock
required hereunder have been made in accordance with the terms of this Plan. To
the extent that any Cash or other property remains in a Disputed Claims Reserve
established pending the resolution of Disputed Administrative Expense Claims or
Disputed Tax Claims or Disputed Claims in Classes 1, 2A, 2B or 3 (including any
interest accrued thereon), and such reserve has been terminated in accordance
with Section 16.5(b) of the Plan, such Cash or other property shall immediately
and irrevocably vest in the Creditors' Trust which shall thereafter be empowered
to take whatever steps may be reasonably necessary to exercise control over such
Cash or other property. To the extent that any Cash or shares of Class A New
Common Stock remain in a Disputed Claims Reserve established pending resolution
of Disputed Class 6 Claims or Disputed Class 7 Common Stock Interests, and such
reserve has been terminated in accordance with Section 16.5(b) of the Plan, such
Cash or shares of Class A New Common Stock, as the case may be, shall be
distributed, on a pro rata basis, to holders of Allowed Claims or Allowed
Interests of the same class.
<PAGE>
On and after the Effective Date, the Creditors' Trust will pay the fees and
expenses of the professionals retained by New Keene, with the reasonable consent
of the Creditors' Trust, that are associated with the filing and prosecution of
objections to Claims and Interests within thirty (30) days after the submission
of a reasonably detailed invoice to the Trustees setting forth such fees and
expenses. Within ten (10) days after the submission of an invoice, the
Creditors' Trust may object to all or part of such invoice; provided, however,
that the Creditors' Trust shall be obligated to pay the undisputed portion of
such invoice within thirty (30) days of its submission. In the event that the
parties cannot resolve any dispute with respect to the invoice within thirty
(30) days after its submission, either the Creditors' Trust or the affected
professional may apply to the Court for resolution of the matter.
8. Undeliverable Distributions; Unclaimed Distributions. If New Keene is
unable to make payment or distribution to the holder of an Allowed Claim or
Allowed Common Stock Interest under the Plan for lack of a current address for
the holder or otherwise, it shall file with the Court the name, if known, and
last known address of the holder and the reason for inability to make payment,
and if, after the passage of 60 days and after any additional effort to locate
the holder that the Court may direct, the payment or distribution still cannot
be made, the payment or distribution and any further payment or distribution to
the holder shall be treated as unclaimed property pursuant to Section 15.7 of
the Plan and the Claim or Common Stock Interest shall be deemed satisfied to the
same extent as if payment or distribution had been made to the holder of the
Allowed Claim or Allowed Common Stock Interest.
If any distribution of property remains unclaimed for a period of one year
after it has been delivered pursuant to the terms of the Plan to the holder
entitled thereto, such unclaimed property shall be forfeited by such holder and
(i) all rights, title and interest to such property shall immediately and
irrevocably vest in the Creditors' Trust if such property was to be distributed
on account of an Allowed Administrative Expense Claim, an Allowed Tax Claim or
an Allowed Class 1, 2, 3 or 6 Claim, or (ii) all rights, title and interest to
such property shall immediately and irrevocably vest with New Keene if such
property was to be distributed on account of an Allowed Class 7 Common Stock
Interest.
9. Transmittal of Distributed Property and Notices. Except as otherwise
provided in the Plan and except as otherwise may be agreed to by the Debtor or
New Keene and the holder of a particular Claim or Interest, any property or
notice to which such holder shall become entitled pursuant to the provisions of
the Plan, shall be delivered to such holder by regular mail, postage prepaid, in
an envelope addressed to such holder as he or she or his or her authorized agent
may direct in a request filed, on or before the Effective Date, with the Court
(or filed, after the Effective Date, with New Keene), but if no such request is
filed, to the address shown in the Schedules or to such holder's counsel known
to the Debtor, or, if a different address is stated in a proof of claim duly
filed, to such address. In all cases where delivery or distribution is
effectuated by mail, the date of delivery or distribution shall be the date of
mailing. Property delivered as set forth in the Plan and as described above will
be deemed delivered to the holder regardless of whether such property is
actually received by such holder.
10. Full and Final Satisfaction. All payments and other distributions made
pursuant to the terms and conditions of this Plan shall be in full and final
satisfaction, settlement, release and, to the extent permitted by applicable
law, discharge of all Claims, Demands and Interests.
11. Legally Binding Effect. Upon the Effective Date of the Plan, its
provisions will bind, and inure to the benefit of, New Keene, the Creditors'
Trust, any holder of a Claim, any holder of a Demand, any holder of an Interest,
and their respective heirs, successors, executors, administrators, assigns,
agents, officers and directors, whether or not they accept the Plan.
12. Withholding Taxes. New Keene will comply with all withholding and
reporting requirements imposed by federal, state or local taxing authorities in
connection with the making of distributions pursuant to the Plan. All holders of
Claims shall be required to provide information to effectuate the withholding of
such taxes.
13. Satisfaction, Discharge and Release. Except as otherwise specifically
provided by the Plan, the distributions and rights that are provided in the Plan
shall be in complete satisfaction, release and, to the extent permitted by
applicable law, discharge of (i) all Claims and Demands against, liabilities of,
liens on, obligations of and Interests in the Debtor, New Keene or the
Creditors' Trust or the assets and properties of the Debtor, New Keene or the
Creditors' Trust, whether known or unknown, and (ii) all causes of action,
whether known or unknown, either directly or derivatively through the Debtor or
New Keene, against the Released Parties based on the same subject matter as any
Claim, Demand or Interest, in each case, regardless of whether a proof of Claim
or Interest was filed, whether or not Allowed, and whether or not the holder of
such Claim or Interest has voted on this Plan, or based on any act or omission,
transaction or other activity or security, instrument or other agreement of any
kind or nature occurring, arising or existing prior to the Effective Date that
was or could have been the subject of any Claim, Demand or Interest, in each
case, regardless of whether a proof of Claim or Interest was filed, whether or
not Allowed and whether or not the holder of such Claim or Interest has voted on
this plan.
'Released Party' means each of the Debtor, New Keene and the Creditors' Trust or
any of their respective successors or assigns, and each of their present and
former directors and officers and the Committee, its members and
representatives, the Legal Representative, the Transactions Claims Examiner, the
Plan Examiner, the Consultants, the Transactions Lawsuit Defendants in their
<PAGE>
capacities as such, the Subscribing Individuals and the insurance carriers
and sureties of the Corporate Transactions Defendants in the insurance carriers'
and sureties' capacities as such, and each of the professionals retained by
Order of the Court by each of the Debtor, New Keene, the Creditors' Trust, the
Committee, the Legal Representative, the Transactions Claims Examiner, the Plan
Examiner, and the Consultants (excluding those professionals retained as special
counsel to, or as an ordinary course professional of, the Debtor or the
Committee); provided, however, that, notwithstanding this or any provision of
the Plan to the contrary, an Entity's 'Released Party' status shall not preclude
the Creditors' Trust from pursuing claims against (i) the Transactions Lawsuit
Defendants in the Transactions Lawsuit; (ii) Bairnco in the Bairnco NOL Action;
(iii) Glenn W. Bailey in the Bailey Lawsuit (as to those claims in the complaint
not released under the Plan); and (iv) any insurance carrier or surety that
issued a policy or policies of insurance to, or on behalf of, Keene or any of
the above-referenced defendants.
14. Release. Upon the Effective Date of the Plan, all of the Released
Parties shall be released from any claims or causes of action belonging to the
Debtor or its creditors except for (a) any claims relating to the Indemnity
Payments and asserted against Glenn W. Bailey in the Bailey Lawsuit, (b) any
claims asserted against the Transactions Lawsuit Defendants in the Transactions
Lawsuit, and (c) any claims asserted against Bairnco in the Bairnco NOL Action.
In addition, the Debtor, its officers, directors, agents and attorneys at the
time the Keene 27 Action was commenced, shall be deemed released from any claim
or cause of action that the estate or any defendant in the Keene 27 Action may
have in connection with the Keene 27 Action and an injunction shall be entered
to effectuate such release.
Additionally, except as otherwise specifically provided by the Plan, any
Entity accepting any distributions or rights pursuant to the Plan shall be
presumed conclusively to have released the Released Parties from any cause of
action based on the same subject matter as the Claim, Demand or Interest on
which the distribution or right is received to the full extent permitted by
applicable law.
15. Injunction. The satisfactions, releases and discharges set forth in the
Plan shall also act as an injunction against any Entity commencing or continuing
any action, employment of process or act to collect, offset, affect or recover
any Claim, Demand, Interest or cause of action satisfied, released or discharged
hereunder.
16. Limitation of Release and Injunction. Notwith-standing any other
provision of the Plan to the contrary, the release and injunction provisions of
Section 17.1(a) of the Plan shall not serve to release or enjoin claims by the
Creditors' Trust against (i) any of the Transactions Lawsuit Defendants in the
Transactions Lawsuit; (ii) Bairnco in the Bairnco NOL Action; (iii) Glenn W.
Bailey in the Bailey Lawsuit (as to those claims in the complaint not released
under the Plan); and (iv) any insurance carrier or surety that issued a policy
or policies of insurance to, or on behalf of, Keene or any of the
above-referenced defendants.
17. Exculpation. Except as otherwise provided in the Plan, none of the
Released Parties shall have or incur any liability to any Entity for any act or
omission in connection with or arising out of the formulation, preparation,
dissemination, prosecution, confirmation, consummation, discussion,
implementation or administration of the Plan, the Disclosure Statement, any
contract, release, or other agreement or document created or entered into, the
property to be distributed under the Plan, or any other action taken or omitted
to be taken in connection with the Chapter 11 Case or the Plan, except for gross
negligence or willful misconduct, and in all respects shall be entitled to rely
upon the advice of counsel with respect to their duties and responsibilities
under the Plan. For the definition of 'Released Parties' see Section E.13.,
entitled, 'The Plan of Reorganization--Other Provisions of the Plan--Discharge'.
18. Permanent Channeling Injunction. In addition, the Confirmation Order
will contain the Permanent Channeling Injunction. In 1994, the Bankruptcy Code
was amended to add, inter alia, new subsection (g) to section 524, which
validates existing injunctions similar to the Permanent Channeling Injunction
(such as those used in the chapter 11 cases of Johns-Manville Corporation and
UNR Corporation) and codifies a court's authority to issue a permanent
injunction to supplement the existing injunctive relief afforded by section 524
of the Bankruptcy Code in asbestos-related reorganizations under chapter 11. The
section provides that, if certain defined conditions are satisfied, a court may
issue a supplemental permanent injunction, such as the Permanent Channeling
Injunction, barring claims and demands against the reorganized company and
channeling those claims and demands to an independent trust. To qualify under
the statute, a trust must have certain characteristics, which are specified in
section 524(g).
To ensure that the Creditors' Trust meets the standards of section 524(g)
of the Bankruptcy Code, the Debtor has made compliance with these conditions a
condition precedent to confirmation of the Plan. See Section VII.B.3., entitled,
'Confirmation/Consummation Procedures--Confirmation--Conditions to
Confirmation.'
Pursuant to the Permanent Channeling Injunction, on and after the Effective
Date, any Entity who holds or may hold an Asbestos-Related Claim or Demand will
be forever stayed, restrained, and enjoined from taking certain actions for the
purpose of, directly or indirectly, collecting, recovering, or receiving payment
of, on, or with respect to any Asbestos-Related Claims or Demands (other than
pursuant to the provisions of the Creditors' Trust Documents or to enforce the
provisions of the Plan) against any of the Protected Parties or their respective
property.
<PAGE>
A 'Protected Party' means any of the following:
(a) the Debtor;
(b) New Keene;
(c) any Entity that, pursuant to the Plan or after the Effective Date,
becomes a direct or indirect transferee of, or successor to, any
assets of the Debtor, New Keene, or the Creditors' Trust (but only
to the extent that liability is asserted to exist by reason of it
becoming such a transferee or successor);
(d) any Entity that, pursuant to the Plan or after the Effective Date,
makes a loan to New Keene or the Creditors' Trust or to a
successor to, or transferee of, any assets of the Debtor, New
Keene or the Creditors' Trust (but only to the extent that
liability is asserted to exist by reason of such Entity becoming
such a lender or to the extent any pledge of assets made in
connection with such a loan is sought to be upset or impaired);
(e) any Entity to the extent he, she, or it is alleged to be directly
or indirectly liable for the conduct of, Claims against, or
Demands on, the Debtor, New Keene or the Creditors' Trust on
account of Asbestos-Related Claims or Demands including, without
limitation, the Transactions Lawsuit Defendants, the Subscribing
Individuals and the insurance carriers and sureties of the
Corporate Transactions Defendants in the insurance carriers' and
sureties' capacities as such; or
(f) any of the Debtor's present subsidiaries and each of the present
and former officers, directors, agents, employees,
representatives, advisors, financial advisors, accountants and
attorneys.
provided, however, that notwithstanding this or any other provision of the Plan
to the contrary, an Entity's 'Protected Party' status shall not preclude the
Creditors' Trust from pursuing claims against (i) the Transactions Lawsuit
Defendants in the Transactions Lawsuit; (ii) Bairnco in the Bairnco NOL Action;
(iii) Glenn W. Bailey in the Bailey Lawsuit (as to those claims in the complaint
not released under the Plan); and (iv) any insurance carrier or surety that
issued a policy or policies of insurance to, or on behalf of, Keene or any of
the above-referenced defendants.
The following actions are enjoined pursuant to the Permanent Channeling
Injunction:
o commencing, conducting, or continuing in any manner, directly or
indirectly, any action against or affecting any Protected Party, or
any property or interests in property of any Protected Party;
o enforcing or in any way seeking to recover any judgment, award,
decree, or other order against any Protected Party or any property
or interests in property of any Protected Party;
o creating, perfecting, or in any way enforcing any encumbrance
against any Protected Party or any property or interests in
property of any Protected Party;
o in any way seeking to offset, recoup, or recover any amount against
any liability owed to any Protected Party; and
o proceeding in any manner in any place with regard to any matter
that is subject to resolution pursuant to the Creditors' Trust,
except in conformity and compliance therewith.
Nothing contained in the Permanent Channeling Injunction shall be deemed a
waiver of any claim, right, or cause of action that the Debtor, New Keene, or
the Creditors' Trust may have against any Person in connection with or arising
out of an Asbestos-Related Claim or Demand.
19. Dismissal of the Keene 27 Action and Related Injunction. On and after
the Effective Date, the Debtor, New Keene and their respective directors,
officers, agents, and attorneys shall be the beneficiaries of the Keene 27
Injunction, which injunction shall permanently and forever stay, restrain and
enjoin any defendant in the Keene 27 Action from commencing or continuing any
action or other proceeding of any kind with respect to any claim, counter-claim
or cause of action which was or could have been asserted in, or related directly
or indirectly to, the preparation, dissemination, discussion, filing and/or
prosecution of the Keene 27 Action. Section 17.3(b) of the Plan provides that,
on the Effective Date, the Debtor will dismiss the Keene 27 Action with
prejudice and such dismissal shall be deemed to be in complete satisfaction and
release of all claims and causes of action that the Debtor may have against any
of the defendants in the Keene 27 Action. In consideration for such dismissal
and release, the Debtor, its officers, directors, agents and attorneys at the
time the action was commenced, shall be deemed released from any claim or cause
of action that the estate or any defendant in the Keene 27 Action has or may
have arising from or in any way, directly or indirectly relating to the
preparation, dissemination, discussion, filing and/or prosecution of the Keene
27 Action and the Keene 27 Injunction shall be entered to effectuate such
release. The Committee and the Legal Representative fully intend the Plan to
become effective subject to the benefits bargained for with respect to the
dismissal of the Keene 27 Action.
<PAGE>
20. The Conversion of the Coleman Injunction into a Permanent Injunction.
On and after the Effective Date, the Coleman Injunction shall be converted to a
permanent injunction for the benefit of New Keene and the Creditors' Trust,
consistent with the terms and conditions of the Transactions Stipulation, and
shall prohibit any action or suit, with the exception of the Transactions
Lawsuit, against the Transactions Lawsuit Defendants.
21. Term of Existing Injunctions or Stays. Unless otherwise provided in the
Plan, all injunctions or stays in effect on the Confirmation Date pursuant to
sections 105(a) or 362(a) of the Bankruptcy Code or otherwise shall remain in
full force and effect until the Effective Date.
22. Dissolution and Termination of Authority. On the Effective Date, the
Committee shall be dissolved and the members of the Committee and their
representatives, the Legal Representative, the Transactions Claims Examiner, the
Plan Examiner and the Consultants and their respective professionals, and the
Debtor's legal and financial advisors, shall thereupon be released and
discharged of and from all further duties, responsibilities and obligations, if
any, related to, arising from and in connection with services rendered in their
respective capacities in the Chapter 11 Case.
23. Modification of the Plan. Prior to the entry of the Confirmation Order,
the Debtor, upon the written consent of the Committee and the Legal
Representative, may alter, amend, or modify the Plan in accordance with section
1127(a) of the Bankruptcy Code, which requires that the Plan, as modified,
comply with sections 1122 and 1123 of the Bankruptcy Code (governing
classification of claims and interests and the contents of a plan,
respectively). After the entry of the Confirmation Order and prior to the
Effective Date, the Debtor may, upon the written consent of the Committee and
the Legal Representative, modify the Plan pursuant to section 1127(b) of the
Bankruptcy Code so long as (i) the Plan, as modified, complies with sections
1122 and 1123 of the Bankruptcy Code, (ii) circumstances warrant such
modification, and (iii) the Court, after notice and a hearing, confirms the
modified Plan under section 1129 of the Bankruptcy Code. For all modifications,
the Debtor must comply with the disclosure and solicitation requirements of
section 1125 of the Bankruptcy Code.
Should Class 6 vote to reject the Plan, the Debtor reserves the right to
seek to amend the Plan and, as so amended, to seek confirmation under the
so-called 'cramdown' provisions of the Bankruptcy Code.
The Debtor, subject to the consent of the Committee and the Legal
Representative, will seek agreement to the following modifications to the Plan
should Class 6 vote to reject the Plan:
(i) No class junior to Class 6 would receive or retain any property
under the Amended Plan;
(ii) The distribution that would have gone to Class 7 will, instead,
be distributed to the Creditors' Trust; and
(iii) The Creditors' Trust Documents will be modified so as to require
the Trustees thereof to distribute 49% of the equity in New Keene, in the
form of Class A Common Stock, to the holders of record of Keene's Common
Stock as of the Effective Date.
Holders of Class 4 Claims, in particular, should be aware of this potential
modification to the Plan and take its implications into consideration when
voting thereon.
24. Withdrawal of the Plan. The Debtor, upon the written consent of the
Committee and the Legal Representative, may revoke and withdraw the Plan at any
time prior to the entry of the Confirmation Order or if the conditions to
effectiveness cannot be satisfied for any reason after the Confirmation Date, at
any time up to the Effective Date. If the Debtor revokes or withdraws the Plan
or if the Confirmation Date does not occur, the Plan shall be deemed null and
void.
25. Vesting. In accordance with sections 1123(a)(5) and 1141 of the
Bankruptcy Code, except as otherwise provided in the Plan, on the Effective
Date, title to property of the Debtor shall pass to New Keene free and clear of
all Claims, Demands, Interests, liens and encumbrances, including, without
limitation, all Asbestos-Related Claims, Demands and Transactions Stipulation
Claims. Also, on the Effective Date, title to all of the Creditors' Trust
Distribution shall pass to the Creditors' Trust free and clear of all Claims,
Interests, liens and encumbrances, except liabilities relating to
Asbestos-Related Claims, Demands and Transactions Stipulation Claims.
26. Transfer of Documents. On the Effective Date, or as soon thereafter as
reasonably practicable, the Debtor or New Keene, as the case may be, shall
transfer or make available to the Creditors' Trust any and all records of Keene.
27. Cooperation. The Debtor, New Keene and the Creditors' Trust shall
cooperate with each other and provide each other with reasonable assistance in
connection with the performance of this Plan and the Creditors' Trust Documents.
<PAGE>
28. Transfer of all Privileges. All privileges which the Debtor is
entitled to assert, including but not limited to attorney/client and work
product privileges, shall be transferred on the Effective Date to the Creditors'
Trust. The Creditors' Trust, in its sole and absolute discretion, may assert any
applicable privileges or use, disclose or waive any applicable privileges of the
Debtor with respect to any information or documents received or obtained
pursuant to the Plan. In addition, New Keene shall make available to the
Creditors' Trust any persons then employed by New Keene as a director, officer,
employee, professional, agent or representative, at reasonable times and on a
reasonable basis, at the cost and expense of the Creditors' Trust, to assist the
Creditors' Trust in the performance of its duties, including the prosecution of
the Causes of Action. The Debtor shall be deemed to have authorized the
Creditors' Trust, at the Creditors' Trust's cost and expense, for itself and in
the name of the Debtor, to the extent permitted by law (or with the consent of
the person(s) in question), to obtain from any of the Debtor's current and
former attorneys, special counsel, ordinary course professionals, accountants,
advisors, professionals, officers, directors, employees, representatives or
agents any and all information and documents which the Debtor would be entitled
or permitted to obtain; provided, however, that in the event legal action is
required to obtain such information or documents, or any cost or expense shall
be incurred in connection therewith, the Creditors' Trust shall take such
action, either in its name, or, if required, in the name of the Debtor, and the
Creditors' Trust shall bear all legal fees, costs and expenses related thereto.
29. Confidentiality. The Creditors' Trust shall not be obligated or
required to disclose to New Keene any information, documents or professional
advice it receives or obtains relating or referring to the Causes of Action.
30. Tax Provision. The issuance, transfer or exchange of a security, or the
making, delivery or recording of a deed or other instrument of transfer under
the Plan shall constitute the issuance, transfer or exchange of a security or
the making or delivery of an instrument of transfer within the meaning of
section 1146(c) of the Bankruptcy Code, and shall not be taxed either to the
Debtor's estate, as seller, or to the transferee or recipient thereof under any
law imposing a stamp tax or similar tax.
31. Surrender and Cancellation of Securities, Notes or Other Instruments.
As of the Effective Date, all Interests, notes or other instruments evidencing a
Claim, Demand or Interest under the Plan shall be cancelled and shall become
null and void (a 'Cancelled Security') and each of the transfer books maintained
for any such Interests, notes or other instruments shall be closed. Except for
the right to receive the distributions, if any, provided by the Plan, the holder
of a Cancelled Security shall have no rights arising from or relating to such
Cancelled Security on and after the Effective Date.
32. Authorization of Corporate Action. The entry of the Confirmation Order
shall constitute a direction to and authorization of the Debtor, New Keene and
the Creditors' Trust to take or cause to be taken any corporate action necessary
or appropriate to effectively implement the provisions of the Plan (including,
without limitation, the filing of the Amended and Restated Certificate of
Incorporation and the Amended and Restated By-laws or similar constituent
documents of New Keene), and all such actions taken or caused to be taken shall
be deemed to have been authorized and approved in all respects without any
further action by the stockholders or directors of the Debtor or New Keene.
33. Indemnification. The Plan provides that the obligations of the Debtor
to indemnify, reimburse, or limit the liability of certain officers and
directors of the Debtor for prepetition conduct will be terminated by the Plan
and will be discharged. The Amended and Restated Certificate of Incorporation
and Amended and Restated By-laws, however, provide for the indemnification of
the officers and directors of New Keene to the fullest extent permitted by
Delaware law now or hereafter in effect.
Given actual and threatened litigation against its respective members,
officers, directors and professionals by Mr. Bailey and/or other parties in
interest, the Debtor, the Committee and the Legal Representative currently
contemplate the establishment of a post-Effective Date reserve or escrow account
to fund future defense costs. To that end, monies that would otherwise be
distributed to the Creditors' Trust may be decreased, at least initially, by the
amount deposited in such account. The reserve or escrow account, if established,
would last a specified term, after which time any remaining funds would revert
to the Creditors' Trust. Notwithstanding the foregoing, the Debtor, the
Committee and the Legal Representative may develop an alternative mechanism to
the one described above to assure payment of defense costs. Such alternative
method may require, among other things, the continuation of the Debtor and/or
the Committee after the Effective Date for such limited purposes.
34. Retention of Jurisdiction. The Plan provides that the business and
assets of the Debtor shall remain subject to the jurisdiction of the Court until
the Effective Date. From and after the Effective Date, except as otherwise
provided by law, the Court will retain and have exclusive jurisdiction over New
Keene and the Chapter 11 Case for the purpose of determining all disputes and
other issues presented by or arising under the Plan including, without
limitation, the following matters:
(a) to allow, disallow, estimate, liquidate or determine any Claim
against or Interest in the Debtor and to enter or enforce any order
requiring the filing of any such Claim or Interest before a particular
date, and to resolve any and all disputes relating to any Claim or
Interest, except in each case an Asbestos-Related Personal Injury Claim, an
Asbestos In Buildings Claim, a Bonded Judgment Claim or a Transactions
Stipulation Claim;
<PAGE>
(b) to determine requests for payment of Claims entitled to priority
under section 507(a)(1) of the Bankruptcy Code, including any and all
interim and final applications for compensation for professional services
rendered and disbursements incurred in connection therewith;
(c) to resolve any and all controversies and disputes regarding the
interpretation and enforcement as may be necessary to effectuate the
consummation and full and complete implementation of the Plan;
(d) to resolve any and all controversies and disputes regarding the
implementation or interpretation of the Creditors' Trust and related
matters, including, without limitation, the settlement of accounts, the
resolution of disputes between the TAC and the Trustees, and the
termination of the Creditors' Trust, as those matters are provided for in
paragraphs 2.2(f), 5.1(c) and 6.2(a)(iii), respectively, of the Creditors'
Trust Agreement, but excluding all matters related to the Permanent
Channeling Injunction, as set forth in Section 18.2 of the Plan;
(e) to enter orders in aid of the execution of this Plan, and releases
provided for in this Plan, including, without limitation, appropriate
orders (which may include contempt or other sanctions) to protect the
Debtor, its affiliates and other Entities from actions prohibited under
Article XVI of the Plan;
(f) to remedy any defect or omission or reconcile any inconsistency in
the Confirmation Order;
(g) to determine any and all applications, motions, adversary
proceedings and contested matters pending on the Effective Date and arising
under, arising in or related to the Chapter 11 Case or the Plan, including
any remands of appeals that may be pending on the Effective Date;
(h) to enforce the provisions of the Plan relating to the
distributions to be made thereunder;
(i) to resolve any action brought to avoid or otherwise determine the
validity, extent, enforceability, priority and perfection of any lien or
other encumbrance on any property of the Debtor;
(j) to determine any and all pending applications for the rejection or
disaffirmance of executory contracts or leases, and to hear and determine,
and if need be to liquidate, any and all Claims arising therefrom;
(k) to resolve any disputes concerning any reserve established for
Disputed Claims or Disputed Interests or the administration thereof;
(l) to resolve any disputes concerning any release of a nondebtor
hereunder or the injunction against acts, employment of process or actions
against such nondebtor arising hereunder;
(m) to resolve any disputes concerning whether an Entity had
sufficient notice of the Chapter 11 Case, any applicable Claims bar date,
the hearing on the approval of the Disclosure Statement as containing
adequate information, the hearing on the confirmation of the Plan for the
purpose of determining whether a Claim, Demand or Interest is satisfied,
released or discharged hereunder or for any other purpose;
(n) to determine such other matters as may be set forth in the
Confirmation Order or that may arise in connection with the implementation
of the Plan;
(o) to resolve any disputes regarding any invoice submitted to the
Creditors' Trust by a professional for fees and/or expenses associated with
the prosecution or settlement of objections to Claims or Interests; and
(p) to enter a final decree closing the Chapter 11 Case.
35. Jurisdiction as to the Permanent Channeling Injunction. The United
States District Court for the Southern District of New York shall retain
jurisdiction over any proceeding that involves the validity, application,
construction, or modification of the Permanent Channeling Injunction.
<PAGE>
36. Notices. All notices or requests to the Debtor in connection with the
Plan shall be in writing and will be deemed to have been given when received by
first class mail, postage prepaid or by overnight courier addressed to:
(i) Keene Corporation
757 Third Avenue
New York, New York 10017
Attention: Mr. Timothy E. Coyne
with a copy to:
Berlack, Israels & Liberman LLP
Attorneys to the Debtor and Debtor
in Possession
120 West 45th Street
New York, New York 10036
Attention: Edward S. Weisfelner, Esq.;
(ii) Marcus Montgomery P.C.
Attorneys to Official Committee
of Unsecured Creditors
53 Wall Street
New York, NY 10005-2899
Attention: John J. Preefer, Esq.; and
(iii) Matthew Gluck, Esq.
Legal Representative for Future Claimants
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, NY 10004.
All notices and requests to Entities 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 who has filed a notice of appearance in the
Chapter 11 Case. The parties listed above, or any successors thereto, and any
such holder of a Claim or Interest may designate in writing any other address to
receive notices pursuant to the Plan, which designation will be effective upon
receipt.
37. Entire Agreement. The Plan and the exhibits thereto constitute and
contain the entire agreement of the parties with respect to the subject matter
hereof and, upon the Effective Date, collectively supersede any and all prior
negotiations, correspondence, understandings and agreements regarding the
subject matter hereof, including but not limited to, the Plan Stipulation.
<PAGE>
Item 7. Financial statements, pro forma financial statements and exhibits
(c) Exhibits
99(a) Debtor's Fourth Amended Plan of Reorganization
99(b) Modifications to Debtor's Fourth Amended Plan of Reorganization
99(c) Findings of Fact, Conclusions of Law and Order Confirming the
Debtor's Fourth Amended Plan of Reorganization Under Chapter 11
of the Bankruptcy Code, as modified, entered June 14, 1996
99(d) Operating Report dated June 17, 1996 for the period April 28,
1996 to May 25, 1996
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KEENE CORPORATION
(Registrant)
By: /s/ Timothy E. Coyne
Timothy E. Coyne
President
Date: June 28, 1996
<PAGE>
EXHIBIT 99 (a)
Debtor's Fourth Amended Plan of Reorganization
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
.............................. x
In re: :
Chapter 11
KEENE CORPORATION,
: Case No.: 93 B 46090 (SMB)
Debtor.
:
:
.............................. x
DEBTOR'S FOURTH AMENDED PLAN OF REORGANIZATION
BERLACK, ISRAELS & LIBERMAN LLP
120 West 45th Street
New York, New York 10036
(212) 704-0100
Counsel to Keene Corporation,
Debtor and Debtor in Possession
DATED: MARCH 11, 1996
NEW YORK, NEW YORK
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I..................................................................................................................... 1
DEFINITIONS................................................................................................................. 1
1.1 Defined Terms.................................................................................................... 1
1.2 Other Terms...................................................................................................... 8
ARTICLE II.................................................................................................................... 8
PROVISION FOR TREATMENT OF ADMINISTRATIVE EXPENSE CLAIMS.................................................................... 8
2.1 Administrative Expense Claims...
ARTICLE III................................................................................................................... 9
PROVISION FOR TREATMENT OF TAX CLAIMS....................................................................................... 9
3.1 Tax Claims....................................................................................................... 9
ARTICLE IV.................................................................................................................... 9
PROVISION FOR TREATMENT OF DEMANDS.......................................................................................... 9
4.1 Demands............................................................................................................ 9
ARTICLE V..................................................................................................................... 9
CLASSIFICATION OF CLAIMS AND INTERESTS...................................................................................... 9
5.1 Priority Claims.................................................................................................. 9
5.2 Secured Claims................................................................................................... 9
5.3 Unsecured Claims................................................................................................. 9
5.4 Interests........................................................................................................ 9
ARTICLE VI.................................................................................................................... 10
IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS NOT IMPAIRED AND IMPAIRED BY THIS PLAN.................................... 10
6.1 Classes of Claims and Interests Not Impaired by this Plan........................................................ 10
6.2 Classes of Claims and Interests Impaired by this Plan and Entitled to Vote....................................... 10
6.3 Deemed Rejection of Other Interests.............................................................................. 10
ARTICLE VII................................................................................................................... 10
PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS............................................................................ 10
7.1 Priority Claims (Class 1)........................................................................................ 10
7.2 Bonded Judgment Claims (Class 2A)................................................................................ 10
7.3 Secured Claims (Class 2B)........................................................................................ 10
7.4 Convenience Class Claims (Class 3)............................................................................... 10
7.5 Asbestos-Related Claims (Class 4)................................................................................ 10
7.6 Transactions Stipulation Claims (Class 5)........................................................................ 10
7.7 General Unsecured Claims (Class 6)............................................................................... 10
7.8 Common Stock Interests (Class 7)................................................................................. 11
7.9 Other Interests (Class 8)........................................................................................ 11
ARTICLE VIII.................................................................................................................. 11
PROVISIONS OF SECURITIES TO BE ISSUED PURSUANT TO THIS PLAN AND RELATED MATTERS............................................. 11
8.1 Reorganization Securities........................................................................................ 11
8.2 Provisions of New Common Stock................................................................................... 11
8.3 Description of Stock Incentive Plan.............................................................................. 12
8.4 Registration Rights.............................................................................................. 13
i
<PAGE>
ARTICLE IX................................................................................................................... 14
THE CREDITORS' TRUST........................................................................................................ 14
9.1 Creation of the Creditors' Trust................................................................................. 14
9.2 Transfer of Property to the Creditors' Trust..................................................................... 14
9.3 Assumption of Liabilities By the Creditors' Trust................................................................ 14
9.4 New Keene Line of Credit......................................................................................... 14
9.5 Appointment of Trustees.......................................................................................... 14
9.6 Purpose and Goals of the Creditors' Trust........................................................................ 14
9.7 Compensation to and Indemnification of the Trustees.............................................................. 14
9.8 Retention of Professionals and Employees......................................................................... 14
9.9 Payment of Certain Costs......................................................................................... 14
9.10 Trust Advisory Committee......................................................................................... 14
9.11 Certain Property to be Held in Trust by New Keene................................................................ 15
9.12 Preservation of Rights and Defenses.............................................................................. 15
9.13 Asbestos-Related Claims Resolution and Distribution Procedures................................................... 15
ARTICLE X..................................................................................................................... 15
DESCRIPTION OF THE OPERATION OF NEW KEENE................................................................................... 15
10.1 Creation of New Keene............................................................................................ 15
10.2 Management of New Keene.......................................................................................... 15
10.3 Indemnification.................................................................................................. 15
10.4 New Keene Credit Facility........................................................................................ 15
10.5 Permanent Channeling Injunction.................................................................................. 15
ARTICLE XI.................................................................................................................... 16
ACCEPTANCE OR REJECTION OF THIS PLAN........................................................................................ 16
11.1 Each Impaired Class Entitled to Vote Separately.................................................................. 16
11.2 Estimation of Class 4 Claims for Voting Purposes................................................................. 16
11.3 Acceptance by Impaired Classes of Claims......................................................................... 16
11.4 Acceptance by Impaired Class of Interests........................................................................ 16
11.5 Presumed Acceptance of Plan...................................................................................... 16
11.6 Cramdown......................................................................................................... 16
ARTICLE XII................................................................................................................... 16
CONDITIONS PRECEDENT........................................................................................................ 16
12.1 Conditions to Confirmation....................................................................................... 16
12.2 Conditions to Effectiveness of Plan.............................................................................. 17
12.3 Waiver of Conditions............................................................................................. 17
ARTICLE XIII.................................................................................................................. 18
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES....................................................................... 18
13.1 Assumption/Rejection............................................................................................. 18
13.2 Claims Based on Rejection of Executory Contracts or Unexpired Leases............................................. 18
ARTICLE XIV................................................................................................................... 18
IMPLEMENTATION OF THIS PLAN................................................................................................. 18
14.1 Vesting of Property.............................................................................................. 18
14.2 Cancellation of Securities, Notes or Other Instruments; Release of Liens......................................... 18
14.3 Certificate of Incorporation and By-laws......................................................................... 18
14.4 Corporate Authority.............................................................................................. 18
14.5 Retiree Benefits................................................................................................. 19
14.6 Term of Existing Injunctions or Stays............................................................................ 19
ii
<PAGE>
ARTICLE XV.................................................................................................................... 19
PROVISIONS GOVERNING DISTRIBUTIONS.......................................................................................... 19
15.1 Time of Distributions Under this Plan............................................................................ 19
15.2 Settlement Regarding Distributions............................................................................... 19
15.3 Distributions to Creditors' Trust................................................................................ 19
15.4 Record Date...................................................................................................... 19
15.5 Manner of Payments Under This Plan............................................................................... 19
15.6 Rounding......................................................................................................... 19
15.7 Undeliverable Distributions; Unclaimed Property.................................................................. 19
15.8 Transmittal of Distributed Property and Notices.................................................................. 19
15.9 Full and Final Satisfaction...................................................................................... 20
15.10 No Distribution in Excess of Allowed Amount of Claim............................................................. 20
15.11 Withholding Taxes................................................................................................ 20
15.12 Payment Dates.................................................................................................... 20
15.13 Setoffs.......................................................................................................... 20
ARTICLE XVI................................................................................................................... 20
PROCEDURE FOR RESOLVING DISPUTED CLAIMS AND DISPUTED INTERESTS.............................................................. 20
16.1 Applicability.................................................................................................... 20
16.2 Objections to and Estimation and Resolution of Claims and Interests.............................................. 20
16.3 Procedure........................................................................................................ 20
16.4 Payments and Distributions With Respect to Ultimately Allowed Claims or Ultimately Allowed Interests............. 20
16.5 Reserves for Disputed Claims and Interests....................................................................... 21
16.6 Funding of Objections Process.................................................................................... 20
ARTICLE XVII.................................................................................................................. 21
EFFECTS OF PLAN CONFIRMATION................................................................................................ 21
17.1 Discharge, Releases and Injunction............................................................................... 21
17.2 Permanent Channeling Injunction and Keene 27 Injunction.......................................................... 22
17.3 No Release of Causes of Action................................................................................... 22
17.4 Exculpation...................................................................................................... 22
ARTICLE XVIII................................................................................................................. 22
MISCELLANEOUS PROVISIONS.................................................................................................... 22
18.1 Retention of Jurisdiction........................................................................................ 22
18.2 Jurisdiction as to the Permanent Channeling Injunction........................................................... 23
18.3 Binding Effect of Plan........................................................................................... 23
18.4 Withdrawal of this Plan.......................................................................................... 23
18.5 Modification of this Plan........................................................................................ 23
18.6 Transfer of Documents............................................................................................ 23
18.7 Cooperation...................................................................................................... 23
18.8 Transfer of all Privilege........................................................................................ 23
18.9 Confidentiality.................................................................................................. 24
18.10 Tax Provision.................................................................................................... 24
18.11 Notices.......................................................................................................... 24
18.12 Dissolution and Termination of Authority......................................................................... 24
18.13 Headings......................................................................................................... 24
18.14 Severability..................................................................................................... 25
18.15 Entire Agreement................................................................................................. 25
iii
<PAGE>
LIST OF EXHIBITS
Amended and Restated Certificate of Incorporation.............................................................................. A
Amended and Restated By-laws................................................................................................... B
Certificate of Merger.......................................................................................................... C
Creditors' Trust Agreement..................................................................................................... D
Asbestos-Related Claims Resolution and Distribution Procedures................................................................. E
New Keene Credit Facility...................................................................................................... F
Registration Rights Agreement.................................................................................................. G
Share Authorization Agreement.................................................................................................. H
Stock Incentive Plan........................................................................................................... I
</TABLE>
iv
<PAGE>
Keene Corporation, Debtor and Debtor in Possession in the above-captioned
Chapter 11 case, proposes the following Fourth Amended Plan of Reorganization
pursuant to section 1121(a) of title 11 of the United States Code.
ARTICLE I
DEFINITIONS
1.1 Defined Terms. As used herein, the following terms have the respective
meanings specified below, unless the context otherwise requires.
(1) 'Administrative Expense Claim' means: (i) any cost or expense of
administration of the Chapter 11 Case allowed under section 503(b) of the
Bankruptcy Code, including, without limitation, any actual and necessary expense
of preserving the Debtor's estate, Cure Claims, Fee Claims and payments due
under the Retention Program; and (ii) any fees or charges assessed against the
Debtor's estate under section 1930 of chapter 123 of title 28 of the United
States Code.
(2) 'Advisory Board' means, collectively, those individuals who previously
served on the advisory board of Peregrine.
(3) 'Allowed' means:
(i) with respect to any Claim, other than an Administrative Expense
Claim, an Asbestos-Related Claim or a Transactions Stipulation Claim, proof
of which was filed within the applicable period of limitation fixed in
accordance with Bankruptcy Rule 3003(c)(3) by the Bankruptcy Court, (a) as
to which no objection to the allowance thereof has been interposed within
the applicable period of limitation fixed by the Plan, the Bankruptcy Code,
the Bankruptcy Rules or a Final Order of the Bankruptcy Court, such Claim
to the extent asserted in the proof of such Claim, or (b) as to which an
objection has been interposed, such Claim to the extent that it has been
allowed in whole or in part by a Final Order of the Bankruptcy Court;
(ii) with respect to any Claim, other than an Administrative Expense
Claim, an Asbestos-Related Claim or a Transactions Stipulation Claim, as to
which no proof of claim was filed within the applicable period of
limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or
a Final Order of the Bankruptcy Court, such Claim to the extent that it has
been listed by the Debtor in its Schedules as liquidated in amount and not
disputed or contingent;
(iii) with respect to any Claim that is asserted to constitute an
Administrative Expense Claim (a) that represents an actual or necessary
expense of preserving the estate or operating the business of the Debtor,
any such Claim to the extent that the Debtor, with the consent of the
Committee and the Legal Representative and, after the Effective Date, New
Keene, with the consent of the Creditors' Trust, determines it to
constitute an Administrative Expense Claim, (b) other than with respect to
a Claim of a professional person employed under section 327 or 1103 of the
Bankruptcy Code that is required to apply to the Bankruptcy Court for the
allowance of compensation and reimbursement of expenses pursuant to section
330 of the Bankruptcy Code, that the Debtor, the Committee or the Legal
Representative or, after the Effective Date, New Keene and the Creditors'
Trust, do not believe constitutes an Administrative Expense Claim, any such
Claim to the extent it is allowed in whole or in part by a Final Order of
the Bankruptcy Court and only to the extent that such allowed portion is
deemed, pursuant to a Final Order of the Bankruptcy Court, to constitute a
cost or expense of administration under sections 503(b) and 507(a)(1) of
the Bankruptcy Code, or (c) that represents a Claim of a professional
person employed under section 327 or 1103 of the Bankruptcy Code that is
required to apply to the Bankruptcy Court for the allowance of compensation
and reimbursement of expenses pursuant to section 330 of the Bankruptcy
Code, such Claim to the extent it is allowed by a Final Order of the
Bankruptcy Court under section 330 of the Bankruptcy Code;
(iv) with respect to any Asbestos-Related Claim, such Claim to the
extent that it is allowed in accordance with the procedures established
pursuant to the Creditors' Trust Documents, including the Asbestos-Related
Claims Resolution and Distribution Procedures implemented in accordance
therewith;
(v) with respect to any Transactions Stipulation Claim, such Claim to
the extent that it is allowed in accordance with the procedures
contemplated by the Transactions Stipulation; and
(vi) with respect to any Common Stock Interest or Other Interest, such
Interest to the extent that it is listed on (A) the list of equity security
holders filed pursuant to Bankruptcy Rule 1007(a)(3) or (B) to the extent
such holder shall be identified on the transfer records of the Debtor as of
the Record Date.
(4) 'Allowed Amount' means the lesser of (a) the dollar amount of an
Allowed Claim or (b) the Estimated Amount of such Claim. Unless otherwise
specified herein or by Final Order of the Bankruptcy Court, the Allowed Amount
of an Allowed Claim shall not include interest accruing on such Allowed Claim
from and after the Petition Date.
(5) 'Amended and Restated By-laws' means the amended and restated by-laws
of New Keene, substantially in the form attached hereto as Exhibit B and as may
be amended from time to time according to its terms.
(6) 'Amended and Restated Certificate of Incorporation' means the amended
and restated certificate of incorporation of New Keene, substantially in the
form attached hereto as Exhibit A and as may be amended from time to time
according to its terms.
<PAGE>
(7) 'Appeal Rights' means, with respect to the Bonded Judgment Claims, the
right to appeal or otherwise challenge the finality of any judgment rendered
prior to the Petition Date and any refund, revestiture or other payment rights
which may accrue upon such successful appeal or other challenge.
(8) 'Asbestos Claimant' means any Entity holding an Asbestos-Related Claim.
(9) 'Asbestos In Buildings Claims' means those Claims against the Debtor,
whether in the nature of or sounding in tort, contract, warranty or any other
theory of law, equity or admiralty for, relating to or arising by reason of,
directly or indirectly, damages arising from the presence in buildings or other
structures of asbestos or asbestos containing products manufactured, sold,
supplied, produced, distributed, or in any way marketed by Keene or any of its
current or former subsidiaries or affiliates (or another person, firm,
corporation or other Entity for which the Debtor is or may be liable), including
but not limited to abatement costs, diminution of value, environmental damage,
economic loss and all Claims, debts, obligations or liabilities for compensatory
damages (such as proximate, consequential, general or special) and punitive
damages.
(10) 'Asbestos-Related Building Contribution Claims' means those claims for
contribution, reimbursement, indemnity or subrogation (as those terms may be
defined pursuant to the law of the relevant jurisdiction) that are: (a) held by
Entities (i) who have been or may be defendants or respondents in an action or
proceeding seeking damages for Asbestos In Buildings Claims or (ii) seeking
reimbursement or payment of settlements paid by or on behalf of codefendants or
litigation or defense costs, including without limitation legal fees, incurred
in connection with litigation involving Asbestos In Buildings Claims; and (b)
asserted against the Debtor for (x) reimbursement of all or any portion of any
damages any such Entity has paid or may pay to the Entity asserting such
Asbestos In Buildings Claims or (y) reimbursement of related litigation or
defense costs.
(11) 'Asbestos-Related Claims' means Asbestos-Related Personal Injury
Claims, Asbestos In Buildings Claims, Asbestos-Related Personal Injury
Contribution Claims and Asbestos-Related Building Contribution Claims.
(12) 'Asbestos-Related Claims Resolution and Distribution Procedures' means
those dispute, claims resolution and distribution procedures to be implemented
by the Trustees pursuant to the terms and conditions of this Plan and the
Creditors' Trust Documents, to liquidate, determine and administer claims of and
distributions to Asbestos Claimants and Future Claimants, substantially in the
form attached hereto as Exhibit E and as may be amended from time to time
according to its terms.
(13) 'Asbestos-Related Personal Injury Claims' means those Claims against
the Debtor, whether in the nature of or sounding in tort, contract, warranty or
any other theory of law, equity or admiralty for, relating to or arising by
reason of, directly or indirectly, physical, emotional or other personal
injuries or other damages caused, or allegedly caused, directly or indirectly,
by the presence of, or exposure to, asbestos or asbestos-containing products
manufactured, sold, supplied, produced, distributed or in any way marketed and
arising or allegedly arising, directly or indirectly, from acts or omissions of
Keene or any of its current or former subsidiaries or affiliates (or another
person, firm, corporation or other Entity for or with which Keene is or may be
liable), including but not limited to all Claims, debts, obligations or
liabilities for compensatory damages (such as loss of consortium, wrongful
death, survivorship, proximate, consequential, general and special damages) and
punitive damages and any portion of a Bonded Judgment Claim that exceeds the
value of the supersedeas bond or funded escrow amount regarding such Claim.
(14) 'Asbestos-Related Personal Injury Contribution Claims' means those
Claims for contribution, reimbursement, indemnity or subrogation (as those terms
may be defined pursuant to the law of the relevant jurisdiction) that are: (a)
held by Entities (i) who have been or may be defendants or respondents in an
action or proceeding seeking damages for Asbestos-Related Personal Injury Claims
or (ii) seeking reimbursement or payment of settlements paid by or on behalf of
codefendants or litigation or defense costs, including without limitation legal
fees, incurred in connection with litigation involving Asbestos-Related Personal
Injury Claims; and (b) asserted against the Debtor for (x) reimbursement of all
or any portion of any damages any such Entity has paid or may pay to the
Entities asserting such Asbestos-Related Personal Injury Claims or (y)
reimbursement of related litigation or defense costs.
(15) 'Available Cash' means all Cash on hand and held in bank accounts of
the Debtor (except Cash held in escrow accounts or in trust pursuant to a
written agreement or order of a court or the Bankruptcy Court) as of the
Effective Date.
(16) 'Bailey Lawsuit' means that certain adversary proceeding, bearing Adv.
Proc. No. 95-1575A, pending in the Bankruptcy Court and commenced by the
Committee by complaint dated December 1, 1995 (as such complaint may be amended
from time to time).
(17) 'Bairnco NOL Action' means that certain adversary proceeding, bearing
Adv. Proc. No. 94-8843A, pending in the Bankruptcy Court and commenced by the
Debtor by complaint dated September 9, 1994 (as such complaint may be amended
from time to time).
(18) 'Bairnco NOL Stipulation' means that certain agreement executed
between Keene and Bairnco Corporation and approved by Order of the Bankruptcy
Court dated January 4, 1995 in the Bairnco NOL Action.
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(19) 'Ballot' means the form, distributed together with the Disclosure
Statement, to holders of Claims or Interests in classes that are impaired and
entitled to vote on this Plan, other than to holders of Class 4 Claims, for the
purpose of indicating acceptance or rejection of this Plan and, with respect to
the holders of Class 6 Claims, electing treatment as a holder of a Convenience
Claim in accordance with Section 7.7 hereof.
(20) 'Bankruptcy Code' means title 11 of the United States Code, as amended
from time to time.
(21) 'Bankruptcy Court' means the United States District Court for the
Southern District of New York, having jurisdiction over the Chapter 11 Case and,
to the extent of any reference made pursuant to section 157 of title 28 of the
United States Code, the unit of such District Court constituted pursuant to
section 151 of title 28 of the United States Code.
(22) 'Bankruptcy Rules' means the Federal Rules of Bankruptcy Procedure, as
amended from time to time, together with the local rules adopted by the
Bankruptcy Court, as amended from time to time.
(23) 'Bonded Judgment Claims' means those Claims against the Debtor arising
by virtue of a judgment rendered prior to the Petition Date in connection with
which the holder thereof became the beneficiary of a supersedeas bond or funded
escrow account; provided, however, that the amount of any such Bonded Judgment
Claim in excess of the amount of the related supersedeas bond or in the funded
escrow account shall be an Asbestos-Related Personal Injury Claim or an Asbestos
In Buildings Claim.
(24) 'Business Day' means any day other than a Saturday, Sunday or 'legal
holiday,'as such term is defined in Bankruptcy Rule 9006(a).
(25) 'Cash' means cash, cash equivalents and other readily marketable
securities or instruments, including, without limitation, readily marketable
direct obligations of the United States of America, certificates of deposit
issued by banks and commercial paper of any entity, including interest accrued
or earned thereon.
(26) 'Causes of Action' means any and all of the Debtor's actions, claims,
rights, suits and causes of action (and all rights relating thereto, including
any tolling agreements), whether known or unknown, in law, equity or otherwise,
including, without limitation: (i) the Debtor's claims arising pursuant to
sections 510, 542, 544, 545, 547, 548, 549, 550, 551, 552 and 553 of the
Bankruptcy Code or state, non-bankruptcy federal and other applicable law; (ii)
the Bairnco NOL Action; (iii) the Bairnco NOL Stipulation and the rights
thereunder; (iv) the Transactions Lawsuit (subject to the terms and conditions
of the Transactions Stipulation); (v) the Bailey Lawsuit; (vi) the Insurance
Actions; (vii) the Co-Defendant Actions; (viii) the Appeal Rights; (ix) the
Rights to Payment and (x) the benefits of the continuation of the Coleman
Injunction consistent with the Transactions Stipulation.
(27) 'Certificate of Merger' means the Certificate of Merger referred to in
Section 10.1 hereof, substantially in the form attached hereto as Exhibit C.
(28) 'Chapter 11 Case' means Case Number 93 B 46090(SMB), concerning the
Debtor.
(29) 'Claim' means a claim, as that term is defined in section 101(5) of
the Bankruptcy Code, against the Debtor.
(30) 'Class A New Common Stock' means the 1,480,000 shares of Class A New
Common Stock, par value $.01 per share.
(31) 'Class B New Common Stock' means the 1,020,000 shares of Class B New
Common Stock, par value $.01 per share.
(32) 'Class 4 Special Ballot' means the form, distributed together with the
Disclosure Statement, to holders of Class 4A and 4B Claims, for the purpose of
indicating acceptance or rejection of this Plan.
(33) 'Class 7 Equity Distribution' means 980,000 shares of Class A New
Common Stock.
(34) 'Co-Defendant Actions' means any claims or causes of action that the
Debtor has or may have against actual or potential co-defendants arising from or
relating to any prior, pending or threatened asbestos-related litigation or
settlement, including, without limitation, the Manville Trust Claim.
(35) 'Coleman Injunction' means the preliminary injunction issued by the
Bankruptcy Court by Memorandum Decision dated March 3, 1994 and Amended Order
dated March 11, 1994, in Keene v. Coleman, Adv. Proc. No. 94-8015A.
(36) 'Committee' means the Official Committee of Unsecured Creditors
appointed in the Chapter 11 Case by the United States Trustee for the Southern
District of New York on January 12, 1994, as the membership of such committee
may be amended from time to time.
(37) 'Common Stock Interest' means any equity interest in the Debtor
represented by shares of Old Common Stock and any Claim against the Debtor
arising from rescission of a purchase or sale of a security of the Debtor or of
an affiliate of the Debtor, for damages arising from the purchase or sale of
such a security, or for reimbursement or contribution allowed under section 502
of the Bankruptcy Code on account of such a Claim.
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(38) 'Compensation Estimate' means a written good faith estimate, to be
filed on or before three (3) calendar days before the first date set for the
hearing on the confirmation of the Plan, of the maximum amount of compensation
and reimbursement of expenses to be requested for any period prior to the
Effective Date, including, without limitation, any compensation for substantial
contribution in the Chapter 11 Case and for any fees or premiums in addition to
normal hourly charges or quoted fees.
(39) 'Confirmation Date' means the date upon which the Confirmation Order
shall be entered on the docket maintained by the Clerk of the Bankruptcy Court.
(40) 'Confirmation Order' means the order of the Bankruptcy Court
confirming this Plan.
(41) 'Consultants' means, collectively, Richard A. Lippe, Archie R. Dykes
and John J. Robbins, and any successors thereto.
(42) 'Convenience Claim' means any one General Unsecured Claim, or the
aggregate of the General Unsecured Claims held by any one Entity, in an amount
of $1,000 or less or which is voluntarily reduced to $1,000 by election of the
holder thereof pursuant to such holder's Ballot.
(43) 'Corporate Transactions Defendants' means Transactions Lawsuit
Defendants Bairnco Corporation and its wholly-owned subsidiaries, Kasco
Corporation, Shielding Systems Corporation and Arlon, Inc. and Transactions
Lawsuit Defendants Kaydon Corporation and The Genlyte Group Incorporated.
(44) 'Creditors' Trust' means the trust established pursuant to the
Creditors' Trust Agreement in accordance with the terms of Section 9.1 hereof.
(45) 'Creditors' Trust Agreement' means the agreement between the Debtor,
as Trustor, and the Trustees establishing the Creditors' Trust and all exhibits
thereto, substantially in the form attached hereto as Exhibit D and as may be
amended from time to time according to its terms.
(46) 'Creditors' Trust Cash Distribution' means all Available Cash and any
amounts payable to the Creditors' Trust pursuant to Sections 15.7(b), 16.4 and
16.5(b) hereof, less (i) the aggregate amount of all Plan Payments, (ii) the
aggregate amount of all Plan Estimates and (iii) the reasonable costs and
expenses associated with the making of the Plan Payments and the prosecution of
objections to Claims and Interests.
(47) 'Creditors' Trust Distribution' means all of the property of the
estate remaining after (i) payment of the Plan Payments, and (ii) reservations
for the Plan Estimates, including, without limitation, the Creditors' Trust Cash
Distribution, the Creditors' Trust Equity Distribution, the Causes of Action,
and the rights under the Registration Rights Agreement and the Share
Authorization Agreement; provided, however, that the Creditors' Trust
Distribution specifically excludes the distribution to holders of Class 7 Common
Stock Interests, the Plan Payments and the Plan Estimates and the reasonable
costs and expenses associated with the making of the Plan Payments and the
prosecution of objections to Claims and Interests; provided, further, however,
that the Creditors' Trust Distribution shall include any amounts subsequently
payable to the Creditors' Trust pursuant to Sections 15.7(b), 16.4 and 16.5(b)
hereof.
(48) 'Creditors' Trust Documents' means the documents establishing and
governing the terms and conditions for the operation and administration of the
Creditors' Trust including, but not limited to, the Creditors' Trust Agreement,
the Asbestos-Related Claims Resolution and Distribution Procedures and all
exhibits to each such document, substantially in the forms attached hereto as
Exhibits D and E and as such documents may be amended from time to time
according to their terms.
(49) 'Creditors' Trust Equity Distribution' means 1,020,000 shares of Class
B New Common Stock.
(50) 'Cure Claim' means a Claim by a party to an executory contract or
unexpired lease of the Debtor for the costs of curing any defaults under any
such contract or lease that is to be assumed and assigned by the Debtor,
pursuant to section 365(b) of the Bankruptcy Code.
(51) 'Debtor' means Keene Corporation, a Delaware corporation.
(52) 'Demand' means a demand for payment, present or future, that was not a
Claim during the Chapter 11 Case, arises out of the same or similar conduct or
events that gave rise to the Asbestos-Related Claims and is to be paid by the
Creditors' Trust.
(53) 'Disclosure Statement' means the Second Amended Disclosure Statement
describing this Plan and consistent with the Transactions Stipulation, prepared
in accordance with section 1125 of the Bankruptcy Code and approved by order of
the Bankruptcy Court, as the same may be amended or modified from time to time.
(54) 'Disputed' means, with respect to any Claim or Interest other than a
Bonded Judgment Claim, an Asbestos In Buildings Claim, an Asbestos-Related
Personal Injury Claim or a Transactions Stipulation Claim, any Claim or Interest
that is not an Allowed Claim or Allowed Interest.
(55) 'Disputed Claims Reserve' has the meaning set forth in Section 16.5(a)
hereof.
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(56) 'Effective Date' means the date which is the first Business Day on
which all conditions to the effectiveness of this Plan shall have been satisfied
or waived.
(57) 'Entity' means any individual, corporation, partnership, joint
venture, association, joint stock company, limited liability company, estate,
entity, trust, trustee, unincorporated organization, government, governmental
unit (as defined in section 101(27) of the Bankruptcy Code), agency or political
subdivision thereof, the United States Trustee or any other entity.
(58) 'ERISA' means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
(59) 'Estimated Amount' means the estimated dollar amount of an
unliquidated Claim, Disputed Claim or contingent Claim pursuant to section
502(c) of the Bankruptcy Code.
(60) 'Fee Claim' means any Administrative Claim resulting from the
rendering of professional services and related disbursements under section
503(b)(2)-(4) of the Bankruptcy Code.
(61) 'Final Order' means an order, ruling or judgment that is no longer
subject to review, reversal, modification or amendment by appeal or writ of
certiorari.
(62) 'Future Claimant' means any Entity who is or becomes the holder of a
Demand.
(63) 'General Unsecured Claim' means any Claim that is not an
Administrative Expense Claim, a Tax Claim, a Priority Claim, a Bonded Judgment
Claim, a Secured Claim, a Convenience Claim, an Asbestos-Related Claim, or a
Transactions Stipulation Claim, but includes any portion of a Secured Claim
(other than a Bonded Judgment Claim) that exceeds the value of the property
securing such Claim.
(64) 'Indemnity Payments' means those payments made by Keene on or about
December 2, 1993 to the law firms of Abowitz, Welch & Rhodes, P.C. and Peabody &
Arnold.
(65) 'Insurance Actions' means claims and causes of action of the Debtor
against various insurers or insurance guaranty funds, including, without
limitation, those claims asserted by Keene in the Keene IV Action and the PIGA
Action.
(66) 'Interest' means any Common Stock Interest or Other Interest.
(67) 'Keene' means the Debtor.
(68) 'Keene IV Action' means that certain action bearing Civil Action No.
04454-85, pending in the Superior Court for the District of Columbia.
(69) 'Keene 27 Action' means that certain adversary proceeding bearing Adv.
Proc. No. 94-8393A, pending in the Bankruptcy Court and commenced by the Debtor
by complaint dated June 3, 1994.
(70) 'Keene 27 Injunction' means an order of the Bankruptcy Court
permanently and forever staying, restraining and enjoining any defendant in the
Keene 27 Action from commencing or continuing any action or other proceeding of
any kind with respect to any claim, counter-claim or cause of action which was
or could have been asserted in or related directly or indirectly to the
preparation, dissemination, discussion of, filing and/or prosecution of the
Keene 27 Action.
(71) 'Legal Representative' means Matthew Gluck, Esq., appointed by Order
of the Bankruptcy Court dated June 21, 1994, and any successor thereto.
(73) 'Manville Trust Claim' means that claim, asserted by the Debtor on
behalf of the estate, against the co-defendant class settlement established in
the class action captioned Findley v. Falise (In re Joint Eastern and Southern
District Asbestos Litigation) C.A. 90-3973 (E.D.N.Y.), CA 90-7518 (S.D.N.Y.)
prosecuted against the Manville Personal Injury Settlement Trust.
(74) 'Merger' means the merger of Reinhold with and into the Debtor on the
Effective Date pursuant to the Certificate of Merger.
(75) 'MIC Program' means the Debtor's management incentive compensation
program and the payments made thereunder for the years 1993 and 1994.
(76) 'New Common Stock' means the 2,500,000 shares of common stock of New
Keene, of which 1,480,000 shares shall be designated as Class A and 1,020,000
shares shall be designated as Class B.
(77) 'New Keene' means the reorganized Debtor, which shall be known as
Reinhold Industries, Inc., as the renamed surviving entity of the Merger.
(78) 'New Keene Credit Facility' means that certain credit facility between
the Creditors' Trust and New Keene, substantially in the form attached hereto as
Exhibit F and as may be amended from time to time according to its terms.
(79) '1992 Employee Retention Program' means the employee retention program
established by Keene in October of 1992.
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(80) 'Old Common Stock' means the shares of common stock of the Debtor, par
value $0.0001 per share.
(81) 'Other Interest' means any equity interest in the Debtor, other than
as represented by Old Common Stock, including, without limitation, any rights
granted pursuant to the Rights Agreement dated as of June 1990 between Keene
Corporation and Continental Bank, N.A., as rights agent, or any other options,
warrants, calls, subscriptions or other similar rights or other agreements,
commitments or outstanding securities obligating the Debtor to issue, transfer
or sell any shares of capital stock of the Debtor.
(82) 'PBGC' means the Pension Benefit Guaranty Corporation.
(83) 'Pension Plan' means the retirement plan of Keene, dated January 1,
1991, which merged the five then existing Keene pension plans and, as such,
covers the employees of Reinhold.
(84) 'Peregrine' means Peregrine Solutions, a division of Keene.
(85) 'Permanent Channeling Injunction' means an order or orders of the
Bankruptcy Court or the District Court permanently and forever staying,
restraining, and enjoining an Entity from taking any action for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on, or
with respect to any Asbestos-Related Claim or Demand (other than actions brought
to enforce any right or obligation under the Plan, any Exhibits to the Plan, or
any other agreement or instrument between the Debtor or New Keene and the
Creditors' Trust, which actions shall be in conformity and compliance with the
provisions hereof), including:
(a) commencing, conducting, or continuing in any manner, directly or
indirectly, any suit, action, or other proceeding (including, without
express or implied limitation, any thereof in a judicial, arbitral,
administrative, or other forum) against or affecting any Protected Party or
any property or interests in property of any Protected Party;
(b) enforcing, levying, attaching (including, without express or
implied limitation, any prejudgment attachment), collecting, or otherwise
recovering by any means or in any manner, whether directly or indirectly,
any judgment, award, decree, or other order against any Protected Party or
any property or interests in property of any Protected Party;
(c) creating, perfecting, or otherwise enforcing in any manner,
directly or indirectly, any encumbrance against any Protected Party or any
property or interests in property of any Protected Party;
(d) setting off, seeking reimbursement of, contribution from, or
subrogation against, or otherwise recouping in any manner, directly or
indirectly, any amount against any liability owed to any Protected Party or
any property or interests in property of any Protected Party; and
(e) proceeding in any manner in any place with regard to any matter
that is subject to resolution pursuant to the Creditors' Trust, except in
conformity and compliance therewith.
(86) 'Petition Date' means December 3, 1993.
(87) 'PIGA Action' means that certain action bearing Civil Action No.
93-13525, pending in the Court of Common Pleas, Montgomery County, Pennsylvania.
(88) 'Plan' means this Fourth Amended Plan of Reorganization of the Debtor
consistent with the Transactions Stipulation, which supersedes any prior plan of
reorganization filed by the Debtor, as the same may be amended or modified from
time to time.
(89) 'Plan Estimates' means the aggregate amount of all payments to be set
aside (i) in the Disputed Claims Reserve and (ii) on account of all Compensation
Estimates.
(90) 'Plan Examiner' means the Honorable William H. Webster, appointed by
the United States Trustee, which appointment was approved by Order of the
Bankruptcy Court dated January 6, 1995, and any successor thereto.
(91) 'Plan Payments' means those payments to be made by the Debtor pursuant
to the terms of this Plan to holders of Allowed Administrative Expense Claims,
Allowed Tax Claims, Allowed Priority Claims, Allowed Secured Claims, Allowed
Convenience Claims and Allowed General Unsecured Claims.
(92) 'Priority Claim' means any Claim, other than any Administrative
Expense Claim or any Tax Claim, which is entitled to priority in right of
payment pursuant to section 507(a) of the Bankruptcy Code.
(93) 'Protected Party' means any of the following parties:
(a) the Debtor;
(b) New Keene;
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(c) any Entity that, pursuant to the Plan or after the Effective Date,
becomes a direct or indirect transferee of, or successor to, any assets of
the Debtor, New Keene, or the Creditors' Trust (but only to the extent that
liability is asserted to exist by reason of it becoming such a transferee
or successor);
(d) any Entity that, pursuant to the Plan or after the Effective Date,
makes a loan to New Keene or the Creditors' Trust or to a successor to, or
transferee of, any assets of the Debtor, New Keene or the Creditors' Trust
(but only to the extent that liability is asserted to exist by reason of
such Entity becoming such a lender or to the extent any pledge of assets
made in connection with such a loan is sought to be upset or impaired);
(e) any Entity to the extent he, she, or it is alleged to be directly
or indirectly liable for the conduct of, Claims against, or Demands on, the
Debtor, New Keene or the Creditors' Trust on account of Asbestos-Related
Claims or Demands, including, without limitation, the Transactions Lawsuit
Defendants, the Subscribing Individuals and the insurance carriers and
sureties of the Corporate Transactions Defendants in such insurance
carriers' and sureties' capacities as such; or
(f) any of the Debtor's present subsidiaries and each of the present
and former officers, directors, agents, employees, representatives,
advisors, financial advisors, accountants and attorneys;
provided, however, that notwithstanding this or any other provision of this Plan
to the contrary, an Entity's 'Protected Party' status shall not preclude the
Creditors' Trust from pursuing claims against (i) the Transactions Lawsuit
Defendants in the Transactions Lawsuit; (ii) Bairnco Corporation in the Bairnco
NOL Action; (iii) Glenn W. Bailey in the Bailey Lawsuit (as to those claims in
the complaint not released under the Plan) and (iv) any insurance carrier or
surety that issued a policy or policies of insurance to, or on behalf of, Keene
or any of the above-referenced defendants.
(94) 'Record Date' means 5:00 p.m. (New York time) on the day that the
Confirmation Order is entered, or such other date and time as may be designated
in the Confirmation Order.
(95) 'Registration Rights Agreement' means that agreement between New Keene
and the Creditors' Trust, substantially in the form attached hereto as Exhibit G
and as may be amended from time to time according to its terms.
(96) 'Reinhold' means Reinhold Industries, Inc.
(97) 'Released Party' means each of the Debtor, New Keene and the
Creditors' Trust or any of their respective successors or assigns, and each of
their present and former directors and officers, the Committee, its members and
representatives, the Legal Representative, the Transactions Claims Examiner, the
Plan Examiner, the Consultants, the Transactions Lawsuit Defendants in their
capacities as such, the Subscribing Individuals and the insurance carriers and
sureties of the Corporate Transactions Defendants in such insurance carriers'
and sureties' capacities as such, and each of the professionals retained by
Order of the Bankruptcy Court by each of the Debtor, New Keene, the Creditors'
Trust, the Committee, the Legal Representative, the Transactions Claims
Examiner, the Plan Examiner, and the Consultants (excluding those professionals
retained as special counsel to, or as an ordinary course professional of, the
Debtor and the Committee); provided, however, that notwithstanding this or any
provision of this Plan to the contrary, an Entity's 'Released Party' status
shall not preclude the Creditors' Trust from pursuing claims against (i) the
Transactions Lawsuit Defendants in the Transactions Lawsuit; (ii) Bairnco
Corporation in the Bairnco NOL Action; (iii) Glenn W. Bailey in the Bailey
Lawsuit (as to those claims in the complaint not released under the Plan); and
(iv) any insurance carrier or surety that issued a policy or policies of
insurance to, or on behalf of, Keene or any of the above-referenced defendants.
(98) 'Retention Program' means the supplemental severance and compensation
program approved by the Bankruptcy Court pursuant to an order dated June 7,
1995.
(99) 'Rights to Payment' means the Debtor's right to receive payments or
distributions on account of its claim to tax refunds for taxable years prior to
the Effective Date and its assertion of the Manville Trust Claim and claims
against Midland Insurance Company and the Integrity Insurance Company.
(100) 'Schedules' means the schedules of assets and liabilities and
statements of financial affairs filed by the Debtor in accordance with section
521 of the Bankruptcy Code and Bankruptcy Rule 1007, as such schedules and
statements may be amended or supplemented from time to time in accordance with
the Bankruptcy Code and the Bankruptcy Rules; provided, however, that the
Schedules shall not be amended after June 1, 1995 without the consent of the
Committee and the Legal Representative unless by motion on notice to the
Committee and the Legal Representative.
(101) 'Secured Claim' means any Claim, other than a Bonded Judgment Claim,
secured by a valid and unavoidable lien on or security interest in property of
the Debtor pursuant to section 506(a) of the Bankruptcy Code, but only to the
extent of the value as of the Confirmation Date of such lien or security
interest as determined by Final Order of the Bankruptcy Court or as agreed to by
the Debtor and the holder of such Claim.
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(102) 'Severance Policy' means Keene's pre-petition severance policy
entitling all employees that were terminated other than for cause to severance
pay equal to one week's pay for each year employed by Keene.
(103) 'Share Authorization Agreement' means that certain agreement between
New Keene and the Creditors' Trust, substantially in the form attached hereto as
Exhibit H and as may be amended from time to time according to its terms.
(104) 'Stock Dividends' means all Cash dividends Keene paid to holders of
Old Common Stock during the years 1991 and 1992.
(105) 'Stock Incentive Plan' or 'SIP' means the New Keene Stock Incentive
Plan, substantially in the form attached hereto as Exhibit I and as may be
amended from time to time according to its terms.
(106) 'Subscribing Individual' means any individual who is a signatory to
the Transactions Stipulation.
(107) 'Tax Claim' means a Claim of a governmental unit of the kind
specified in section 507(a)(8) of the Bankruptcy Code.
(108) 'Transactions Claims Examiner' means Thomas Moers Mayer, Jr., Esq.,
appointed by Orders of the Bankruptcy Court dated March 11, 1994 and April 15,
1994, and any successor thereto.
(109) 'Transactions Lawsuit' means that certain adversary proceeding
bearing Adv. Proc. No. 95-9393A, pending in the Bankruptcy Court and commenced
by the Committee by complaint dated June 8, 1995 (as such complaint may be
amended in accordance with the Transactions Stipulation).
(110) 'Transactions Lawsuit Defendants' means those Entities named as
defendants in the Transactions Lawsuit.
(111) 'Transactions Stipulation' means that certain agreement executed
between and among Keene, the Committee, the Legal Representative and the
Transactions Stipulation Claimants, approved by the Transactions Stipulation
Order and attached as Exhibit 5 to the Disclosure Statement.
(112) 'Transactions Stipulation Claimant' means any Entity holding a
Transactions Stipulation Claim.
(113) 'Transactions Stipulation Claims' means those Claims against the
Debtor asserted by the Corporate Transactions Defendants and the Subscribing
Individuals.
(114) 'Transactions Stipulation Order' means the Order of the Bankruptcy
Court dated March 11, 1996, approving the Transactions Stipulation and attached
as Exhibit 6 to the Disclosure Statement.
(115) 'Trust Advisory Committee' means the three advisors initially chosen
by the Committee and the Legal Representative whose duties, obligations and
compensation shall be as set forth in the Creditors' Trust Agreement, and any
successors thereto.
(116) 'Trustees' means the three individuals initially selected to act as
trustees pursuant to the terms of the Creditors' Trust Documents to administer
the Creditors' Trust, and any successors thereto.
(117) 'Ultimately Allowed Claim' or 'Ultimately Allowed Interest' means any
Disputed Claim or Disputed Interest to the extent that it becomes an Allowed
Claim or Allowed Interest in accordance with Article XVI of this Plan.
(118) 'Voting Procedures Order' means the order of the Bankruptcy Court
dated March 11, 1996, approving and authorizing the voting procedures to be
employed in this Chapter 11 Case, including the Class 4 Special Ballot, attached
as Exhibit 4 to the Disclosure Statement.
1.2 Other Terms. The words 'herein,' 'hereof,' 'hereto,' 'hereunder,' and
others of similar import refer to this Plan as a whole and not to any particular
section, subsection or clause contained in this Plan, unless the context
requires otherwise. Any term used in this Plan that is not defined herein but
that is defined in the Bankruptcy Code shall have the meaning assigned to that
term in the Bankruptcy Code. In addition, the rules of construction contained in
section 102 of the Bankruptcy Code apply to the construction of this Plan.
ARTICLE II
PROVISION FOR TREATMENT OF
ADMINISTRATIVE EXPENSE CLAIMS
2.1 Administrative Expense Claims. Each holder of an Administrative Expense
Claim that the Debtor, with the consent of the Committee and the Legal
Representative or, after the Effective Date, New Keene with the consent of the
Creditors' Trust, does not dispute or which has been allowed by the Bankruptcy
Court, shall be paid in full, in Cash, on or as soon as practicable after the
Effective Date; provided, however, that Allowed Administrative Expense Claims
representing obligations incurred by the Debtor in the ordinary course of
business during the Chapter 11 Case (other than Fee Claims) shall be paid in
full by the Debtor or performed by either New Keene or the Creditors' Trust, as
the case may be, when due in the ordinary course of business and in accordance
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with the terms and conditions of the particular agreements governing such
obligations, if any; provided, further, however, that Administrative Expense
Claims representing compensation or reimbursement of expenses awarded by the
Bankruptcy Court pursuant to sections 503(b)(2), 503(b)(3) or 503(b)(4) of the
Bankruptcy Code shall be reserved for by Keene in full, in Cash, in such amounts
equal to the Compensation Estimates and paid by New Keene on the date upon which
the Bankruptcy Court enters an order allowing such Administrative Expense Claim
and, to the extent that such reserve is insufficient to satisfy an Allowed Fee
Claim, the deficiency shall be paid by the Creditors' Trust; provided, however,
that the Debtor shall also reserve sufficient funds to satisfy any and all
Administrative Expense Claims that may become Ultimately Allowed Claims.
ARTICLE III
PROVISION FOR TREATMENT OF TAX CLAIMS
3.1 Tax Claims. Each holder of an Allowed Tax Claim shall be paid the full
amount of its Allowed Tax Claim, in Cash, on or as soon as practicable after the
Effective Date.
ARTICLE IV
PROVISION FOR TREATMENT OF DEMANDS
4.1 Demands. On the Effective Date, Demands shall be fully satisfied as
against the Debtor by virtue of the distribution of the Creditors' Trust
Distribution to the Creditors' Trust for the benefit of all holders of
Asbestos-Related Claims and Demands pursuant to the terms and conditions of the
Creditors' Trust Documents. Each holder of a Demand shall have its Demand
channeled to the Creditors' Trust and such Demand shall be assertable
exclusively against the Creditors' Trust in accordance with the provisions set
forth in the Creditors' Trust Documents.
ARTICLE V
CLASSIFICATION OF CLAIMS AND INTERESTS
Pursuant to section 1122 of the Bankruptcy Code, set forth below is a
designation of classes of Claims against and Interests in the Debtor. A Claim or
Interest is classified in a particular class only to the extent that the Claim
or Interest qualifies within the description of the class and is classified in a
different class to the extent the Claim or Interest qualifies within the
description of that different class. In accordance with sections 1123(a)(1) and
524(g)(5) of the Bankruptcy Code, Administrative Expense Claims, Tax Claims and
Demands are not classified.
5.1 Priority Claims.
Class 1. Class 1 consists of all Allowed Priority Claims.
5.2 Secured Claims.
Class 2. Class 2 consists of the following Claims:
Class 2A. Class 2A consists of all Allowed Bonded Judgment Claims.
Class 2B. Class 2B consists of all Allowed Secured Claims, each of
which will be within a separate subclass with each subclass to be deemed
a separate Class for all purposes.
5.3 Unsecured Claims.
Class 3. Class 3 consists of all Allowed Convenience Claims.
Class 4. Class 4 consists of the following Asbestos-Related Claims:
Class 4A--Asbestos-Related Personal Injury Claims and
Asbestos-Related Personal Injury Contribution Claims.
Class 4B--Asbestos In Buildings Claims and Asbestos-Related
Building Contribution Claims.
Class 5. Class 5 consists of all Allowed Transactions Stipulation
Claims.
Class 6. Class 6 consists of all Allowed General Unsecured Claims.
5.4 Interests.
Class 7. Class 7 consists of all Allowed Common Stock Interests in the
Debtor.
Class 8. Class 8 consists of all Other Interests.
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ARTICLE VI
IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS
NOT IMPAIRED AND IMPAIRED BY THIS PLAN
6.1 Classes of Claims and Interests Not Impaired by this Plan. Priority
Claims (Class 1), Bonded Judgment Claims (Class 2A), Secured Claims (Class 2B),
Convenience Claims (Class 3) and Transactions Stipulation Claims (Class 5) are
not impaired by this Plan. Pursuant to section 1126(f) of the Bankruptcy Code,
the holders of such Claims are conclusively presumed to have accepted this Plan,
and the votes of such holders shall not be solicited.
6.2 Classes of Claims and Interests Impaired by this Plan and Entitled to
Vote. Asbestos-Related Personal Injury Claims and Asbestos-Related Personal
Injury Contribution Claims (Class 4A), Asbestos In Buildings Claims and
Asbestos-Related Building Contribution Claims (Class 4B), General Unsecured
Claims (Class 6), and Common Stock Interests (Class 7) are impaired by this Plan
and the holders of such Claims and Interests are entitled to vote to accept or
reject this Plan.
6.3 Deemed Rejection of Other Interests. Other Interests (Class 8) are
impaired by this Plan. Pursuant to section 1126(g) of the Bankruptcy Code, the
holders of such Interests are deemed to have rejected this Plan, and the votes
of such holders shall not be solicited.
ARTICLE VII
PROVISIONS FOR TREATMENT OF CLAIMS AND INTERESTS
PRIORITY CLAIMS
7.1 Priority Claims (Class 1). Class 1 Claims are not impaired. On the
Effective Date, each holder of an Allowed Priority Claim shall receive the full
amount of its Allowed Priority Claim in Cash.
SECURED CLAIMS
7.2 Bonded Judgment Claims (Class 2A). Class 2A Claims are not impaired.
Each holder of an Allowed Bonded Judgment Claim shall, subject to the Appeal
Rights, be entitled to payment from the proceeds of the supersedeas bond or
escrow account securing its Claim.
7.3 Secured Claims (Class 2B). Class 2B Claims are not impaired. With
respect to each Allowed Secured Claim, at the sole option of the Debtor, (a) the
legal, equitable and contractual rights of such holder of an Allowed Secured
Claim shall remain unaltered; (b) the holder of such Allowed Secured Claim shall
receive the full amount of its Allowed Secured Claim in cash on the Effective
Date; (c) the holder of such Allowed Secured Claim shall have released to it the
collateral securing its Claim; or (d) the Debtor shall provide such other
treatment that will render the Allowed Secured Claim unimpaired pursuant to
section 1124 of the Bankruptcy Code.
UNSECURED CLAIMS
7.4 Convenience Class Claims (Class 3). Class 3 Claims are not impaired. On
the Effective Date, each holder of an Allowed Convenience Claim shall receive
the full amount of its Allowed Convenience Claim, in Cash, up to and including
the amount of $1,000.
7.5 Asbestos-Related Claims (Class 4). Class 4 Claims are impaired. On the
Effective Date, Asbestos-Related Claims shall be fully satisfied and discharged
as against the Debtor by virtue of the distribution of the Creditors' Trust
Distribution to the Creditors' Trust for the benefit of all holders of
Asbestos-Related Claims and Demands pursuant to the terms and conditions of the
Creditors' Trust Documents. Each holder of an Asbestos-Related Claim shall have
its Claim channeled to the Creditors' Trust and such Claim shall be assertable
exclusively against the Creditors' Trust in accordance with the procedures of
the Creditors' Trust Documents.
7.6 Transactions Stipulation Claims (Class 5). Class 5 Claims are not
impaired. On the Effective Date, Transactions Stipulation Claims shall be fully
satisfied and discharged as against the Debtor pursuant to the benefits of the
Transactions Stipulation.
7.7 General Unsecured Claims (Class 6). Class 6 Claims are impaired. On the
Effective Date, each holder of an Allowed General Unsecured Claim, unless such
holder has elected to be treated as an Allowed Convenience Claim in Class 3,
shall receive such holder's pro rata share of a pool of available funds
totalling $250,000 in the aggregate.
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INTERESTS
7.8 Common Stock Interests (Class 7). Class 7 Common Stock Interests are
impaired. On the Effective Date, each holder of an Allowed Common Stock Interest
shall receive its pro rata share of the Class 7 Equity Distribution.
7.9 Other Interests (Class 8). Class 8 Other Interests are impaired. On the
Effective Date, all Other Interests shall be cancelled, annulled or
extinguished, and the holders thereof shall not be entitled to receive or retain
any property or distribution pursuant to this Plan.
ARTICLE VIII
PROVISIONS OF SECURITIES TO BE
ISSUED PURSUANT TO THIS PLAN AND RELATED MATTERS
8.1 Reorganization Securities. The following is a summary of certain of the
principal terms of the New Common Stock, which shall have such rights as set
forth in the Amended and Restated Certificate of Incorporation, substantially in
the form attached hereto as Exhibit A. The following summary is qualified in its
entirety by reference to the Amended and Restated Certificate of Incorporation.
New Keene, as a successor in interest to the Debtor, will issue the New Common
Stock pursuant to section 1145 of the Bankruptcy Code.
<TABLE>
8.2 Provisions of New Common Stock
<S> <C> <C>
(i) Issuer: New Keene.
(ii) Aggregate Number of
Authorized Shares: 2,500,000 shares of New Common Stock, 1,480,000 shares to be designated as Class A New Common
Stock and 1,020,000 shares to be designated as Class B New Common Stock.
(iii) Aggregate Number of
Shares to be Issued on
the Effective Date: 2,000,000 shares of New
Common Stock. Pursuant to the terms of this
Plan, on the Effective Date, 980,000 shares
of Class A New Common Stock will be issued
and distributed to the holders of Class 7
Interests and 1,020,000 shares of Class B
New Common Stock will be issued and
distributed to the Trustees of the
Creditors' Trust.
(iv) Restriction on the
Issuance of Additional
Shares Pursuant to the Share Authorization
Agreement, substantially in the form
attached hereto as Exhibit H, no additional
shares of Class A New Common Stock shall be
authorized or issued without the prior
written consent of the holder of Class B
New Common Stock; provided, however, that
such consent rights require that the Class
B New Common Stock then outstanding
represent not less than ten percent (10%)
of the aggregate number of shares of New
Common Stock then outstanding.
(v) Dividends: New Keene may declare dividends
to the holders of New Common Stock, and may
pay such dividends in Cash, property or
stock of New Keene, as such dividends may
be from time to time declared by the Board
of Directors out of the legally available
assets or funds of New Keene.
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(vi) Voting Rights of Shares
to be Issued: After the Effective Date, in accordance with the provisions of the Amended and Restated
Certificate of Incorporation and Amended and Restated By-laws, each share of Class A and
Class B New Common Stock shall entitle the holder thereof to one vote on account of such
share; provided, however, that in no event shall holders of Class A New Common Stock or Class
B New Common Stock authorize an amendment which shall adversely affect class voting rights
without the approval of such other class. The Amended and Restated Certificate of
Incorporation of New Keene shall provide for the election of one director by holders of Class
A New Common Stock, and for the election of two directors by the holder of Class B New Common
Stock until such time as the Class B New Common Stock shall represent less than twenty-five
percent (25%) (but greater than ten percent (10%)) of the aggregate number of shares of New
Common Stock then outstanding, in which event, the holder of Class B New Common Stock, voting
as a class, shall be entitled to elect one director and the holders of the Class A New Common
Stock, voting as a class, shall be entitled to elect two directors; provided, however, that
at such time as the Class B New Common Stock shall represent less than ten percent (10%) of
the aggregate shares of New Common Stock then outstanding, all the shares of Class B New
Common Stock held by the Creditors' Trust shall convert to Class A New Common Stock, at which
time holders of Class A New Common Stock shall be entitled to elect all such directors.
(vii) Restrictions Applicable
Solely to Class B New
Common Stock: Class B New Common Stock may be held only by the Creditors' Trust. Class B New Common Stock
shall become Class A New Common Stock upon the earlier occurrence of any of the following
events: (i) such Class B New Common Stock has been sold or otherwise transferred by the
Creditors' Trust; (ii) the total votes attributable to all such shares of Class B New Common
Stock held by the Creditors' Trust aggregates to less than ten percent (10%) of the aggregate
number of shares of New Common Stock then outstanding; or (iii) ten years from the Effective
Date.
(viii) Restrictions on Transfer
of New Common Stock: In order to preserve the
Debtor's net operating losses, the Amended
and Restated Certificate of Incorporation
will provide that, unless all members of
the Board of Directors otherwise approve,
New Keene will treat as null and void the
acquisition of New Common Stock by any
person who is, or would thereby become, a
four and three-quarters percent (4.75%)
shareholder (within the meaning of the
applicable regulations under section 382 of
the Internal Revenue Code). The New Common
Stock certificates will contain a legend
setting forth this restriction.
</TABLE>
8.3 Description of Stock Incentive Plan. While this Plan provides for the
establishment of the SIP, all awards, vesting procedures and benefits which may
be derived thereunder shall be within the exclusive discretion of the Board of
Directors of New Keene. Until such time as the Board may grant awards
thereunder, no employee shall have any rights or entitlements to any specific
stock incentive or similar compensation. The following is a summary of the
principal terms of the SIP and is qualified in its entirety by reference to the
SIP, substantially in the form attached hereto as Exhibit I.
<TABLE>
<S> <C> <C>
(i) Number of Shares Subject
to SIP: 100,000 shares of Class A New Common Stock, with a 10,000 maximum number of shares for any
one participant as may be specified by the Board of Directors.
(ii) Effective Date: The SIP shall be effective on the Effective Date.
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(iii) Form of Awards: Awards may be granted in the form of options, stock appreciation rights ('SAR') 'phantom'
stock or restricted stock, in the discretion of the committee (the 'Compensation Committee')
of the Board of Directors of New Keene appointed to administer the SIP. Options may be either
incentive stock options qualifying under section 422 of the Internal Revenue Code or
non-qualified options, as determined by the Compensation Committee. SARs may be granted only
in connection with a related option. The issuance of any shares of authorized Class A New
Common Stock pursuant to the SIP is subject to the consent of the Creditors' Trust, pursuant
to the terms of the Share Authorization Agreement. In the event that the Creditors' Trust
declines to consent to the issuance of any additional shares of Class A New Common Stock,
awards granted pursuant to the SIP may be in the form of phantom stock or SARs unless New
Keene elects to purchase shares of Class A New Common Stock on the open market to satisfy SIP
awards.
(iv) Eligible Employees: Any employee of New Keene or any of its subsidiaries designated by the Compensation Committee
may be eligible to participate in the SIP.
(v) Statutory Provisions: The SIP is designed
to qualify as a 16b-3 plan under the
Securities Exchange Act of 1934 and to
satisfy the requirements of section 162(m)
of the Internal Revenue Code, relating to
the deductibility of compensation in excess
of $1,000,000 annually, and shall contain
such terms and conditions as necessary to
effectuate that design.
</TABLE>
8.4 Registration Rights. The following is a summary of the principal terms
of the Registration Rights Agreement, and is qualified in its entirety by
reference to the Registration Rights Agreement, substantially in the form
attached hereto as Exhibit G.
<TABLE>
<S> <C> <C>
(i) Issuer: New Keene
(ii) Other Party: Creditors' Trust
(iii) Conditions to
Exercisability of
Rights: Not earlier than 2 years from the Effective Date. Other customary terms and provisions shall
apply.
(iv) Demands: The Creditors' Trust shall have
the right to make two demands for the
registration of its Class B New Common
Stock as Class A New Common Stock;
provided, however, that in no event may the
Creditors' Trust make a demand for the
registration of securities within twelve
(12) months of any prior demand or
registration.
(v) Piggyback Rights: The Creditors' Trust
shall have unlimited piggyback rights;
provided, however, that (a) the number of
shares subject to such rights shall not
exceed the number of shares then being
registered by New Keene and (b) if the
underwriter seeks to reduce the number of
shares subject to registration, such
reduction shall be applied first against
the shares that the Creditors' Trust seeks
to register.
(vi) Expenses: New Keene will pay all registration fees and expenses in connection with any registration
effected under the Registration Rights Agreement, including the cost of counsel and
accountants retained by New Keene in connection with such registration, except that the
Creditors' Trust will pay the fees and expenses of its own counsel and accountants, if any,
as well as underwriters' fees and expenses and underwriting discounts and commissions and
transfer taxes incurred by the Creditors' Trust with respect to its New Common Stock being
registered.
</TABLE>
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<PAGE>
ARTICLE IX
THE CREDITORS' TRUST
9.1 Creation of the Creditors' Trust. On the Effective Date, the
Creditors' Trust shall be created and established, pursuant to the terms of the
Creditors' Trust Documents, as a designated settlement fund or a qualified
settlement fund, within the meaning of section 468B of the Internal Revenue Code
and the regulations issued by the Internal Revenue Service pursuant to said
statute.
9.2 Transfer of Property to the Creditors' Trust. On the Effective Date,
the Debtor shall transfer, or cause to be transferred, to the Creditors' Trust
the Creditors' Trust Distribution.
9.3 Assumption of Liabilities By the Creditors' Trust. In consideration of
the property transferred to the Creditors' Trust pursuant to Section 9.2 hereof
and in furtherance of the purpose of the Creditors' Trust (as set forth in
Section 1.2 of the Creditors' Trust Agreement, this Plan and Section
524(g)(2)(B)(i) of the Bankruptcy Code) the Creditors' Trust will assume all
liability and responsibility for all Asbestos-Related Claims, Demands and
Transactions Stipulation Claims within the meaning of Section 524(g) of the
Bankruptcy Code. New Keene shall have no financial or other responsibilities for
or in connection with such Asbestos-Related Claims, Demands or Transactions
Stipulation Claims.
9.4 New Keene Line of Credit. On the Effective Date, the Creditors' Trust
and New Keene shall enter into the New Keene Credit Facility, substantially in
the form attached hereto as Exhibit F.
9.5 Appointment of Trustees. The Creditors' Trust, initially, shall be
managed by three independent Trustees, selected by the Committee and the Legal
Representative, who have no affiliation with the Debtor, are not holders of
Asbestos-Related Claims or Demands, and do not and have not personally
represented, in connection with an Asbestos-Related Claim or Demand, any Entity
who asserts or who has asserted an Asbestos-Related Claim or Demand. Each
initial Trustee shall serve for a three year term or until the earlier of such
person's death, resignation or removal. Thereafter, the initial Trustees, with
the consent of the Trust Advisory Committee, shall designate one Trustee who
shall serve as the sole Trustee until his or her (i) death or incapacity, (ii)
removal or (iii) resignation. All successor Trustees shall be appointed in
accordance with the terms and conditions contained in the Creditors' Trust
Agreement. Each Trustee shall be deemed to be (and the Confirmation Order shall
provide that such Trustee is) a 'party in interest' within the meaning of
section 1109(b) of the Bankruptcy Code. On the Effective Date, the Creditors'
Trust shall be deemed the successor to the Committee with respect to any then
pending motions, contested matters, adversary proceedings or appeals to which
the Committee was a party.
9.6 Purpose and Goals of the Creditors' Trust. The purposes of the
Creditors' Trust are: (i) to assume any and all liabilities of the Debtor and
its successors in interest with respect to any and all Asbestos-Related Claims
and Demands within the meaning of section 524(g) of the Bankruptcy Code; (ii) to
use the assets and income of the Creditors' Trust to pay holders of valid
Asbestos-Related Claims and Demands in accordance with the Creditors' Trust
Agreement and the Asbestos-Related Claims Resolution and Distribution
Procedures; and (iii) to otherwise comply in all respects with the requirements
of a trust set forth in section 524(g)(2)(B)(i) of the Bankruptcy Code through
the provisions of the Creditors' Trust Agreement and the Asbestos-Related Claims
Resolution and Distribution Procedures.
9.7 Compensation to and Indemnification of the Trustees. The Trustees shall
receive compensation for their services, and shall be indemnified, in accordance
with the terms of the Creditors' Trust Agreement.
9.8 Retention of Professionals and Employees. The Creditors' Trust may
retain the services of attorneys, accountants, valuation experts, employees and
other agents necessary to assist and advise the Trustees in the performance of
their duties in accordance with the terms and provisions of the Creditors' Trust
Documents.
9.9 Payment of Certain Costs. New Keene, with the reasonable consent of the
Creditors' Trust, may retain professionals to facilitate the distribution of
Cash and other property pursuant to the Plan and to prosecute objections to
Claims and Interests. The Creditors' Trust shall be responsible for the payment
of the fees and expenses of such professionals within thirty (30) days of the
submission by such professionals of reasonably detailed invoices. The Creditors'
Trust may object to the payment of such invoices within ten days of their
submission; provided, however, that the Creditors' Trust shall remain obligated
to pay the undisputed portion of each such invoice within thirty (30) days from
the date of submission. The resolution of the disputed portion of any such
invoice, if not otherwise resolved by an agreement among such professional and
the Creditors' Trust, shall be subject to the exclusive jurisdiction of the
Bankruptcy Court.
9.10 Trust Advisory Committee. The Trust Advisory Committee ('TAC') shall
consult with and advise the Trustees. Members of the Committee and their
representatives are eligible to serve as members of the TAC. The TAC shall have
such other duties and authority as set forth in the Creditors' Trust Documents.
The fees and expenses of the TAC shall be paid by the Creditors' Trust and the
Creditors' Trust shall indemnify the TAC in accordance with the terms of the
Creditors' Trust Documents. In addition, the TAC may retain the services of
attorneys, accountants, valuation experts and other professionals necessary to
the performance of its duties. The TAC shall be deemed to be (and the
Confirmation Order shall provide that the TAC is) a 'party in interest' within
the meaning of section 1109(b) of the Bankruptcy Code.
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9.11 Certain Property to be Held in Trust by New Keene. If and to the
extent that any property of the Debtor under applicable law or any contractual
provision cannot be effectively transferred and assigned to the Creditors'
Trust, or if New Keene shall receive any such property (and any proceeds
thereof), New Keene shall notify the Creditors' Trust immediately upon receipt
of such property and, unless directed otherwise by the Creditors' Trust, take
all reasonable actions to hold and retain such property in trust for the benefit
of the Creditors' Trust and, promptly upon receipt thereof, take such actions as
are necessary to perfect such trust; in the event the property is Cash, check or
negotiable instruments, New Keene shall deposit same in a trust account so named
for the benefit of the Creditors' Trust and, following notice, shall take only
such actions with respect to such property (and proceeds thereof) as the
Trustees reasonably may direct in writing.
9.12 Preservation of Rights and Defenses.
(a) The Creditors' Trust shall have, with respect to each Asbestos-Related
Claim or Demand, among other things, all defenses (including but not limited to
all defenses under section 502 of the Bankruptcy Code), affirmative defenses,
rights of setoff and recoupment, counterclaims and rights of contribution,
reimbursement, subrogation and indemnity (i) that the Debtor would have had
under applicable law if (x) the Chapter 11 Case had not occurred and (y) the
holder of such Asbestos-Related Claim or Demand had asserted such
Asbestos-Related Claim or Demand by initiating civil litigation against the
Debtor, and (ii) that the Debtor now has or has ever had.
(b) The rights and defenses of the Creditors' Trust with respect to the
Transactions Lawsuit and the Transactions Stipulation Claims shall be subject to
the terms and conditions of the Transactions Stipulation. The conduct of the
Transactions Lawsuit by the Creditors' Trust and the enforcement and
satisfaction by the Creditors' Trust of any judgment obtained in the
Transactions Lawsuit against any Transactions Lawsuit Defendant shall be subject
in all respects to the terms and conditions of the Transaction Stipulation. No
findings of fact or conclusions of law entered in the course of the Chapter 11
Case or any provisions or statements in this Plan, the Disclosure Statement, the
Transactions Stipulation or any orders confirming or implementing the Plan
(other than any findings of fact or conclusions of law entered by the Bankruptcy
Court in the Transactions Lawsuit or the Bairnco NOL Action) shall have any res
judicata, collateral estoppel or other similar preclusive effect in the
Transactions Lawsuit, the Bairnco NOL Action or in connection with the assertion
or prosecution of the Transactions Stipulation Claims of the Corporate
Transactions Defendants or the Subscribing Individuals or the Creditors' Trust's
assertion or pursuit of defenses or objections thereto.
9.13 Asbestos-Related Claims Resolution and Distribution Procedures. The
Creditors' Trust shall implement the Asbestos-Related Claims Resolution and
Distribution Procedures in accordance with the terms of the Creditors' Trust
Documents.
ARTICLE X
DESCRIPTION OF THE OPERATION OF NEW KEENE
10.1 Creation of New Keene. On the Effective Date, Reinhold will merge with
and into Keene. The Certificate of Merger shall be filed with the Secretary of
State of the State of Delaware on the Effective Date. Pursuant to the Merger,
all of the issued and outstanding capital stock of Reinhold shall be cancelled
and Reinhold shall be merged with and into the Debtor. Keene shall be the
surviving corporation of the Merger and shall be renamed Reinhold Industries,
Inc. The authorized capital stock of New Keene shall be as set forth in Article
VIII hereof and shall be distributed as provided for elsewhere herein.
10.2 Management of New Keene. On and after the Effective Date, the
management, control and operation of New Keene will become the general
responsibility of the Board of Directors of New Keene. Upon consummation of the
Plan, the Amended and Restated Certificate of Incorporation and the Amended and
Restated By-laws of New Keene will provide that the Board of Directors of New
Keene shall consist of three (3) directors. One (1) of such directors shall be
nominated by Keene's existing Board of Directors, and such nominee shall be the
present Chief Executive Officer of Reinhold. The other two (2) directors shall
be selected jointly by the Committee and the Legal Representative; provided,
however, that one of such nominees shall not represent or be retained on behalf
of any creditor or holder of a Demand.
On the Effective Date, it is expected that the executive officers of New
Keene (the 'Executive Officers') shall be as designated in the Disclosure
Statement and that their employment shall be governed by management contracts.
10.3 Indemnification. The Amended and Restated Certificate of Incorporation
and Amended and Restated By-laws of New Keene provide for indemnification of New
Keene's directors and officers to the fullest extent permitted by applicable law
now or hereafter in effect.
10.4 New Keene Credit Facility. Pursuant to the terms of the New Keene
Credit Facility, New Keene shall have the ability to draw on a $1.5 million line
of credit extended by the Creditors' Trust. The New Keene Credit Facility
provides that New Keene may make draws on the line of credit up to a maximum
amount of $1.5 million at any time over a two year period following the
Effective Date, and requires that New Keene's obligations thereunder be paid in
full on the third anniversary of the Effective Date.
10.5 Permanent Channeling Injunction. New Keene shall have the benefits of
the Permanent Channeling Injunction, as more fully set forth in Article XVII
hereof.
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ARTICLE XI
ACCEPTANCE OR REJECTION OF THIS PLAN
11.1 Each Impaired Class Entitled to Vote Separately. Except as otherwise
provided by this Plan, the holders of Claims or Interests in each impaired class
of Claims or Interests, other than the holders of Other Interests in Class 8,
shall be entitled to vote separately as a class to accept or reject this Plan.
Class 8 is deemed to have rejected the Plan pursuant to section 1126(g) of the
Bankruptcy Code.
11.2 Estimation of Class 4 Claims for Voting Purposes. Pursuant to the
Voting Procedures Order, the Claims of holders of Class 4A and 4B Claims shall
be Allowed, for voting purposes only, on the terms and conditions specified
therein.
11.3 Acceptance by Impaired Classes of Claims. Pursuant to section 1126(c)
of the Bankruptcy Code, an impaired class of Claims, including without
limitation Class 4 and Class 6 Claims, shall have accepted this Plan if (1) the
holders (other than Claims held by any holder designated pursuant to section
1126(e) of the Bankruptcy Code) of at least two-thirds (2/3) in dollar amount of
the Allowed Claims actually voting in such class have voted to accept this Plan
and (2) more than one-half (1/2) in number (other than Claims held by any holder
designated pursuant to section 1126(e) of the Bankruptcy Code) of such Allowed
Claims actually voting in such class have voted to accept this Plan.
11.4 Acceptance by Impaired Class of Interests. Pursuant to section
1126(d) of the Bankruptcy Code, an impaired class of Interests shall have
accepted this Plan if the holders (other than Interests held by any holder
designated pursuant to section 1126(e) of the Bankruptcy Code) of at least
two-thirds (2/3) in amount of the Allowed Interests actually voting in such
class have voted to accept this Plan.
11.5 Presumed Acceptance of Plan. Classes 1, 2A, 2B, 3 and 5 are unimpaired
under this Plan and, therefore, are conclusively presumed to have accepted this
Plan pursuant to section 1126(f) of the Bankruptcy Code.
11.6 Cramdown. Class 8 is deemed to have rejected the Plan. Accordingly,
the Debtor shall invoke cramdown with respect to such class pursuant to section
1129(b) of the Bankruptcy Code. In addition, if Class 7 votes to reject the
Plan, the Debtor shall invoke cramdown with respect to such Class; provided,
however, that Class 7 shall, in such event, nevertheless retain such treatment
as specified in Section 7.8 of this Plan.
ARTICLE XII
CONDITIONS PRECEDENT
12.1 Conditions to Confirmation. The following conditions must occur and
be satisfied, or be waived, on or before the Confirmation Date:
(a) The Confirmation Order shall have been signed by the Bankruptcy
Court and duly entered on the docket maintained for the Chapter 11 Case by
the Clerk of the Bankruptcy Court, in form and substance reasonably
acceptable to the Debtor, the Committee and the Legal Representative;
(b) The Voting Procedures Order shall have been signed by the
Bankruptcy Court and duly entered on the docket maintained for the Chapter
11 Case by the Clerk of the Bankruptcy Court, in form and substance
reasonably acceptable to the Debtor, the Committee and the Legal
Representative, and such Voting Procedures Order shall have become a Final
Order;
(c) The Transactions Stipulation Order shall have been signed by the
Bankruptcy Court and duly entered on the docket maintained for the Chapter
11 Case by the Clerk of the Bankruptcy Court, in form and substance
reasonably acceptable to the Debtor, the Committee, the Legal
Representative and the Corporate Transactions Defendants;
(d) The Bankruptcy Court shall have signed an Order or Orders
approving the Creditors' Trust Documents, including the Asbestos-Related
Claims Resolution and Distribution Procedures, and such Order or Orders
shall have been duly entered on the docket maintained by the Clerk of the
Bankruptcy Court, in form and substance reasonably acceptable to the
Debtor, the Committee and the Legal Representative;
(e) The Bankruptcy Court shall have signed an Order, which may be the
Confirmation Order, establishing the Permanent Channeling Injunction and
the injunction set forth in Section 17.1, which Order shall have been duly
entered on the docket maintained by the Clerk of the Bankruptcy Court, in
form and substance reasonably acceptable to the Debtor, the Committee and
the Legal Representative;
(f) The Bankruptcy Court shall have signed an order, which may be the
Confirmation Order, converting the Coleman Injunction to a permanent
injunction, as set forth in Section 17.1, which Order shall have been duly
entered on the docket maintained by the Clerk of the Bankruptcy Court, in
form and substance reasonably acceptable to the Debtor, the Committee, the
Legal Representative and the Corporate Transactions Defendants;
(g) All Causes of Action shall be preserved and provision shall have
been made to transfer the Causes of Action to the Creditors' Trust for
prosecution by the Creditors' Trust; and
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(h) The Bankruptcy Court shall have made the following findings, each
of which shall be contained in the Confirmation Order:
(i) The Permanent Channeling Injunction is to be implemented in
connection with the Creditors' Trust.
(ii) At the time of the order for relief, Keene had been named as
a defendant in personal injury, wrongful death, and property damage
actions seeking recovery for damages allegedly caused by the presence
of, or exposure to, asbestos and asbestos-containing products.
(iii) The Creditors' Trust, as of the Effective Date, will assume
the liabilities of the Debtor with respect to Asbestos-Related Claims,
Demands and Transactions Stipulation Claims within the meaning of
section 524(g) of the Bankruptcy Code.
(iv) The Creditors' Trust is to be funded in whole or in part by
securities of the Debtor and by the obligation of the Debtor to make
future payments, including dividends.
(v) The Creditors' Trust is to own a majority of the voting
shares of New Keene.
(vi) The Creditors' Trust is to use its assets or income to pay
Asbestos-Related Claims and Demands.
(vii) The Debtor is likely to be subject to substantial future
Demands for payment arising out of the same or similar conduct or
events that gave rise to the Asbestos-Related Claims and Demands that
are addressed by the Permanent Channeling Injunction.
(viii) The actual amounts, numbers and timing of the future
Demands cannot be determined.
(ix) Pursuit of such Demands outside the procedures prescribed by
the Plan is likely to threaten the Plan's purpose to deal equitably
with Asbestos-Related Claims and future Demands.
(x) The terms of the Permanent Channeling Injunction, including
any provisions barring actions against the Protected Parties, pursuant
to section 524(g)(4)(A) of the Bankruptcy Code, are set forth in the
Plan and in the Disclosure Statement.
(xi) The Plan establishes, in Classes 4A and B thereof
(Asbestos-Related Claims), separate classes of claimants whose Claims
are to be addressed by the Creditors' Trust.
(xii) The holders of Class 4 Claims, voting as a class, have
voted, by at least 75 percent (75%) of those voting, in favor of the
Plan.
(xiii) Pursuant to court orders or otherwise, the Creditors'
Trust will operate through mechanisms such as structured, periodic, or
supplemental payments, pro rata distributions, matrices, or periodic
review of estimates of the numbers and values of present
Asbestos-Related Claims and Demands, or other comparable mechanisms,
that provide reasonable assurance that the Creditors' Trust will
value, and be in a financial position to pay, Asbestos-Related Claims
and Demands that involve similar Claims in substantially the same
manner.
(xiv) The Legal Representative was appointed as part of the
proceedings leading to issuance of the Permanent Channeling Injunction
for the purpose of protecting the rights of Entities that might
subsequently assert Demands that are addressed in the Permanent
Channeling Injunction and transferred to the Creditors' Trust.
(xv) Identifying each Protected Party is fair and equitable with
respect to Entities that might subsequently assert Demands against any
such Protected Party, in light of the benefits provided, or to be
provided, to the Creditors' Trust by or on behalf of the Debtor and
any such Protected Party.
12.2 Conditions to Effectiveness of Plan. The following conditions must
occur and be satisfied, or waived, on or before the Effective Date or the Plan
shall not become effective:
(a) There shall not be any stay in effect with respect to the
Confirmation Order;
(b) The Transactions Stipulation Order shall have become a Final
Order;
(c) The Confirmation Order and, if separate, the Order establishing
the Permanent Channeling Injunction, shall, to the extent required by
Section 524(g) of the Bankruptcy Code, have been issued or affirmed by the
United States District Court for the Southern District of New York (the
'District Court') and shall have become a Final Order or Final Orders and
shall have been duly entered on the docket of the Clerk of the District
Court;
(d) The Order, which may be the Confirmation Order, converting the
Coleman Injunction into a permanent injunction shall have become a Final
Order;
(e) The Confirmation Order and the Permanent Channeling Injunction
shall be in full force and effect;
(f) The Trustees of the Creditors' Trust and the Trust Advisory
Committee shall have been selected in accordance with the terms of the
Creditors' Trust Agreement;
(g) All Trustees of the Creditors' Trust shall have executed the
Creditors' Trust Agreement;
(h) The Certificate of Merger shall have been filed with the Office of
the Secretary of State of the State of Delaware;
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(i) The Keene 27 Action and all litigation to be dismissed as set
forth in the Stipulation and Order of Settlement Regarding a Consensual
Plan of Reorganization of the Debtor entered into on March 28, 1995 shall
have been dismissed with prejudice pursuant to the terms hereof and a Final
Order shall have been entered dismissing such actions and providing for the
release and injunctive relief described in Section 17.3(b) hereof; and
(j) The aggregate amount of Allowed and Disputed General Unsecured
Claims (Class 6) shall not exceed $5 million.
12.3 Waiver of Conditions. None of the conditions contained in Sections
12.1 and Section 12.2 hereof may be waived, in whole or in part, except jointly
by the Debtor, the Committee and the Legal Representative, in a writing to be
filed with the Bankruptcy Court, without any further notice to any Entity other
than as may be required by the Bankruptcy Court, without leave or order of the
Bankruptcy Court or any other formal action; provided, however, that the
conditions relating to the Transactions Stipulation Order, the Coleman
Injunction, and the General Unsecured Claims cap may not be waived without the
additional written consent of the Corporate Transactions Defendants, which
consent shall not be unreasonably withheld.
ARTICLE XIII
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
13.1 Assumption/Rejection. Pursuant to section 1123(b)(2) of the Bankruptcy
Code, all executory contracts and unexpired leases of the Debtor that have not
already been assumed or rejected shall be deemed rejected as of the Effective
Date unless there is then pending before the Bankruptcy Court a motion for the
assumption and assignment of such executory contract and/or unexpired lease.
13.2 Claims Based on Rejection of Executory Contracts or Unexpired Leases.
An Allowed Claim arising from the rejection of an executory contract or an
unexpired lease shall be classified and treated as a Class 3 or Class 6 Claim
depending on the amount thereof. Pursuant to the Order Establishing Last Date
for Filing Proofs of Claim for Non-Asbestos-Related General Claims entered on
September 28, 1994, all proofs of claim with respect to Claims arising from the
rejection, pursuant to this Article XIII, of executory contracts or unexpired
leases must be filed with the Bankruptcy Court on or before the later to occur
of: (i) thirty (30) days after the date of entry of an order of the Bankruptcy
Court approving such rejection or (ii) thirty (30) days after service of notice
of such rejection, if such rejection occurs by expiration of time fixed by the
Bankruptcy Court, or such Claims shall be forever barred against the Debtor and
its estate and the assets and properties of New Keene and the Creditors' Trust.
Any Entity that fails to file proof of its Claim arising from such a rejection
within the period set forth above shall be forever barred from asserting a Claim
against the Debtor, New Keene or the Creditors' Trust, any of their respective
affiliates or the property or interests in property of the Debtor, New Keene or
the Creditors' Trust, or any of their respective affiliates.
ARTICLE XIV
IMPLEMENTATION OF THIS PLAN
14.1 Vesting of Property. Except as otherwise provided by this Plan, in
accordance with sections 1123(a)(5) and 1141 of the Bankruptcy Code, on the
Effective Date, title to property of the Debtor shall pass to New Keene free and
clear of all Claims, Demands, Interests, liens and encumbrances including,
without limitation, all Asbestos-Related Claims, Demands and Transactions
Stipulation Claims. Also, on the Effective Date, title to the Creditors' Trust
Distribution shall pass to the Creditors' Trust free and clear of all Claims,
Interests, liens and encumbrances, except liabilities relating to
Asbestos-Related Claims, Demands and Transactions Stipulation Claims.
14.2 Cancellation of Securities, Notes or Other Instruments; Release of
Liens. (a) As of the Effective Date, all Interests, notes or other instruments
evidencing a Claim, Demand or Interest shall be cancelled and rendered void and
each of the transfer books maintained for any such Claim, Demand, Interest, note
or other instrument shall be closed.
(b) Except for the right to receive the distributions, if any, provided for
by this Plan, the holder of a Claim, Demand, Interest, note or other instrument
shall have no rights arising from or relating to such Claim, Demand, Interest,
note or other instrument on and after the Effective Date.
14.3 Certificate of Incorporation and By-laws. The certificate of
incorporation and the by-laws of Keene shall be superseded, amended and restated
substantially in the forms set forth as Exhibits A and B hereto, and as so
amended and restated shall, as of the Effective Date, be in full force and
effect.
14.4 Corporate Authority. The entry of the Confirmation Order shall
constitute a direction and authorization to and of the Debtor, New Keene and the
Creditors' Trust to take or cause to be taken any corporate action necessary or
appropriate to consummate the provisions of this Plan, including without
limitation, the adoption of the Amended and Restated Certificate of
Incorporation and the Amended and Restated By-laws or similar constituent
documents for New Keene, the selection of directors and officers of New Keene,
the adoption of the SIP, the distribution of Cash and the issuance and
distribution of the New Common Stock, the adoption, execution, delivery and
implementation of all contracts, instruments, releases and other agreements
relating to
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this Plan, and all such actions taken or caused to be taken shall be deemed
authorized and approved in all respects without any further action by the
stockholders or directors of the Debtor or New Keene.
14.5 Retiree Benefits. New Keene as the contributing sponsor within the
meaning of ERISA will continue and maintain the Pension Plan. New Keene will
comply with all funding and other requirements of ERISA.
Unless and until the Pension Plan has been terminated, the Debtor and New
Keene will have no debt due the Pension Plan or the PBGC, and, accordingly, any
liabilities due the PBGC for any unfunded benefits liabilities shall not be
affected in any way by this reorganization, including the discharge. If the
Pension Plan has not been terminated prior to the Confirmation Date, any Claim
by the Pension Plan or the PBGC shall be treated as arising after the
Confirmation Date. Upon the Effective Date, any Claim that the PBGC has, or may
have asserted, shall be deemed to have been withdrawn.
14.6 Term of Existing Injunctions or Stays. Unless otherwise provided in
the Plan, all injunctions or stays in effect on the Confirmation Date pursuant
to sections 105(a) or 362(a) of the Bankruptcy Code or otherwise shall remain in
full force and effect until the Effective Date.
ARTICLE XV
PROVISIONS GOVERNING DISTRIBUTIONS
15.1 Time of Distributions Under this Plan. Notwithstanding any other
provisions of this Plan, except with respect to Section 15.7 and Article XVI of
this Plan, payments and distributions on account of Allowed Claims, Demands and
Allowed Interests, and the transfer set forth in Section 9.2 hereof, shall be
made by the Debtor or New Keene on the Effective Date or as soon thereafter as
is reasonably practicable (but in no event later than ten (10) Business Days
after the Effective Date).
15.2 Settlement Regarding Distributions. Notwithstanding any other
provisions contained herein, distributions to holders of Allowed Claims, Demands
and Allowed Interests shall be as specified in this Plan, unless such holder
agrees to accept less favorable treatment by settlement or otherwise.
15.3 Distributions to Creditors' Trust. Any and all distributions to be
made to the Creditors' Trust pursuant to the terms of this Plan shall be made to
the Trustees of the Creditors' Trust for the benefit of holders of
Asbestos-Related Claims and Demands, all in accordance with applicable law,
including without limitation, the laws governing trusts.
15.4 Record Date. As of the close of business on the Record Date the
transfer ledger of Old Common Stock shall be closed, and there shall be no
further changes in the holders of record thereof. New Keene shall have no
obligation to recognize any transfer of the Old Common Stock occurring
thereafter. New Keene shall be entitled instead to recognize and deal for all
purposes herein with only those holders of record stated on the transfer ledger
for the Old Common Stock as of the close of business on the Record Date.
15.5 Manner of Payments Under This Plan. Solely for the purposes of making
distributions pursuant to the Plan, on the Effective Date, the Plan Payments and
the Plan Estimates shall be transferred to New Keene and maintained in separate
interest bearing accounts. Any Cash payment to be made pursuant to the terms of
this Plan may be made by a check or wire transfer or as otherwise required or
provided in applicable agreements.
15.6 Rounding. (a) Cash. Whenever any payment of a fraction of a cent would
otherwise be called for, the actual payment shall reflect a rounding of such
fraction to the nearest whole cent, with one-half cent being rounded up to the
nearest whole cent.
(b) No Fractional Shares. Notwithstanding anything contained herein to the
contrary, no fractional shares of New Common Stock will be distributed. Whenever
any distribution of a fraction of a share of New Common Stock would otherwise be
called for, the actual distribution shall reflect a rounding of such fraction
down to the nearest whole number of shares. Any shares of New Common Stock
remaining due to the rounding of such shares shall be held by New Keene as
Treasury Stock.
15.7 Undeliverable Distributions; Unclaimed Property. (a) If New Keene is
unable to make payment or distribution to the holder of an Allowed Claim or an
Allowed Interest under this Plan for lack of a current address for the holder or
otherwise, New Keene will file with the Bankruptcy Court the name, if known, and
last known address of the holder and the reason for inability to make payment,
and if, after the passage of 60 days and after any additional effort to locate
the holder that the Bankruptcy Court may direct, the payment or distribution
still cannot be made, the payment or distribution and any further payment or
distribution to the holder shall be treated as unclaimed property in accordance
with Section 15.7(b) hereof.
(b) If any distribution of property remains unclaimed for a period of one
(1) year after it has been delivered in accordance with this Plan to the holder
entitled thereto, such unclaimed property shall be forfeited by such holder,
whereupon all right, title and interest in and to such unclaimed property (i)
shall immediately and irrevocably vest in the Creditors' Trust if such property
was to be distributed on account of an Allowed Administrative Expense Claim, an
Allowed Tax Claim or an Allowed Class 1, 2, 3 or 6 Claim, or (ii) shall
immediately and irrevocably vest with New Keene if such property was to be
distributed on account of an Allowed Class 7 Common Stock Interest.
15.8 Transmittal of Distributed Property and Notices. Except as otherwise
provided in this Plan and except as otherwise may be agreed to by the Debtor or
New Keene and the holder of a particular Claim or Interest, any property or
notice to which such
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holder shall become entitled pursuant to the provisions of this Plan, shall be
delivered to such holder by regular mail, postage prepaid, in an envelope
addressed to such holder as he or she or his or her authorized agent may direct
in a request filed, on or before the Effective Date, with the Bankruptcy Court
(or filed, after the Effective Date, with New Keene), but if no such request is
filed, to the address shown in the Schedules or to such holder's counsel known
to the Debtor, or, if a different address is stated in a proof of claim duly
filed, to such address. In all cases where delivery or distribution is
effectuated by mail, the date of delivery or distribution shall be the date of
mailing. Property delivered in accordance with this Section 15.8 will be deemed
delivered to the holder regardless of whether such property is actually received
by such holder.
15.9 Full and Final Satisfaction. Except as otherwise provided by this
Plan, all payments and other distributions made pursuant to the terms and
conditions of this Plan shall be in full and final satisfaction, settlement,
release and, to the extent permitted by applicable law, discharge of all Claims,
Demands and Interests.
15.10 No Distribution in Excess of Allowed Amount of
Claim. Notwithstanding anything to the contrary herein, no holder of an Allowed
Claim shall receive on account of such Claim any distribution (of a value set
forth herein or in the Disclosure Statement) in excess of the Allowed Amount of
such Claim, excluding payments on account of interest due and payable from and
after the Effective Date pursuant to the terms of this Plan.
15.11 Withholding Taxes. Any federal, state or local withholding taxes or
other amounts required to be withheld under any applicable law shall be deducted
from any payments or other distributions hereunder or otherwise. All holders of
Claims shall be required to provide information to effectuate the withholding of
such taxes.
15.12 Payment Dates. Whenever any payment or other distribution to be made
of the distributions pursuant to the terms of this Plan is due on a day other
than a Business Day, such payment or distribution will instead be made on the
next Business Day and shall be deemed to have been completed as of the required
date.
15.13 Setoffs. For purposes of determining the Allowed Amount of each Claim
on which a distribution shall be made, the Debtor or New Keene, as the case may
be, may, but shall not be required to, set off against any Claim, any claims of
any nature whatsoever the Debtor may have against the claimant, but neither the
failure to do so nor the allowance of any Claim hereunder shall constitute a
waiver or release by the Debtor or New Keene of any such claim the Debtor may
have against any such claimant.
ARTICLE XVI
PROCEDURE FOR RESOLVING DISPUTED CLAIMS AND DISPUTED INTERESTS
16.1 Applicability. The procedure set forth in this Article XVI for
resolving Disputed Claims and Disputed Interests shall apply to all Claims and
Interests, other than Bonded Judgment Claims, Asbestos In Buildings Claims,
Asbestos-Related Personal Injury Claims and Transactions Stipulation Claims.
16.2 Objections to and Estimation and Resolution of Claims and Interests.
An objection to the allowance of a Claim or Interest, or any motion pursuant to
section 502(c) of the Bankruptcy Code to estimate any Claim, shall be in writing
and must be filed with the Bankruptcy Court by the Debtor, the Committee or the
Legal Representative (each, an 'Objecting Party'), as the case may be, on or
before the Confirmation Date, or such later date as the Bankruptcy Court may
fix; provided, however, that any party in interest may object to an
application for allowance of compensation and reimbursement of expenses of
professionals under section 330 of the Bankruptcy Code; provided, further,
however, that objections to Asbestos-Related Claims (other than Asbestos-Related
Building Contribution Claims and Asbestos-Related Personal Injury Contribution
Claims) and Bonded Judgment Claims shall be addressed exclusively by the
Creditors' Trust and Transactions Stipulation Claims shall be dealt with in
accordance with the Transactions Stipulation.
16.3 Procedure. The Objecting Party shall litigate the merits of each
Disputed Claim and each Disputed Interest until determined by a Final Order and
shall litigate the amount at which a Disputed Claim or Interest shall be
estimated; provided, however, that subject to the approval of the Bankruptcy
Court, the Objecting Party may compromise and settle any objection to any Claim
or Interest.
16.4 Payments and Distributions With Respect to Ultimately Allowed Claims
or Ultimately Allowed Interests. Payments or other distributions shall be made
on account of a Disputed Claim or a Disputed Interest within thirty (30) days
after the date that such Disputed Claim or Disputed Interest becomes an
Ultimately Allowed Claim or Ultimately Allowed Interest; provided, however, that
no payments or other distributions shall be made on account of any Disputed
Class 6 Claim or Class 7 Interest until thirty (30) days after the date that the
last Disputed Class 6 Claim or Class 7 Interest challenged by any Objecting
Party becomes an Ultimately Allowed Claim or Ultimately Allowed Interest, or is
disallowed. Holders of Disputed Claims or Disputed Interests that become
Ultimately Allowed Claims or Ultimately Allowed Interests shall be bound,
obligated and governed in all respects by the provisions of this Plan. Upon
disallowance of a Disputed Claim, other than a Disputed Class 6 Claim, the
consideration reserved for such Claim (together with interest accrued thereon)
shall vest with the Creditors' Trust in accordance with Section 16.5(b) of this
Plan. Upon disallowance of a Disputed Class 6 Claim or a Disputed Class 7
Interest, the consideration reserved for such Class 6 Claim or Class 7 Interest
shall vest with New Keene whereupon New Keene shall distribute such property to
the members of such Class in accordance with Section 16.5(b) of the Plan.
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16.5 Reserves for Disputed Claims and Interests. (a) On or as soon as
practicable after the Effective Date, New Keene shall reserve for the account of
each holder of a Disputed Claim or Disputed Interest, (i) that property which
would otherwise be distributable to such holder on such date in accordance with
this Plan were such Disputed Claim or Disputed Interest an Allowed Claim or an
Allowed Interest, as applicable, on such date or (ii) such other property as
such holder and New Keene may agree. If applicable, New Keene shall place
property reserved pursuant to this Section 16.5 in an interest bearing escrow
fund (which need not be segregated, but for which separate book entries shall be
kept by New Keene) for each class to be established and maintained by New Keene
pending resolution of such Disputed Claims or Disputed Interests. Cash held in
any reserve established for Disputed Claims (the 'Disputed Claims Reserve')
shall be invested in a manner consistent with the requirements of section 345 of
the Bankruptcy Code or any order of the Bankruptcy Court. Any voting rights of
Class A New Common Stock held in reserve on account of a Disputed Interest
shall, until such securities are released from such reserve, be deemed voted in
identical proportions to all other Class A New Common Stock that shall have
voted.
(b) Any Disputed Claims Reserve shall be terminated by New Keene once all
distributions and other dispositions of Cash and/or Class A New Common Stock
required hereunder have been made in accordance with the terms of this Plan. To
the extent that any Cash or other property remains in a Disputed Claims Reserve
established pending the resolution of Disputed Administrative Expense Claims,
Disputed Tax Claims or Disputed Class 1, 2B or 3 Claims (including any interest
accrued thereon), and such reserve has been terminated in accordance with this
Section 16.5(b), such Cash or other property shall immediately and irrevocably
vest in the Creditors' Trust which shall thereafter be empowered to take
whatever steps may be reasonably necessary to exercise control over such Cash or
other property. To the extent that any Cash or shares of Class A New Common
Stock remain in a Disputed Claims Reserve established pending resolution of
Disputed Class 6 Claims or Disputed Class 7 Interests, and such reserve has been
terminated in accordance with this Section 16.5(b), such Cash or shares of Class
A New Common Stock, as the case may be, shall be distributed, on a pro rata
basis, to Allowed Claims or Allowed Interests of the same class.
16.6 Funding of Objections Process. On and after the Effective Date, the
Creditors' Trust will pay the fees and expenses of the professionals retained by
New Keene, with the reasonable consent of the Creditors' Trust, that are
associated with the filing and prosecution of objections to Claims and Interests
within 30 days after the submission of a reasonably detailed invoice to the
Trustees setting forth such fees and expenses. Within ten (10) days after the
submission of an invoice, the Creditors' Trust may object to all or part of such
invoice; provided, however, that the Creditors' Trust shall be obligated to pay
the undisputed portion of such invoice within thirty (30) days of its
submission. In the event that the parties cannot resolve any dispute with
respect to the invoice within thirty (30) days after its submission, either the
Creditors' Trust or the affected professional may apply to the Bankruptcy Court
for resolution of the matter.
ARTICLE XVII
EFFECTS OF PLAN CONFIRMATION
17.1 Discharge, Releases and Injunction.
(a) Except as otherwise specifically provided by this Plan, the
distributions and rights that are provided in this Plan shall be in complete
satisfaction, release and, to the extent permitted by applicable law, discharge
of (i) all Claims and Demands against, liabilities of, liens on, obligations of
and Interests in the Debtor, New Keene or the Creditors' Trust or the assets and
properties of the Debtor, New Keene or the Creditors' Trust, whether known or
unknown, and (ii) all causes of action, whether known or unknown, either
directly or derivatively through the Debtor or New Keene, against the Released
Parties based on the same subject matter as any Claim, Demand or Interest, in
each case, regardless of whether a proof of Claim or Interest was filed, whether
or not Allowed, and whether or not the holder of such Claim or Interest has
voted on this Plan, or based on any act or omission, transaction or other
activity or security, instrument or other agreement of any kind or nature
occurring, arising or existing prior to the Effective Date that was or could
have been the subject of any Claim, Demand or Interest, in each case, regardless
of whether a proof of Claim or Interest was filed, whether or not Allowed and
whether or not the holder of such Claim or Interest has voted on this plan.
Furthermore, but in no way limiting the generality of the foregoing, except
as otherwise specifically provided in this Plan, any Entity accepting any
distributions or rights pursuant to this Plan shall be presumed conclusively to
have released the Released Parties from any cause of action based on the same
subject matter as the Claim, Demand or Interest on which the distribution or
right is received to the full extent permitted by applicable law.
The satisfactions, releases and discharges set forth in this Section 17.1
shall also act as an injunction against any Entity commencing or continuing any
action, employment of process or act to collect, offset, affect or recover any
Claim, Demand, Interest or cause of action satisfied, released or discharged
hereunder.
On and after the Effective Date, the Coleman Injunction shall be converted
to a permanent injunction for the benefit of New Keene and the Creditors' Trust,
consistent with the terms and conditions of the Transactions Stipulation, and
shall prohibit any action or suit, with the exception of the Transactions
Lawsuit, against the Transactions Lawsuit Defendants.
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(b) Notwithstanding Section 17.1(a) or any other provision of this Plan to
the contrary, the release and injunction set forth in Section 17.1(a) shall not
serve to release or enjoin claims by the Creditors' Trust against (i) the
Transactions Lawsuit Defendants in the Transactions Lawsuit; (ii) Bairnco
Corporation in the Bairnco NOL Action; (iii) Glenn W. Bailey in the Bailey
Lawsuit (as to those counts in the complaint not released under the Plan) and
(iv) any insurance carrier or surety that issued a policy or policies of
insurance to, or on behalf of, Keene or any of the above-referenced defendants.
17.2 Permanent Channeling Injunction and Keene 27 Injunction. On and after
the Effective Date, the Protected Parties shall obtain the benefits and
protections of the Permanent Channeling Injunction. In addition, on and after
the Effective Date, the Debtor, New Keene and their respective officers,
directors and agents shall obtain the benefits and protections of the Keene 27
Injunction.
17.3 No Release of Causes of Action.
(a) Notwithstanding any other provision of this Plan, pursuant to section
1123(b)(3) of the Bankruptcy Code, the Creditors' Trust (as a representative of
the Debtor's estate) shall obtain title to and have the exclusive right to and
may commence, enforce, prosecute, manage and/or settle against any Entity all
Causes of Action of the Debtor, including those covered by the Coleman
Injunction, that arose before the Effective Date, including all Causes of Action
of a trustee and debtor-in-possession under the Bankruptcy Code and any and all
claims and causes of action arising under federal, state or other applicable
law; provided, however, that the estate will not commence, and the Creditors'
Trust shall not obtain the right to commence any avoidance or recovery action
relating to payments made pursuant to the MIC Program, the 1992 Employee
Retention Program or the Severance Policy, or in connection with the Advisory
Board or the Stock Dividends or relating to the Indemnity Payments as against
the Debtor's current and former officers and directors except as otherwise
asserted in the Bailey Lawsuit.
(b) The Causes of Action preserved in Section 17.3 shall not include the
Keene 27 Action. As required by Section 12.2, on the Effective Date, the Debtor
shall dismiss with prejudice the Keene 27 Action and such dismissal shall be
deemed to be in complete satisfaction and release of all claims and causes of
action that the Debtor may have against any of the defendants in the Keene 27
Action. In consideration for such dismissal and release, the Debtor, and its
officers, directors, agents and attorneys at the time the Keene 27 Action was
commenced, shall be deemed released from any claim or cause of action that the
estate or any defendant in the Keene 27 Action has or may have arising from or
in any way, directly or indirectly relating to the preparation, dissemination,
discussion, filing and/or prosecution of the Keene 27 Action and the Keene 27
Injunction shall be entered to effectuate such release.
17.4 Exculpation. Except as otherwise provided in the Plan, none of the
Released Parties shall have or incur any liability to any Entity for any act or
omission in connection with or arising out of the formulation, preparation,
dissemination, prosecution, confirmation, consummation, discussion,
implementation or administration of this Plan, the Disclosure Statement, any
contract, release, or other agreement or document created or entered into, the
property to be distributed under the Plan, or any other action taken or omitted
to be taken in connection with the Chapter 11 Case or this Plan, except for
gross negligence or willful misconduct, and in all respects shall be entitled to
rely upon the advice of counsel with respect to their duties and
responsibilities under the Plan.
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
18.1 Retention of Jurisdiction. The business and assets of the Debtor shall
remain subject to the jurisdiction of the Bankruptcy Court until the Effective
Date. From and after the Effective Date, except as otherwise provided by law,
the Bankruptcy Court shall retain and have exclusive jurisdiction over New Keene
and the Chapter 11 Case for the purpose of determining all disputes and other
issues presented by or arising under this Plan including, without limitation,
the following matters:
(a) to allow, disallow, estimate, liquidate or determine any Claim
against or Interest in the Debtor and to enter or enforce any order
requiring the filing of any such Claim or Interest before a particular
date, and to resolve any and all disputes relating to any Claim or
Interest, except in each case an Asbestos-Related Personal Injury Claim, an
Asbestos In Buildings Claim, a Bonded Judgment Claim or a Transactions
Stipulation Claim;
(b) to determine requests for payment of Claims entitled to priority
under section 507(a)(1) of the Bankruptcy Code, including any and all
interim and final applications for compensation for professional services
rendered and disbursements incurred in connection therewith;
(c) to resolve any and all controversies and disputes regarding the
interpretation and enforcement as may be necessary to effectuate the
consummation and full and complete implementation of this Plan;
(d) to resolve any and all controversies and disputes regarding the
implementation or interpretation of the Creditors' Trust and related
matters, including, without limitation, the settlement of accounts, the
resolution of disputes between the TAC and the Trustees, and the
termination of the Creditors' Trust, as those matters are provided for in
paragraphs 2.2(f), 5.1(c) and 6.2(a)(iii), respectively, of the Creditors'
Trust Agreement, but excluding all matters related to the Permanent
Channeling Injunction, as set forth in Section 18.2 hereof;
22
<PAGE>
(e) to enter orders in aid of the execution of this Plan, and releases
provided for in this Plan, including, without limitation, appropriate
orders (which may include contempt or other sanctions) to protect the
Debtor, its affiliates and other Entities from actions prohibited under
Article XVII of this Plan;
(f) to remedy any defect or omission or reconcile any inconsistency in
the Confirmation Order;
(g) to determine any and all applications, motions, adversary
proceedings and contested matters pending on the Effective Date and arising
under, arising in or related to the Chapter 11 Case or this Plan, including
any remands of appeals that may be pending on the Effective Date;
(h) to enforce the provisions of this Plan relating to the
distributions to be made hereunder;
(i) to resolve any action brought to avoid or otherwise determine the
validity, extent, enforceability, priority and perfection of any lien or
other encumbrance on any property of the Debtor;
(j) to determine any and all pending applications for the rejection or
disaffirmance of executory contracts or leases, and to hear and determine,
and if need be to liquidate, any and all Claims arising therefrom;
(k) to resolve any disputes concerning any reserve established for
Disputed Claims or Disputed Interests or the administration thereof;
(l) to resolve any disputes concerning any release of a nondebtor
hereunder or the injunction against acts, employment of process or actions
against such nondebtor arising hereunder;
(m) to resolve any disputes concerning whether a Entity had sufficient
notice of the Chapter 11 Case, any applicable Claims bar date, the hearing
on the approval of the Disclosure Statement as containing adequate
information, and the hearing on the confirmation of this Plan for the
purpose of determining whether a Claim, Demand or Interest is satisfied,
released or discharged hereunder or for any other purpose;
(n) to determine such other matters as may be set forth in the
Confirmation Order or that may arise in connection with the implementation
of this Plan;
(o) to resolve any disputes regarding any invoice submitted to the
Creditors' Trust by a professional for fees and/or expenses associated with
the prosecution or settlement of objections to Claims or Interests; and
(p) to enter a final decree closing the Chapter 11 Case.
Notwithstanding anything contained in this Section 18.1, the reference to
the Bankruptcy Court with respect to the Transactions Lawsuit shall be
withdrawn as provided in the Transactions Lawsuit Stipulation.
18.2 Jurisdiction as to the Permanent Channeling Injunction. The United
States District Court for the Southern District of New York shall retain
jurisdiction over any proceeding that involves the validity, application,
construction, or modification of the Permanent Channeling Injunction.
18.3 Binding Effect of Plan. The provisions of this Plan and the rights,
benefits and obligations of any Entity named or referred to in this Plan,
including without limitation New Keene, any holder of a Claim, Demand or
Interest and the Creditors' Trust, shall be binding upon, and will inure to the
benefit of, such Entity's heirs, executors, administrators, successors, assigns,
agents, officers and directors.
18.4 Withdrawal of this Plan. The Debtor reserves the right, upon the
written consent of the Committee and the Legal Representative, to revoke and
withdraw this Plan as the plan of reorganization for the Debtor's Chapter 11
Case, at any time prior to the entry of the Confirmation Order or, if the
conditions set forth in Section 12.2 hereof cannot be satisfied for any reason
after the Confirmation Date, at any time up to the Effective Date. If the Debtor
revokes or withdraws this Plan or if the Confirmation Date or Effective Date
does not occur, then this Plan shall be deemed null and void.
18.5 Modification of this Plan. Prior to the entry of the Confirmation
Order, the Debtor reserves the right, upon the written consent of the Committee
and the Legal Representative, and in accordance with the Bankruptcy Code, to
amend or modify this Plan, and after the entry of the Confirmation Order, the
Debtor may, upon the written consent of the Committee and the Legal
Representative, upon order of the Court, amend or modify this Plan in accordance
with section 1127(b) of the Bankruptcy Code, or remedy any defect or omission or
reconcile any inconsistency in this Plan in such manner as may be necessary to
carry out the purpose and intent of this Plan; provided, however, that this Plan
may not be amended or modified in any manner that materially affects the rights
or obligations of the Corporate Transactions Defendants or the Subscribing
Individuals without the consent of each Corporate Transactions Defendant.
18.6 Transfer of Documents. On the Effective Date, or as soon thereafter as
reasonably practicable, the Debtor or New Keene, as the case may be, shall
transfer or make available to the Creditors' Trust any and all records of Keene.
18.7 Cooperation. The Debtor, New Keene and the Creditors' Trust shall
cooperate with each other and provide each other with reasonable assistance in
connection with the performance of this Plan and the Creditors' Trust Documents.
18.8 Transfer of all Privilege. All privileges which the Debtor is
entitled to assert, including but not limited to attorney/client and work
product privileges, shall be transferred on the Effective Date to the Creditors'
Trust. The Creditors' Trust,
23
<PAGE>
in its sole and absolute discretion, may assert any applicable privileges or
use, disclose or waive any applicable privileges of the Debtor with respect to
any information or documents received or obtained pursuant to this Section 18.8.
In addition, New Keene shall make available to the Creditors' Trust any persons
then employed by New Keene as a director, officer, employee, professional, agent
or representative, at reasonable times and on a reasonable basis, at the cost
and expense of the Creditors' Trust, to assist the Creditors' Trust in the
performance of its duties, including the prosecution of the Causes of Action.
The Debtor shall be deemed to have authorized the Creditors' Trust, at the
Creditors' Trust's cost and expense, for itself and in the name of the Debtor,
to the extent permitted by law (or with the consent of the person(s) in
question), to obtain from any of the Debtor's current and former attorneys,
special counsel, ordinary course professionals, accountants, advisors,
professionals, officers, directors, employees, representatives or agents any and
all information and documents which the Debtor would be entitled or permitted to
obtain; provided, however, that in the event legal action is required to obtain
such information or documents, or any cost or expense shall be incurred in
connection therewith, the Creditors' Trust shall take such action, either in its
name, or, if required, in the name of the Debtor, and the Creditors' Trust shall
bear all legal fees, costs and expenses related thereto.
18.9 Confidentiality. The Creditors' Trust shall not be obligated or
required to disclose to New Keene any information, documents or professional
advice it receives or obtains relating or referring to the Causes of Action.
18.10 Tax Provision. The issuance, transfer or exchange of a security, or
the making, delivery or recording of a deed or other instrument of transfer
under this Plan shall constitute the issuance, transfer or exchange of a
security or the making or delivery of an instrument of transfer within the
meaning of section 1146(c) of the Bankruptcy Code, and shall not be taxed either
to the Debtor's estate, as seller, or to the transferee or recipient thereof
under any law imposing a stamp tax or similar tax.
18.11 Notices. All notices or requests to the Debtor in connection with
this Plan shall be in writing and will be deemed to have been given when
received by first class mail, postage prepaid or by overnight courier addressed
to:
(i) Keene Corporation
757 Third Avenue
New York, New York 10017
Attention: Mr. Timothy E. Coyne
with a copy to:
Berlack, Israels & Liberman LLP
Attorneys for Debtor and Debtor in Possession
120 West 45th Street
New York, New York 10036
Attention: Edward S. Weisfelner, Esq.;
(ii) Marcus Montgomery P.C.
Attorneys for Official Committee of Unsecured
Creditors
53 Wall Street
New York, New York 10005-2899
Attention: John J. Preefer, Esq.;
and
(iii) Matthew Gluck, Esq.
Legal Representative of Future Claimants
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004.
All notices and requests to Entities 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 who has filed a notice of appearance in the
Chapter 11 Case. The parties listed above, or any successors thereto, and any
such holder of a Claim or Interest may designate in writing any other address
for purposes of this Section 18.11, which designation will be effective upon
receipt.
18.12 Dissolution and Termination of Authority. On the Effective Date, the
Committee shall be dissolved, and the members of the Committee and their
representatives, the Legal Representative, the Transactions Claims Examiner, the
Plan Examiner, the Consultants and their respective professionals, and the
Debtor's legal and financial advisors, shall thereupon be released and
discharged of and from all further duties, responsibilities and obligations, if
any, related to, arising from and in connection with services rendered in their
respective capacities in the Chapter 11 Case.
18.13 Headings. The headings used in this Plan are inserted for convenience
only and neither constitute a portion of this Plan nor in any manner affect the
provisions of this Plan.
24
<PAGE>
18.14 Severability. Should any provision in this Plan be determined to be
unenforceable, then, and in that event, this Plan shall be deemed modified to
delete such provision, and such determination shall in no way limit or affect
the enforceability and operative effect of any or all other provisions of this
Plan.
18.15 Entire Agreement. This Plan and the Exhibits hereto constitute and
contain the entire agreement of the parties with respect to the subject matter
hereof and, upon the Effective Date, collectively supersede any and all prior
negotiations, correspondence, understandings and agreements regarding the
subject matter hereof, including but not limited to, that certain Stipulation
and Order of Settlement Regarding a Consensual Plan of Reorganization of the
Debtor entered into on March 28, 1995.
Dated: New York, New York,
March 11, 1996
KEENE CORPORATION
By: /s/ TIMOTHY E. COYNE_________________
Name: Timothy E. Coyne
Title: Vice President--Finance
BERLACK, ISRAELS & LIBERMAN LLP Counsel to Keene Corporation, Debtor and Debtor
in Possession 120 West 45th Street New York, New York 10036 (212) 704-0100
By: /s/ EDWARD S. WEISFELNER_____________
Edward S. Weisfelner (EW 5581)
Janice B. Grubin (JG 1544)
25
<PAGE>
EXHIBIT A
TO
THE PLAN
Amended and Restated Certificate of Incorporation
of Reinhold Industries, Inc.
<PAGE>
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION OF
REINHOLD INDUSTRIES, INC.
ARTICLE I
The name of the corporation (the 'Corporation') is: Reinhold Industries,
Inc.
ARTICLE II
The address of its registered office in the State of Delaware is 1209
Orange Street in the City of Wilmington, County of New Castle. The name of its
registered agent at such address is The Corporation Trust Company.
ARTICLE III
The nature of the business or purposes to be conducted or promoted by the
Corporation is to engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of the State of Delaware (the
'DGCL').
ARTICLE IV
The authorized amount of the capital stock of the Corporation and the
number and par value of the shares of which it is to consist are two million
five hundred thousand (2,500,000) shares, consisting of one million four hundred
eighty thousand (1,480,000) shares of Class A New Common Stock, par $.01 per
share ('Class A New Common Stock'), and one million twenty thousand (1,020,000)
shares of Class B New Common Stock, par value $.01 per share; provided, however,
that upon the conversion of Class B New Common Stock into Class A New Common
Stock, pursuant to this Article IV(8), the number of authorized shares of Class
A New Common Stock shall automatically be increased by the number shares of
Class B New Common Stock so converted and the number of authorized shares of
Class B New Common Stock shall be decreased by the number of shares so
converted, but in no event shall the authorized number of shares of Class A New
Common Stock exceed two million five hundred thousand (2,500,000). (Class A New
Common Stock and Class B New Common Stock are hereinafter collectively referred
to as the 'Common Stock'). No shares of capital stock of the Corporation of any
class shall be issued without voting power as hereinafter provided. Except as
otherwise set forth in this Certificate of Incorporation, Class A New Common
Stock and Class B New Common Stock shall be identical and shall entitle the
holder thereof to the same rights and privileges.
The designations, preferences, privileges and voting powers of each class
of stock of the Corporation, and the restrictions or qualifications thereof, or
manner of determining the same, shall be as follows:
1. Except as provided herein, the holders of the Common Stock shall
have and possess all rights appertaining to full voting and participating
common stock of a corporation organized under the Delaware General
Corporation Law.
2. The affirmative vote of the holders of a majority of the
outstanding shares of Common Stock shall be required to authorize the
following: (i) any amendment to the Certificate of Incorporation of the
Corporation; provided, however, that in no event shall any amendment be
adopted which would adversely affect the voting rights of either the
holders of Class A New Common Stock or the holders of Class B New Common
Stock, as the case may be, without the consent of the holders of a majority
of the outstanding shares of the class whose rights will be adversely
affected thereby; (ii) any amendment to the By-laws of the Corporation upon
which holders of Common Stock are entitled to vote; provided, however, that
any amendment of Article II or Article III of the By-laws shall require the
affirmative vote of the holders of a majority of the outstanding shares of
each of the Class A New Common Stock and the Class B New Common Stock;
(iii) any merger or consolidation of the Corporation with another
corporation or entity upon which holders of Common Stock are entitled to
vote; and (iv) any sale of assets or plan of dissolution of the Corporation
upon which holders of Common Stock are entitled to vote.
3. (a) The holders of the Class A New Common Stock, voting as a class,
shall elect one director of the Corporation until such time as the number
of shares of Class B New Common Stock represents less than twenty-five
(25%) percent of the aggregate number of shares of Common Stock then
outstanding, in which event the holders of the Class A New Common Stock,
voting as a class, shall elect two directors of the Corporation; provided,
however, that at such time all of the remaining shares of Class B New
Common Stock shall have been converted to Class A New Common Stock as set
forth in Article IV(5)(b), the holders of Class A New Common Stock, voting
as a class, shall elect all of the directors of the Corporation.
(b) Each director elected by the holders of Class A New Common Stock
shall be elected by a majority of the shares of the Class A New Common
Stock voting at such time.
A-1
<PAGE>
4. (a) The holders of the Class B New Common Stock, voting as a class,
shall elect two directors of the Corporation until such time as the number
of shares of Class B New Common Stock represents less than twenty-five
(25%) percent of the aggregate number of shares of Common Stock then
outstanding, in which event the holders of the Class B New Common Stock,
voting as a class, shall elect one director.
(b) Each director elected by the holders of Class B New Common Stock
shall be elected by a majority of the shares of Class B New Common Stock
voting at such time.
5. Shares of Class B New Common Stock shall automatically be converted
into shares of Class A New Common Stock as follows:
(a) If the Creditors' Trust, as established pursuant to Section 9.1 of
the Debtor's Third Amended Plan of Reorganization (the 'Plan') of Keene
Corporation (Case No. 93 B 46090 (SMB), United States Bankruptcy Court,
Southern District of New York), shall assign, transfer or dispose of any
shares of Class B New Common Stock (other than to an entity in which the
Creditors' Trust owns all of the beneficial interests or in connection with
the pledge or hypothecation of such Class B New Common Stock to secure bona
fide indebtedness which is not convertible into Class B New Common Stock),
each such share so assigned, transferred or disposed of shall be converted
into one share of Class A New Common Stock;
(b) Upon the earlier to occur of (A) the date upon which the number of
shares of Class B New Common Stock shall represent less than ten (10%)
percent of the aggregate shares of Common Stock then outstanding, and (B)
the date occurring ten years from the Effective Date (as such term is
defined in the Plan), all of the then remaining shares of Class B New
Common Stock shall be converted into Class A New Common Stock;
(c) Upon conversion of shares of Class B New Common Stock into shares
of Class A New Common Stock, the holder of Class B New Common Stock shall
surrender the certificate representing such Class B New Common Stock to the
Corporation, which will issue new certificates reflecting such conversion.
6. No holder of shares of Common Stock shall be entitled, as a matter
of right, to subscribe for or purchase any part of any new or additional
issue of stock of any class whatsoever of the Corporation, or of securities
convertible into stock of any class whatsoever, whether now or hereafter
authorized or whether issued for cash or other consideration or by way of
dividend.
7. Each holder of Common Stock shall be entitled to one vote for each
share held by such holder.
8. (a) Except as otherwise provided herein, for a period of
twenty-five (25) months from the Effective Date, (A) no holder
('Transferor') of shares of Common Stock shall transfer, convey, assign,
pledge or otherwise dispose (including without limitation distributions
from the Creditors Trust, to any beneficiary thereof) of all, or any
interest in, the shares of Common Stock of such holder, or grant an option
or contractual right ('Rights') to acquire ownership of such shares
(whether or not currently exercisable) (collectively, a 'Transfer') to any
person or entity or group of persons or entities acting in concert
('Transferee') and no Transferee shall acquire ownership of such shares or
Rights if, immediately following such Transfer, such Transferee owns or
thereby acquires ownership of more than four and three-quarters (4.75%)
percent of issued and outstanding shares of Common Stock (a Transferee who
has or acquires more than the allowed ownership percentage is hereinafter
referred to as a 'Prohibited Transferee') and (B) no Transfer shall be made
by a person or entity or a group of persons or entities acting in concert
('Prohibited Transferor') who own five (5%) percent or more of the issued
and outstanding Shares of Common Stock. (Any Transfer prohibited by this
Article IV(8) is hereinafter referred to as a 'Prohibited Transfer'). For
these purposes, a Transferee's ownership percentage of the Common Stock
shall be determined under Section 382 of the Internal Revenue Code of 1986,
as amended, and the Treasury Regulations promulgated thereunder which are
applicable on the date of such actual or purported transfer and shall
include direct ownership and adjustments for indirect ownership as required
under such statute and regulations.
(b) Within thirty (30) days of obtaining actual knowledge of any
Transfer, the Corporation may demand in writing that the Transferor making
a Transfer of, or the Transferee acquiring, such Common Stock provide a
certificate ('Certificate') to the Corporation within ten (10) days of
receipt of such notice, which Certificate sets forth the aggregate number
of shares of Common Stock owned, in title or beneficially, by the
Transferor or the Transferee both preceding and following such Transfer and
such other information (including, but not limited to, direct or indirect
interests in other entities owning shares of Common Stock, family
relationships with persons owning shares of Common Stock or direct or
indirect interests in entities owning such shares, and options or
contractual rights to purchase shares of Common Stock) as the Corporation
shall reasonably deem necessary to determine the Transferor's and the
Transferee's percentage ownership of Common Stock for purposes of this
Article IV(8).
(c) If, upon review of the Certificate and other available facts, the
Corporation determines that the Transferee is, or by reason of the transfer
has become, a Prohibited Transferee, or that the Transferor is a Prohibited
Transferor, the Corporation shall declare the transfer to a Prohibited
Transfer under this Article IV(8), and the acquisition of the shares or
Rights by the
A-2
<PAGE>
Prohibited Transferee or the Transfer of the shares or Rights by a
Prohibited Transferor, as the case may be, shall be deemed null and void ab
initio, the transfer agent for the Corporation shall treat the shares
subject to the Prohibited Transfer (including any shares subject to Rights)
as having never been transferred to, or acquired by, the Prohibited
Transferee, or the Transferee of a Prohibited Transferor, and the
Corporation's books and records shall reflect that no Transfer of such
shares has occurred, unless the Board of Directors of the Corporation by
unanimous consent shall waive, in writing, the provisions of this Article
IV(8) with respect to such transfer.
(d) In the event of a Prohibited Transfer, any purported Transferee
shall not be entitled to any rights as a shareholder of the Corporation,
including, but not limited to, the right to vote shares subject to a
Prohibited Transfer, and the right to receive any dividend distributions,
including liquidating distributions on account thereon, and the purported
Transferee shall, upon written demand by the Corporation, return any and
all distributions which such Transferee shall have received from the
Corporation with respect to any shares of Common Stock subject to a
Prohibited Transfer.
(e) Each certificate evidencing Common Stock shall bear the following
restrictive legend:
(A) The front of such certificate shall bear a conspicuous legend
reading as follows:
'THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO
RESTRICTION PURSUANT TO THE AMENDED AND RESTATED CERTIFICATE OF
INCORPORATION OF REINHOLD INDUSTRIES, INC., WHICH RESTRICTION IS
SUMMARIZED ON THE BACK OF THIS CERTIFICATE.'
(B) The back of such certificate shall bear a legend reading as
follows:
'Transfer of the shares of Common Stock of the Corporation is
restricted in accordance with Article IV(8) of the Amended and
Restated Certificate of Incorporation of the Corporation, which
prohibits the acquisition of the ownership of shares, or rights to
acquire shares, of Common Stock by a person or entity or persons or
entities acting in concert which has, or thereby would have, ownership
of more than four and three quarters (4.75%) percent of the issued and
outstanding shares of Common Stock, as determined under Section 382 of
Internal Revenue Code of 1986, as amended, and the Treasury
Regulations promulgated thereunder (collectively, 'Section 382'). The
transfer of shares, or rights to acquire shares, by a person or entity
or persons or entities acting in concert which has ownership of five
(5%) percent of the issued and outstanding Common Stock of the
Corporation, as determined under Section 382, also is restricted in
accordance with Article IV(8) of the Amended and Restated Certificate
of Incorporation. Any transfer prohibited by Article IV(8) of the
Amended and Restated Certificate of Incorporation of the Corporation
shall be null and void ab initio and will not be reflected on the
books and records of the Corporation, unless the restrictions are
waived by the unanimous consent of the Board of Directors of the
Corporation.'
ARTICLE V
The Corporation's Board of Directors shall consist of three members who
shall be elected as provided in Article IV.
ARTICLE VI
In furtherance and not in limitation of the powers conferred by statute,
the by-laws of the Corporation may be made, altered, amended or repealed by a
majority vote of the entire board of directors (except with respect to Article
II or Article III of the by-laws, which may be altered, amended or repealed only
by a unanimous vote of the entire board of directors) or by the vote of the
stockholders, approving the alteration, amendment or repeal, as the case may be,
in accordance with the provisions of Article IV(2).
ARTICLE VII
1. The Corporation shall indemnify to the fullest extent permitted under
and in accordance with the laws of the State of Delaware any person who was or
is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative by reason of the fact that he is or was a director, officer,
employee or agent of or in any other capacity with another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, and with respect
to any criminal action or proceeding, had no reasonable cause to believe his
conduct was unlawful.
2. Expenses (including attorneys' fees) incurred in defending any civil,
criminal, administrative or investigative action, suit or proceeding shall (in
the case of any action, suit or proceeding against a director of the
Corporation) or may (in the case of any
A-3
<PAGE>
action, suit or proceeding against an officer, trustee, employee or agent) be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding as authorized by the Board upon receipt of an undertaking by or on
behalf of the indemnified person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Corporation as
authorized in this paragraph.
3. The indemnification, advancement of expenses and other rights set forth
in this Paragraph shall not be exclusive of any provisions with respect thereto
in the by-laws or any other contract or agreement between the Corporation and
any officer, director, employee or agent of the Corporation.
4. Neither the amendment nor repeal of this Article VII, subparagraphs 1, 2
or 3, nor the adoption of any provision of this Certificate of Incorporation
inconsistent with Article VII, subparagraphs 1, 2 or 3, shall eliminate or
reduce the effect of this Article VII, subparagraphs 1, 2 and 3, in respect of
any matter occurring before such amendment, repeal or adoption of an
inconsistent provision or in respect of any cause of action, suit or claim
relating to any such matter which would have given rise to a right of
indemnification or right to receive expenses pursuant to this Article VII,
subparagraphs 1, 2 or 3, if such provision had not been so amended or repealed
or if a provision inconsistent therewith had not been so adopted.
5. No director shall be personally liable to the Corporation or any
stockholder for monetary damages for breach of fiduciary duty as a director,
except for any matter in respect of which such director (A) shall be liable
under Section 174 of the DGCL or any amendment thereto or successor provision
thereto, or (B) shall be liable by reason that, in addition to any and all other
requirements for liability, he: (i) shall have breached his duty of loyalty to
the Corporation or its stockholders; (ii) shall not have acted in good faith or,
in failing to act, shall not have acted in good faith; (iii) shall have acted in
a manner involving intentional misconduct or a knowing violation of law or, in
failing to act, shall have acted in a manner involving intentional misconduct or
a knowing violation of law; or (iv) shall have derived an improper personal
benefit.
If the Delaware General Corporation Law is amended after the date of
incorporation of the Corporation to authorize corporation action further
eliminating or limiting the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the fullest
extent permitted by the Delaware General Corporation Law, as so amended.
6. This Certificate of Merger shall be effective on or such date as the
Order hereinabove referred to shall provide.
Dated: , 1996
ATTEST: REINHOLD INDUSTRIES, INC.
By:
Secretary Name:
Title:
ATTEST: KEENE CORPORATION
By:
Secretary Name:
Title:
A-4
<PAGE>
EXHIBIT B
TO
THE PLAN
Amended and Restated By-laws
of Reinhold Industries, Inc.
(formerly, Keene Corporation)
<PAGE>
AMENDED AND RESTATED BY-LAWS OF
REINHOLD INDUSTRIES, INC.
(FORMERLY, KEENE CORPORATION)
ARTICLE I
OFFICES
SECTION 1. Delaware Office. The registered office of Reinhold Industries,
Inc. (the 'Corporation') within the State of Delaware shall be maintained at the
office of CT Corporation in the City of Dover, County of Kent.
SECTION 2. Other Offices. The Corporation may also have an office or
offices and keep the books and records of the Corporation, except as otherwise
may be required by law, in such other place or places, either within or without,
the State of Delaware, as the Board of Directors of the corporation (the
'Board') may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Place of Meetings. All meetings of holders of shares of capital
stock of the Corporation shall be held at the office of the Corporation in the
State of Delaware or at such other place, within or without the State of
Delaware, as may from time to time be fixed by the Board or specified or fixed
in the respective notices or waivers of notice thereof.
SECTION 2. Annual Meetings. An annual meeting of stockholders of the
Corporation for the election of directors and for the transaction of such other
business as may properly come before the meeting (an 'Annual Meeting') shall be
held on the first Tuesday of each [ ], commencing
, 1997 or on such other date and at such time as may be
fixed by the Board. If the Annual Meeting shall not be held on the day
designated, the Board shall call a special meeting of stockholders as soon as
practicable for the election of directors.
SECTION 3. Special Meetings. Special meetings of stockholders, unless
otherwise provided by law, may be called at any time by the Board, the President
or stockholders owning, in the aggregate, twenty-five (25%) percent or more of
the outstanding Common Stock of the Corporation. Any such call must specify the
matters to be acted upon at such meeting and only such matters shall be acted
upon thereat.
SECTION 4. Notice of Meetings. Except as otherwise may be required by law,
notice of each meeting of stockholders, whether an Annual Meeting or a special
meeting, shall be in writing, shall state the purpose or purposes of the
meeting, the place, date and hour of the meeting and, unless it is an Annual
Meeting, shall indicate that the notice is being issued by or at the direction
of the person or persons calling the meeting, and a copy thereof shall be
delivered or sent by mail, not less than ten (10) nor more than sixty (60) days
before the date of said meeting, to each stockholder entitled to vote at such
meeting. In the event that a meeting relates solely to matters in which either
only the holders of Class A New Common Stock or Class B New Common Stock may
vote, such notice shall be given only to the holders of such class as shall be
entitled to vote thereon. If mailed, such notice shall be directed to such
stockholder at his address as it appears on the stock records of the
Corporation, unless he shall have filed with the Secretary a written request
that notices to him be mailed to some other address, in which case it shall be
directed to him at such other address. Notice of an adjourned meeting need not
be given if the time and place to which the meeting is to be adjourned was
announced at the meeting at which the adjournment was taken, unless (i) the
adjournment is for more than thirty (30) days or (ii) the Board shall fix a new
record date for such adjourned meeting after the adjournment.
SECTION 5. Quorum. At each meeting of stockholders of the Corporation, the
holders of shares having majority of the voting power of the capital stock of
the Corporation issued and outstanding and entitled to vote thereat shall be
present or represented by proxy to constitute a quorum for the transaction of
business, except as otherwise provided by law; provided, however, that if the
meeting is called for the purpose of, or relates to, the election of directors
and the Corporation has both Class A New Common Stock and Class B New Common
stock outstanding, a quorum shall consist of the holders of shares having a
majority of the shares of Class A New Common Stock and a majority of the shares
of Class B New Common Stock, respectively.
SECTION 6. Adjournments. In the absence of a quorum at any meeting of
stockholders or any adjournment or adjournments thereof, holders of shares
having a majority of the voting power of the capital stock present or
represented by proxy at the meeting may adjourn the meeting from time to time
until a quorum shall be present or represented by proxy. At any such adjourned
meeting at which a quorum shall be present or represented by proxy, any business
may be transacted which might have been transacted at the meeting originally
called if a quorum had been present or represented by proxy thereat.
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SECTION 7. Voting. Except as otherwise provided in the Certificate of
Incorporation of the Corporation (the 'Certificate of Incorporation') at each
meeting of stockholders, every stockholder of the corporation entitled to vote
shall be entitled to one vote for every share of capital stock standing in his
name on the stock records of the Corporation (i) at the time fixed pursuant to
Section 6 of Article VII of these By-Laws as the record date for the
determination of stockholders entitled to vote at such meeting, or (ii) if no
such record date shall have been fixed, then at the close of business on the day
next preceding the day on which notice thereof shall be given. At each meeting
of stockholders, all matters shall be decided by a majority of the votes cast at
such meeting by the holders of shares of capital stock present or represented by
proxy and entitled to vote thereon, a quorum being present, except where a
different vote is required by law or the Certificate of Incorporation.
SECTION 8. Inspectors. For each election of directors by the stockholders
and in any other case in which it shall be advisable, in the opinion of the
Board, that the voting upon any matter shall be conducted by inspectors of
election, the Board shall appoint two inspectors of election. If, for any such
election of directors or the voting upon any such other matter, any inspector
appointed by the Board shall be unwilling or unable to serve, or if the Board
shall fail to appoint inspectors, the chairman of the meeting shall appoint the
necessary inspector or inspectors. The inspectors so appointed, before entering
upon the discharge of their duties, shall be sworn faithfully to execute the
duties of inspectors with strict impartiality, and according to the best of
their ability, and the oath so taken shall be subscribed by them. Such
inspectors shall determine the number of shares of capital stock of the
Corporation outstanding and the voting power of each of the shares represented
at the meeting, the existence of a quorum, and the validity and effect of
proxies, and shall receive votes, ballots or consents, hear and determine all
challenges and questions arising in connection with the right to vote, count and
tabulate all votes, ballots or consents, determine the result, and do such acts
as are proper to conduct the election or vote with fairness to all stockholders
on request of the chairman of the meeting or any stockholder entitled to vote
thereat, the inspectors shall make a report in writing of any challenge,
question or matter determined by them and shall execute a certificate of any
fact found by them. No director or candidate for the office of director shall
act as an inspector of election of directors. Inspectors need not be
stockholders.
ARTICLE III
DIRECTORS
SECTION 1. Powers. The business and affairs of the Corporation shall be
managed by or under the direction of the Board. The Board may select one of its
members to be Chairman of the Board. The Chairman of the Board shall, if
present, preside at all meetings of the Board and of the stockholders. If the
Chairman is not present, the members of the Board then present will elect one of
the members so present to serve as Acting Chairman.
SECTION 2. Number, Election and Terms. The total number of directors
constituting the entire Board shall be three. Any vacancies on the Board
resulting from death, resignation, disqualification, removal or other cause
shall be filled as follows:
(a) If the vacancy relates to a director who was elected by the holder
of the Class B New Common Stock of the Corporation, such vacancy shall be
filled by such holder.
(b) If the vacancy relates to a director who was elected by the
holders of the Class A New Common Stock of the Corporation, and there
remain one or more directors elected by the holders of the Class A New
Common Stock, such vacancy shall be filled by the affirmative vote of a
majority of such remaining directors, or by the sole remaining director
elected by such holders if there shall be only one such director; however,
if there is no remaining director elected by the holders of the Class A New
Common Stock, the remaining directors shall call a special meeting of the
holders of the Class A New Common Stock for the purpose of electing a
director to fill such vacancy.
Any director elected in accordance with either of this Section 2(a) or 2(b)
shall hold office until the Annual Meeting at which the term of office to which
such director has been elected expires and until such director's successor shall
have been duly elected and qualified.
SECTION 3. Nominations of Directors; Election. Nominations for the election
of directors may be made by the Board or by any stockholder entitled to vote
generally in the election of directors who complies with the procedures set
forth in this Section 3. Directors shall be at least 21 years of age. Directors
need not be stockholders. At each meeting of stockholders for the election of
directors at which a quorum is present, the persons receiving a plurality of the
votes cast shall be elected directors. All nominations by stockholders shall be
made pursuant to timely notice in proper written form to the Secretary of the
Corporation. To be timely, except in the case of a director to be elected by the
holder of the Class B New Common Stock at a Special Meeting, a stockholder's
notice shall be delivered to or mailed and received at the principal executive
offices of the Corporation not less than thirty (30) days nor more than sixty
(60) days prior to the meeting; provided, however, that in the event that less
than forty (40) days notice or prior public disclosure of the date of the
meeting is given or made to stockholders, notice by the stockholder to be timely
must be so received not later than the close of business on the tenth (10th) day
following the day on which such notice of the date of the meeting was mailed or
such public disclosure was made. To be in proper written form, such stockholders
notice shall set forth in
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writing (i) as to each person whom the stockholder proposes to nominate for
election or reelection as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended, including, without
limitation, such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected; and (ii) as to the
stockholder giving the notice, (x) the name and address, as they appear on the
Corporations books, of such stockholder and (y) the class and number of shares
of the Corporation which are beneficially owned by such stockholder. In the
event that a stockholder seeks to nominate one or more directors, the Secretary
shall appoint two inspectors, who shall not be affiliated with the Corporation,
to determine whether a stockholder has complied with this Section 3. If the
inspectors shall determine that a stockholder has not complied with this Section
3, the inspectors shall direct the chairman of the meeting to declare to the
meeting that a nomination was not made in accordance with the procedures
prescribed by the By-Laws of the Corporation, and the chairman shall so declare
to the meeting and the defective nomination shall be disregarded.
SECTION 4. Place of Meetings. Meetings of the Board shall be held at the
Corporation's office in the State of Delaware or at such other place, within or
without such State, as the Board may from time to time determine or as shall be
specified or fixed in the notice or waiver of notice of any such meeting.
SECTION 5. Regular Meetings. Regular meetings of the Board shall be held
quarterly in accordance with a yearly meeting schedule as determined by the
Board; or such meetings may be held on such other days and at such other times
as the Board may from time to time determine. Notice of regular meetings of the
Board need not be given except as otherwise required by these By-Laws.
SECTION 6. Special Meetings. Special meetings of the Board may be called
by the Chairman or the President and shall be called by the Secretary at the
request of any two directors.
SECTION 7. Notice of Meetings. Notice of each special meeting of the Board
(and of each regular meeting for which notice shall be required), stating the
time, place and purposes thereof, shall be mailed to each director, addressed to
him at his residence or usual place of business, or shall be sent to him by
telex, cable or telegram so addressed, or shall be given personally or by
telephone on twenty-four hours' notice.
SECTION 8. Quorum and Manner of Acting. The presence of at least a majority
of the authorized number of directors shall be necessary and sufficient to
constitute a quorum for the transaction of business at any meeting of the Board.
Except where a different vote is required by law, the Certificate of
Incorporation or these By-Laws, the act of a majority of the directors present
at any meeting at which a quorum shall be present shall be the act of the Board;
provided, however, that the affirmative vote of the entire Board of Directors
shall be required to amend Article II or Article III of these By-laws. Any
action required or permitted to be taken by the Board may be taken without a
meeting if all the directors consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
directors shall be filed with the minutes of the proceedings of the Board. Any
one or more directors may participate in any meeting of the Board by means of a
conference telephone or similar communications equipment allowing all persons
participating in the meeting to hear each other at the same time. Participation
by such means shall be deemed to constitute presence in person at a meeting of
the Board.
SECTION 9. Resignation. Any director may resign at any time by giving
written notice to the Corporation; provided, however, that written notice to the
Board, the Chairman of the Board, the President or the Secretary shall be deemed
to constitute notice to the Corporation. Such resignation shall take effect upon
receipt of such notice or at any later time specified therein and, unless
otherwise specified therein, acceptance of such resignation shall not be
necessary to make it effective.
SECTION 10. Removal of Directors. Any director may be removed from office,
with or without cause, by the affirmative vote of such number of shares of
Common Stock as would be sufficient to elect him if then voted at a meeting held
to elect the entire Board of Directors.
ARTICLE IV
COMMITTEES OF THE BOARD
SECTION 1. Appointment and Powers of Executive Committee. The Board may, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Executive Committee of the Board which shall
consist of such number of members (but not less than three) as the Board shall
determine, one of whom shall be the President. Except as provided by Delaware
law, during the interval between the meetings of the Board, the Executive
Committee shall possess and may exercise all the powers of the Board in the
management and direction of all the business and affairs of the Corporation
(except the matters hereinafter assigned to any other Committee of the Board),
in such manner as the Executive Committee shall deem in the best interests of
the Corporation in all cases in which specific directions shall not have been
given by the Board. A majority of the members of the Executive Committee shall
constitute a quorum for the transaction of business by the committee and the act
of a
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majority of the members of the committee present at a meeting at which a quorum
shall be present shall be the act of the committee. Either the President or the
Chairman of the Executive Committee may call the meetings of the Executive
Committee.
SECTION 2. Appointment and Powers of Audit Committee. The Board may, by
resolution adopted by the affirmative vote of a majority of the authorized
number of directors, designate an Audit Committee of the Board, which shall
consist of such number of members of the Board as the Board shall determine. The
Audit Committee shall (i) make recommendations to the Board as to the
independent accountants to be appointed by the Board; (ii) review with the
independent accountants the scope of their examination; (iii) receive the
reports of the independent accountants and meet with representatives of such
accountants for the purpose of reviewing and considering questions relating to
their examination and such reports; (iv) review, either directly or through the
independent accountants, the internal accounting and auditing Procedures of the
Corporation; and (v) perform such other functions as may be assigned to it from
time to time by the Board. The Audit Committee may determine its manner of
acting and fix the time and place of its meetings, unless the Board shall
otherwise provide. A majority of the members of the Audit Committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of the committee present at a meeting at which a
quorum shall be present shall be the act of the committee.
SECTION 3. Other Committees. The Board may, by resolution adopted by the
affirmative vote of a majority of the authorized number of directors, designate
members of the Board to constitute such other committees of the Board as the
Board may determine. Such committees shall in each case consist of such number
of directors as the Board may determine, and shall have and may exercise, to the
extent permitted by law, such powers as the Board may delegate to them, in the
respective resolution, appointing them. Each such committee may determine its
manner of acting and fix the time and place of its meeting, unless the Board
shall otherwise provide. A majority of the members of any such committee shall
constitute a quorum for the transaction of business by the committee and the act
of a majority of the members of such committee present at a meeting at which a
quorum shall be present shall be the act of the committee.
SECTION 4. Action by Consent; Participation by Telephone or Similar
Equipment. Unless the Board shall otherwise provide, any action required or
permitted to be taken by any committee may be taken without a meeting if all
members of the committee consent in writing to the adoption of a resolution
authorizing the action. The resolution and the written consents thereto by the
members of the committee shall be filed with the minutes of the proceedings of
the committee by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
one another. Participation by such means shall constitute presence in person at
a meeting of the committee.
SECTION 5. Changes in Committees; Resignations. The Board shall have power,
by the affirmative a majority of the authorized number of directors, at any
time, change the members of, to fill vacancies in, and to discharge any
committee of the Board. Any member of any such committee may resign at any time
by giving notice to the Corporation; provided, however, that notice to the
Board, the Chairman of the Board, President, the chairman of such committee or
the Secretary shall be deemed to constitute notice to the Corporation. Such
resignation shall take effect upon receipt of such notice or at any later time
specified therein; and, unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective. Any member of any such
committee may be removed at any time, either with or without cause, by the
affirmative vote of a majority of the authorized number of any meeting of the
Board called for that.
ARTICLE V
OFFICERS
SECTION 1. Number and Qualification. The Corporation shall have such
officers as may be necessary or desirable for the business of the Corporation.
There shall be elected by the Board persons having the titles and exercising the
duties (as prescribed by the By-Laws or by the Board) of Chairman of the Board,
President, Vice President, Treasurer and Secretary, and such other persons
having such other titles and such other duties as the Board may prescribe. The
same person may hold more than one office. The Chairman of the Board shall be
elected from among the directors. Unless otherwise determined by the Board, the
officers of the Corporation shall be elected by the Board at the annual meeting
of the Board, and shall be elected to hold office until the next succeeding
annual meeting of the Board. In the event of the failure to elect officers at
such annual meeting, officers may be elected at any regular or special meeting
of the Board. Each officer shall hold office until his successor has been
elected and qualified, or until his earlier death, resignation or removal.
SECTION 2. Resignations. Any officer may resign at any time by giving
written notice to the Corporation; provided, however, that notice to the Board,
the President, Chairman of or the Secretary shall be deemed to constitute notice
to the Corporation. Such resignation shall take effect upon receipt of such
notice or at any later time specified therein.
SECTION 3. Vacancies. Any vacancy among the officers, whether caused by
death, resignation, removal or any other cause, shall be filled in the manner
prescribed for election or appointment to such office.
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SECTION 4. President. The President shall be the chief executive officer of
the corporation. The President shall have general and day to day supervision of
the business and affairs of the Corporation. He shall perform the duties
incident to the office of the President and all such other duties and shall have
such other powers as are specified in these By-Laws or as shall be assigned to
or conferred upon him from time to time by the Board by resolution or in any
employment agreement approved by the Board.
SECTION 5. Vice President. Each Vice President shall perform such duties
and exercise such powers as may be assigned to him from time to time by the
Board. In the absence of a President, the duties of a President shall be
performed and his powers may be exercised by such Vice President as may be
designated by the President or, failing such designation, such duties shall be
performed and such power may be exercised by each Vice President in the order of
their earliest election to that office; subject in any case to review and
superseding action by the President.
SECTION 6. Treasurer. The Treasurer shall have charge and custody of, and
responsibility for, all funds and securities of the Corporation, shall keep full
and accurate accounts of receipts and disbursements in books belonging to the
Corporation, shall deposit all moneys and other valuables for the credit of the
corporation in such depositaries as may be designated pursuant to these By-Laws,
shall receive, and give receipts for, moneys due and payable to the Corporation
from any source whatsoever, shall disburse the funds of the Corporation and
shall render at all regular meetings of the Board, or whenever the Board may
require, an account of all his transactions as Treasurer. He shall, in general,
perform all the duties incident to the office of Treasurer and all such other
duties as may be assigned to him from time to time by the President or such
other officers whom the Treasurer reports.
SECTION 7. Secretary. The Secretary shall, if present, act as secretary of,
and keep the minutes of all meetings of the Board, the Executive Committee and
other committees of the Board and the stockholders in one or more books provided
for that purpose, shall see that all notices are duly given in accordance with
these By-Laws and as required by law, shall be custodian of the seal of the
corporation and shall affix and attest the seal to all documents to be executed
on behalf of the Corporation under its seal. He shall, in general, perform all
the duties incident to the office of Secretary and all such other duties as may
be assigned to him from time to time by the President or such other officer to
whom the secretary reports.
SECTION 8. Additional Officers. The Board may by resolution appoint such
other officers and agents as it may deem appropriate, and such other officers
and agents shall hold their offices for such terms and shall exercise such
powers and perform such duties as may be determined from time to time by the
Board.
SECTION 9. Bonds of Officers. If required by the Board, any officer of the
Corporation shall give a bond for the faithful discharge of his duties in such
amount and with such surety or sureties as the Board may require.
SECTION 10. Salaries. The salaries of all officers and agents of the
Corporation shall be fixed by the Board. No officer shall be prevented from
receiving any such salary by reason of the fact that he is also a director of
the Corporation.
ARTICLE VI
CONTRACTS, CHECKS, LOANS, DEPOSITS, ETC.
SECTION 1. Contracts. The Board may authorize any officer or officers,
agents, in the name and on behalf of the Corporation, to enter into any contract
or to execute and deliver any instrument, which authorization may be general or
confined to specific instances; and, unless so authorized by the Board, no
officer, agent or employee shall have any power or authority to bind the
Corporation by any contract or engagement or to pledge its credit or to render
liable pecuniarily for any purpose or for any amount.
SECTION 2. Checks, etc. All checks, drafts, bills of exchange or other
orders for the Payment of money out of the funds of the corporation, and all
notes or other evidences of indebtedness of the Corporation, shall be signed in
the name and on behalf of the Corporation in such manner as shall from time to
time be authorized by the Board, which authorization may be general or confined
to instances.
SECTION 3. Loans. No loan shall be contracted on behalf of the corporation,
and no negotiable paper shall be issued in its name, unless authorized by the
Board, which authorization may be general or confined to specific instances. All
bonds, debentures, notes and other obligations or evidences of indebtedness of
the Corporation issued for such loans shall be made, executed and delivered as
the Board shall authorize.
SECTION 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time for the credit of the Corporation in such
banks, trust companies or other depositaries as may be selected by or in the
manner designated by the Board. The Board or designees may make such special
rules and regulations with respect to such bank accounts, not inconsistent with
the provisions of the Certificate of Incorporation or these By-laws, as they may
deem advisable.
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ARTICLE VII
CAPITAL STOCK
SECTION 1. Stock Certificate. Each stockholder shall be entitled to have,
in such form as shall be approved by the Board, a certificate or certificates
signed by the Chairman of the Board or the President, and by either the
Treasurer or an Assistant Treasurer or the Secretary or an Assistant Secretary
(except that, when any such certificate is countersigned by a transfer agent or
registered by a registrar other than the Corporation or an employee of the
Corporation, the signatures of any such officers may be facsimiles, engraved or
printed), which may be sealed with the seal of the Corporation (which seal may
be a facsimile, engraved or printed), certifying the number of shares of capital
stock of the Corporation owned by such stockholder. In the event any officer who
has signed or whose facsimile signature has been placed upon any such
certificate shall have ceased to be such officer before such certificate is
issued, such certificate may be issued by the Corporation with the same effect
as if he were such officer at the date of its issue. Certificates evidencing
shares of Common Stock shall bear the restrictive legend required by the
Certificate of Incorporation relating to Net Operating Losses of the
Corporation.
SECTION 2. List of Stockholders Entitled to Vote. The officer of the
Corporation who has charge of the stock ledger of the Corporation shall prepare
and make or cause to be prepared or made, at least ten (10) days before every
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting arranged in alphabetical order, and showing the address of each
stockholder and the number of shares of capital stock registered in the name of
each stockholder. Such list shall be open to the examination of any stockholder,
for any purpose germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at a place within
the city where the meeting is to be held, which place shall be specified in the
notice of the meeting, or, if not so the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
for the duration thereof, and may be inspected by any stockholder of the
Corporation who is present.
SECTION 3. Stock Ledger. The stock ledger of the Corporation shall be the
only evidence as to who are the stockholders entitled to examine the stock
ledger, the list required by Section 2 of this Article VII or the books of the
Corporation, or to vote in person or by proxy at any meeting of stockholders.
SECTION 4. Transfers of Capital Stock. Transfers shares of capital stock of
the Corporation shall be made only on the stock ledger of the Corporation by the
holder of record thereof, by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, or by
the transfer agent of the Corporation, and only on surrender of the certificate
or certificates representing such shares, properly endorsed or accompanied by a
duly executed stock transfer power. The Board may make such additional rules and
regulations as it may deem advisable concerning the issue and transfer of
certificates representing shares of the capital stock of the Corporation.
SECTION 5. Lost Certificates. The Board may direct a new certificate to be
issued in place of any certificate theretofore issued by the Corporation alleged
to have been lost, stolen or destroyed, upon the making of an affidavit of that
fact by the person claiming the certificate of stock to be lost, stolen or
destroyed. When authorizing such issue of a new certificate, the Board may, in
its discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate, or his legal
representative, to give the Corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
SECTION 6. Fixing of Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or entitled to receive payment of any
dividends or other distributions or allotments of any rights, or entitled to
exercise any rights in respect to any change, conversion or exchange of stock,
or for the purpose of any other lawful action, the Board may fix, in advance, a
record date, which shall not be more than sixty (60) days nor less than ten (10)
days before the date of such meeting, nor more than sixty (60) days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board may fix a new record date for the
adjourned meeting.
SECTION 7. Beneficial Owner. The Corporation shall be entitled to recognize
the exclusive right of a person registered on its books as the owner of shares
to receive dividends and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares,
and shall not be bound to recognize any equitable or other claim to or interest
in such shares on the part of any other person, whether or not the Corporation
shall have express or other notice thereof, except as otherwise provided by law.
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ARTICLE VIII
FISCAL YEAR
The Corporation's fiscal year shall coincide with the calendar year.
ARTICLE IX
SEAL
The corporate seal shall be in such form as the Board of Directors shall
prescribe.
ARTICLE X
WAIVER OF NOTICE
Whenever any notice is required by law, the Certificate of Incorporation or
these By-Laws to be given to any director, member of a committee or stockholder,
a waiver thereof in writing, signed by the person or persons entitled to such
notice, whether signed before or after the time stated in such written waiver,
shall be deemed equivalent to such notice. Attendance of a person at a meeting
shall constitute a waiver of notice of such meeting, except when such person
attends a meeting for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business on the grounds that the meeting is
not lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any meeting of the stockholders, directors, or members of a
committee of Directors need be specified in any written waiver of notice.
ARTICLE XI
AMENDMENTS
These By-Laws or any of them may be amended or supplemented in any respect
at any time, either (i) at any meeting of stockholders; provided that any
amendment or supplement proposed to be acted upon at any such meeting shall have
been described or referred to in the notice of such meeting; or (ii) at any
meeting of the Board, provided that any amendment or supplement proposed to be
acted upon at any such meeting shall have been described or referred to in the
notice of such meeting or an announcement with respect thereto shall have been
made at the last previous Board meeting, and provided further that no amendment
or supplement adopted by the Board shall vary or conflict with any amendment or
supplement adopted by the stockholders.
<PAGE>
B-7
EXHIBIT C
TO
THE PLAN
Certificate of Merger
of Reinhold Industries, Inc.
into Keene Corporation
<PAGE>
CERTIFICATE OF MERGER OF
REINHOLD INDUSTRIES, INC.
INTO
KEENE CORPORATION
The undersigned corporation organized and existing under and by virtue of
the General Corporation Law of Delaware, DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of the constituent
corporations of the merger is as follows:
NAME STATE OF INCORPORATION
Keene Corporation........................................... Delaware
Reinhold Industries, Inc.................................... Delaware
SECOND: That provision for the making of this Certificate of Merger of
Reinhold Industries, Inc. into Keene Corporation and for the making of the
amendment to the Certificate of Incorporation of Keene Corporation is contained
in an order, dated , 1996, of the United States Bankruptcy Court for the
Southern District of New York (the 'Bankruptcy Court'), in In re Keene
Corporation, Case No. 93 B 46090.
THIRD: That this Certificate of Merger has been duly executed and
acknowledged by the officers of the corporation so designated in such order of
the Bankruptcy Court in accordance with Sections 251 and 303 of the General
Corporation Law of the State of Delaware.
FOURTH: That the name of the surviving corporation of the merger is 'Keene
Corporation', which name is being changed as set forth below.
FIFTH: That the Certificate of Incorporation of the surviving corporation
of the merger shall be amended and restated to read in its entirety as follows:
[To be attached to Amended and Restated
Certificate of Incorporation]
C-1
<PAGE>
EXHIBIT D
TO
THE PLAN
Creditors' Trust Agreement
<PAGE>
CREDITORS TRUST AGREEMENT
This Creditors Trust Agreement ('Trust Agreement') dated as of
among Keene Corporation, as trustor (the 'Trustor' or the'Debtor'), Archie R.
Dykes, Richard A. Lippe, and John J. Robbins, as Trustees,
and New Keene.
WHEREAS, the Trustor filed a voluntary petition for relief under Title 11
of Chapter 11 of the United States Code (the 'Bankruptcy Code') on December 3,
1993 and proposed a plan of reorganization (the 'Plan')(1) which called for the
establishment of the Creditors Trust (the 'Trust'); and
WHEREAS, pursuant to the Plan, the Trust is to use its assets and/or income
to liquidate and to pay in accordance with the Asbestos Related Personal Injury
and Asbestos In Buildings Claims Resolution and Distribution Procedures attached
hereto as Exhibit A and B (collectively, the 'Procedures') Asbestos Related
Claims and Demands against the Debtor, as defined in Sections 101(5) and
524(g)(5) of the Bankruptcy Code, respectively; and
WHEREAS, pursuant to the Plan, the Trust is intended to qualify as a
'designated settlement fund' or a 'qualified settlement fund' within the meaning
of Section 1.468B-1 of the Treasury regulations promulgated under Section 468B
of the Internal Revenue Code; and
WHEREAS, the Bankruptcy Court (the 'Court') has determined that the Trust
and the Plan satisfy all the prerequisites for a supplemental injunction
pursuant to Section 524(g) of the Bankruptcy Code, which Permanent Channelling
Injunction has been entered in connection with the Order confirming the Plan;
and
WHEREAS, in order to effectuate the Debtor's Plan, to provide for the
payment of Asbestos Related Claims and Demands and to receive the benefits under
the Internal Revenue Code of so providing for certain of such payments, the
Trustor desires to enter into this Trust Agreement with the Trustees and
transfer the Creditors Trust Distribution (the 'Trust Assets') to the Trust
pursuant hereto.
NOW, THEREFORE, IT IS HEREBY AGREED as follows:
ARTICLE I
DECLARATION OF TRUST
1.1 Name. The Trust shall be known as the 'Keene Creditors Trust', and the
Trustees may transact the business and affairs of the Trust in that name.
1.2 Purpose. The purposes of the Trust are (i) to assume the liabilities
within the meaning of Section 524(g)(2)(B)(i)(1) of the Bankruptcy Code of the
Debtor and its successors in interest resulting from personal injury, wrongful
death, or property-related damage attributable to the presence of, or exposure
to, the Debtor's asbestos or asbestos-containing products; (ii) to use the Trust
Assets and income to pay holders of valid Asbestos Related Claims and Demands in
accordance with this Trust Agreement and the Procedures; and (iii) to otherwise
comply in all respects with the requirements of a trust set forth in Section
524(g)(2)(B)(i) of the Bankruptcy Code.
1.3 Transfer of Assets. The Trustor hereby transfers and assigns to the
Trust the assets listed on Schedule 1 attached hereto (the 'Trust Assets')
having heretofore obtained all consents and taken all other steps prerequisite
to such transfer and assignment. New Keene, as the successor to the Trustor for
this purpose, shall take any and all steps as may be further necessary to
effectuate fully the transfer and assignment of the Trust Assets.
1.4 Acceptance of Assets and Assumption of Liabilities.
(a) In connection with and in furtherance of the purposes of the Trust and
subject to Section 4.4, below, the Trustees hereby expressly accept the transfer
and assignment to the Trust of the Trust Assets and the Trust hereby further
expressly assumes liability within the meaning of Section 524(g)(2)(B)(i)(1) of
the Bankruptcy Code for, and undertakes and shall control, liquidating in
accordance with the Procedures all Asbestos Related Claims and Demands.
(b) The Trust shall indemnify New Keene for any expenses, costs, fees
(including attorneys fees), judgments, settlements, or other liabilities
asserted at any time after the Effective Date of the Plan arising from or
incurred in connection with an Asbestos Related Claim or Demand. Nothing in this
section or any other section of this Trust Agreement shall be construed in any
way to limit the scope, enforceability, or effectiveness of the Permanent
Channelling Injunction issued by the Bankruptcy Court in connection with the
Plan.
- ------------------
(1) Unless the context requires otherwise, all capitalized terms used herein and
not otherwise defined have the meanings assigned thereto in the Plan for
Keene Corporation as confirmed by an Order of the Bankruptcy Court.
D-1
<PAGE>
ARTICLE II
POWERS; TRUST ADMINISTRATION
2.1 Powers. (a) Subject to the limitations set forth in this Trust
Agreement, the Trustees shall have the power to take any and all such actions as
in the judgment of the Trustees are necessary or convenient to effectuate the
purposes of the Trust, including, without limitation, each power expressly
granted in Subsection 3.1(c) below and any power reasonably incidental thereto.
(b) Except as provided in the Plan or otherwise specified herein, the
Trustees need not obtain an order of approval of any court in the exercise of
any power or discretion conferred hereunder.
(c) Without limiting the generality of Subsection 2.1(a) above, the
Trustees shall have the power to:
(i) receive and hold the Trust Assets, and invest monies held from
time to time therein, transfer, exchange or sell any or all assets of the
Trust on such terms as the Trust considers proper and to sell all or any
part of the securities issued by the Trustor that are included in the Trust
Assets, subject to the restrictions set forth in the Amended and Restated
Certificate of Incorporation of New Keene;
(ii) supervise and administer the Procedures;
(iii) pay Trust expenses, liabilities and to pay Claims and Demands as
such Claims and Demands are determined in accordance with the Procedures or
otherwise;
(iv) borrow money and issue notes and other evidences of indebtedness
(which notes or other evidences of indebtedness shall exonerate the
Trustees from personal liability with respect thereto) in the ordinary
course of operations for payment of indemnification liabilities and other
Trust expenses and the Claims;
(v) enter into any other agreement required by the Plan or reasonably
necessary or beneficial to implement the Plan and the Procedures and
perform all of the Trust's obligations thereunder, including, without
limitation, enter into any agreement with other asbestos claims resolution
organizations to implement the Procedures;
(vi) commence, prosecute, settle, dismiss or abandon any of the Causes
of Action;
(vii) extend a line of credit to New Keene pursuant to the terms of
the New Keene Credit Facility;
(viii) exercise all rights and benefits accruing to the Trust as owner
of any shares of New Common Stock that the Trust shall own from time to
time;
(ix) establish such funds, reserves and accounts within the Trust, in
addition to the funds created hereby, as deemed by the Trustees to be
useful in carrying out the purposes of the Trust;
(x) sue and be sued and participate, as a party or otherwise, in any
judicial, administrative, arbitrative or other proceeding, including,
without limitation, in connection with the Procedures;
(xi) adopt and amend any by-laws desirable for the administration of
the Trust;
(xii) appoint such officers and hire such employees and engage such
legal, financial and other advisors, professionals and agents as the
business of the Trust requires and to delegate to such persons such powers,
authority, and discretion as the Trustees deem advisable or necessary in
order to carry out the purposes of the Trust, and pay the Trustees, subject
to Section 4.5 and pay such officers, employees, advisors and agents
reasonable compensation as determined by the Trustees and properly
documented out-of-pocket costs and expenses;
(xiii) to pay the compensation and properly documented out-of-pocket
expenses and costs of the members of the TAC and any legal, financial and
other advisors or professionals retained by the TAC;
(xiv) enter into such other arrangements with third parties as are
deemed by the Trustees to be useful in carrying out the purposes of the
Trust (including, without limitation, engaging an Entity having trust
powers to act as paying agent, depositary, custodian, or trustee with
respect to funds, reserves or accounts created hereby or established
pursuant hereto);
(xv) indemnify (and purchase insurance indemnifying) the Trustees,
officers, employees, agents, advisors and professionals and representatives
of the Trust, the members of the TAC and their professionals and advisors
and New Keene to the fullest extent that a corporation organized under New
York law is from time to time entitled to indemnify its directors,
officers, employees, agents or representatives;
(xvi) enter into any contract or otherwise engage in any transaction
with any Trustee or any Entity affiliated with any Trustee, provided,
however, that such contract or such transaction is approved by the
unanimous vote of the Trustees voting thereon, it being understood that to
the extent permitted by law the usual rules prohibiting fiduciaries from
dealing with
D-2
<PAGE>
themselves as individuals or from dealing with respect to any manner in
which they have a personal interest shall not apply to the Trustees;
(xvii) delegate any or all of the discretionary power and authority
herein conferred at any time with respect to all or any portion of the
Trust Assets to any one or more reputable individuals or recognized
institutional advisors or investment managers without liability for any
action taken or omission made because of any such delegation;
(xviii) associate with, contract with and/or use the resources of
and/or merge with any other claims resolution facility if the Trustees
shall determine by unanimous vote that such claims resolution facility has
the capacity to evaluate and/or pay Claims and Demands in a manner
generally consistent with the purposes of the Trust and the Plan, and not
inconsistent with the Procedures; and
(xix) execute and deliver such deeds, leases and other instruments as
the Trustees consider proper in administering the Trust.
(d) The Trustees on behalf of the Trust shall not have the power to
guarantee any debt of other Entities, except in connection with the sale of
Trust Assets in which case the Trust shall have the power to provide a guarantee
in an amount not exceeding the consideration received by the Trust on the sale.
2.2 Administration. (a) The Trust shall be administered as follows:
(i) Offices. The principal office of the Trust shall be in the City of
[New York] or at such other place, within or without the State of [New
York], as the Trustees may from time to time determine to be necessary for
the efficient and cost-effective administration of the Trust.
(ii) Regular Meetings. Regular meetings of the Trustees may be held at
such time as from time to time shall be determined by the Trustees with
notice to the TAC; provided, however, that the Trustees shall meet at least
once per calendar quarter during the first year following the execution of
this agreement and at least once per year thereafter.
(iii) Special Meetings; Notice. Special meetings of the Trustees shall
be held whenever called by the Managing Trustee (defined below). Notice of
each such meeting shall be mailed by first class mail, postage prepaid, to
each Trustee and the members of the TAC, addressed to them at their
residences or usual places of business, at least three days before the date
on which the meeting is to be held, or shall be sent to such place by
facsimile, telegraph, cable, radio or wireless, or be delivered personally
or by hand or by express mail or overnight courier or by telephone, not
later than the day before the day on which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the
purpose(s) for which it is called. In lieu of the notice to be given as set
forth above, a waiver thereof in writing, signed by the Trustees entitled
to receive such notice and by the members of the TAC, either before or
after the meeting, shall be deemed equivalent thereto for purposes of this
Section.
(iv) Action Without a Meeting; Meeting by Conference Call. Any action
required or permitted to be taken at any meeting of the Trustees or the TAC
may be taken without a meeting if all of the Trustees or all the members of
the TAC, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Trustees or the
TAC.
The Trustees or members of the TAC may participate in a meeting of the
Trustees or the TAC, as the case may be, by means of conference telephone
or similar communication equipment provided that all persons participating
in the meeting can hear each other. Participation in a meeting pursuant to
this paragraph shall constitute presence in person at such meeting.
(b) Accounting Period. The accounting period for the Trust (the 'Fiscal
Year') shall be selected by the Trustees.
(c) Delivery of Trust Documents to New Keene. The Trustees shall timely
file or shall deliver to New Keene such documents and other information as New
Keene may reasonably require in order to permit it to timely file such income
tax and other returns and statements as are required of it to comply with
applicable provisions of the Internal Revenue Code and state law and any
regulations promulgated thereunder.
(d) Annual Reports. The Trustees shall cause to be prepared and filed with
the Court, with copies to the members of the TAC, as soon as available but, in
any event, within 90 days following the end of each Fiscal Year, an annual
report containing financial statements of the Trust (including, without
limitation, a balance sheet and a statement of operations for such Fiscal Year)
audited by a firm of independent public accountants selected by the Trustees and
certified by such firm as to fairness of presentation and consistency, a report
on the number of Claims received and the number of Claims liquidated, if any,
and the amount per Claim paid or payable and such other information as the Trust
deems relevant.
(e) Tax Returns. The Trustees shall timely file income tax and other
returns and statements and comply with all withholding obligations as required
under applicable provisions of the Internal Revenue Code and state law and any
regulations promulgated thereunder.
D-3
<PAGE>
(f) Settlement of Trustees' Accounts. Notwithstanding any state law to the
contrary, the Court shall have exclusive jurisdiction over the settlement of the
accounts of the Trustees, whether such account is rendered by the Trustees
themselves or is sought by any person holding an Asbestos Related Claim or
Demand or other person. The Trustees shall render successive accounts covering
periods of one year. In addition, an account shall be rendered for the period
ending on the date of the death, resignation, removal or retirement of any
Trustee. Upon the acceptance of any such account by the Court after hearing on
notice to New Keene, the TAC and such other parties as the Court shall
designate, the Trustees shall be discharged from any further liability or
responsibility to any person holding an Asbestos Related Claim or Demand or
other Person, as to all matters embraced in such account.
ARTICLE III
ACCOUNTS, PAYMENTS AND INVESTMENTS
3.1 Accounts.
(a) The Trustees may, from time to time, create additional funds, reserves
and accounts within the Trust as they may deem necessary, prudent or useful in
order to provide for the payment of Trust expenses, Claims and Demands or
otherwise to effectuate the purposes of the Trust and may, with respect to any
such fund, reserve or account, restrict the use of monies therein.
(b) After establishing a reasonable reserve for expenses of the Trust
including indemnification of the Trustees and the TAC, if required, the Trustees
shall promptly establish a separate fund (the 'Litigation Reserve') which
Litigation Reserve shall be separately maintained solely for the prosecution of
the Causes of Action in an amount determined by the Trustees to be sufficient
for the costs and expenses of the full prosecution of the Causes of Action. The
Litigation Reserve shall be maintained as a separate fund until the Transaction
Lawsuit and the Bairnco Lawsuit are concluded. The amount of the Litigation
Reserve shall be determined with the advice and consent of the TAC.
(c) After payment of expenses of the Trust, including, establishment of a
reserve for the reasonable future expenses of the Trust, the Litigation Reserve
pursuant to Section 3.1(b) above and line of credit to New Keene as provided for
in subsection 2.1(c)(vii) and, if necessary, a reserve for the indemnification
of the Trustees and the TAC, the remaining Cash and any additional cash received
by the Trust, net of expenses ('Available Cash') shall be allocated into two
funds as follows:
(i) 92 1/2% of the first $100 million of Available Cash; 90% of
Available Cash between $100 million and $150 million and 87% of Available
Cash above $150 million shall be held in a fund for distributions to
holders of Asbestos Related Personal Injury Claims and Demands (the
'Asbestos Personal Injury Fund');
(ii) 7 1/2% of the first $100 million of Available Cash 10% of
Available Cash between $100 and $150 million and 12 1/2% of Available Cash
above $150 million shall be held in a fund for distributions to holders of
Asbestos in Building Damage Claims (the 'Asbestos in Building Claims').
3.2 Payments.
(a) At such time as the Trust has at least $30 million of Available Cash,
the Trust shall:
(i) cause estimates to be made of the numbers and values of pending
and projected Asbestos Related Personal Injury Claims and Demands with the
assistance of a consultant familiar with asbestos disease claim projections
and at the same time cause estimates to be made of the total Available Cash
and non cash assets held by the Trust except for the Causes of Action
unless at the time a settlement is pending.
(ii) calculate the pro rata share of the Asbestos Personal Injury Fund
for the payment of Asbestos-Related Personal Injury Claims and Demands so
that the holders thereof shall receive substantially the same percentage
payment on subsequent distribution dates;
(iii) make distributions from the Asbestos Personal Injury Fund in
accordance with Procedures.
(iv) make distributions from the Asbestos in the Building Fund in
accordance with the Procedures.
(b) At any time subsequent to the distribution of Available Cash pursuant
to Section 3.2(a) as the Trustees believe they are likely to have Available Cash
to pay claimants, the Trust shall cause an additional estimate to be made of the
numbers and values of Asbestos-Related Personal Injury Claims and Demands and
valuation of Trust Assets in the same manner as in subsections 3.2(a) (i) and
(ii) above, and shall cause additional distributions to be made in the same
manner as in subsections 3.2(a)(iii) and 3.2(a)(iv) above.
(c) Recognizing that it is desirable to make payment to claimants
expeditiously, provided it is economically prudent given the funds then
available to the Trust, nevertheless the Trustees may determine to defer making
any payments under either of the Procedures if the Trustees, after consultation
with the TAC, determine that the administrative costs of such an expeditious
payment is proportionately so significant that no payment should be made pending
receipt of additional funds.
D-4
<PAGE>
(d) In making any estimates, judgments or decisions concerning the amounts
to be paid, percentages, pro rata payments, and timing of payments, the judgment
and decisions of the Trustees shall be final and conclusive and not subject to
review.
3.3 Investments. Investment of funds held in the Trust shall be invested in
the manner in which individuals of ordinary prudence, discretion and judgment
would act in the management of their own affairs, subject to the following
limitations and provisions:
(a) The Trust shall not acquire, directly or indirectly, equity in any
Entity (other than New Keene and its subsidiaries, successors and assigns) or
business enterprise if, immediately following such acquisition, the Trust would
hold more than 5% of the equity in such Entity or business enterprise unless (1)
such Entity or business enterprise is an asbestos claims processing facility or
(2) such equity has been conveyed to the Trust in full or partial consideration
for settlement of a lawsuit in which the Trust is a plaintiff. The Trust shall
not hold, directly or indirectly, more than 10% of the equity in any Entity
(other than New Keene and its subsidiaries, successors and assigns) or business
enterprise, unless (1) such Entity or business enterprise is an asbestos claims
processing facility or (2) such equity has been conveyed to the Trust in full or
partial consideration for settlement of a lawsuit in which the Trust is a
plaintiff.
(b) The Trust shall not acquire nor hold any long-term debt securities
unless such securities (i) are rated 'A' or higher by Moody's Investors Service,
Inc. ('Moody's'), 'AA' or higher by Standard & Poor's Corporation ('S&P') or
have been given an equivalent investment grade rating by another nationally
recognized statistical rating agency or (ii) have been issued or fully
guaranteed as to principal and interest by the United States of America or any
agency or instrumentality thereof or (iii) unless (1) such securities have been
issued by an asbestos claims processing facility or (2) such securities have
been conveyed to the Trust in full or partial consideration for settlement of a
lawsuit in which the Trust is a plaintiff.
(c) The Trust shall not acquire nor hold for longer than ninety days any
commercial paper unless such commercial paper is rated 'Prime-1' or higher by
Moody's or 'A-1' or higher by S&P or has been given an equivalent investment
grade rating by another nationally recognized statistical rating agency.
(d) The Trust shall not acquire nor hold any equity in any Entity or
business enterprise (other than New Keene, its subsidiaries, successors and
assigns) unless such equity is in the form of securities which are traded on a
national securities exchange or major international securities exchange or
through the National Association of Securities Dealers Automated Quotation
System or unless (1) such Entity or business enterprise is an asbestos claims
processing facility or (2) such equity has been conveyed to the Trust in full or
partial consideration for settlement of a lawsuit in which the Trust is a
plaintiff.
(e) The Trust shall not acquire nor hold any preferred stock unless such
preferred stock is rated 'B' or higher by Moody's or 'B+' or higher by S&P or
has been given an equivalent investment grade rating by another nationally
recognized statistical rating agency, and also complies with subsection (d)
above or unless such preferred stock is (1) preferred stock of an asbestos
claims processing facility or (2) such preferred stock has been conveyed to the
Trust in full or partial consideration for settlement of a lawsuit in which the
Trust is a plaintiff.
(f) The Trust shall not acquire any debt securities or other instruments
issued by any Entity (other than debt securities or other instruments issued or
fully guaranteed as to principal and interest by the United States of America or
any agency or instrumentality thereof) if, following such acquisition, the
aggregate market value of all securities and instruments issued by such Entity
held by the Trust would exceed 5% of the aggregate value of the Trust Assets,
unless (1) such Entity or business enterprise is an asbestos claims processing
facility or (2) such securities or instruments have been conveyed to the Trust
in full or partial consideration for settlement of a lawsuit in which the Trust
is a plaintiff. The Trust shall not hold any debt securities or other
instruments issued by any Entity (other than debt securities or other
instruments issued or fully guaranteed as to principal and interest by the
United States of America or any agency or instrumentality thereof) to the extent
that the aggregate market value of all such securities and instruments issued by
such Entity held by the Trust would exceed 10% of the aggregate value of the
Trust Assets, unless (1) such Entity or business enterprise is an asbestos
claims processing facility or (2) such securities or instruments have been
conveyed to the Trust in full or partial consideration for settlement of a
lawsuit in which the Trust is the plaintiff.
(g) The Trust shall not acquire nor hold any certificates of deposit unless
all publicly held long-term debt securities, if any, of the financial
institution issuing the certificate of deposit and the holding company, if any,
of which such financial institution is a subsidiary, meet the standards set
forth in Section 3.3(b), above.
(h) The Trust shall not acquire nor hold any repurchase obligations unless,
in the opinion of the Trustees, they are adequately collateralized.
(i) Notwithstanding the foregoing guidelines, the Trust shall have the
authority to extend credit to New Keene as described above in Subsection
2.1(c)(vii) hereof.
3.4 Source of Payments. All Trust expenses and payments in respect of
Claims and Demands shall be payable solely out of the Trust Assets. Neither the
Trustees nor any officer, agent or employee of the Trust nor any member of the
TAC, nor the Trustor
D-5
<PAGE>
nor any of its present subsidiaries nor any director, officer, employee or agent
of the Trustor or any of their subsidiaries shall be liable for the payment of
any Trust expense, Claim, Demand or liability of the Trust except as provided in
the Plan, and no Entity shall look to any of the foregoing Entities for
satisfaction of any such expense, Claim, Demand or liability; provided, however,
that nothing in this Section 3.4 shall limit the right of the Trustees and the
Trust to claim against any officer, agent or employee of the Trust, the Trustor,
or any officer, director, agent or subsidiary of the Trustor for breach of
employment agreement or other breach of duty to the Trust.
ARTICLE IV
TRUSTEES
4.1 Number; Managing Trustee.
(a) There shall be three Trustees (the 'Initial Trustees') from the
commencement of the Trust until the expiration of the initial term of service
described below in Section 4.2. The Initial Trustees shall be those persons
named in the signature page hereto. After the Initial Term, there shall be one
Trustee until the termination of the Trust in accordance with the terms hereof.
(b) One of the Initial Trustees selected by the Trustees shall serve as
Managing Trustee and shall be compensated for his or her services as Managing
Trustee. The Managing Trustee shall serve as the Trust's liaison, shall
coordinate and schedule meetings of the Trustees and shall handle all
administrative matters that come before the Trust.
4.2 Term of Service.
(a) Each Initial Trustee shall serve for a period of three years (the
'Initial Term') or until his or her death, incapacity, resignation or removal.
If any such event should occur within the Initial Term a successor will be
appointed.
(b) After the Initial Term, the Trustees shall select one Trustee to serve
as the sole Trustee until his or her (i) death or incapacity, (ii) removal or
(iii) resignation.
(c) Any Trustee may resign at any time by written notice to each of the
remaining Trustees and the TAC. Such notice shall specify a date when such
resignation shall take effect, which shall not be less than 30 days after the
date such notice is given, unless the remaining Trustees after consultation with
the TAC consent to an earlier date for the effect of a resignation.
(d) Any Trustee may be removed for cause by the majority vote of the other
Trustees, such removal to take effect at such time as the Trustees shall by such
vote determine.
4.3 Appointment of Successor Trustee.
(a) In the event of a vacancy during the Initial Term in the position of
Trustee, the vacancy shall be filled by unanimous vote of the remaining Trustees
after consultation with the TAC, who shall take into account the relevant
provisions hereof.
(b) If, after the Initial Term has expired, a vacancy is caused by death,
incapacity, resignation or removal of the sole Trustee, the TAC shall nominate a
successor trustee for approval of the Court. Before a vacancy occurs, after the
Initial Term, the sole Trustee may appoint a successor with consent of the TAC.
(c) Immediately upon the appointment of any successor Trustee, all rights,
titles, duties, powers and authority of the predecessor Trustee hereunder shall
be vested in and undertaken by the successor Trustee without any further act. No
successor Trustee shall be liable personally for any act or omission of his
predecessor.
4.4 Liability of Trustees. No Trustee shall be liable to the Trust or to
any beneficiary thereof except for his own gross negligence or willful
misconduct. No Trustee shall be liable for any act or omission-of any officer,
agent or employee of the Trust unless such Trustee acted with gross negligence
or willful misconduct in the selection or retention of such officer, agent or
employee.
4.5 Compensation and Expenses of Trustees.
(a) Each of the Trustees shall receive compensation for his or her services
as Trustee in the amount of $30,000 per annum. The Managing Trustee shall
receive an additional compensation of $20,000 per annum. The Trustees shall also
receive $1000 per diem for meetings of the Trust attended by such Trustee and
other Trust business. All such amounts shall be increased or decreased annually
at the rate of the Consumer Price Index for urban wage earners and clerical
workers (U.S. City Average) unadjusted for seasonal variation, published by the
Bureau of Labor Statistics of the United States Department of Labor.
(b) All properly documented reasonable out-of-pocket costs and expenses
incurred by the Trustees in connection with the performance of their duties
hereunder shall be promptly reimbursed by the Trust.
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<PAGE>
4.6 Indemnification of Trustees and Others.
(a) The Trustees shall be indemnified by the Trust to the fullest extent
that a corporation or a trust organized under New York law is from time to time
entitled to indemnify its directors against any and all liabilities, expenses,
claims, damages or losses incurred by them in the performance of their duties
hereunder. Additionally, each member of the TAC (collectively, 'Additional
Indemnitees') who was or is a party, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding of any kind, whether
civil, administrative or arbitrative, by reason of any act or omission of such
Additional Indemnitees with respect to (i) the liquidation of any Claims, (ii)
the administration of the Trust and the implementation of the Procedures, (iii)
the prosecution of the Causes of Action, and (iv) any action provided for in
this agreement, shall be indemnified and defended by the Trust against expenses,
costs and fees (including attorneys' fees), judgments, awards, costs, amounts
paid in settlement, and liabilities of all kinds incurred by each Additional
Indemnitee in connection with or resulting from such action suit, or proceeding,
unless there is a final determination of a Court with jurisdiction that such
Additional Indemnitee acted other than in good faith and in a manner such
Additional Indemnitee reasonably believed to be in, or not opposed to, the best
interests of the holders of Claims and Demands.
(b) Reasonable expenses, costs and fees (including attorneys' fees)
incurred by or on behalf of a Trustee or Additional Indemnitee in connection
with any action, suit, or proceeding, whether civil, administrative or
arbitrative from which they are indemnified by the Trust pursuant to this
Section 4.6, may be paid by the Trust in advance of the final disposition.
(c) The Trustees shall have the power, generally or in specific cases, to
cause the Trust to indemnify the employees and agents of the Trust to the same
extent as provided in this Section 4.6 with respect to the Trustees.
(d) To the extent any indemnification under Section 4.6 of this Agreement
with respect to an action, suit, or proceeding requires a determination that
indemnification is proper in the circumstances, such determination shall be made
by the Trustee or Trustees who were not parties to such action, suit, or
proceeding, if at least one such Trustee was or is not a party; otherwise, the
determination as to each Trustee will be made by the remaining Trustee or
Trustees, regardless of whether or not he, she or they were or are parties.
(e) The Trustee may purchase and maintain reasonable amounts and types of
insurance on behalf of any individual who is or was a Trustee, officer,
employee, agent or representative of the Trust or Additional Indemnitee against
liability asserted against or incurred by such individual in that capacity or
arising from his or her status as a Trustee, member of the TAC, officer,
employee, agent, professional advisor or representative thereof.
4.7 Trustees' Lien. The Trustees shall have a prior lien upon the Trust
Assets to secure the payment of any amounts payable to them pursuant to Sections
4.5 and 4.6.
4.8 Trustees' Employment of Advisors. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers, other professionals
or advisors and other parties deemed by the Trustees to be qualified as experts
on the matters submitted to them (regardless of whether any such party is an
affiliated party of any Trustee or is otherwise affiliated with any of the
Trustees in any manner, except as otherwise expressly provided for in this Trust
Agreement) and the advice of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the advice of any such party.
4.9 Additional Qualifications.
(a) No Trustee or related party of a Trustee shall represent or shall have
represented the Trustor or any Entity who asserts or has asserted a Claim
against Keene Corporation.
(b) No Trustee shall own any securities of Keene Corporation, New Keene or
any of its affiliates or have any other financial interest, direct or indirect,
in the Keene Corporation, New Keene, or any of its affiliates.
(c) If there has been a violation of Subsection (a) or (b), above, the
Trustee involved shall be subject to removal pursuant to Section 4.2(d), above.
4.10 Trustees' Service As Director of Reorganized Keene. No Trustee is
prohibited from serving as a director of New Keene. If any Trustee serves as a
director of New Keene, he or she shall not receive compensation for such service
over and above the compensation received as a Trustee under Section 4.5 but
shall receive a per diem allowance in the amount that New Keene pays its
directors for their attendance at meetings.
4.11 Bond. Notwithstanding any state law to the contrary each Trustee
(including any successor trustee) shall be exempt from giving any bond or
security in any jurisdiction.
D-7
<PAGE>
ARTICLE V
THE TRUSTEE ADVISORY COMMITTEE
5.1 Duties. a. Consultation. The Trustee shall consult with the TAC and the
TAC shall assist the Trustees in the implementation of the Trust and the
Procedures generally by providing consulting services with respect to material
issues affecting the Trust including, but not limited to, implementation of
Procedures, development of payment rules, forms and procedures, releases, time
frames and other matters specified herein and in the Procedures. Where
consultation is required under the Trust or the Procedures, the Trustees need
only seek advice and counsel from the TAC.
b. Consent. The Trustees shall be obligated to obtain the consent of the
TAC in writing in order to (1) implement material changes in any Claims
Resolution Procedures; (2) dismiss, settle or abandon Transaction Lawsuit and
Bairnco Lawsuit; (3) associate with another claims facility; (4) amend any
provision of the Trust Agreement; (5) effect termination of this Trust pursuant
to Sections 6.2(a) (i), (ii), or (iii); (6) select a successor Trustee during
the Initial Term, and (7) determine the Litigation Reserve. The TAC shall not
unreasonably withhold any consent required hereunder.
c. Court approval. Any proposed action or decision of the Trustees for
which the consent of the TAC is required as to which the TAC withholds consent
may be taken only upon Court approval after reasonable notice to each member of
the TAC.
5.2 Procedures. With respect to any matter relating to the Trust as to
which the consultation or consent of the TAC is expressly required, the Trust
shall:
(i) provide the TAC reasonable access to the relevant documents,
records and reports and to experts and advisors retained by the Trust and
to the Trust staff during such time as the decision is being considered;
(ii) bring the proposed decision to the attention of the TAC; and
(iii) provide the TAC with no fewer than 30 days to comment with
respect to the proposed decision, unless the TAC agrees to a shorter
period.
5.3 Number; Chairperson
(a) At the commencement of the Trust, there shall be three members of the
TAC (the 'Initial TAC Members') who shall serve until the expiration of the
Initial TAC Term defined below in Section 5.4. The Initial TAC Members shall be
selected by the Committee pursuant to the Plan.
(b) There shall be a chairperson of the TAC selected by the Initial TAC
Members. The chairperson shall act as the TAC's liaison, shall coordinate and
schedule meetings of the TAC and shall handle all administrative matters that
come before the TAC.
(c) After expiration of the Initial TAC Term, the Chairperson of the TAC,
plus one other member of the TAC selected by the Initial TAC Members, shall
serve until the termination of the Trust or his or her death, incapacity,
resignation or removal and in such event, the remaining member shall serve as
the sole TAC member.
5.4 Term. (a) The Initial TAC Members shall serve for a period of three
years (the 'Initial TAC Term') subject to any member's earlier death,
incapacity, removal or resignation.
(b) Any member of the TAC may resign at any time by at least 30 days
written notice to each of the remaining members specifying the date when such
resignation shall take place.
(c) A member of the TAC may be removed from office by the unanimous vote of
the remaining members of the TAC and a determination of the Bankruptcy Court
that such removal is appropriate upon cause shown.
5.5 Successors. In the event of a vacancy in the membership of the TAC
during the Initial TAC Term, the vacancy shall be filled by the unanimous vote
of the remaining Initial TAC Members.
5.6 Quorum. The presence of two members during the Initial TAC Term and so
long as there are two members serving shall constitute a quorum of the TAC for
the transaction of business. In the absence of a quorum, the members present may
adjourn the meeting from time to time without notice. In order for the Trustees
to obtain consent of the TAC with respect to actions listed in Section 5.1
hereof and otherwise specified in this Agreement, the TAC must approve the
Trustees' recommendation by a majority unless otherwise specified herein.
5.7 TAC's Employment of Advisors. The TAC may, but shall not be required
to, consult with counsel, accountants, appraisers, advisors and other parties on
the matters submitted to them (regardless of whether any such party is an
affiliated party of any member of the TAC or is otherwise affiliated with any of
the TAC in any manner, except as otherwise expressly provided in this Trust
Agreement) and the advice of any such parties on any matters submitted to them
by the TAC shall be full and complete authorization and protection in respect of
any action taken or not taken by the TAC hereunder in good faith and in
accordance with the advice of any such party.
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5.8 Compensation and Expenses of Members of the TAC and their advisors. The
Chairperson of the TAC shall receive $25,000 as compensation for his or her
service plus $1,000 per diem. Each member of the TAC shall receive compensation
for his or her services as a member in the amount of $20,000 per annum plus
$1,000 per diem for meetings of the TAC. All properly documented, reasonable
out-of-pocket costs and expenses incurred by the TAC members in connection with
the performance of their duties hereunder will be promptly reimbursed by the
Trust.
5.9 Liability of TAC. No member of the TAC shall be liable to the Trust or
to any beneficiary thereof except for his or her own gross negligence or willful
misconduct. No member of the TAC shall be liable for any act or omission of any
member, advisor, agent or employee of the TAC unless the TAC acted with gross
negligence or willful misconduct in the selection or retention of such member,
advisor, agent or employee.
ARTICLE VI
GENERAL PROVISIONS
6.1 Irrevocability. The Trust is irrevocable, but this agreement is
subject to amendment as provided herein.
6.2 Termination.
(a) The Trust shall terminate on the date (the 'Termination Date') that is
90 days after the first occurrence of any of the following:
(i) the Trustees in their sole discretion decide to terminate the
Trust because (A) they deem it unlikely that new Asbestos Related Claims or
Demands will be filed against the Trust and (B) all Asbestos Related Claims
duly filed with the Trust have been liquidated and satisfied and twelve
consecutive months have elapsed during which no new Asbestos Related Claim
has been filed with the Trust;
(ii) the date on which the Bankruptcy Court order becomes final which
has approved the arrangements the Trustees have made to establish Claims
handling agreements and other necessary arrangements with suitable third
parties adequate to discharge all expected remaining obligations and
expenses of the Trust in a manner consistent with this Trust Agreement and
the Procedures;
(iii) if in the judgment of the Trustees, the continued administration
of the Trust is uneconomic or inimical to the best interests of the persons
holding Asbestos Related Claims and Demands and the Trustees have obtained
an order of the Court that the termination of the Trust will not expose or
subject New Keene or any successor in interest to any increased or undue
risk of having any Asbestos Related Claims and Demands asserted against it
or them or in any way jeopardize the validity or enforceability of the
Permanent Channeling Injunction; or
(iv) 21 years less 91 days after the death of the last survivor of all
the descendants of Joseph P. Kennedy, Sr. of Massachusetts living on the
date hereof.
(b) On the Termination Date, after payment of all the Trust's liabilities
has been provided for, all funds remaining in the Trust estate shall be
transferred to charitable organization(s) selected by the Trustees using their
reasonable discretion; provided, however, that (i) if practicable, the
charitable organization(s) shall be related to the treatment, research, or the
relief of suffering of individuals suffering from asbestos disorders, and (ii)
the tax-exempt organization(s) shall not bear any relationship to New Keene.
(c) As soon as practicable after the Termination Date, the Trustee shall
(i) certify to the Court that all conditions precedent to the Termination Date
have been satisfied and (ii) file a final accounting and serve a copy on the TAC
and the Trustor. Thereupon, the Trust shall be dissolved and the Trustee(s) and
the TAC discharged.
6.3 Amendments. This Trust Agreement may be amended, modified and/or
supplemented by unanimous vote of the Trustees only with the consent of the TAC.
6.4 Cooperation. New Keene and the Trust shall each cooperate to the extent
reasonably requested by the other in the handling of Asbestos-Related Claims and
Demands and the prosecution of the Causes of Action and generally in the
operation of the Trust for the purposes set forth herein. New Keene shall
transfer to the Trust such claim files and other documents related to the
Asbestos Related Claims as are under its custody or control, and shall use its
best efforts to make available its present or former officers, directors,
employees, agents or representatives to the extent the Trust deems such persons
necessary to appear at any trial or arbitration proceeding related to the
liquidation of the Asbestos Related Claims. To the extent the valuation of any
assets of the Trust are necessary for the tax returns of New Keene, (a) the
Trust shall provide New Keene with such valuation and (b) New Keene shall use
such valuation in its tax returns.
6.5 Severability. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
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<PAGE>
6.6 Notices. Notices to claimants shall be given at the address of such
claimants, or, where applicable, such claimants' Attorney of Record, in each
case as provided on such claimant Claim forms. Any notices or other
communications required or permitted hereunder shall be in writing and delivered
at the addresses designated below, or sent by telex or telecopy pursuant to the
instructions listed below, or mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows, or to such other
addresses as may hereafter be furnished by New Keene to the Trustees and the TAC
or by the Trustees and the TAC to New Keene in compliance with the terms hereof.
To the Trust or the Trustees:
Mr. Archie R. Dykes
Capital City Holdings Inc.
Rivergate Executive Park
907 Two Mile Parkway
Suite D-5
Goodlettsville, TN 37072
Richard A. Lippe, Esq.
Meltzer, Lippe, Goldstein, Wolf,
Schlissel & Sazer
The Chancery
190 Willis Avenue
Mineola, NY 11501
Mr. John J. Robbins
112 Walton Heath
Williamsburg, VA 23188
With a copy to:
George A. Davidson, Esq.
Hughes Hubbard & Reed
One Battery Park Plaza
New York, NY 10004
To New Keene:
- ---------------------------------------------
- ---------------------------------------------
with a copy to:
- ---------------------------------------------
- ---------------------------------------------
To the TAC:
Stanley J. Levy, Esq.
Levy Phillips & Kongisberg
90 Park Avenue
New York, NY 10016
Charles F. Vihon, Esq.
Much Shelist Freed Denenberg
& Ament
200 North LaSalle Street
Suite 2100
Chicago, IL 60601-1095
Perry Weitz, Esq.
Weitz & Luxenberg
40 Fulton Street
New York, NY 10038
All such notices and communications shall be effective when delivered at
the designated addresses or when the telex or telecopy communication is received
at the designated addresses and confirmed by the recipient by return telex or
telecopy in conformity with the provisions hereof.
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<PAGE>
6.7 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
6.8 Successors and Assigns. The provisions of this Trust Agreement shall be
binding upon and inure to the benefit of the Trustors, the Trust, the Trustees
and the TAC and their respective successors and assigns, except that neither the
Trustor nor the Trust, nor any Trustee, nor any member of the TAC
may assign or otherwise transfer any of its or his or her rights or obligations
under this Trust Agreement except as provided for in this Trust Agreement.
6.9 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein, and
this Trust Agreement supersedes any prior oral or written agreements concerning
the subject matter hereof. No failure to exercise or delay in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise of any right, power or privilege hereunder
preclude any further exercise thereof of any other right, power or privilege.
The rights and remedies herein provided are cumulative and are not exclusive of
rights under law or in equity.
6.10 Headings. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor in
any manner affect the construction of the provisions of this Trust Agreement.
6.11 Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to principles of conflicts of law.
6.12 Dispute Resolution. Any disputes which arise under this Agreement
with respect to interpretation and implementation shall be resolved by the
Bankruptcy Court.
IN WITNESS WHEREOF, the Trustor has caused this Trust Agreement to be
executed by a duly authorized officer of representative of the Trustor and
attested by another duly authorized officer of the Trustor and the Trustees and
New Keene have each executed this Trust Agreement, all as of the day and year
first above written.
KEENE CORPORATION
By: _____________________________________
Name:
Attest:
By: _____________________________________
Name:
_____________________________, as Trustee
Archie R. Dykes
_____________________________, as Trustee
Richard A. Lippe
_____________________________, as Trustee
John J. Robbins
NEW KEENE
By: _____________________________________
Name:
Attest:
By: _____________________________________
Name:
D-11
EXHIBIT E
TO
THE PLAN
Asbestos-Related Claims Resolution
and Distribution Procedures
<PAGE>
ASBESTOS IN BUILDINGS CLAIMS RESOLUTION PROCEDURES
I. INTRODUCTION.
These Asbestos In Buildings Claims Resolution Procedures (the 'AIB
Procedures') are designed to evaluate, liquidate, pay and dispose of the
Asbestos in Buildings Claims ('AIB Claims') asserted against the Keene
Corporation ('Keene') in a non-litigated, low-transaction-cost manner pursuant
to Keene's Plan of Reorganization (the 'Plan') and the Trust Agreement.(1)
The Procedures shall provide the exclusive method for disposition and
payment of AIB Claims. The goal is to provide fair payment to all claimants with
valid AIB Claims, taking into account the resources available to the Trust for
this purpose. As such, the AIB Procedures pertain only and are unique to the
Keene Chapter 11 Case and have no applicability on any other basis and are not
relevant to any litigation or other disputed proceeding.
The Procedures may be interpreted by the Trustees only where an ambiguity
exists. That interpretation shall be consistent with the purpose of providing
payment for cost-effective, reasonable methods of Abatement (as hereinafter
defined) of asbestos-containing materials. The Trustees shall consider duties
imposed on claimants in the future by applicable law or regulation so as to
insure that there is no inequity, unfairness, or unjust enrichment resulting
from the implementation of these AIB Procedures.
Claimants may, but need not, be represented by counsel during any of the
activities under these AIB Procedures.
II. DEFINITIONS.
1. Abatement: 'Abatement' shall mean and refer to the removal,
enclosure, encapsulation or repair of ACM.
2. Abatement Costs: 'Abatement Costs' shall mean and refer to the
reasonable costs of past and future Abatement, including, by way of
example, costs for the Abatement itself, design, consultant and laboratory
fees and other costs in connection with the Abatement, on-site monitoring,
insurance costs, disposal costs, and, except for Abatement upon demolition,
the reasonable costs of replacement of ACM with a non-asbestos material.
3. ACM: 'ACM' shall mean and refer to any material or product
containing more than 1% asbestos by weight.
4. ACM Surface Treatments: 'ACM Surface Treatments' shall mean and
refer to Keene's brands of ceiling tile containing amosite and a perforated
asbestos-cement board used for acoustical treatment, 'Monospray' and
'Pyrospray'.
5. ACM TSI: 'ACM TSI' shall mean and refer to ACM that is applied to
pipes, fittings, boilers, breeching, tanks, ducts or other interior
structural components to prevent heat loss or gain or water or condensation
for other purposes, such as pipe covering, insulation block and insulating
and finishing cements.
6. Allowed Costs: 'Allowed Costs' shall mean and refer to Abatement
Costs which are eligible for payment under these Procedures. Allowed Costs
do not include costs for surveys or operations and maintenance.
7. Applicable Jurisdiction: 'Applicable Jurisdiction' shall mean and
refer to the jurisdiction whose laws may be the basis for determining
whether a Claimant has provided Reasonable Evidence, where required by
these procedures.
8. Approved Laboratory: 'Approved Laboratory' shall mean and refer to
a laboratory which is competent to perform constituent analysis of bulk
samples of ACM.
9. Asbestos: 'Asbestos' shall mean and refer to chrysotile, amosite,
crocidolite, tremolite asbestos, anthophyllite asbestos, actinolite
asbestos and any of these minerals that have been chemically treated and/or
altered.
10. Asbestos Coordinator: 'Asbestos Coordinator' shall mean and refer
to a Claimant's employee who has primary responsibility for asbestos
Abatement and control activities.
11. Category 1 Fund: 'Category 1 Fund' shall mean and refer to the
total consideration allocated for payment of Category 1 Claims.
12. Category 2 Fund: 'Category 2 Fund' shall mean and refer to the
total consideration allocated for payment of Category 2 Claims.
13. Claimant: 'Claimant' shall mean and refer to the owner or operator
of one or more buildings as to which a proof of claim has been filed, or to
the duly authorized legal agent thereof.
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(1) All capitalized terms herein shall have the meaning provided for them in the
Plan or the Trust, unless the context clearly indicates otherwise.
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14. Cost Model: 'Cost Model' shall mean and refer to estimated past or
future Abatement Costs based upon the reasonable abatement cost for the
subject type of ACM as set forth in an appropriate model developed by the
Trustees with the advice and concurrence of the TAC.
15. Demolition: 'Demolition ' shall mean and refer to the deliberate
destruction of a building or a part thereof, or a building system or
component thereof, for any purpose by its owner or operator, by those
acting for or on behalf of the owner or operator, or by a government
agency, undertaken in whole or in principal part for reasons not related to
asbestos management or control or Abatement.
16. Disallowed Claims: 'Disallowed Claims' shall mean and refer to
those Claims which are determined not to qualify for payment under the
Procedures.
17. Future Allowed Costs: 'Future Allowed Costs' shall mean and refer
to estimated Abatement Costs to be incurred based upon the Cost Model.
Future Allowed Costs may include the Abatement Costs for removal of
previously encapsulated or enclosed ACM.
18. Homogeneous Area: 'Homogeneous Area' shall mean and refer to a
section of ACM installed within one construction phase of a building that
appears uniform in color, texture and appearance.
19. Keene ACM: 'Keene ACM' shall mean and refer to ACM designed,
mined, manufactured, sold or distributed by Keene, or for which Keene may
be otherwise responsible under the laws of one of the Applicable
Jurisdictions, including, but not limited to, ACM containing Keene
asbestos.
20. Past Allowed Costs: 'Past Allowed Costs' shall mean and refer to
the lesser of Abatement Costs actually incurred prior to the Confirmation
Date or those based upon application of the Cost Model.
21. Principal ACM: 'Principal ACM' shall mean and refer to the primary
types of ACM which Keene, mined, manufactured, distributed or sold, to wit:
sprayed mineral fiber materials containing a mixture of mineral wool,
asbestos and binders; ceiling tiles; and ACM TSI.
22. Reasonable Evidence: 'Reasonable Evidence' shall mean and refer to
evidence sufficient to present a jury issue under the tort system of one of
the Applicable Jurisdictions.
23. Removal: 'Removal' shall mean and refer to the physical removal of
ACM from a building and disposal thereof in accordance with all applicable
regulations.
24. Renovation: 'Renovation' shall mean and refer to the removal,
replacement, substitution, alteration or modification of a building or any
internal or external building surface, system, component or material,
undertaken in whole or in principal part for reasons not related to
asbestos management, control or Abatement.
III. ALLOWANCE OF AIB CLAIMS.
A. Categories of AIB Claims.
1. Category 1. Category 1 shall include all AIB Claims for which
Claimants provide either Reasonable Evidence or a final, non appealable
judgment that the ACM is Keene ACM.
2. Category 2. Any Claimant may agree to accept, from the Category 2
Fund only, its pro rata share thereof on account of its AIB Claim with
respect to Principal ACM. Claimants who elect to be paid from the Category
2 Fund will not receive any other payment on account of the type of ACM for
which payment is being received from the Category 2 Fund.
3. There shall be two sub-categories within each of the above
Categories 1 and 2, as follows:
a. sub-category (a) shall include all AIB Claims for Past Allowed
Costs; and
b. sub-category (b) shall include all AIB Claims for Future Allowed
Costs.
B. Allowed Amounts.
1. Each Category 1(a) Claim will be allowed in the amount supported by
Reasonable Evidence.
2. Each Category 1(b) Claim will be allowed to the extent of 75% of
the amount supported by Reasonable Evidence.
3. Each Category 2(a) Claim will be allowed to the extent of 50% of
the amount of Past Allowed Costs.
4. Each Category 2(b) Claim will be allowed to the extent of 25% of
the amount of Future Allowed Costs.
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C. Disallowed Claims. The Trustees shall disallow any Claim:
1. for which a timely AIB Claim Form (defined below) has not been
filed;
2. for punitive and/or enhanced damages; and
3. which is subject to a final judicial order or a stipulation which
determines or recognizes that the ACM (for which the AIB is filed herein)
is that of a specific, identified entity other than Keene.
D. Payment of Claims.
1. The Trustees shall process all AIB Claims as soon as possible
beginning not later than one year after the Effective Date.
2. The Allowed Amounts of all Category 1 Claims shall be paid pro rata
from the Category 1 Fund, but in no event shall any Claimant receive more
than 100% of such Allowed Amount.
3. The Allowed Amounts of all Category 2 Claims shall be paid pro rata
from the Category 2 Fund, but in no event shall any Claimant receive more
than 100% of such Allowed Amount.
4. Any funds remaining in the Category 2 Fund after payment of the
Category 2 Claims shall be transferred to the Category 1 Fund.
5. Any funds remaining in the Category 1 Fund after payment of the
Category 1 Claims shall be transferred to the Category 2 Fund if Category 2
Claimants received (or will receive) less than 100% of the Allowed Amount
of their Claims; otherwise, all funds remaining in the Category 1 Fund
shall be used by the Trustees to pay Personal Injury Claims.
E. Documentation.
Except as otherwise may be provided for herein, no AIB Claim shall be
Allowed unless the documentation required below is submitted to the Trustees in
support of the Claim. Such documentation must be sufficient to constitute
Reasonable Evidence, where such is required. In and of itself, the absence of
one or more type of document shall not be the basis for disallowance of an AIB
Claim. Documents not provided may be substituted for by a certification by the
Claimant that, despite reasonable efforts to do so, the required material could
not be located. In such case, alternative Reasonable Evidence shall be accepted.
1. Category 1 Claims.
a. Description of the location, type and amount of the Keene ACM,
including a certification of the accuracy of the information.
b. Copies of all presently existing bulk sample analysis results
and/or records thereof showing that the material contained asbestos (The
bulk sample analysis technique must be polarized light microscopy or
another of the generally acceptable methods, including those acceptable to
the United States Environmental Protection Agency. A minimum of one sample
from each Homogeneous Area for which Abatement Costs are claimed must have
been analyzed.) and that the material was a Homogeneous Area.
c. Reasonable Evidence that the ACM which is the subject of the AIB
Claim is Keene ACM, such as:
(1) constituent analysis of representative bulk samples from a
Homogeneous Area; or
(2) a sworn affidavit of an individual with personal knowledge that
the material installed in the Homogeneous Area was Keene ACM and the
factual basis for that conclusion; or
(3) sales invoices, purchase orders, architectural specifications
and records, bid documents, contracts and subcontracts, change orders,
material approvals, maintenance, repair and renovation records,
complaints to contractors, installation records, advertisements,
insurance claims, supplier records, documents from discovery in lawsuits
and Keene records; and
(4) the following, if available,
(a) copy of the report of a qualified industrial or occupational
hygienist, qualified engineer, qualified consultant, qualified
contractor or Claimant's qualified asbestos coordinator describing the
type, location and quantity of ACM, and type and scope of Abatement
work performed or to be performed,
(b) copies of receipted bills, or vouchers or other proof of
Abatement Costs,
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<PAGE>
(c) copies of bid specifications and contracts for all Abatement
work performed or to be performed by persons other than the Claimant's
employees,
(d) copies of all special insurance policies purchased by
Claimant to cover Abatement work risks or copies of receipted bills,
vouchers or other proof of special insurance, and
(e) with respect to Abatement work performed by Claimant's
employees, copies of personnel contracts or other proof of the salary
of Claimant's employees and the number of hours spent by them on
Abatement activities, including a breakdown of those activities.
2. Category 2 Claims.
a. Description of the location, type and amount of the Principal ACM,
including a certification of the accuracy of the information.
b. Copies of all presently existing bulk sample analysis results
and/or records thereof showing that the abated material contained asbestos,
pursuant to paragraph 1.b., above.
c. To the extent it exists, the documentation identified in paragraph
1.c.(4), above.
IV. REVIEW AND PROCESSING OF CLAIMS.
A. Submission of Claims.
All AIB Claims shall be submitted on a Standardized Claim Form to be
prepared by the Trustees (the 'AIB Claim Form'). All AIB Claims must be
submitted no later than two years after the Effective Date.
The Trustees may establish procedures designed to minimize administrative
costs but they must not prejudice Claimants' substantive rights. The Trustees
also may establish guidelines to prevent abuse of the objective of providing for
cost-effective and reasonable methods of asbestos Abatement and control; these
also must not prejudice Claimants' substantive rights and may not be
inconsistent with these Procedures.
B. Review of Claims.
Upon receipt of a AIB Claim Form, the Trustees shall review it to determine
whether the necessary documentation has been included. If additional
documentation is required, the Trustees, by overnight (second day service) or
facsimile mail, shall so notify the Claimant. Any AIB Claim requiring additional
documentation as to which such additional documentation is not provided within
60 days from the date of such notification, or within such additional time as
may be granted by the Trustees (but which, in no event, shall exceed 30 days),
shall be Disallowed, provided that the Claimant shall have the right to request
reconsideration and ultimately Binding Dispute Resolution as defined below.
Nothing herein shall preclude the Claimant and the Trustees from engaging in any
informal discussion or exchange of documents prior to the Trustees' official
determination of the Claim.
Once all necessary documentation has been received, the Trustees will
determine whether and to what extent the AIB Claim will be Allowed. Within 120
days of receipt of all necessary documentation, by overnight (second day
service) or facsimile mail, the Trustees shall notify the Claimant of their
determination.
The Trustees shall have the right, upon reasonable notice to the Claimant,
to inspect Claimant's building(s) or structure(s) and conduct non-invasive or
non-destructive tests reasonably necessary for the evaluation of the AIB. Such
inspection and/or testing shall be done at times convenient to the Claimant and
in accordance with all applicable federal, state and local rules or regulations
regarding safe practices and the Claimant's operations and maintenance program,
if any. Unless the Claimant agrees otherwise, inspection or testing shall not
extend the period within which the Trustees must determine the allowability of
the AIB Claim. For purposes of this section, the requirement that any testing by
the Trustees be non-invasive or non-destructive shall not preclude securing bulk
samples provided, however, that the sampling must be conducted in accordance
with all applicable federal, state and local rules or regulations regarding safe
practices and the Claimant's operations and maintenance program, if any, and the
Trustees shall repair and restore the location from which the sample is taken to
the extent of the 'damage' done on account of such testing or sampling.
Determination of the Allowability of an AIB Claim shall also include a
specification of the dollar amount of Allowed Costs. However, the Allowed Amount
of the AIB Claim may not be greater than the appropriate percentage of
reasonable and customary costs for the action taken under the circumstances. If
the Allowed Amount is less than that sought by the Claimant for any reason, the
Trustees shall state the reason for their determination, provide copies of all
reports of any inspection and/or testing and fully discuss the Claimant's right
to request reconsideration and Binding Dispute Resolution.
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C. Reconsideration of Claim.
A Claimant shall have 60 days from the time it receives the Trustees'
determination of Allowance/Disallowance to file a written request for
reconsideration of that determination. The Claimant must state in writing the
reason(s) for seeking reconsideration and include any materials not theretofore
submitted which the Claimant wishes to be considered in connection with the
reconsideration.
Once the Trustees have received the request for reconsideration, they shall
review it, all supporting documentation, the Claimant's reason for seeking
reconsideration and any other relevant material. The review shall be conducted
de novo by a panel consisting of a Trustee, a claims analyst and a disinterested
member of the TAC. (The claims analyst who made the original determination shall
not sit on the reconsideration panel.) The panel shall have 90 days from the
date the Trustees received Claimant's request for reconsideration to decide the
matter. If no final decision is issued within said 90-day time period, the AIB
Claim shall be Allowed as originally submitted.
The reconsideration panel's decision shall be given the Claimant in
writing; it shall specify the amount of the Allowed Costs. If the Allowed Costs
decided upon by the reconsideration panel are less than the appropriate
percentage of the amount of the Claim as originally filed by the Claimant or the
AIB Claim is Disallowed in whole or in part, the panel's decision shall be fully
detailed and shall also contain a discussion of the Claimant's right to request
Binding Dispute Resolution.
D. Binding Dispute Resolution.
The Claimant may request that a reconsideration panel's decision which
denies the AIB Claim in whole or in part be submitted to an arbitrator for
Binding Dispute Resolution. The Claimant shall have 60 days from the date it
receives the reconsideration panel's decision to file with the Trustees a
written request for Binding Dispute Resolution.
The Trustees shall maintain a list of not less than 15 independent
arbitrators who are available to conduct Binding Dispute Resolution. Once a
request for Binding Dispute Resolution is received by the Trustees, within 10
days of their receipt of such request they shall send to the Claimant the names
and addresses of 10 independent arbitrators selected at random from their list
by the Trustees. Claimant shall have 30 days from the date the list is received
to strike from the list five arbitrators and to return to the Trustees the list
of the five remaining arbitrators.
Once the Trustees have received the Claimant's list of five arbitrators,
they shall select one from that list and arrange with that arbitrator a date and
location for Binding Dispute Resolution to commence. The Binding Dispute
Resolution shall be commenced within 90 days of the date the Trustees received
the Claimant's choice of arbitrators. When the date and location that Binding
Dispute Resolution is to take place have been determined, the Trustees shall
notify the Claimant in writing of that along with the identity of the
arbitrator.
The arbitrator shall review the AIB Claim de novo pursuant to the standards
set forth in these Procedures. In no event may an arbitrator Allow an AIB Claim
in an amount less than that decided upon by the reconsideration panel, unless
the arbitrator determines that the claim is not Allowable. The Trust shall pay
the arbitrator's fees, provided, however, that, in the event Claimant fails to
obtain an award in an amount equal to or greater than 125% of the
reconsideration panel's final determination, such fees and expenses shall be
borne by the Claimant.
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KEENE ASBESTOS RELATED PERSONAL INJURY CLAIMS
RESOLUTION AND DISTRIBUTION PROCEDURES
These Keene Asbestos Related Personal Injury Claims Resolution and
Distribution Procedures (the 'Asbestos Claims Procedures') have been prepared in
connection with the Plan of Reorganization (the 'Plan') of Keene Corporation
('Keene') confirmed by order of the United States Bankruptcy Court for the
Southern District of New York (The 'Court'), dated , 1996 and the Keene
Creditors Trust Agreement (the 'Trust Agreement') filed with the Plan.
These Asbestos Claims Procedures provide for processing, liquidating,
paying and satisfying all Asbestos Personal Injury Claims and all asbestos
related Contribution and Indemnity Claims ('Contribution and Indemnity Claims')
arising as a result of exposure to asbestos materials manufactured and/or sold
by Keene as provided in and required by the Plan and the Trust Agreement. The
Trust (the 'Trust') shall implement and administer these Asbestos Claims
Procedures in accordance with the Trust Agreement.
SECTION I.
DEFINITIONS
1.1 Defined Terms. Capitalized terms used herein and not otherwise
defined herein or below shall have the meanings assigned to them in the Trust
Agreement or the Plan.
(1) 'Claim' means either a Claim or a Demand as those terms are
defined in the Plan.
SECTION II.
PURPOSE, OVERVIEW AND INTERPRETATION
2.1 Purpose. These Asbestos Claims Procedures are adopted pursuant to and
in connection with the Trust Agreement and are designed to provide payment to
holders of Keene Asbestos Related Personal Injury Claims ('Personal Injury
Claims') in such a way that holders of similar Personal Injury Claims are paid
in a substantially similar manner.
2.2 Overview. The process for determining the amount to be offered for a
valid Personal Injury Claim will be based on the claimant establishing that the
Claim meets the criteria for one of five Scheduled Diseases--Mesothelioma, Lung
Cancer, Other Cancer, Asbestos Lung Disease, Category 1 and Asbestos Lung
Disease, Category 2, as later defined in Section 5.2.
In general, each claimant who the Trust determines meets the criteria for
payment will be offered the established percentage of the Scheduled Disease
Amount for the disease category applicable to that claimant and payment will be
made from one of the two Funds established by the Trust pursuant to Section VI.
If the claimant rejects the Trust's offer of the established percentage of
the Scheduled Disease Amount, the claimant may elect to have the validity and
amount of his or her Claim determined by the tort system. Valid Contribution and
Indemnity Claims also will be resolved in a manner provided for in these
Asbestos Claims Procedures.
2.3 Interpretation. Nothing in these Asbestos Claims Procedures shall be
deemed to create a substantive right for any claimant. These Asbestos Claims
Procedures are procedural, and they may be amended, deleted or added to pursuant
to the terms of the Trust Agreement and the terms of these Asbestos Claims
Procedures.
SECTION III.
PAYMENT PERCENTAGE; PERIODIC ESTIMATES
3.1 General. The Trust will pay holders of valid Claims of asbestos related
diseases caused by Keene products, from the Trust Assets only, the percentage of
each Claim's Scheduled Value (the 'Payment Percentage') as determined by the
Trustee pursuant to this Section III, in full satisfaction of each Claim and
consistent with the objective of paying holders of similar Claims in a
substantially similar manner.
There is substantial uncertainty regarding Keene's total liability to
present and future Keene Personal Injury claimants, the total value of the
Trust's assets, whether those assets will be sufficient to pay all Personal
Injury Claims and when any such assets will be available. Prior to making any
distributions to claimants the Trust must, consistent with Sections 3.2(a) and
(b) of the Trust Agreement, make a determination of the aggregate Scheduled
Value of present and foreseeable future asbestos claims, of the cash available
for distributions, and of such other factors necessary to determine the Payment
Percentage of each claim that the Trust can afford to pay to holders of Personal
Injury Claims. Subject to Sections 3.2 and 3.3 below, the Trust shall pay the
Payment Percentage of the Scheduled Value of each claim allowed under these
procedures.
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3.2 Adjustment of Payment Percentage.
(a) Consistent with the Trust Agreement, and subject to Section 3.2(c)
below, the Trust may evaluate and change the Payment Percentage. Any such
evaluation shall be performed in a flexible and pragmatic manner that takes into
account the relevant circumstances, including the practical limitations imposed
by the inability to predict with precision the future assets and liabilities of
the Trust, the costs involved in preparing such evaluations, and any other
factors the Trust considers relevant.
(b) In the event the Trust, after any periodic re-evaluation under Section
3.2(b) of the Trust Agreement, determines that the Payment Percentage should be
changed, such change shall be applied to all present unpaid present claimants,
all future claimants and all partially paid present claimants so that each
claimant in a substantially similar position is treated reasonably similarly.
The Trust shall not attempt to recover from any paid claimant or claimant's
representative the difference between the amount paid to the claimant and the
then prevailing Payment Percentage, and no paid claimant or claimant's
representative will have any obligation to return to the Trust any such
differential.
(c) The Trust shall consult with the TAC concerning any proposal for
adjusting the Payment Percentage, and shall supply the results of any analysis
performed by or on behalf of the Trust as well as any valuations prepared by the
Trust's investment bankers, if any, and other consultants. The proposed
adjustment shall take effect unless affirmatively objected to by the TAC. In
case of such affirmative objection, the issue shall be resolved in accordance
with Section 5.1(c) of the Trust Agreement.
3.3 Equalization of Payment Percentages. In the event a new higher Payment
Percentage is determined the Trust shall make an additional payment to those
Trust beneficiaries who have not been paid or whose cumulative payment was less
than the new higher Payment Percentage, consistent with the objective of paying
holders of similar Claims in a substantially similar manner. However, the Trust
shall not be obligated to make such an additional payment if in the judgment of
the Trust it concludes that the administrative burden or cost does not justify
the payment at that time.
3.4 Monetization of Assets. The Trust shall monetize its assets, other than
the Causes of Action, at the earliest opportunity consistent with its obligation
to preserve and enhance the value of the Trust assets, to provide prompt and
equitable distribution of Trust Assets to present and future Keene Asbestos
Personal Injury Claimants and consistent with any provision of the Plan or Trust
Agreement imposing restrictions on the Trust Assets.
3.5 Access to Financial Information. Subject to entry into an appropriate
confidentiality agreement where applicable, the Trust shall make available to
the TAC any investment banking or other financial, accounting or statistical
information available to the Trust relating to issues to be discussed with
and/or as to which consent or advice is required of the TAC.
3.6 Amendments to Procedures Involving the Payment Percentage. The
procedures set forth herein governing the Payment Percentage may be amended,
altered, or adjusted to reflect changed circumstances, greater information,
and/or improved procedures by the Trust, with the consent of the TAC, provided
however that no amendment to these Asbestos Claims Procedures shall be
inconsistent with the provisions of Sections 3.2(a) and (b) of the Trust
Agreement.
SECTION IV.
CLAIMS, TYPES, PROCESSING AND PAYMENT
4.1 Order of Payment. Once the initial Payment Percentage is determined and
the Trust has a minimum of $30 million of Available Cash in the Personal Injury
Claim Fund as required by Section 3.2 of the Trust Agreement, the Trust shall
pay Claims in the order in which the Claims are liquidated in accordance with
Section V below. To the extent practicable, the Trust shall make such payment
within 30 days of the Trust's receipt of an executed release from the
subject claimant. If at any time the Trust has insufficient available funds to
pay any Claim, the Trust may suspend payment until such time as the Trust
monetizes additional assets. No Claim shall be preferred over any other for
purposes of payment, unless otherwise specified herein.
4.2 Prepetition Liquidated Claims.
(a) Bonded Judgments. Prepetition Liquidated Claims that have been reduced
to judgment and are secured by letters of credit, appeal bonds, or other
security or sureties ('Bonded Judgment Claims') shall first exhaust their rights
against any applicable security. If such collateral is insufficient to pay the
Bonded Judgment Claim in full, the established Payment Percentage shall be
applied to the unpaid amount of the prepetition judgment and that amount shall
be processed and paid as an allowed Claim. In the case of any Bonded Judgment
Claim where there has been a decision in Keene's favor, the Trust, in its sole
discretion, may exercise whatever appeal rights Keene possessed.
(b) Claims Settled or Reduced to Judgment or Damage Verdict. Any other
pre-petition Personal Injury Claims against Keene that were liquidated by
settlement agreement or by an unsecured judgment or verdict as to the amount of
damages that was entered prior to December 3, 1993 ('Prepetition Liquidated
Claims') require no processing other than verification of the holder's identity,
payment, and release of the Trust. The Scheduled Value of a Prepetition
Liquidation Claim shall be the Scheduled Value
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for the Scheduled Disease as set forth in Section 5.3 below or the settlement,
judgment or damage verdict amount agreed to or entered against Keene, less any
payment received, whichever is higher. Holders of Prepetition Liquidated Claims
shall be paid the established Payment Percentage based upon that higher amount.
SECTION V.
The following provisions shall apply only after (1) the Trust has a minimum
of $30 million of Available Cash in the Asbestos Personal Injury Fund as
required by Section 3.2 of the Trust Agreement and (2) the Trustees have
determined that the Trust assets are sufficiently liquid to make it cost
beneficial to begin receiving and processing Claims. Prior to that time the
Trust shall have no obligation to receive or process Claims.
5.1 Ordering and Categorizing of Unliquidated Claims.
(a) Claims Materials. As soon as reasonably practicable the Trust shall
make available claims materials ('Claims Material') to each person with a
Personal Injury Claim who (a) has a pending lawsuit against Keene; (b) filed a
proof of claim with the Court, or (c) has otherwise been identified to the Trust
as holding a Keene Personal Injury Claim that is not a Prepetition Liquidated
Claim or Bonded Judgment Claim. The Trust shall make the Claims Material
available to any person holding a Keene Personal Injury Claim who identifies
himself in writing to the Trust, as soon as practicable under the circumstances
following such identification. The Trust may make the Claims Material available
to a claimant care of an attorney representing the claimant.
(b) Claims Information. The Claims Material will include a copy of these
Asbestos Claims Procedures, instructions, and a claim form. To the extent
feasible, the claim forms used by the Trust shall be the same or substantially
similar to those used by other asbestos claims resolution facilities, subject to
the Trust's determinations pursuant to Section 5.4 below. Instead of collecting
some or all claims information from a claimant or the claimant's attorney, the
Trust may obtain such information from electronic data bases maintained by any
other asbestos claim resolution organization.
(c) Order of Claims. Claims will be ordered for processing in the order in
which they are received and for payment in the order in which they are
liquidated. Subject to the provisions of Sections 5.2 and 5.4(a) and (b) below,
a claimant may be treated by the Trust as having established disease category or
exposure if the claimant has received an offer of payment from another asbestos
claim resolution facility on the basis of evidence establishing a disease in
such disease category or establishing exposure at a site which the Trust is
satisfied would have resulted in exposure to Keene products, provided the
decision to accept claims information from such other claims resolution facility
had previously been consented to by the TAC.
(d) Time to File Claims. In order to be eligible for payment under these
Asbestos Claims Procedures, a claimant must return all claims information
requested by the Trust, or otherwise make available the information sought
pursuant to Section 5.4(b) below, within six months following his or her receipt
of the Claims Material. Failure to return the Claims Material within the six
month period will result in automatic disallowance of the claim, unless the
claimant satisfies the Trust that such failure should be excused.
5.2 Scheduled Disease Categories. In accordance with Section 5.4(b) below
Compensable Claims will be claims of persons who establish that they were
injured by exposure to asbestos-containing products manufactured or supplied by
Keene and who suffer from medical conditions which fall within the following
five Scheduled Disease categories: (1) Mesothelioma; (2) Lung Cancer; (3) Other
Cancer; (4) Asbestos Lung Disease I ('ALD-1'); and (5) Asbestos Lung Disease II
('ALD-2').
(a) 'Mesothelioma' means a diagnosis by a board-certified pathologist of a
malignant tumor caused or contributed to by exposure to asbestos originating in
the mesothelial cells of the pleura, peritoneum or like tissue, or reasonable
equivalent clinical diagnosis in the absence of adequate tissue for pathological
diagnosis.
(b) 'Lung Cancer' means a diagnosis by a qualified physician of a malignant
primary tumor of any cell type, originating within the lung, caused or
contributed to by exposure to asbestos.
(c) 'Other Cancer' means a diagnosis by a qualified physician that
indicates a malignant tumor originating in the larynx, pharynx, stomach,
esophagus, colon or rectum, caused or contributed to by exposure to asbestos.
(d) 'ALD-1' means either: (1) a diagnosis of pulmonary asbestosis by a
board-certified internist or pulmonary specialist based on the following minimum
objective criteria:
(a) a chest x-ray abnormality of 1/1, or greater; or
(b) if a chest x-ray is not evaluated as grade 1/1 or greater for a
diagnosis of asbestosis, two of the following criteria must be present:
(i) A chest x-ray abnormality of 1/0 or pleural encasement (i.e.,
rarely seen extensive bilateral pleural changes) that substantially
contributes to one or more of the pulmonary function abnormalities found
in (ii)--(v), below; (ii) a forced vital capacity below 80% of
predicted; (iii) A diffusing capacity below 80% of predicted; (iv) a
total living capacity
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below 80% of predicted; or (v) a decline of 20% over the past 5 years in
any of the following values; FVC, TLC, or DLCO; or
(2) a signed statement by a board-certified pathologist that more than one
representative section of lung tissue otherwise uninvolved with any other
process (e.g., cancer or emphysema) demonstrates a pattern of peribronchiolar or
parenchymal scarring in the presence of characteristic asbestos bodies, and also
that there is no other more likely explanation for the presence of the fibrosis.
(e) 'ALD-2' means a diagnosis by a qualified physician that indicates other
abnormalities of the parenchyma or pleura attributed to prior asbestos exposure,
including pleural plaques, pleural thickening, pleural encasement and mild
parenchymal fibrosis not meeting the definition of ALD-1.
5.3 Schedule of Asbestos-Related Disease Categories and Values. Personal
Injury Claims will be categorized and valued in accordance with the following
schedule of asbestos-related diseases and values.
<TABLE>
<CAPTION>
SCHEDULED
CATEGORY SCHEDULED DISEASE VALUE
- --------- ------------------------ -----------
<S> <C> <C>
1 Malignant Mesothelioma $125,000.00
2 Lung Cancers $ 50,000.00
3 Other Cancer $ 30,000.00
4 Asbestos Lung Disease--1 $ 25,000.00
5 Asbestos Lung Disease--2 $ 6,500.00
</TABLE>
5.4 Categorization of Claims and Claims Criteria and Processing.
(a) Supporting Evidence.
(i) Proof of Disease. Subject to Section 5.1(c) above and Section 5.4(c)
below, in order to establish a valid Personal Injury Claim, a claimant must
submit at least one medical report from a qualified physician that contains a
diagnosis of asbestos related injury. The Trust may require the submission of
x-rays, laboratory tests, medical examinations or reviews, other medical
evidence or any other evidence to support such Personal Injury Claims and may
also require that the medical evidence submitted comply with recognized medical
standards regarding equipment, testing methods and procedures to assure that
such evidence is reliable. The Trust will categorize claims based on the medical
evidence submitted to the Trust as part of the claimant's proof of claim. A
claimant may, but not need, supplement this information with more current
medical evidence. Where the claimant has filed an incomplete claim for
categorization, the Trust may notify the claimant of the need for additional
information and the Trust need not process the Claim until the file is complete.
In addition to the data required above and by Section 5.2 above, the Trust after
consultation with the TAC, may require that additional evidence be provided.
(ii) Proof of Exposure. The Trust may require such evidence of exposure or
may apply such presumptions based on job site, occupation, dates of employment,
and other factors as the Trustees in their discretion may from time to time
determine are appropriate to balance the goal of paying only claimants with
exposure to Keene asbestos-containing product with the goal of preventing
excessive expenditure on claim processing. Any such requirements and
presumptions should be calculated to yield findings with respect to exposure
that would be permissible under the Federal Rules of Evidence.
(iii) Proof of Validity Under Applicable Law. The Trust may require such
additional evidence, if any, under the applicable substantive law and statute of
limitations as the Trustees in the exercise of their discretion may determine is
appropriate to balance the goal of paying only valid claims with the goal of
preventing excessive expenditure on claim processing.
(iv) Modification of Evidentiary Requirements. The Trustees may from time
to time review the nature of the documentation and other evidence the Trust will
require to establish a Claim under each disease category and in the exercise of
their discretion may modify such requirements to the extent they deem advances
in medical knowledge, change in claim filing patterns, or the goal of preventing
excessive expenditure on claims handling make such modification appropriate.
(b) Other Data Banks. In lieu of actually receiving the medical and
exposure evidence discussed in Sections 5.2 and 5.4(a) above, the Trustees may,
subject to the provisions of Section 2.1(c)(xviii) of the Trust Agreement,
utilize the data bank of any other asbestos claims resolution facility provided
the decision to use the claims' information from such other claims resolution
facility has received the prior consent of the TAC. To minimize costs, this
procedure shall be utilized whenever possible to verify a Claim.
(c) If after reviewing the Claim submitted, the Trust determines that the
Claim meets the Trust's criteria or if it is a Prepetition Liquidated Claim, the
Trust shall tender the claimant an offer of payment in the amount of the
established Payment Percentage of the Scheduled Value for the Scheduled Disease,
together with a form of release to be developed by the Trust for this purpose.
If the claimant accepts the offer and returns the release properly executed, the
Trust shall disburse payment within 30 days
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thereafter or as promptly as its financial condition then permits, and in
accordance with the procedures contained in Section 3 above.
(d) If the claimant does not respond to the Trust's offer within three
months, unless that time is extended by the Trust, the Trust's offer and the
Claim will be deemed to be withdrawn. A claimant may also elect to withdraw a
Claim at any time. A Claim that is withdrawn or deemed to have been withdrawn
may be refiled at any time, and shall be ordered on the Trust Claims list based
on the date of receipt by the Trust of the refiled claim.
(e) If the Trust determines that a Claim does not meet Trust criteria for
any payment or if a claimant disagrees with the Scheduled Disease determination
made by the Trust, the claimant may dispute such determination. Upon receipt of
written advice from the claimant of such a dispute, coupled with the claimant's
written statement of the basis for the dispute and any supporting documentation
within such time period established by the Trust and communicated to the
claimant, the Trust shall reevaluate the claim in light of all then available
documentation and advise the claimant of its reevaluation. If on reevaluation
the Trust determines that the Claim qualifies for placement in a Scheduled
Disease category or in a different Scheduled Disease category than the Trust
originally determined, the Trust shall tender an offer in the amount of the
established Payment Percentage of the Scheduled Value for the Scheduled Disease
so determined, together with a form of release as described in Section 5.4(c)
above. If the claimant accepts the offer and returns the release properly
executed, the Trust shall tender payment within 30 days thereafter or as
promptly thereafter as financial conditions permit, and in accordance with the
procedures contained in Section 3 above.
5.5 Audit Procedures. In all cases, the Trust may require that medical
x-rays, tests, laboratory examinations and other medical evidence comply with
recognized medical standards regarding equipment, testing methods, and
procedures to assure that such evidence is reliable. The Trust may develop
methods for auditing the reliability of medical evidence, including independent
reading of x-rays. If this audit shows an unacceptable level of reliability for
medical evidence submitted by specific doctors or medical facilities, the Trust
may refuse to accept medical evidence from such doctors or medical facilities.
In addition, the Trust may develop methods for auditing other types of evidence
necessary to support a claim.
5.6 Resolution of Categorization and Valuation Disputes.
(a) Payment of Claims. If a claim otherwise meets the criteria for payment
of Claims, the Trust will pay the established Payment Percentage of the
Scheduled Value for the disease in accordance with the provisions of these
Asbestos Claims Procedures.
(b) Litigation. Only claimants who reject the Trust's reevaluation of the
Percentage Payment of the Scheduled Value of the Claim pursuant to Section
5.4(e) above retain the right to trial against the Trust to determine the
validity and the liquidated value, if any, of their Claims. The Trust will not
be required to appear in any action brought by a claimant against the Trust nor
shall the Trust be subject to party discovery or levy and execution on any
judgment. No punitive damage claim may be asserted against the Trust and
pursuant to the Plan of Reorganization and Confirmation Order the Trust shall
not pay any punitive damage claims awarded to a claimant. A judgment creditor is
eligible for payment from the Trust's Available Cash, as provided in Section 6.1
below, 30 days after the judgment is final and non-appealable or at such time as
the Trust's financial condition permits, and in accordance with Section 3 above.
SECTION VI.
PAYMENT FUNDS
6.1 Creation of Two Funds. The Trust shall establish two separate funds for
the payment of Claims asserted against the Trust, to be designated a Fund A and
Fund B.
(a) Fund A. Fund A will pay the established Percentage Payment of (i) any
deficiency due to a Secured Bonded Judgment holder pursuant to Section 4.2(a);
(ii) any Prepetition Liquidated Personal Injury Claims pursuant to Section
4.2(b); (iii) the Claim of any Personal Injury Claimant who accepts an offer
from the Trust based on the Scheduled Value for a Scheduled Disease; (iv) the
Claim of any Asbestos Personal Injury Claimant who obtains a verdict in the tort
system, but only up to the amount of the Scheduled Value for the particular
Scheduled Disease category established at trial.
(b) Fund B. Fund B will pay: (i) any deficiency due a Keene Asbestos
Personal Injury Claimant who received a judgment in excess of the Scheduled
Value for the Scheduled Disease; (ii) the Claim of any claimant who obtained a
judgment or has an accepted Claim for Contribution or Indemnity; (iii) any other
Keene Asbestos Personal Injury Claimant not otherwise identified, but in an
amount not to exceed the established Payment Percentage of the Scheduled Value
for the Claim in question.
(c) Distribution of Trust Cash Between the Fund. The Trust's Available Cash
for distribution to Trust beneficiaries shall be held by the Trust for
distribution to beneficiaries with determined Fund A Claims until such time if
ever that all such beneficiaries have received aggregate payments equalling 85%
of the Scheduled Value of their claims.
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(d) Reallocation of Unused Fund A Amounts. If and when all claimants due to
receive money from Fund A have been paid or an appropriate reserve for claims of
future claimants has been established, the balance remaining in Fund A will be
transferred to Fund B.
SECTION VII.
TRUST LITIGATION
7.1 Dismissal of Lawsuits. In order to conserve the assets of the Trust,
except as set forth below holders of Claims are enjoined from filing future
litigation against Keene, New Keene, or the Trust, may not proceed in any manner
against the Trust, Keene or New Keene in any state or federal court, and are
required to pursue their claims against the Trust solely as provided in these
Asbestos Claims Procedures.
7.2 No Requirement to Appear. Except as provided herein, the Trust shall
not be required to enter an appearance in any court as to any claim, nor shall
it be subject to discovery or to default judgment or levy and execution on any
judgment and under no circumstances shall the Trust be required to pay claims,
whether for asbestos-related conditions or for contribution or indemnification,
except in accordance with these Asbestos Claims Procedures.
7.3 Litigation between Trust Beneficiaries.
(a) Right to Introduce Evidence. In any litigation between Asbestos
Personal Injury Claimants and other asbestos manufacturers, all parties retain
their respective rights provided by applicable law in state or federal courts in
the appropriate jurisdiction.
(b) Third-party claims may be asserted against the Trust for the sole
purpose of listing the Trust on a verdict form in those jurisdictions where such
procedures apply.
7.4 Contribution and Indemnity Claims.
(a) Right to Pursue Contribution and Indemnity Claims Retained.
Co-defendants shall have the right to pursue contribution and indemnity only
where (1) allowed by applicable local law and (2) no set-off credit is allowed
by applicable local law. The Co-defendant shall not be eligible to assert a
contribution or indemnity claim until it has paid the entire amount due to the
claimant.
(b) Processing, Valuation and Payment of Contribution Claims. The Trust may
establish forms for filing Contributions and Indemnity Claims. Contribution and
Indemnity Claims made to the Trust shall be processed in order of their receipt
by the Trust, without reference to any list established for Claims of Asbestos
Personal Injury Claimants. Contribution and Indemnity Claims shall be valued by
the Scheduled Disease of the underlying Personal Injury Claimant and paid the
established Payment Percentage of the Scheduled Value of the claimant's disease.
SECTION VIII.
TRUST DECISIONS FINAL
All decisions made by the Trust with respect to determining Payment
Percentages, order of payment, amount and timing of payment, and any other
matters covered by these Asbestos Claims Procedures shall be final and binding,
and not subject to review.
SECTION IX.
MISCELLANEOUS
9.1 Amendments. The Trustees may amend, modify, delete, or add to any of
these Asbestos Claims Procedures (including, without limitation, amendments to
conform these procedures to advances in scientific or medical knowledge or other
changes in circumstances) by a majority vote of the Trustees, provided they
first obtain the advice and consent of the TAC. Notwithstanding anything
contained herein to the contrary, these Asbestos Claims Procedures shall not be
modified or amended in any way that would jeopardize the validity or
enforceability of the Permanent Channeling Injunction.
9.2 Severability. Should any provision contained in the Asbestos Claims
Procedures be determined to be unenforceable, such determination shall in no way
limit or affect the enforceability and operative effect of any and all other
provisions of the Asbestos Claims Procedures.
9.3 Attorneys' Fees. Attorneys' fees payable in connection with Trust
Claims liquidated and paid through these Asbestos Claims Procedures where
calculated as a percentage of recovery, shall be the lower of the fee provided
in the contract between claimant and counsel or 25%, exclusive of costs
chargeable to the claimant. The recovery shall be measured by the actual
payments from the Trust to the claimant, not the Scheduled Value of the Claim.
E-11
<PAGE>
EXHIBIT F
TO
THE PLAN
Reinhold Credit Facility Agreement
<PAGE>
REINHOLD CREDIT FACILITY AGREEMENT
AGREEMENT (the 'Agreement'), dated as of [ ], 1996, between ,
as trustee(the 'Trustee') of that certain trust (the'Creditors' Trust')of even
date herewith established in connection with the Debtor's Third Amended
Plan of Reorganization (the 'Plan') in the Chapter 11 case captioned In re
Keene Corporation, Case No. 93 B 46090 (SMB), United States Bankruptcy Court,
Southern District of New York ('Bankruptcy Court') and Reinhold
Industries, Inc., a Delaware corporation ('Reinhold').
WHEREAS, Reinhold is successor in interest to Keene Corporation, Debtor
('Debtor') in the above-referenced case; and
WHEREAS, pursuant to the Plan, the Creditors' Trust is required to enter
into the 'New Keene Credit Facility' with Reinhold on the terms and conditions
contained herein.
NOW, THEREFORE, the parties hereto agree as follows:
1. (a) During the period ('Initial Period') beginning on the Effective
Date (as defined in the Plan) and ending on the second anniversary thereof,
on the terms and conditions set forth herein, the Creditors' Trust shall
make loans (each, a 'Loan' and collectively, the 'Loans') to Reinhold from
time to time in an aggregate principal amount not exceeding One Million
Five Hundred Thousand ($1,500,000) Dollars at any one time outstanding.
Subject to such limitation, during the Initial Period, Reinhold shall have
the right to repay any or all of the indebtedness due hereunder and
thereafter obtain one or more additional Loans.
(b)(i) Reinhold may exercise its right to borrow funds hereunder by
giving not less than thirty (30) days prior written notice ('Notice') of
the amount and date of such borrowing, in which event the funds shall be
delivered by the Creditors' Trust to Reinhold on such date in the form of a
bank or certified check or a wire transfer to a bank account designated by
Reinhold; provided, however, that (A) the Creditors' Trust shall not be
required to honor any such Notice which is delivered after the expiration
of the Initial Period, and (B) the minimum amount of any loan shall be One
Hundred Thousand ($100,000) Dollars.
(ii) Each such Notice shall include a certificate, duly signed by an
officer of Reinhold, that Reinhold satisfies the requirement set forth in
Section 3 as of the date of such Notice, which Notice shall be accompanied
by the internal financial statements described in Section 3(i).
(c) (i) Each Loan shall bear interest on the unpaid amount thereof at
a fluctuating rate equal to the rate of interest publicly announced from
time to time by Citibank, N.A. as its base rate ('Prime Rate'), such
interest rate to change automatically effective as of the effective date of
any change in the Prime Rate; however, such interest rate hereunder shall
not exceed the maximum rate of interest allowable under applicable law.
(ii) Interest shall be payable on or before the fifth day of each
month with respect to the amount of interest accrued on the outstanding
loans during the preceding month.
(iii) After the Maturity Date (or following the acceleration of the
Loans under Section 5, if earlier) the Loans shall bear interest at the
Prime Rate plus five (5%) percent per annum, (but not more than the legally
allowable interest rate).
(d) The Loans, including all accrued, unpaid interest and any
outstanding principal, shall be due on the date (the 'Maturity Date')
occurring three (3) years following the Effective Date; provided, however,
that any amounts owed hereunder may be prepaid, in whole or in part and
without penalty, at any time.
(e) (i) Any payments shall be applied first against accrued interest
and thereafter against the outstanding principal of the Loans.
(ii) All payments shall be made in immediately available funds in
lawful money of the United States at such office and to such account as
designated by the Creditors' Trust.
2. As of the date hereof, Reinhold represents and warrants to the
Creditors' Trust that:
(a) The Company is a corporation formed and validly existing under
the General Corporation Law of the State of Delaware and has all
requisite power and authority under such law to own its property and to
carry on its business as now being conducted, and that it is qualified
to do business in any state and foreign jurisdiction where such
qualification is required.
(b) With such exceptions as do not in the aggregate materially
adversely affect its business, Reinhold has all permits, licenses and
approvals necessary to carry on its business as presently conducted as
required by law and each governmental agency having appropriate
authority.
<PAGE>
F-1
(c) Reinhold has full power and authority to enter into this
Agreement and to incur and perform the obligations provided for herein,
all of which have been duly authorized by all power and necessary
action. No consent or approval of any third party, including any
governmental or administrative authority, instrumentality or agency is
required as a condition to the validity of this Agreement.
(d) This Agreement constitutes the valid and legally binding
obligation of Reinhold enforceable in accordance with its terms, subject
to bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles.
(e) To the best knowledge of Reinhold, there are no proceedings or
investigations pending or threatened before any court, arbitrator or
governmental or administrative authority, instrumentality or agency
which, in any one case or in the aggregate, could reasonably be expected
to have a materially adverse effect on Reinhold's ability to perform its
obligations under or pursuant to this Agreement.
(f) There is no statute, regulation, rule, order or judgment, or
provision of Reinhold's Amended and Restated Certificate of
Incorporation or its Amended By-laws, and no provision of any mortgage,
indenture, contract or agreement binding on Reinhold or affecting its
property, which would conflict with or prevent the execution, delivery
or carrying out of the terms of this Agreement, and no consents or
waivers of any party is required for the execution, delivery or carrying
out of the terms of this Agreement.
3. The obligation of the Creditors' Trust to make each Loan is subject
to the following conditions precedent at the time of each such Loan:
(a) Reinhold shall have complied and shall then be in compliance
with all the terms, covenants and conditions of this Agreement which are
binding upon it.
(b) There shall exist no Event of Default and no event which with
the giving of notice or the lapse of time, or both, would constitute an
Event of Default.
(c) The representations and warranties contained in Section 2
hereof shall be true with the same effect as though such representations
and warranties had been made at the time of the Loan.
(d) Reinhold shall have paid and discharged all taxes, assessments
and governmental charges upon it, its income and its properties prior to
the date on which penalties are attached thereto, unless Reinhold shall
be contesting such taxes, assessments or governmental charges in good
faith.
(e) Reinhold shall not have directly or indirectly sold, leased or
otherwise disposed of all or substantially all of its properties or
assets or consolidated with or merged into any other Person, or
permitted any other Person to consolidate or merge with it, unless such
person (i) assumed the obligations of Reinhold hereunder and (ii) if
immediately after giving effect to such transaction there is no event
which upon notice or lapse of time, or both, would constitute an Event
of Default.
(f) Reinhold shall be in compliance with the funding requirements
of the Employee Retirement Income Security Act of 1974 with respect to
employee benefit plans for its employees.
(g) Reinhold shall be in compliance with all statutes, regulations,
orders and other regulatory requirements the noncompliance with which
would materially and adversely affect its ability to conduct its
business.
(h) Reinhold shall not be in material default under any contract,
lease, or other obligation; provided, that Reinhold shall be deemed to
be in compliance with this Section 3(h) if the aggregate liabilities
represented by such contracts, leases or obligations, as to which
Reinhold is in material default, does not exceed Fifty Thousand
($50,000) Dollars.
(i) Reinhold shall have a consolidated net book equity, as
calculated in accordance with generally accepted accounting principles
and based on the latest available internal financial statements, of not
less than Seven Hundred Fifty Thousand ($750,000) Dollars.
4. (a) As of the date hereof, the Creditors' Trust represents and
warrants to Reinhold that:
(i) The Creditors' Trust is a trust validly established and
organized under the law of the State of [New York] and has all requisite
power and authority under such law to conduct its business as now being
conducted.
(ii) The Creditors' Trust has full power and authority to enter
into this Agreement and to incur and perform the obligations provided
for herein, all of which have been duly authorized by all power and
necessary action. No consent or approval of any third party, including
any governmental or administrative authority, instrumentality or agency
is required as a condition to the validity of this Agreement.
F-2
<PAGE>
(iii) This Agreement constitutes the valid and legally binding
obligation of the Creditors' Trust enforceable in accordance with its
terms, subject to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles.
(iv) To the best knowledge of the Creditors' Trust, there are no
proceedings or investigations pending or threatened before any court,
arbitrator or governmental or administrative authority, instrumentality
or agency which, in any one case or in the aggregate, could reasonably
be expected to have a material adverse effect on the Creditors' Trust's
ability to perform its obligations under or pursuant to this Agreement.
(v) There is no statute, regulation, rule, order or judgment, or
provision of the agreement, dated as of even date hereof, between the
Debtor and the Trustee establishing the Creditors' Trust or in any other
contract or agreement binding on the Creditors' Trust, or affecting its
property, which would conflict with or prevent the execution, delivery
or carrying out of the terms of this Agreement, and no consents or
waivers of any party is required for the execution, delivery or carrying
out of the terms of this Agreement.
(b) During the Initial Period, the Creditors' Trust will reserve
sufficient funds at all times so that it will be able to meet its
obligations to make Loans hereunder and the Creditors' Trust will not
merge or consolidate with any other entity, or transfer its assets to
such entity, if such action would impair the ability of the Creditors'
Trust to meet its funding obligations hereunder.
5. (a) If any one or more of the following events (hereinafter called
'Events of Default') shall have occurred and be continuing:
(i) if Reinhold shall not pay the principal or interest on one or
more of the Loans or any other amount due hereinafter, when the same
shall be due (whether at the Maturity Date, earlier as a result of
acceleration or otherwise) and such failure shall continue for a period
of five (5) days after notice thereof; or
(ii) if any representation made by Reinhold in this Agreement shall
prove to have been false or misleading in any material respect when
made; or
(iii) if, any time during the term of this Agreement (whether or
not Reinhold is requesting a Loan), Reinhold shall not be in material
compliance with the representations set forth in Section 3 and such
noncompliance shall not be remedied within sixty (60) days after written
notice, specifying such default, shall have been delivered to Reinhold
by the Creditors' Trust; or
(iv) any of the following actions by, or with respect to, Reinhold:
Assignment for the benefit of its creditors; application for, or
appointment of, a receiver for Reinhold or substantially all of its
property; filing a voluntary petition, or an involuntary petition which
is not dismissed within 60 days, under any of the provisions of Title 11
of the United States Code; entry of a judgment in excess of $500,000
(execution of which judgment has not been stayed or from which any
appeal has not been taken); dissolution; insolvency, however evidenced;
or suspension or liquidation of its usual business,
then in such event the Creditors' Trust may, at its option, exercised by written
notice to Reinhold, declare the Loans, including accrued interest, to be due and
payable immediately, whereupon the Loans shall become payable, without the
necessity of any presentment, demand, protest or further notices, all of which
are hereby waived by Reinhold.
(b) If any Event of Default shall have occurred and be continuing,
the Creditors' Trust may proceed to protect and enforce its rights by it
in equity and/or by action of law, whether for the specific performance
of any term or agreement contained herein or for any injunction against
any breach of any such term or agreement or in aid of the exercise of
any power granted herein, or proceed to enforce the payment of the Loans
or the performance of this Agreement or to enforce any other legal or
equitable rights. No remedy herein conferred upon the Creditors' Trust
is intended to be exclusive of any other remedy, and each and every such
remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity
or by statute or otherwise.
6. The Bankruptcy Court shall retain original jurisdiction over any
disputes or controversies arising under or in connection with this
Agreement.
F-3
<PAGE>
7. (a) All notices, requests or other communications required or
permitted to be made in accordance with this Agreement shall be in writing
and shall be delivered personally or by digital facsimile transmission or
mailed by first class mail:
(i) if to the Reinhold, to:
(ii) if to the Creditors' Trust, to:
(iii) Notices sent by facsimile transmission shall be deemed delivered
when actually received, and notices sent by first class mail shall be
deemed delivered three business days after mailing.
(b) Either party may change the address at which it is to receive
notices under this Agreement by furnishing written notice to the other in
accordance with the provisions of this Section 7.
8. (a) Reinhold agrees, in the case of the Event of Default, to pay
all reasonable expenses incurred by the Creditors' Trust in connection with
the enforcement of any provision of this Agreement and the collection of
the Loans.
(b) Each and every right granted to the Creditors' Trust hereunder
or under any other document delivered hereunder or under any other
document delivered hereunder or in connection herewith, or allowed it by
law or equity, shall be cumulative and may be exercised from time to
time. No failure on the part of the Creditors' Trust to exercise, and no
delay in exercising, any right shall operate as a waiver, nor shall any
single or partial exercise of any right preclude any other or future
exercise thereof or the exercise of any other right, power or privilege.
(c) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but which together shall
constitute but one and the same instrument.
(d) This Agreement shall be governed by, construed under and
interpreted in accordance with the laws of the State of New York,
without giving effect to principles of conflicts of law.
(e) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable any such
provision in any other jurisdiction.
(f) This Agreement may be amended, modified or terminated only by
written agreement executed by the parties hereto. This Agreement
contains the entire agreement and understanding between the parties
related to the subject matter hereof, and supersedes all prior
agreements, understandings, representations and warranties, whether
written or oral, with respect thereto.
(g) This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns. Except as
required by applicable laws, the rights and obligations of each party
hereto may not be assigned, transferred or delegated by either party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
REINHOLD INDUSTRIES, INC.
By: _____________________________________
CREDITORS' TRUST
By: _____________________________________
F-4
<PAGE>
EXHIBIT G
TO
THE PLAN
Registration Rights Agreement
<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated , 1996, among Reinhold Industries,
Inc., a Delaware corporation (the 'Company'), and that certain trust established
pursuant to the Debtor's Fourth Amended Plan of Reorganization ('Plan') of Keene
Corporation, which Plan has been filed by Keene Corporation in United States
Bankruptcy Court for the Southern District of New York (Case No.
93 B 46090) (the 'Creditors' Trust').
1. Background. This Agreement is entered into pursuant to the Plan. This
Agreement shall become effective upon the issuance of the Class B New Common
Stock by Reinhold to the Creditors' Trust.
2. Registration under Securities Act.
2.1. Registration on Request. (a) Request. At any time subsequent to the
date occurring two (2) years following the Effective Date (as defined in the
Plan), the Creditors' Trust shall have the right to request in writing that the
Company use its best efforts to effect the registration under the Securities Act
of all or part of such holder's Registrable Securities; provided, however, that
the Company shall not be obligated to effect more than two registrations
pursuant to this Section 2.1 and not more than one registration in any twelve
(12) month period. The Company will use its best efforts to effect the
registration under the Securities Act of the Registrable Securities which the
Company has been so requested to register.
(b) Registration of Other Securities. Whenever the Company shall effect a
registration pursuant to this Section 2.1, no securities other than Registrable
Securities shall be included among the securities covered by such registration
unless the managing underwriter of such offering shall have advised the
Creditors' Trust that the inclusion of such other securities would not adversely
affect such offering.
(c) Registration Statement Form. Registrations under this Section 2.1 shall
be on such appropriate registration form of the Commission (i) as shall be
selected by the Company and as shall be reasonably acceptable to the Creditors'
Trust; provided, however, that Form S-1 or any comparable successor form shall
be deemed acceptable and (ii) as shall permit the disposition of such
Registrable Securities in accordance with the intended method or methods of
disposition specified in their request for such registration.
(d) Expenses. The Company will pay all Registration Expenses incurred in
connection with the two registration requests pursuant to this Section 2.1,
other than the fees and expenses of counsel to the Creditors' Trust or the fees
and expenses of any other person retained by the Creditors' Trust and the
underwriting discounts and commissions and transfer taxes allocable to the
Registrable Securities being sold.
(e) Effective Registration Statement. A registration requested pursuant to
this Section 2.l shall not be deemed to have been effected (i) unless a
registration statement with respect thereto has become effective and, unless all
the securities registered thereby are theretofore sold, has remained effective
for at least 90 consecutive days, (ii) if after it has become effective, such
registration is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court for any
reason, and the Registrable Shares covered thereby have not been sold, or (iii)
if the conditions to closing on the part of the underwriter with respect to the
Company specified in the selling agreement or underwriting agreement entered
into in connection with such registration are not satisfied or waived by the
underwriters. The Company shall not register the Registrable Securities on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act, or
any like registration form.
(f) Underwriters. If any registration effected pursuant to this Section 2.1
shall be a firm commitment or best efforts underwritten public offering, the
managing underwriter or underwriters thereof shall be selected by the Creditors'
Trust with the consent of the Company, which consent will not be unreasonably
withheld.
(g) Apportionment in Registrations Requested. If, in connection with a
registration requested pursuant to this Section 2.1, the managing underwriter
shall advise the Company in writing that, in its opinion, marketing factors
require a delay in the offering or a limitation of the number of shares to be
underwritten below the number of shares requested to be included in such
registration or the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering within a
price range acceptable to the Creditors' Trust requested to be included in such
registration, the Company will include in such registration the number of shares
that the Company is so advised can be sold in such offering. In connection with
any registration as to which the provisions of this clause (g) apply, no
securities other than Registrable Securities shall be covered by such
registration and if the aforesaid results in the exclusion of in excess of 50%
of the Registrable Securities originally sought to be registered and the holders
of Registrable Securities elect not to proceed, the request shall not be counted
for purposes of determining the number of registrations pursuant to Section 2.1
hereof. If a registration pursuant to this clause (g) includes securities of
other persons in accordance with Section 2.1(b) hereof and the managing
underwriter concludes that preceding criteria is appropriate, the securities
proposed to be included by such other persons shall be eliminated from the
offering prior to effecting any reduction in the number of Registrable
Securities to be included by the Creditors' Trust.
G-1
<PAGE>
(h) (i) Within one hundred twenty (120) days immediately following the
effective date of any registration statement filed pursuant to this Section 2.1
or (ii) if the Company shall furnish a certificate signed by the President of
the Company stating that in the good faith judgment of the Board of Directors of
the Company, it would be seriously detrimental to the Company or its
stockholders for such registration statement to be filed on or before the date
filing would be required and it is therefore essential to defer the filing of
such registration statement, then the Company shall have the right to defer the
filing of the registration statement for a period of not more than 120 days;
provided, however, that the Company may not utilize such right more than once in
any twelve month period.
2.2. Incidental Registration. (a) Right to Include Registrable Securities.
If the Company at any time proposes to register any of its Class A New Common
Stock under the Securities Act (other than by a registration on Form S-8 or Form
S-4 or any successor or similar form, in connection with a merger or acquisition
of a business or assets or similar transaction), whether or not for sale for its
own account, it will each such time give prompt written notice to the Creditors'
Trust of its intention to do so and of the Creditors' Trust's rights under this
Section 2.2. Upon the written request of the Creditors' Trust made within 30
days after the receipt of any such notice (which request shall specify the
Registrable Securities intended to be disposed of by such holder and the
intended method of disposition thereof), the Company will use reasonable
diligence to effect the registration under the Securities Act of all Registrable
Securities which the Company has been so requested to register, provided that
the number of shares of Registrable Securities of the Creditor's Trust shall not
exceed the number of shares of Class A New Common Stock which the Company then
intends to register; provided, further, that if, at any time after giving
written notice of its intention to register any securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to the Creditors' Trust and, thereupon, (i)
in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration (but not from its obligation to pay the Registration Expenses in
connection therewith), without prejudice, however, to the rights of the
Creditors' Trust to request that such registration be effected as a registration
under Section 2.1, and (ii) in the case of a determination to delay registering,
shall be permitted to delay registering any Registrable Securities, for the same
period as the delay in registering such other securities. No registration
effected under this Section 2.2 shall relieve the Company of its obligation to
effect any registration upon request under Section 2.1. The Company will pay all
Registration Expenses in connection with each registration of Registrable
Securities requested pursuant to this Section 2.2, other than the fees and
expenses of counsel to the Creditors' Trust or the fees and expenses of any
other person retained by the Creditors' Trust and the underwriting discounts and
commissions and transfer taxes allocable to the Registrable Securities being
sold.
(b) Apportionment in Incidental Registrations. If (i) registration pursuant
to this Section 2.2 involves an underwritten offering of the securities being
registered, whether or not for sale for the account of the Company, to be
distributed (on a firm commitment or best efforts basis) by or through one or
more underwriters of recognized standing under underwriting terms appropriate
for such a transaction, and (ii) the managing underwriter of such underwritten
offering shall inform the Company (who shall immediately notify the Creditors'
Trust of its belief that marketing factors require a delay in the offering or a
limitation of the number of shares to be underwritten below the number of shares
requested to be included in such registration or the number of securities
requested to be included in such registration exceeds the number which can be
sold in (or during the time of) such offering, or within a price range
acceptable to it and the Company, then the Company may include all securities
proposed by the Company to be sold for its own account and may decrease the
number of Registrable Securities and other securities of the Company so proposed
to be sold and so requested to be included in such registration by the
Creditors' Trust to the extent necessary to reduce the number be included in the
registration to the level recommended by the managing underwriter.
2.3. Registration Procedures. If and whenever the Company is required to
use its best efforts to effect the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1 and 2.2, the Company will
as expeditiously as possible:
(i) prepare and (as soon thereafter as possible or in any event no
later than 90 days after the end of the period within which requests for
registration may be given to the Company or such longer period as the
Company shall in good faith require to produce the financial statements
required in connection with such registration) file with the Commission the
requisite registration statement to effect such registration and thereafter
use its best efforts to cause such registration statement to become
effective, provided that the Company may discontinue any registration of
its securities which are not Registrable Securities (and, under the
circumstances specified in Section 2.2(a), its securities which are
Registrable Securities) at any time prior to the effective date of the
registration statement relating thereto;
(ii) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in
connection therewith as may be necessary to keep such registration
statement effective for at least 90 consecutive days and to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement until such time as all of
such securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof set forth in such
registration statement;
G-2
<PAGE>
(iii) furnish to the Creditors' Trust to the extent that it is selling
shares covered by such registration statement such number of conformed
copies of such registration statement and of each such amendment and
supplement thereto (in each case including all exhibits, but only one copy
thereof), such number of copies of the prospectus contained in such
registration statement (including each preliminary prospectus and any
summary prospectus) and any other prospectus filed under Rule 424 under the
Securities Act, in conformity with the requirements of the Securities Act,
and such other documents, as such seller may reasonably request;
(iv) use its best efforts to register or qualify all Registrable
Securities and other securities covered by such registration statement
under such other securities or blue sky laws or such jurisdictions as the
managing underwriter shall request, to keep such registration or
qualification in effect for so long as such registration statement remains
in effect, and take any other action which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the securities owned by such seller, except that the
Company shall not for any such purpose be required to qualify generally to
do business as a foreign corporation in any jurisdiction wherein it would
not but for the requirements of this subdivision (iv) be obligated to be so
qualified or to consent to general service of process in any such
jurisdiction;
(v) use its best efforts to cause all Registrable Securities covered
by such registration statement to be registered with or approved by such
other governmental agencies or authorities as may be necessary to enable
the seller or sellers thereof to consummate the disposition of such
Registrable Securities;
(vi) furnish to the Creditors' Trust to the extent that it is selling
shares a signed counterpart, addressed to such seller, except as provided
in (y) below, (and the underwriters, if any)
(x) a signed copy, addressed to each seller of Registrable
Securities, of the opinion of counsel for the Company delivered to the
underwriters or other purchasers under the underwriting or like
agreement, and
(y) a signed copy of any 'comfort' letter, dated the effective date
of such registration statement (and, if such registration includes an
underwritten public offering, dated the date of the closing under the
underwriting agreement), signed by the independent public accountants
who have certified the Company's financial statements included in such
registration statement, addressed to each seller, to the extent the same
can be reasonably obtained, and addressed to the underwriters, if any,
covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the
case of the accountants' letter, with respect to events subsequent to
the date of such financial statements, as are customarily covered in
opinions of issuer's counsel and in accountants' letters delivered to
the underwriters in underwritten public offerings of securities and, in
the case of the accountants' letter, such other financial matters, and,
in the case of the legal opinion, such other legal matters, as such
seller or such holder (or the underwriters, if any) may reasonably
request; provided, however, that in an underwritten public offering, the
sellers of Registrable Shares shall accept a signed copy of the comfort
letter delivered to and accepted by the underwriters;
(vii) notify each seller of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus
included in such registration statement, as then in effect, includes an
untrue statement of a material fact or omits to state any material fact
required to be stated therein or necessary to make the statements therein
not misleading in the light of the circumstances under which they were
made, and at the request of any such seller or holder promptly prepare to
furnish to such seller or holder a reasonable number of copies of a
supplement to or an amendment of such prospectus as may be necessary so
that, as thereafter delivered to the purchasers of such securities, such
prospectus shall not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make
the statements therein not misleading in the light of the circumstances
under which they were made;
(viii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission, and make available to its security
holders, as soon as reasonably practicable, an earnings statement covering
the period of at least twelve months, but not more than eighteen months,
beginning with the first full calendar month after the effective date of
such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act, and will furnish to each
such seller at least two business days prior to the filing thereof a copy
of any amendment or supplement to such registration statement or prospectus
and shall not file any thereof to which any such seller shall have
reasonably objected on the grounds that such amendment or supplement does
not comply in all material respects with the requirements of the Securities
Act or of the rules or regulations thereunder;
(ix) provide and cause to be maintained a transfer agent and registrar
for all Registrable Securities covered by such registration statement from
and after a date not later than the effective date of such registration
statement; and
(x) use its best efforts to list all Registrable Securities covered by
such registration statement on any securities exchange on which any of the
Registrable Securities is then listed.
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The Company may require the Creditors' Trust to furnish the Company in writing
such information regarding the Creditors' Trust and the distribution of such
securities as the Company may from time to time reasonably request.
The Creditors' Trust agrees by acquisition of such Registrable Securities
that upon receipt of any notice from the Company of the happening of any event
of the kind described in subdivision (vii) of this Section 2.3, it will
forthwith discontinue disposition of Registrable Securities pursuant to the
registration statement relating to such Registrable Securities until such
holder's receipt of the copies of the supplemented or amended prospectus
contemplated by subdivision (vii) of this Section 2.3 and, if so directed by the
Company, will deliver to the Company (at the Company's expense) all copies,
other than permanent file copies, then in its possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice.
2.4. Underwritten Offerings. (a) Requested Underwritten Offerings. If
requested by the underwriters for any offering pursuant to a registration
requested under Section 2.1, the Company will enter into an underwriting
agreement with such underwriters for such offering, such agreement to be
satisfactory in substance and form to the Company and to the Creditors' Trust
and the underwriters and to contain such representations and warranties by the
Company and the Creditors' Trust and such other terms as are generally
prevailing in agreements of this type, including, without limitation,
indemnities to the effect and to the extent provided in Section 2.6. The
Creditors' Trust will cooperate with the Company in the negotiation of the
underwriting agreement and will give consideration to the reasonable requests of
the Company regarding the form thereof, provided that nothing herein contained
shall diminish the foregoing obligations of the Company.
(b) Incidental Underwritten Offerings. If the Company at any time proposes
to register any of its securities under the Securities Act as contemplated by
Section 2.2 and such securities are to be distributed by or through one or more
underwriters, the Company will, if requested by the Creditors' Trust as provided
in Section 2.2 and subject to the provisions of Section 2.2(b), arrange for such
underwriters to include all the Registrable Securities to be offered and sold by
the Creditors' Trust among the securities to be distributed by such
underwriters.
2.5. Preparation; Reasonable Investigation. In connection with the
preparation and filing of each registration statement under the Securities Act
pursuant to this Agreement, the Company will give the Creditors' Trust and its
counsel the opportunity to participate in the preparation of such registration
statement, each prospectus included therein or filed with the Commission, and
each amendment thereof or supplement thereto, and will give each of them such
access to its books and records and such opportunities to discuss the business
of the Company with its officers and the independent public accountants who have
certified its financial statements as shall be necessary, in the opinion of such
holders' and such underwriters' respective counsel, to conduct a reasonable
investigation within the meaning of the Securities Act.
2.6. Indemnification. (a) Indemnification by the Company. In the event of
any registration of any securities of the Company under the Securities Act, the
Company will, and hereby does, indemnify and hold harmless the Creditors' Trust,
its trustees, employees and agents, each other Person who participates as an
underwriter in the offering or sale of such securities and such other Person, if
any, who controls such seller or any such underwriter within the meaning of the
Securities Act, against any losses, claims, damages or liabilities, joint or
several, to which such seller or any such trustee, employee, agent, underwriter
or controlling person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof) arise out of
or are based upon any untrue statement or alleged untrue statement of any
material fact contained in any registration statement under which such
securities were registered under the Securities Act, any preliminary prospectus,
final prospectus or summary prospectus contained therein, or any amendment or
supplement thereto, or any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Company will reimburse such seller and each such
trustee, employee, agent, underwriter and controlling person for any legal or
any other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, liability, action or proceeding; provided
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability (or action or proceeding in respect thereof)
or expense arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in such registration statement,
any such preliminary prospectus, final prospectus, summary prospectus, amendment
or supplement in reliance upon and in conformity with written information
furnished to the Company in writing by or on behalf of a seller for use in the
preparation thereof and, provided further that the Company shall not be liable
to any Person who participates as an underwriter, in the offering or sale of
Registrable Securities or any other Person, if any, who controls such
underwriters within the meaning of the Securities Act, in any such case to the
extent that any such loss, claim, damage, liability (or action or proceeding in
respect thereof) or expense arises out of such Person's failure to send or give
a copy of the final prospectus, as the same may be then supplemented or amended,
to the Person asserting an untrue or alleged untrue statement or omission or
alleged omission or prior to the written confirmation of the sale of Registrable
Securities to such Person if such statement or omission was corrected in such
final prospectus. Such indemnity shall remain in full force and effect
regardless of any investigation made by on or behalf of such seller or any such
trustee, employee, agent, underwriter or controlling person and shall survive
the transfer of such securities by such seller.
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<PAGE>
(b) Indemnification by Creditors' Trust. The Company may require, as a
condition to including any Registrable Securities in any registration statement
filed pursuant to Section 2.3, that the Company shall have received an
undertaking satisfactory to it from the prospective seller of such securities,
to indemnify and hold harmless (in the same manner and to the same extent as set
forth in subdivision (a) of this Section 2.6) the Company, each director of the
Company, each officer of the Company and each other Person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, if such
statement or alleged statement or omission or alleged omission was made in
reliance upon and in conformity with written information furnished to the
Company in writing by or on behalf of the Creditors' Trust, specifically for use
in the preparation of such registration preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement. Such indemnity shall
remain in full force and effect, regardless of any investigation made by or on
behalf of the Company or any such director, officer or controlling Person and
shall survive the transfer of such securities by such seller.
(c) Notices of Claims, etc. Promptly after receipt by an indemnified party
of notice of the commencement of any action or proceeding involving a claim
referred to in the preceding subdivisions of this Section 2.6, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of such action,
provided that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under the
preceding subdivisions of this Section 2.6, except to the extent that the
indemnifying party is actually prejudiced by such failure to give notice. In
case any such action is brought against an indemnified party, unless in such
indemnified party's reasonable judgment a conflict of interest between such
indemnified party and indemnifying parties may exist in respect of such claim,
the indemnifying party shall be entitled to participate in and to assume the
defense thereof, jointly with any other indemnifying party similarly notified to
the extent that it may wish, with counsel reasonably satisfactory to such
indemnified party, and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party shall not be liable to such indemnified party for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof other than reasonable costs of investigation. No indemnifying
party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect to such claim or
litigation.
(d) Other Indemnification. Indemnification similar to that specified in the
preceding subdivisions of this Section 2.6 (with appropriate modifications)
shall be given by the Company and the Creditors' Trust with respect to any
required registration or other qualification of securities under any Federal or
state law or regulation of any governmental authority other than the Securities
Act.
(e) Indemnification Payments. The indemnification required by this Section
2.6 shall be made by periodic payments of the amount thereof during the course
of the investigation or defense, as and when bills are received or expense,
loss, damage or liability is incurred.
(f) Lock-up. The underwriter for any offering of the Company's securities
to the general public shall have the option to restrict the sale of any of the
Company's Common Stock, or Securities exchangeable therefor, by the Company
(except for securities subject to a registration on Form S-8) other than
securities registered in such offering, for a period of up to 120 days from the
effective date of any such offering.
3. Definitions. As used herein, unless the context otherwise requires, the
following terms have the following respective meanings:
Commission: The Securities and Exchange Commission or any other Federal
agency at the time administering the Securities Act.
Class A New Common Stock: Class A New Common Stock, $.01 par value per
share, of the Company.
Class B New Common Stock: Class B New Common Stock, $.01 par value per
share, of the Company.
Company: Reinhold Industries, Inc., a Delaware corporation.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Person: A corporation, an association, a partnership, a business, an
individual, a governmental or political subdivision thereof or a governmental
agency.
Registrable Securities: Any shares of Class B New Common Stock owned by the
Creditors' Trust, which shall be converted into Class A New Common Stock upon
registration or any shares of Class A New Common Stock owned by a Transferee,
provided that the Creditors' Trust expressly assigned its rights under this
Registration Agreement to such Transferee, but in no event shall the Registrable
Securities subject to this Agreement in the hands of such Transferee exceed the
number of shares of Class B New Common Stock assigned or transferred by the
Creditors' Trust to such Transferee (which shares were converted into Class A
New
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<PAGE>
Common Stock upon such assignment or transfer). Registrable Securities shall
cease to be Registrable Securities when (a) a registration statement with
respect to the sale of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (b) they shall have been distributed to the
public pursuant to Rule 144 (or any successor provision) under the Securities
Act, (c) they shall have been otherwise transferred, new certificates for them
not bearing a legend restricting further transfer shall have been delivered by
the Company or (d) they shall have ceased to be outstanding.
Registration Expenses: All expenses incident to the Company's performance
of or compliance with Section 2, including, without limitation, all
registration, filing and National Association of Securities Dealers, Inc. fees,
all fees and expenses of complying with securities or blue sky laws, all word
processing, duplicating and printing expenses, messenger and delivery expenses,
the fees and disbursements of counsel for the Company and of independent public
accountants, including the expenses of any special audits or 'cold comfort'
letters required by or incident to such performance and compliance, the fees and
disbursements of one counsel retained by the Creditors' Trust provided, however,
that Registration Expenses shall not include underwriting, discounts and
commissions and transfer taxes, if any.
Securities Act: The Securities Act of 1933, as amended.
Transferee: Any Person to which the Creditors' Trust has conveyed, assigned
or transferred at least 200,000 shares of Common Stock.
4. Rule 144. If the Company shall have filed a registration statement
pursuant to the requirements of Section 12 of the Exchange Act or a registration
statement pursuant to the requirements of the Securities Act, the Company will
file the reports required to be filed by it under the Securities Act and the
Exchange Act (or, if the Company is not required to file such reports, will,
upon the request of any holder of Registrable Securities, use its best efforts
to make publicly available other information) and will use its best efforts to
take such further action as any holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (a) Rule 144 under the Securities
Act, as such Rule may be amended from time to time or (b) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any holder
of Registrable Securities, the Company will deliver to such holder a written
statement as to whether it has complied with such requirements.
5. Term. This Agreement and the rights of the parties hereunder shall
commence on the Effective Date and shall terminate on the tenth anniversary
following such Effective Date.
6. Amendments and Waivers. This Agreement may be amended and the Company
may take any action herein prohibited or to perform any act herein required to
be performed by it, only if the Company shall have obtained the written consent
to such amendment, action or omission to act, of the Creditors' Trust.
7. Notices. All communications provided for hereunder shall be sent by
first-class mail and (a) if addressed to the Creditors' Trust, at , or
(b) if addressed to the Company, at to the attention of its President.
8. Assignment. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective
successors and assigns.
9. Descriptive Headings. The descriptive headings of the several sections
and paragraphs of this Agreement are inserted for reference only and shall not
limit or otherwise affect the meaning hereof.
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<PAGE>
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAWS OF
THE STATE OF NEW YORK.
11. Counterpart. This Agreement may be executed simultaneously in any number
of counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered by their respective officers thereunto duly authorized as of the
date first above written.
REINHOLD INDUSTRIES, INC.
By: _____________________________________
Authorized Officer
CREDITORS' TRUST
By: _____________________________________
Trustee
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<PAGE>
EXHIBIT H
TO
THE PLAN
Share Authorization Agreement
<PAGE>
SHARE AUTHORIZATION AGREEMENT
This Agreement, dated , 1996, by and between Reinhold Industries, Inc.
('Reinhold'), a Delaware corporation and , as trustees ('Trustee') of that
certain trust ('Creditors' Trust') established pursuant to Debtor's Fourth
Amended Plan of Reorganization ('Plan') of Keene Corporation, Debtor ('Debtor')
in Case No. 93 B 46090 (SMB), United States Bankruptcy Court, Southern District
of New York ('Bankruptcy Court').
W I T N E S S E T H :
WHEREAS, the Bankruptcy Court confirmed the Plan by order dated , 1996 and
the Plan was consummated on the Effective Date (as
defined in the Plan); and
WHEREAS, Reinhold is successor-in-interest to Debtor and, pursuant to the
Plan, adopted an Amended and Restated Certificate of Incorporation of Reinhold
Industries, Inc. ('Certificate'); and
WHEREAS, the Certificate authorizes and, pursuant to the Plan, on the
Effective Date Reinhold issued to the Creditors' Trust 1,020,000 shares of the
Class B New Common Stock, par value $.01 ('Class B Common') of Reinhold; and
WHEREAS, the Certificate authorizes 1,480,000 shares of Class A New Common
Stock, par value $.01 ('Class A Common') of Reinhold, of which 980,000 shares of
Class A Common are issued and outstanding on the Effective Date; and
WHEREAS, Section 8.2(iv) of the Plan provides that no additional shares of
Class A Common will be authorized or issued without the prior written consent of
the Creditors' Trust, provided that the Class B Common then outstanding
represents not less than ten (10%) percent of the aggregate number of the sum of
the shares of Class A Common and Class B Common (collectively, 'New Common
Stock').
NOW, THEREFORE, the parties hereto, intending to be legally bound, agree as
follows:
1. (a) Without the prior written consent of the Trustees, which may be
withheld in their sole discretion, Reinhold shall not (i) amend its
Certificate to authorize any shares of Class A Common in excess of the
1,480,000 shares now authorized therein or (ii) issue any shares of Class A
Common in excess of the 980,000 shares now issued and outstanding;
provided, however, that Reinhold shall not be required to obtain such
written consent on or after the earliest date on which the number of shares
of Class B Common then outstanding is less than ten (10%) percent of the
total number of shares of New Common Stock.
2. (a) Reinhold acknowledges that this Agreement was negotiated as an
integral part of the Plan and that any breach of the restrictions set forth
herein will cause irreparable damage to the Creditors' Trust in its
capacity as a major shareholder of Reinhold.
(b) In the event of an actual or threatened breach by Reinhold of
the provisions of this Agreement, the Creditors' Trust shall be entitled to
an injunction restraining Reinhold from such violation, provided that
nothing set forth in this Section 2 shall be construed as prohibiting the
Creditors' Trust from pursuing any other legal or equitable remedies
available with respect to such breach, including the recovery of damages.
In addition, Reinhold shall be liable for any and all costs and damages,
including reasonable legal fees incurred by the Creditors' Trust, as a
result of any breach of the provisions of this Agreement.
3. The Bankruptcy Court shall retain original jurisdiction over any
disputes or controversies arising under or in connection with this
Agreement.
4. The term of this Agreement shall commence on the Effective Date and
end on the earlier of (i) the date occurring ten years thereafter or (ii)
the earliest date described in Section 1(a).
5. (a) All notices, requests or other communications required or
permitted to be made in accordance with this Agreement shall be in writing
and shall be delivered personally or by digital facsimile transmission or
mailed by first class mail:
(i) if to Reinhold, to:
(ii) if to the Creditors' Trust, to:
(iii) Notices sent by facsimile transmission shall be deemed
delivered when actually received, and notices sent by first class mail
shall be deemed delivered three business days after mailing.
(b) Either party may change the address at which it is to receive
notices under this Agreement by furnishing written notice to the other in
accordance with the provisions of this Section 5(a).
6. (a) This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original but which together shall
constitute but one and the same instrument.
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<PAGE>
(b) This Agreement shall be governed by, construed under and
interpreted in accordance with the laws of the State of New York, without
giving effect to principles of conflicts of law.
(c) Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall not invalidate the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable any such
provision in any other jurisdiction.
(d) This Agreement may be amended, modified or terminated only by
written agreement executed by the parties hereto. This Agreement contains
the entire agreement and understanding between the parties related to the
subject matter hereof, and supersedes all prior agreements, understandings,
representations and warranties, whether written or oral, with respect
thereto.
(e) This Agreement shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns. Except as
required by applicable laws, the rights and obligations of each party
hereto may not be assigned, transferred or delegated by either party.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
REINHOLD INDUSTRIES, INC.
By: _____________________________________
KEENE CREDITORS' TRUST
By: _____________________________________
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<PAGE>
EXHIBIT I
TO
THE PLAN
Reinhold Industries, Inc.
Stock Incentive Plan
<PAGE>
REINHOLD INDUSTRIES, INC.
STOCK INCENTIVE PLAN
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
1.1. Establishment. Reinhold Industries, Inc., a Delaware corporation (the
'Company'), hereby establishes the 'STOCK INCENTIVE PLAN' (the 'Plan') for key
employees. The Plan permits the grant of Stock Options, Stock Appreciation
Rights and Restricted Stock.
1.2. Purpose. The purpose of the Plan is to advance the interests of the
Company and its Subsidiaries and promote continuity of management by encouraging
and providing key employees with the opportunity to acquire an equity interest
in the Company and to participate in the increase in shareholder value as
reflected in the growth in the price of the shares of the Company's Stock and by
enabling the Company to attract and retain the services of key employees.
1.3. Effective Date. The Plan shall become effective on the Effective Date,
as defined in the Debtor's Fourth Amended Plan of Reorganization of Keene
Corporation, as debtor and debtor-in-possession, dated , 1996 and filed with the
United States Bankruptcy Court for the Southern District of New York on , 1996,
as such Plan may be amended or modified from time to time (the 'Bankruptcy
Plan'), subject to the approval by the affirmative votes of the holders of a
majority of the securities of the Company entitled to vote.
SECTION 2. DEFINITIONS; CONSTRUCTION
2.1. Definitions. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a) 'Act' means the Securities Exchange Act of 1934, as amended.
(b) 'Board' means the Board of Directors of the Company.
(c) 'Change in Capitalization' means any increase or reduction in the
number of shares of Stock, or any change (including, but not limited to, a
change in value) in the shares of Stock or exchange of shares of Stock for
a different number or kind of shares or other securities of the Company or
any other corporation or other entity, by reason of a reclassification,
recapitalization, merger, consolidation, reorganization, spin-off,
split-up, issuance (other than pursuant to the Plan of Reorganization) of
warrants or rights or debentures, stock dividend, stock split or reverse
stock split, extraordinary dividend, property dividend, combination or
exchange of shares or otherwise.
(d) A 'Change in Control' means an event or series of events after the
Consummation Date by which (i) any 'person' or 'group' (as such terms are
used in Section 13 (d) and 14(d) of the Act) becomes the 'beneficial owner'
(as defined in Rule 13d-3 under the Act), directly or indirectly, of more
than fifty (50%) percent of the aggregate voting power of all the capital
stock of the Company normally entitled to vote in the election of directors
or (ii) during any period of two consecutive calendar years individuals who
at the beginning of such period constituted the Board (together with any
new directors whose election by the Board or whose nomination for election
by the Company's stockholders was approved by a vote of at least a majority
of the directors then still in office who either were directors at the
beginning of such period or whose election or nomination was previously so
approved) cease for any reason to constitute a majority of the directors
then in office.
(e) 'Code' means the Internal Revenue Code of 1986, as amended.
(f) 'Committee' means a committee of the Board designated to
administer the Plan which shall consist solely of two or more members of
the Board who are 'disinterested' within the meaning of Rule 16b-3 under
the Act and 'outside directors' within the meaning of Section 162(m) of the
Code.
(g) 'Company' means Reinhold Industries, Inc., a Delaware corporation,
as successor-in-interest to Keene Corporation.
(h) 'Disability' means that, for a period of six (6) consecutive
months, an individual is unable to engage in any substantial activity
required by his employment by reason of any medically determinable,
physical or mental impairment, which, in the opinion of qualified
physicians, is likely to continue for an indefinite period or result in the
death of the individual within the near future.
(i) 'Eligible Employee' means any key employee designated by the
Committee as eligible to participate in the Plan pursuant to Section 3.1
hereof.
(j) 'Employee Option' means an Option granted to an Eligible Employee
pursuant to Section 6.
(k) 'Fair Market Value' means the mean of the high and low prices at
which the Stock is reported to have traded on the relevant date as reported
on the NASDAQ Electronic Interdealer Quotation System ('NASDAQ System');
and if there is no trade on the relevant date, the Fair Market Value shall
mean the mean of the low asked and high bid prices on that date as
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<PAGE>
reported on the NASDAQ System. If the principal market for the Stock shall
become a national securities exchange then the fair market value shall mean
the mean of the high and low prices at which the Stock is reported to have
traded on the relevant date; and if there is no trade on the relevant date,
the Fair Market Value shall mean the mean of the low asked and high bid
prices on that date. If no Fair Market Value has been established in
accordance with the foregoing, Fair Market Value shall be the value
established by the Board in good faith and, in the case of an Incentive
Stock Option, in accordance with Section 422 of the Code.
(l) 'Option' means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan, an Option may be either
(i) an 'incentive stock option' within the meaning of Section 422 of the
Code or (ii) a 'nonstatutory stock option.'
(m) 'Option Agreement' means the agreement evidencing the grant of an
Option as described in Subsection 6.2.
(n) 'Option Price' means the price at which Stock may be purchased
pursuant to an Option.
(o) 'Optionee' means a person to whom an Option has been granted under
the Plan.
(p) 'Participant' means an Eligible Employee who has been granted and,
at the time of reference, holds an Option or share of Restricted Stock.
(q) 'Period of Restriction' means the period during which shares of
Restricted Stock are subject to restrictions pursuant to Section 9 of the
Plan.
(r) 'Restricted Stock' means Stock granted to an Eligible Employee
pursuant to Section 9 of the Plan.
(s) 'Retirement' means the termination of employment with the Company
or any Subsidiary by reason of the attainment of the age which the Company,
by policy or otherwise, has established as the age at which salaried
employees may or shall be required to terminate their employment and
receive retirement benefits.
(t) 'Stock' means the Class A New Common Stock of the Company, par
value $ per share.
(u) 'Stock Appreciation Right' means the right to receive the increase
in the value of Stock subject to an Option in lieu of purchasing such
Stock.
(v) 'Subsidiary' means any present or future subsidiary of the
Company, as defined in Section 424(f) of the Code.
2.2. Number. Except when otherwise indicated by the context, the singular
shall include the plural, and the plural shall include the singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1. Eligibility and Participation. Eligible Employees in the Plan shall be
selected by the Committee from among those officers and other key employees of
the Company and its Subsidiaries who, in the opinion of the Committee, are in a
position to contribute materially to the Company's continued growth and
development and to its long-term financial success.
SECTION 4. STOCK SUBJECT TO PLAN
4.1. Number. The total number of shares of Stock subject to issuance under
the Plan may not exceed 100,000 subject to adjustment upon occurrence of any of
the events indicated in Subsection 4.5. The maximum number of shares of Stock
with respect to which Options or Stock Appreciation Rights may be granted to any
Eligible Employee during the term of the Plan cannot exceed 10,000. The shares
to be delivered under the Plan may consist, in whole or in part, of authorized
but unissued Stock or treasury Stock, not reserved for any other purpose.
4.2. Unused Stock; Unexercised Rights. In the event any shares of Stock are
subject to an Option, which for any reason, expires or is terminated unexercised
as to such shares, or any shares of Stock subject to a Restricted Stock grant
made under the Plan are reacquired by the Company pursuant to Section 9 of the
Plan, such shares again shall become available for issuance under the Plan.
4.3. Exercise of Stock Appreciation Right. Whenever a Stock Appreciation
Right, other than a Stock Appreciation Right described in Section 8.1(a)(ii), is
exercised and payment of the amount determined in Subsection 8.l(b) is made in
cash, the shares of Stock allocable to the portion of the Option surrendered may
again be the subject of Options or Restricted Stock hereunder. Whenever a Stock
Appreciation Right is exercised and payment of the amount determined in
Subsection 8.1(b) is made in shares of Stock or any Stock Appreciation Right
described in Section 8.1(a)(ii) is exercised, no shares of Stock with respect to
which the Stock Appreciation Right is exercised may again be the subject of
Options or Restricted Stock hereunder.
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<PAGE>
4.4. Restricted Stock. Whenever any shares of Stock granted to an Eligible
Employee are forfeited pursuant to Section 9 herein, such shares may again be
the subject of Options or Restricted Stock hereunder, but only if the
Participant had not been paid any dividend or received any other benefit of
ownership of such forfeited shares.
4.5. Adjustment in Capitalization.
(a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to the (i) maximum
number and class of shares of Stock or other securities with respect to which
Options or Restricted Stock may be granted under the Plan; (ii) the number and
class of shares of Stock or other securities which are subject to outstanding
Options or Restricted Stock granted under the Plan, and the purchase price
therefor, if applicable; and (iii) the maximum number of shares of Stock or
other securities with respect to which Options or Stock Appreciation Rights may
be granted to any Eligible Employee during the term of the Plan.
(b) Any such adjustment in the shares of Stock or other securities subject
to outstanding incentive stock options (including any adjustments in the
purchase price) shall be made in such manner as not to constitute a modification
as defined by Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code.
(c) If, by reason of a Change in Capitalization, a grantee of Restricted
Stock shall be entitled to, or an Optionee shall be entitled to exercise an
Option with respect to, new, additional or different shares of stock or
securities, such new additional or different shares shall thereupon be subject
to all of the conditions, restrictions and performance criteria which were
applicable to the Restricted Stock or shares of Stock subject to the Option, as
the case may be, prior to such Change in Capitalization.
SECTION 5. DURATION OF PLAN
5.1. Duration of Plan. The Plan shall remain in effect, subject to the
Board's right to earlier terminate the Plan pursuant to Subsection 12.3 hereof,
until all Stock subject to it shall have been purchased or acquired pursuant to
the provisions hereof. Notwithstanding the foregoing, no Option or Restricted
Stock may be granted under the Plan on or after the tenth anniversary of the
Consummation Date.
SECTION 6. OPTION GRANTS FOR ELIGIBLE EMPLOYEES
6.1. Grant of Employee Options. Subject to the provisions of Sections 4 and
5, Employee Options may be granted to Eligible Employees at any time and from
time to time as shall be determined by the Committee. The Committee shall have
complete discretion consistent with the terms of the Plan in determining whether
to grant Employee Options and the number of Options granted to each Eligible
Employee. The Committee also shall determine whether an Employee Option is to be
an incentive stock option within the meaning of Section 422 of the Code or a
nonstatutory stock option. Nothing in this Section 6 of the Plan shall be deemed
to prevent the grant of nonstatutory stock options in excess of the maximum
established by Section 422 of the Code.
6.2. Option Agreement. Each Employee Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option Price, the
duration of the Option, the number of shares of Stock to which the Option
pertains and such other provisions as the Committee shall determine.
6.3. Option Price. The Option Price for each Employee Option shall be
determined by, or in the manner specified by, the Committee; provided, however,
that no Employee Option shall have an Option Price that is less than the Fair
Market Value of the Stock on the date the Option is granted (110% of Fair Market
Value in the case of an incentive stock option granted to any person who, within
the meaning of Section 422 of the Code, owns stock possessing more than ten
(10%) percent of the total combined voting power of all classes of stock of the
Company or any Subsidiary (a 'Ten Percent Stockholder')).
6.4. Duration of Employee Options. Each Employee Option shall expire at
such time as the Committee shall determine at the time it is granted; provided,
however, that no Employee Option shall be exercisable later than the tenth
anniversary date of its grant (the fifth anniversary in the case of an incentive
stock option granted to a Ten Percent Stockholder).
6.5. Exercise of Employee Options; Vesting. Employee Options granted under
the Plan shall be exercisable at such times and be subject to such vesting
schedules, restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for all Eligible Employees; provided,
however, that in no event shall a Participant's rights to exercise such Options
vest more rapidly than 33 1/3% annually, beginning on the first anniversary date
following the granting of such Option.
SECTION 7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS
7.1. Payment. The Option Price shall be payable to the Company in full
upon exercise of an Option either (i) in cash or its equivalent, or (ii) at the
discretion of the Committee, by tendering shares of Stock held by the Optionee
for more than six (6) months having a Fair Market Value at the time of exercise
equal to the Option Price or (iii) by a combination of (i) and (ii). The
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proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.
7.2. Restrictions on Stock Transferability. The Committee may impose such
restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under requirements of any
stock exchange upon which such shares of Stock are then listed and under any
blue sky or state securities laws applicable to such shares.
7.3. Termination of Employment Due to Retirement or Voluntary or
Involuntary Separation. The Committee may provide in the Option Agreement that
(i) in the event the employment of the Optionee is terminated by reason of
Retirement, any outstanding Options granted to the Optionee which are then
exercisable shall continue to be exercisable at any time prior to the earlier of
the expiration date of the Options and one year after the date of termination,
or (ii) in the event that the employment of the Optionee is terminated for any
reason other than Retirement, death, Disability or Cause (as defined in Section
7.5), any outstanding options granted to the Optionee which are then exercisable
may continue to be exercisable until the earlier of the expiration date of such
Options and three months after the date of termination. Any Options not
exercisable upon Retirement or other termination except due to death or
Disability shall terminate immediately.
7.4. Termination of Employment Due to Death or Disability. The Committee
may provide in the Option Agreement that in the event the employment of the
Optionee is terminated by reason of death or Disability, the rights under any
then outstanding Option granted to the Optionee pursuant to the Plan shall
become fully exercisable until the earlier of the expiration date of the Option
and one (1) year after the date of such termination, subject to such exceptions
(which shall be set forth in the Option Agreement) as the Committee may, in its
sole discretion, approve.
7.5. Termination of Employment for Cause. Notwithstanding anything to the
contrary herein, if the employment of the Optionee shall terminate for Cause (as
defined herein), any then outstanding Option granted pursuant to the Plan to the
Optionee shall terminate immediately; provided, however, that the Committee may
waive, in whole or in part, the automatic forfeiture of such Employee Options
and may set forth such waiver or condition in the Option Agreement or at any
other time, including following the termination of employment. For purposes of
this Plan, 'Cause' means the Optionee's knowingly or recklessly causing material
injury to the Company, the Optionee's willful misconduct in the performance of
(or failure to perform) his duties hereunder, or the Optionee's dishonest,
fraudulent or unlawful behavior involving moral turpitude whether or not in
connection with his employment.
7.6. Non-transferability and Exercisability of Options. No Option granted
under the Plan may be sold, transferred, pledged, assigned or otherwise
alienated or hypothecated, otherwise than by will or by the laws of descent and
distribution. Further, all Options granted to an Optionee under the Plan shall
be exercisable during his lifetime only by such Optionee. Notwithstanding any
provision of the Plan to the contrary, no Option shall be exercisable prior to
the time a registration statement under the Securities Act of 1933 is effective
with respect to the shares of Stock issuable upon the exercise of such Option.
SECTION 8. STOCK APPRECIATION RIGHTS
8.1. Stock Appreciation Rights. The Committee may, in its discretion, in
connection with the grant of an Employee Option, grant to the Optionee Stock
Appreciation Rights, the terms and conditions of which shall be set forth in an
agreement as determined by the Committee. A Stock Appreciation Right shall cover
the same shares of Stock covered by the Option (or such lesser number of shares
of Stock as the Committee may determine) and shall, except as provided in this
Section 8, be subject to the same terms and conditions as the related Option.
Stock Appreciation Rights shall be subject to the following terms and
provisions:
(a) A Stock Appreciation Right may be granted:
(i) either at the time of grant, or at any time thereafter during
the term of the Option if related to a nonstatutory stock option; or
(ii) only at the time of grant if related to an incentive stock
option.
(b) A Stock Appreciation Right will entitle the holder of the related
Option, upon exercise of the Stock Appreciation Right, to surrender such
Option, or any portion thereof to the extent unexercised, and to receive
payment of an amount determined by multiplying (i) the excess of the Fair
Market Value of a share of Stock on the date of exercise of such Stock
Appreciation Right over the purchase price of a share of Stock under the
related Option, by (ii) the number of shares as to which such Stock
Appreciation Right has been exercised. Notwithstanding the foregoing, the
Committee may limit in any manner the amount payable with respect to any
Stock Appreciation Right by including such a limit in the agreement
evidencing the Stock Appreciation Right at the time it is granted.
(c) A Stock Appreciation Right will be exercisable at such time or
times and only to the extent that a related Option is exercisable, and will
not be transferable except to the extent that such related Option may be
transferable. A Stock
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Appreciation Right granted in connection with an incentive stock option
shall be exercisable only if the Fair Market Value of a share of Stock on
the date of exercise exceeds the purchase price of a share of Stock
specified in the related Option.
(d) Upon the exercise of a Stock Appreciation Right, the related
Option shall be canceled to the extent of the number of shares of Stock as
to which the Stock Appreciation Right is exercised, and upon the exercise
of an Option granted in connection with a Stock Appreciation Right, the
Stock Appreciation Right shall be canceled to the extent of the number of
shares of Stock as to which the Option is exercised or surrendered.
(e) Stock Appreciation Rights shall be exercised by an Optionee only
by a written notice delivered in person or by mail to the Secretary of the
Company at the Company's principal executive office, specifying the number
of shares of Stock with respect to which the Stock Appreciation Right is
being exercised. If requested by the Committee, the Optionee shall deliver
the agreement evidencing the Stock Appreciation Right being exercised and
the agreement evidencing any related Option to the Secretary of the Company
who shall endorse thereon a notation of such exercise and return such
agreement to the Optionee.
(f) Payment of the amount determined under Section 8.1(b) may be made
by the Company in the discretion of the Committee, solely in whole shares
of Stock in a number determined at their Fair Market Value on the date
preceding the date of exercise of the Stock Appreciation Right, or solely
in cash, or in a combination of cash and Stock. If the Committee decides to
make full payment in Stock and the amount payable results in a fractional
share, payment for the fractional share will be made in cash.
Notwithstanding the foregoing, no payment in the form of cash may be made
upon the exercise of a Stock Appreciation Right to an officer of the
Company or a Subsidiary who is subject to Section 16 of the Exchange Act,
unless the exercise of such Stock Appreciation Right is made either (i)
during the period beginning on the third business day and ending on the
twelfth business day following the date of release for publication of the
Company's quarterly or annual statements of sales and earnings or (ii)
pursuant to an irrevocable election to receive cash made at least six (6)
months prior to the exercise of such Stock Appreciation Right.
(g) No Stock Appreciation Right may be exercised before the date six
(6) months after the date it is granted.
(h) Subject to the terms of the Plan, the Committee may modify
outstanding awards of Stock Appreciation Rights or accept the surrender of
outstanding awards of Stock Appreciation Rights (to the extent not
exercised) and grant new awards in substitution for them. Notwithstanding
the foregoing, no modification of an award of Stock Appreciation Rights
shall adversely alter or impair any rights or obligations under the
agreement granting such Stock Appreciation Rights without the Optionee's
consent.
SECTION 9. RESTRICTED STOCK
9.1. Grant of Restricted Stock; Vesting. Subject to the provisions of
Sections 4 and 5, the Committee, at any time and from time to time, may grant
shares of Restricted Stock under the Plan to such Eligible Employees and in such
amounts as it shall determine in its sole discretion. Each grant of Restricted
Stock shall be made pursuant to a written agreement which shall contain such
restrictions, terms and conditions as the Committee may determine in its
discretion. Restrictions upon shares of Restricted Stock shall lapse at such
time or times and on such terms and conditions as the Committee may determine;
provided, however, that in no event shall such restrictions on vesting lapse at
a rate more rapidly, on an annual basis, than 33 1/3% of the number of shares
such Restricted Stock subject to such grant beginning on the first anniversary
date following the grant of such Restricted Stock.
9.2. Transferability. Except as provided in this Section 9, the shares of
Restricted Stock granted hereunder may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated for such period of time as shall
be determined by the Committee and shall be specified in the Restricted Stock
grant, or upon earlier satisfaction of other conditions as specified by the
Committee in its sole discretion and set forth in the Restricted Stock grant;
provided, however, that Restricted Stock granted to officers, directors or any
person who owns, directly or indirectly, more than ten (10%) percent of any
class of equity security of the Company which is registered pursuant to Section
13 of the Act may not be sold for at least six (6) months after the date of
grant.
9.3. Other Restrictions. The Committee may impose such other restrictions
on any shares of Restricted Stock granted to any Eligible Employee pursuant to
the Plan as it may deem advisable including, without limitation, restrictions
under applicable federal or state securities laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
9.4. Certificate Legend. In addition to any legends placed on certificates
pursuant to Subsection 9.3 hereof, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following legend:
'The sale or other transfer of the shares of stock represented by this
certificate, whether voluntary, involuntary or by operation of law, is
subject to certain restrictions on transfer set forth in the Reinhold
Industries, Inc. Stock Incentive Plan, rules of administration adopted
pursuant to such Plan and a Restricted Stock grant dated
. A copy of the Plan, such rules and such Restricted
Stock grant may be obtained from the Secretary of Reinhold Industries,
Inc.'
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9.5. Removal of Restrictions. Except as otherwise provided in this Section
9, shares of Restricted Stock covered by each Restricted Stock grant made under
the Plan shall become freely transferable by the Eligible Employee after the
last day of the Period of Restriction. Once the shares are released from the
restrictions, the Eligible Employee shall be entitled to have the legend
required by Subsection 9.4 removed from his or her Stock certificate.
9.6. Voting Rights. During the Period of Restriction, Eligible Employees
holding shares of Restricted Stock granted hereunder may exercise full voting
rights with respect to those shares.
9.7. Dividends and Other Distributions. During the Period of Restriction,
Eligible Employees holding shares of Restricted Stock granted hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in shares of Stock, the shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with respect to which they
were paid.
SECTION 10. BENEFICIARY DESIGNATION
10.1. Beneficiary Designation. Subject to Subsections 7.6 and 9.2, each
Participant under the Plan may, from time to time, name any beneficiary or
beneficiaries (who may be named contingently or successively) to whom any
benefit under the Plan is to be paid in case of the Participant's death before
he or she receives any or all of such benefit. Each designation will revoke all
prior designations by the same Participant, shall be in a form prescribed by the
Committee and will be effective only when filed by the Participant in writing
with the Committee during the lifetime of the Participant. In the absence of any
such designation, benefits remaining unpaid at the Participant's death shall be
paid to the estate of the Participant.
SECTION 11. RIGHTS OF EMPLOYEES
11.1. Employment. The selection of any person to receive an Option, Stock
Appreciation Right or Restricted Stock hereunder shall not interfere with or
limit in any way the right of the Company or any Subsidiary to terminate such
Participant's employment at any time and shall not give such Participant any
right to continue as an employee of the Company or any Subsidiary.
11.2. Participation. No employee shall have a right to be selected as an
Eligible Employee or, having been so selected, to be selected again as an
Optionee or recipient of Restricted Stock. Each grant of Options or Restricted
Stock hereunder shall be separate and distinct from every other grant and shall
not be construed either to give or deny the grantee the right to be granted
additional benefits under the Plan.
11.3. Plan Not Exclusive. The Plan is not exclusive. The Company may have
other plans, programs and arrangements for the grant of options, the issuance of
shares or other compensation. The Plan does not require that any Optionee or
holder of Restricted Stock participate, or be precluded from participation, in
such other plans, programs and arrangements.
SECTION 12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE
12.1. Administration. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Company, and to
make all other determinations necessary or advisable for the administration of
the Plan, but only to the extent not contrary to the express provisions of the
Plan. Determinations, interpretations, or other actions made or taken by the
Committee pursuant to the provisions of the Plan shall be final and binding and
conclusive for all purposes and upon all persons whomsoever. No member of the
Committee shall be personally liable for any action, determination or
interpretation made or taken with respect to the Plan and all members of the
Committee shall be fully indemnified by the Company with respect to any such
action, determination or interpretation.
12.2. Change in Control. Without limiting the authority of the Committee as
provided herein, the Committee, either at the time Employee Options or shares of
Restricted Stock are granted, or, if so provided in the applicable Option
Agreement or Restricted Stock grant, at any time thereafter, shall [have the
authority to] accelerate in whole or in part the exercisability of Employee
Options and/or the last day of the Period of Restriction upon a Change in
Control. The Option Agreements and Restricted Stock grants approved by the
Committee may contain provisions whereby, in the event of a Change in Control,
the acceleration of the exercisability of Employee Options and/or the last day
of the Period of Restriction may be automatic or may be subject to the
discretion of the Committee or may depend upon whether the Change in Control
shall be approved by a majority of the members of the Board or such other
criteria as the Committee may specify. Nothing herein shall obligate the
Committee to take any action upon a Change in Control.
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12.3. Amendment, Modification and Termination of Plan. The Board may at any
time terminate, and from time to time may amend or modify the Plan; provided,
however, that no such action of the Board, without approval of the stockholders,
may:
(a) Increase the total amount of Stock which may be issued under the
Plan, except as provided in Subsection 4.5 of the Plan.
(b) Materially increase the cost of the Plan or materially increase
the benefits to Participants.
(c) Extend the period during which Options or Restricted Stock may be
granted.
(d) Extend the maximum period after the date of grant during which
Options may be exercised.
(e) Change the class of individuals eligible to receive Options or
Restricted Stock.
Any amendment which requires stockholder approval in order for the Plan to
continue to comply with Rule 16b-3 of the Act or any other law, regulation or
stock exchange requirement shall not be effective unless approved by the
requisite vote of stockholders. No amendment, modification or termination of the
Plan shall in any manner adversely affect any Options or Restricted Stock
theretofore granted to any Participant under the Plan, without the consent of
that Participant.
12.4. Interpretation. Unless otherwise expressly stated in the agreement
governing, any grant of Options, Stock Appreciation Rights and Restricted Stock,
such grant, as the case may be, is intended to be compensation within the
meaning of Section 162(m)(4)(C) of the Code. The Committee shall not be entitled
to exercise any discretion otherwise authorized hereunder with respect to such
Options if the ability to exercise such discretion or the exercise of such
discretion itself would cause the compensation attributable to such Options to
fail to qualify as such compensation.
SECTION 13. TAX WITHHOLDING
13.1. Tax Withholding. (a) At such times as an Eligible Employee recognizes
taxable income in connection with the receipt of shares or cash hereunder (a
'Taxable Event'), the Eligible Employee shall pay to the Company an amount equal
to the federal, state and local income taxes and other amounts as may be
required by law to be withheld by the Company in connection with the Taxable
Event (the 'Withholding Taxes') prior to the issuance, or release from escrow,
of such shares or the payment of such cash. The Company shall have the right to
deduct from any payment of cash to an Eligible Employee an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding Taxes. In
satisfaction of his obligation to pay Withholding Taxes to the Company, the
Eligible Employee may make a written election (the 'Tax Election'), which may be
accepted or rejected in the discretion of the Committee, to have withheld a
portion of the shares of Stock then issuable to him having an aggregate Fair
Market Value, on the date preceding the date of such issuance, equal to the
Withholding Taxes, provided that in respect of an Eligible Employee who may be
subject to liability under Section 16(b) of the Exchange Act either: (i) the Tax
Election is made at least six (6) months prior to the date of the Taxable Event
and the Tax Election is irrevocable with respect to all Taxable Events of a
similar nature occurring prior to the expiration of six (6) months following a
revocation of the Tax Election; or (ii) in the case of the exercise of an Option
(A) the Optionee makes the Tax Election at least six (6) months after the date
the Option was granted, (B) the Option is exercised during the ten (10) day
period beginning on the third business day and ending on the twelfth business
day following the release for publication of the Company's quarterly or annual
statement of sales and earnings (a 'Window Period') and (C) the Tax Election is
made during the Window Period in which the related Option is exercised or prior
to such Window Period and subsequent to the immediately preceding Window Period;
or (iii) in the case of a Taxable Event relating to the grant of shares of
Restricted Stock (A) the Eligible Employee makes the Tax Election at least six
(6) months after the date such stock was granted and (B) the Tax Election is
made (x) in the case of a Taxable Event occurring within a Window Period, during
the Window Period in which the Taxable Event occurs, or (y) in the case of a
Taxable Event not occurring within a Window Period, during the Window Period
immediately preceding the Taxable Event relating to such Restricted Stock.
Notwithstanding the foregoing, the Committee may, by the adoption of rules or
otherwise, (i) modify the provisions of this Section 13.1 or impose such other
restrictions or limitations on Tax Elections as may be necessary to ensure that
the Tax Elections will be exempt transactions under Section 16(b) of the
Exchange Act, and (ii) permit Tax Elections to be made at such other times and
subject to such other conditions as the Committee determines will constitute
exempt transactions under Section 16(b) of the Act.
SECTION 14. REQUIREMENTS OF LAW
14.1. Requirements of Law. The granting of Options or Restricted Stock, and
the issuance of shares of Stock upon the exercise of an Option shall be subject
to all applicable laws, rules and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
14.2. Governing Law. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of New York
without giving effect to the choice of law principles thereof, except to the
extent that such law is preempted by federal law.
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EXHIBIT 99 (b)
HEARING DATE: June 12, 1996
TIME: 10:00 a.m.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- --------------------------------x
In re: : Chapter 11
Case No. 93-B-46090 (SMB)
KEENE CORPORATION, :
Debtor. : Civil Action No.
96 CV 3492 (MBM)
- --------------------------------x
MODIFICATIONS TO THE DEBTOR'S
FOURTH AMENDED PLAN OF REORGANIZATION
Keene Corporation, debtor and debtor in possession in the
above-captioned Chapter 11 case, hereby proposes the following modifications to
its Fourth Amended Plan of Reorganization (the "Plan")1, pursuant to section
1127(a) of the Bankruptcy Code.
1.Section 1.1 of the Plan shall be modified as
follows:
a.The following definition shall be added to Section
1.1:
"(13) "Asbestos Related D&O Indemnification
Obligations" means the Debtor's obligations to indemnify its officers
and directors pursuant to its Certificate of Incorporation dated April
12, 1990 and Section 145 of the Delaware General Corporation Law for
Claims and Demands asserted by or on behalf of a holder of an
Asbestos-Related Claim or Demand."
b.Section 1.1(13) of the Plan shall be renumbered as
Section 1.1(14) of the Plan.
c.Section 1.1(14) of the Plan shall be renumbered as
Section 1.1(15) of the Plan.
________________________
1 All terms not otherwise defined herein shall have the meaning ascribed
thereto in the Plan.
<PAGE>
d.Section 1.1(15) of the Plan shall be renumbered as
Section 1.1(16) of the Plan.
e.Section 1.1(16) of the Plan shall be renumbered as
Section 1.1(17) of the Plan.
f.Section 1.1(17) of the Plan shall be renumbered as
Section 1.1(18) of the Plan.
g.Section 1.1(18) of the Plan shall be renumbered as
Section 1.1(19) of the Plan.
h.Section 1.1(19) of the Plan shall be renumbered as
Section 1.1(20) of the Plan.
i.Sec
Section 1.1(26) of the Plan.
o.Section 1.1(26) of the Plan shall be renumbered as
Section 1.1(27) of the Plan.
p.Section 1.1(27) of the Plan shall be renumbered as
Section 1.1(28) of the Plan.
q.Section 1.1(28) of the Plan shall be renumbered as
Section 1.1(29) of the Plan.
r.Section 1.1(29) of the Plan shall be renumbered as
Section 1.1(30) of the Plan.
s.Section 1.1(30) of the Plan shall be renumbered as
Section 1.1(31) of the Plan.
t.Section 1.1(31) of the Plan shall be renumbered as
Section 1.1(32) of the Plan.
u.Section 1.1(32) of the Plan shall be renumbered as
Section 1.1(33) of the Plan.
<PAGE>
v.Section 1.1(33) of the Plan shall be renumbered as
Section 1.1(34) of the Plan.
w.Section 1.1(34) of the Plan shall be renumbered as
Section 1.1(35) of the Plan.
x.Section 1.1(35) of the Plan shall be renumbered as
Section 1.1(36) of the Plan.
y.Section 1.1(36) of the Plan shall be renumbered as
Section 1.1(37) of the Plan.
z.Section 1.1(37) of the Plan shall be renumbered as
Section 1.1(38) of the Plan.
aa.Section 1.1(38) of the Plan shall be renumbered as Section
1.1(39) of the Plan and shall be modified by deleting the phrase "three (3)
calendar days" therefrom and inserting in lieu thereof the phrase "one (1)
calendar day."
ab.Section 1.1(39) of the Plan shall be renumbered as
Section 1.1(40) of the Plan.
ac.Section 1.1(40) of the Plan shall be renumbered as
Section 1.1(41) of the Plan.
ad.The following definition shall be added to Section
1.1:
"(42) "Confirmation Trigger" means the entry of a
Confirmation Order that in any way materially and adversely affects
Sections 17.1, 17.3(b) or 17.4 of the Plan from the perspective of the
Debtor's present and former officers and directors."
ae.Section 1.1(41) of the Plan shall be renumbered as
Section 1.1(43) of the Plan.
af.Section 1.1(42) of the Plan shall be renumbered as
Section 1.1(44) of the Plan.
ag.Section 1.1(43) of the Plan shall be renumbered as
Section 1.1(45) of the Plan.
ah.Section 1.1(44) of the Plan shall be renumbered as
Section 1.1(46) of the Plan.
ai.Section 1.1(45) of the Plan shall be renumbered as
Section 1.1(47) of the Plan.
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aj.Section 1.1(46) of the Plan shall be renumbered as Section
1.1(48) of the Plan and shall be modified by (a) deleting the word "and" in
the third line thereof and inserting in lieu thereof "," and (b) inserting
at the end thereof the phrase ", (iv) the Other Retiree Benefit Expense
Amount and (v) the Special Reserve, if any."
ak.Section 1.1(47) of the Plan shall be renumbered as Section
1.1(49) of the Plan and shall be modified by (a) deleting the word "and" in
the fifth line thereof and inserting in lieu thereof "," and (b) inserting
after the phrase "the Plan Estimates" in the fifth line thereof the phrase
", the Other Retiree Benefit Expense Amount".
al.Section 1.1(48) of the Plan shall be renumbered as
Section 1.1(50) of the Plan.
am.Section 1.1(49) of the Plan shall be renumbered as
Section 1.1(51) of the Plan.
an.Section 1.1(50) of the Plan shall be renumbered as
Section 1.1(52) of the Plan.
ao.Section 1.1(51) of the Plan shall be renumbered as
Section 1.1(53) of the Plan.
ap.Section 1.1(52) of the Plan shall be renumbered as
Section 1.1(54) of the Plan.
aq.Section 1.1(53) of the Plan shall be renumbered as
Section 1.1(55) of the Plan.
ar.Section 1.1(54) of the Plan shall be renumbered as
Section 1.1(56) of the Plan.
as.Section 1.1(55) of the Plan shall be renumbered as
Section 1.1(57) of the Plan.
at.Section 1.1(56) of the Plan shall be renumbered as
Section 1.1(58) of the Plan.
au.Section 1.1(57) of the Plan shall be renumbered as
Section 1.1(59) of the Plan.
av.Section 1.1(58) of the Plan shall be renumbered as
Section 1.1(60) of the Plan.
aw.Section 1.1(59) of the Plan shall be renumbered as
Section 1.1(61) of the Plan.
ax.Section 1.1(60) of the Plan shall be renumbered as
Section 1.1(62) of the Plan.
ay.Section 1.1(61) of the Plan shall be renumbered as
Section 1.1(63) of the Plan.
<PAGE>
az.Section 1.1(62) of the Plan shall be renumbered as
Section 1.1(64) of the Plan.
ba.Section 1.1(63) of the Plan shall be renumbered as
Section 1.1(65) of the Plan.
bb.Section 1.1(64) of the Plan shall be renumbered as
Section 1.1(66) of the Plan.
bc.Section 1.1(65) of the Plan shall be renumbered as
Section 1.1(67) of the Plan.
bd.Section 1.1(66) of the Plan shall be renumbered as
Section 1.1(68) of the Plan.
be.Section 1.1(67) of the Plan shall be renumbered as
Section 1.1(69) of the Plan.
bf.Section 1.1(68) of the Plan shall be renumbered as
Section 1.1(70) of the Plan.
bg.Section 1.1(69) of the Plan shall be renumbered as
Section 1.1(71) of the Plan.
bh.Section 1.1(70) of the Plan shall be renumbered as
Section 1.1(72) of the Plan.
bi.Section 1.1(71) of the Plan shall be renumbered as
Section 1.1(73) of the Plan.
bj.Section 1.1(73) of the Plan shall be renumbered as
Section 1.1(74) of the Plan.
bk.Section 1.1(74) of the Plan shall be renumbered as
Section 1.1(75) of the Plan.
bl.Section 1.1(75) of the Plan shall be renumbered as
Section 1.1(76) of the Plan.
bm.The following definition shall be added to Section
1.1:
"(77) "Modified Retention Costs" means the increased
costs of the Retention Program resulting from the fourth decretal
paragraph of the Bankruptcy Court's Order Approving Modifications To
The Debtor's Existing Retention Program, dated May 22, 1996."
bn.Section 1.1(76) of the Plan shall be renumbered as
Section 1.1(78) of the Plan.
bo.Section 1.1(77) of the Plan shall be renumbered as
Section 1.1(79) of the Plan.
<PAGE>
bp.Section 1.1(78) of the Plan shall be renumbered as
Section 1.1(80) of the Plan.
bq.Section 1.1(79) of the Plan shall be renumbered as
Section 1.1(81) of the Plan.
br.The following definition shall be added to Section
1.1:
"(82) "Non-Asbestos Related D&O Indemnification
Obligations" means the Debtor's obligations to indemnify its officers
and directors pursuant to its Certificate of Incorporation dated April
12, 1990 and Section 145 of the Delaware General Corporation Law for
Claims asserted by or on behalf of any Entity other than a holder of
an Asbestos-Related Claim or Demand".
bs.Section 1.1(80) of the Plan shall be renumbered as
Section 1.1(83) of the Plan.
bt.Section 1.1(81) of the Plan shall be renumbered as
Section 1.1(84) of the Plan.
bu.The following definition shall be added to Section
1.1:
"(85) "Other Retiree Benefit Expense Amount" means
$100,000.00 in Cash."
bv.The following definition shall be added to Section
1.1:
"(86) "Other Retiree Benefits" means the Debtor's
obligations to (a) 110 of its former employees to provide certain life
insurance benefits, with a maximum death benefit at $5,000.00 and (b)
Howard A. Mileaf and Leroy Moeser with respect to their non-qualified,
supplemental retiree benefits."
bw.Section 1.1(82) of the Plan shall be renumbered as
Section 1.1(87) of the Plan.
bx.Section 1.1(83) of the Plan shall be renumbered as
Section 1.1(88) of the Plan.
by.Section 1.1(84) of the Plan shall be renumbered as
Section 1.1(89) of the Plan.
bz.Section 1.1(85) of the Plan shall be renumbered as
Section 1.1(90) of the Plan.
ca.Section 1.1(86) of the Plan shall be renumbered as
Section 1.1(91) of the Plan.
<PAGE>
cb.Section 1.1(87) of the Plan shall be renumbered as
Section 1.1(92) of the Plan.
cc.Section 1.1(88) of the Plan shall be renumbered as
Section 1.1(93) of the Plan.
cd.Section 1.1(89) of the Plan shall be renumbered as
Section 1.1(94) of the Plan.
ce.Section 1.1(90) of the Plan shall be renumbered as
Section 1.1(95) of the Plan.
cf.Section 1.1(91) of the Plan shall be renumbered as
Section 1.1(96) of the Plan.
cg.Section 1.1(92) of the Plan shall be renumbered as
Section 1.1(97) of the Plan.
ch.Section 1.1(93) of the Plan shall be renumbered as
Section 1.1(98) of the Plan.
ci.Section 1.1(94) of the Plan shall be renumbered as
Section 1.1(99) of the Plan.
cj.Section 1.1(95) of the Plan shall be renumbered as
Section 1.1(100) of the Plan.
ck.Section 1.1(96) of the Plan shall be renumbered as
Section 1.1(101) of the Plan.
cl.Section 1.1(97) of the Plan shall be renumbered as
Section 1.1(102) of the Plan.
cm.Section 1.1(98) of the Plan shall be renumbered as
Section 1.1(103) of the Plan.
cn.Section 1.1(99) of the Plan shall be renumbered as
Section 1.1(104) of the Plan.
co.Section 1.1(100) of the Plan shall be renumbered as
Section 1.1(105) of the Plan.
cp.Section 1.1(101) of the Plan shall be renumbered as
Section 1.1(106) of the Plan.
cq.Section 1.1(102) of the Plan shall be renumbered as
Section 1.1(107) of the Plan.
cr.Section 1.1(103) of the Plan shall be renumbered as
Section 1.1(108) of the Plan.
cs.The following definition shall be added to Section
1.1:
"(109) "Special Reserve" means the reserve of
$400,000.00 in Cash to be established by the Creditors' Trust pursuant
<PAGE>
to Section 9.14 hereof for the benefit of New Keene, which shall have
access thereto in order to satisfy its obligations under Section
10.6(b) hereof. The Special Reserve shall be administered by the
Trustees in accordance with those agreements that the Debtor and the
Committee determine are necessary to effectuate the Special Reserve."
ct.Section 1.1(104) of the Plan shall be renumbered as
Section 1.1(110) of the Plan.
cu.Section 1.1(105) of the Plan shall be renumbered as
Section 1.1(111) of the Plan.
cv.Section 1.1(106) of the Plan shall be renumbered as
Section 1.1(112) of the Plan.
cw.Section 1.1(107) of the Plan shall be renumbered as
Section 1.1(113) of the Plan.
cx.Section 1.1(108) of the Plan shall be renumbered as
Section 1.1(114) of the Plan.
cy.Section 1.1(109) of the Plan shall be renumbered as
Section 1.1(115) of the Plan.
cz.Section 1.1(110) of the Plan shall be renumbered as
Section 1.1(116) of the Plan.
da.Section 1.1(111) of the Plan shall be renumbered as
Section 1.1(117) of the Plan.
db.Section 1.1(112) of the Plan shall be renumbered as
Section 1.1(118) of the Plan.
dc.Section 1.1(113) of the Plan shall be renumbered as
Section 1.1(119) of the Plan.
dd.Section 1.1(114) of the Plan shall be renumbered as
Section 1.1(120) of the Plan.
de.Section 1.1(115) of the Plan shall be renumbered as
Section 1.1(121) of the Plan.
df.Section 1.1(116) of the Plan shall be renumbered as
Section 1.1(122) of the Plan.
dg.Section 1.1(117) of the Plan shall be renumbered as
Section 1.1(123) of the Plan.
dh.Section 1.1(118) of the Plan shall be renumbered as
Section 1.1(124) of the Plan.
2. Section 7.7 of the Plan shall be modified by (a) deleting the
"." and inserting "," after the phrase "in the aggregate" in the third line
<PAGE>
thereof, and (b) adding, after ",", the phrase "provided, however, that no
portion of such available funds shall be used to satisfy any Claims arising
under section 502(h) of the Bankruptcy Code, which Claims shall be treated in
accordance with Section 9.3 hereof."
3.Section 9.3 of the Plan shall be modified by (a) deleting the
word "and" in the fourth line thereof and inserting "," in lieu thereof, (b)
adding the phrase ", Asbestos Related D&O Indemnification Obligations" after the
phrase "Transactions Stipulation Claims" in the fourth line thereof, (c) adding
the phrase "and any and all liabilities of the Debtor under Section 502(h) of
the Bankruptcy Code, which shall be payable in the same percentage per dollar
amount of Claim as paid to the holders of Allowed General Unsecured Claims in
Class 6" after the phrase "Section 524(g) of the Bankruptcy Code" and before the
".", (d) deleting the word "or" in the sixth line thereof, inserting "," in lieu
thereof and (e) adding the phrase "or any Claims arising under Section 502(h) of
the Bankruptcy Code.".
4.Article IX of the Plan shall be modified by adding the
following new Sections 9.14 and 9.15 thereto:
"9.14 Special Reserve. If and only if the Confirmation
Trigger occurs, on the Effective Date, the Special Reserve
shall be created, established and administered by the
Creditors' Trust.
"9.15 Indemnification of Committee. The Creditors' Trust shall
indemnify each Entity who was or is a member of the Committee and each of
their respective representatives against any and all liabilities, expenses,
claims, damages or losses incurred by them resulting from the fact that
such Entity was a member of the Committee or a representative thereof if
such Entity acted in good faith or in a manner he or she reasonably
believed to be in discharge of his or her duties."
5.Article X of the Plan shall be modified by adding the following
new Section 10.6 thereto:
"10.6 Assumption of Liabilities by New Keene.
(a) If and only if the Confirmation Trigger occurs, New Keene
shall assume and be obligated for the Modified Retention Costs.
(b)New Keene shall assume any and all Non-Asbestos Related D&O
Indemnification Obligations; provided, however, that if the Confirmation
Trigger occurs, the Special Reserve shall be created and established.
(c)New Keene shall assume all liabilities relating to the Other
Retiree Benefits; provided, however, that New Keene shall receive the Other
Retiree Benefit Expense Amount."
<PAGE>
6.Article X of the Plan shall be modified by adding
the following new Section 10.7 thereto:
"10.7 Transfer of Property to New Keene. On the
Effective Date, New Keene shall receive the Other Retiree
Benefit Expense Amount."
7.Section 12.2 of the Plan shall be modified by (a) deleting the
word "and" at the end of subsection (i), (b) deleting the period at the end of
subsection (j) and adding in lieu thereof a semicolon and the word "and", and
(c) inserting new subsection (k):
"(k) "The Debtor and the Committee shall have executed the
agreement or agreements, in form and substance reasonably acceptable to the
parties, creating and establishing the Special Reserve."
8.Section 14.5 of the Plan shall be modified by adding
the following paragraph at the end thereof:
"The Other Retiree Benefits shall be treated in
accordance with Section 10.7 hereof."
9.Section 16.2 shall be modified by deleting the phrase "by the
Debtor, the Committee or the Legal Representative (each, an "Objecting Party"),
as the case may be, on or before the Confirmation Date, or such later date, as
the Bankruptcy Court may fix;" and inserting in lieu thereof, the following
phrase "within thirty (30) days after the Confirmation Date, or such later date
as the Bankruptcy Court may fix;"
Dated: New York, New York
June 10, 1996
KEENE CORPORATION
By: /s/ Timothy E. Coyne
____________________
Name: Timothy E. Coyne
Title: President
<PAGE>
BERLACK, ISRAELS & LIBERMAN LLP Counsel to Keene Corporation, Debtor and Debtor
in Possession 120 West 45th Street New York, New York 10036 (212) 704-0100
/s/ Edward S. Weisfelner
By: _______________________________
Edward S. Weisfelner (EW 5581)
The foregoing modifications have been approved by the parties
indicated below, in accordance with Section 18.5 of the Plan.
The Official Committee of Unsecured Creditors
By: Marcus Montgomery P.C.
/s/ John T. Preefer
By: ______________________
The Legal Representative for Future Claimants
/s/ Matthew Gluck
By: _________________________
Matthew Gluck
<PAGE>
EXHIBIT 99(c)
Hearing Date: June 12, 1996
Time: 10:00 a.m.
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- ----------------------------------------x
:
In re: : Civil Action No.
: 96 CV 3492 (MBM)
KEENE CORPORATION, :
: Chapter 11
: Case No.
Debtor. : 93 B 46090 (SMB)
:
- ----------------------------------------x
FINDINGS OF FACT, CONCLUSIONS OF LAW AND ORDER CONFIRMING
THE DEBTOR'S FOURTH AMENDED PLAN OF REORGANIZATION
UNDER CHAPTER 11 OF THE BANKRUPTCY CODE, AS MODIFIED
Keene Corporation ("Keene" or the "Debtor") having proposed its
Fourth Amended Plan of Reorganization Under Chapter 11 of the Bankruptcy Code,
dated March 11, 1996 (the "March 11 Plan")1, and having filed modifications to
the March 11 Plan (the "Modifications") on June 11, 1996, (the March 11 Plan, as
modified by the Modifications, being referred to herein as the "Plan")2; the
Bankruptcy Court having entered two orders, dated March 11, 1996 and March 25,
1996, approving the Debtor's Second Amended Disclosure Statement (the
"Disclosure Statement"), establishing procedures for the solicitation and
_______________________
1 Unless otherwise specified, capitalized terms and phrases used herein have the
meanings assigned to them in the Plan (as defined herein). The rules of
interpretation set forth in Section 1.2 of the Plan shall apply to these
Findings of Fact, Conclusions of Law and Order (this "Confirmation Order"). Any
term used in the Plan or this Confirmation Order that is not defined in the Plan
or this Confirmation Order, but that is used in the Bankruptcy Code or the
Bankruptcy Rules, shall have the meaning assigned to that term in the Bankruptcy
Code or the Bankruptcy Rules.
2 Copies of the March 11 Plan and the Modifications are attached hereto as
Exhibit A and incorporated herein by reference.
<PAGE>
tabulation of votes to accept or reject the Plan, approving the employment of
Poorman-Douglas as solicitation and tabulation agent (the "Agent"), scheduling a
hearing on confirmation of the Plan and approving notice, publication and
response procedures relating thereto and providing related relief (collectively,
the "Disclosure Statement Order"); and the Bankruptcy Court having entered an
order, dated March 11, 1996, establishing supplemental procedures for the
solicitation and tabulation of votes to accept or reject the Plan from holders
of Asbestos-Related Claims in Classes 4A and 4B (the "Voting Procedures Order");
and the Bankruptcy Court having entered an order, dated March 11, 1996, which
order has become a Final Order, approving the Transactions Stipulation (the
"Transactions Stipulation Order"); and the Bankruptcy Court having set, in the
Disclosure Statement Order, June 12, 1996 at 10:00 a.m. as the date and time of
the hearing pursuant to section 1129 of the Bankruptcy Code to consider
confirmation of the Plan (the "Confirmation Hearing"); and the United States
District Court for the Southern District of New York (the "District Court," and,
together with the Bankruptcy Court, the "Court") having entered an order
withdrawing the reference with respect to considering the confirmation of the
Plan and all related matters, pursuant to 28 U.S.C. 157(d), and providing
related relief, including reaffirming the originally scheduled date and time of
the Confirmation Hearing, moving the location thereof to the United States
District Court and directing that the Bankruptcy Court also preside at the
<PAGE>
Confirmation Hearing; and upon the Declaration of Debra L. Reyes filed on June
7, 1996, certifying the method and results of the solicitation and the ballot
and master ballot tabulation for the Classes of Claims and Interests voting to
accept or reject the Plan (the "Declaration of Vote"); and the fifteen
Affidavits of Apple Direct Mail Services, Ltd., bearing dates ranging from April
17, 1996 to April 24, 1996, with respect to the mailing of the notice of the
Confirmation Hearing, the Disclosure Statement and the Ballots (the "Mailing
Affidavits") in accordance with the Disclosure Statement Order; and upon the
affidavits of publication by Ruby Iturbe of The Wall Street Journal, National
Edition, dated April 5, 1996, and Venus O. Bradley of USA Today, dated April 17,
1996 (collectively, the "Affidavits of Publication"), filed with respect to the
publications of notice of the Confirmation Hearing in accordance with the
Disclosure Statement Order; and the Court having reviewed the Plan, the
Disclosure Statement, the Disclosure Statement Order, the Voting Procedures
Order, the Transactions Stipulation Order, the Declaration of Vote, the Mailing
Affidavits, the Affidavits of Publication, the Memorandum Of Law Of Keene
Corporation In Support Of Confirmation Of The Debtor's Fourth Amended Plan Of
Reorganization And In Response To The Objections To Confirmation, filed on June
7, 1996 (the "Confirmation Memorandum"), and all filed objections and supporting
memoranda of law, and statements and comments regarding confirmation, as
reflected in the record at the Confirmation Hearing; and the Court having heard
the statements of counsel in support of and in opposition to confirmation at the
Confirmation Hearing; and the Court having considered all evidence admitted at
<PAGE>
the Confirmation Hearing; and the Bankruptcy Court having taken judicial notice
of the papers and pleadings on file in the Chapter 11 Case; and the Court
finding that (i) notice of the Confirmation Hearing and the opportunity to
object to confirmation were adequate and appropriate, in accordance with section
524(g) of the Bankruptcy Code and Bankruptcy Rule 2002(b), as to all parties to
be affected by the Plan and the transactions contemplated thereby and (ii) the
legal and factual bases set forth in the Confirmation Memorandum and presented
at the Confirmation Hearing establish just cause for the relief granted herein;
the Court hereby makes the following Findings of Fact, Conclusions of Law and
Order.3
I. FINDINGS OF FACT
A. JURISDICTION AND VENUE
On December 3, 1993, Keene filed a voluntary petition for relief
under chapter 11 of the Bankruptcy Code. The Debtor was and is qualified to be a
debtor under section 109(a) of the Bankruptcy Code. Keene is a corporation
organized and existing under the laws of the State of Delaware with its
principal place of business in New York City. Accordingly, venue in the Southern
District of New York for the Chapter 11 Case was proper as of the Petition Date
pursuant to 28 U.S.C. 1408 and continues to be proper. By order of the District
Court the automatic reference affected by the District Court General Order of
____________________
3 This Confirmation Order constitutes the Court's findings of fact and
conclusions of law under Fed. R. Civ. P.52, as made applicable by Bankruptcy
Rules 7052 and 9014. Any finding of fact shall constitute a finding of fact even
if it is stated as a conclusion of law, and any conclusion of law shall
constitute a conclusion of law even if it is stated as a finding of fact.
<PAGE>
Reference, entered on July 10, 1984 by Acting Chief Judge Ward for the Southern
District of New York in accordance with 28 U.S.C. 157(a), was withdrawn solely
with respect to considering the confirmation of the Plan and all related
matters, pursuant to 28 U.S.C. 157(d) and sections 105(a), 524(g), 1129 and 1142
of the Bankruptcy Code.
B. COMPLIANCE WITH THE REQUIREMENTS OF SECTION 1129 OF
THE BANKRUPTCY CODE
1. Section 1129(a)(1) -- Compliance of the Plan with
Applicable Provisions of the Bankruptcy Code.
The Plan complies with all applicable provisions of the
Bankruptcy Code, as required by section 1129(a)(1) of the Bankruptcy Code,
including sections 1122, 1123 and 524(g).
a.Sections 1122 and 1123(a)(1)-(4) -- Classification
and Treatment of Claims and Interests.
Pursuant to sections 1122(a) and 1123(a)(1) of the Bankruptcy
Code, Article V of the Plan designates Classes of Claims and Interests, other
than Administrative Expense Claims, Tax Claims and Demands.4 As required by
section 1122(a), each Class of Claims and Interests contains only Claims or
Interests that are substantially similar to the other Claims or Interests within
that Class. Claims and Interests are classified separately in Classes 1 through
8. Such classification is proper under section 1122(a) because such Claims and
___________________________
4 Administrative Expense Claims, Tax Claims and Demands are not required to be
designated pursuant to sections 524(g)(5) and 1123(a)(1) of the Bankruptcy Code.
<PAGE>
Interests have differing rights among each other and against the assets of the
Debtor or differing interests in the Debtor or its reorganization. Additionally,
in accordance with section 1122(b) of the Bankruptcy Code, the Plan provides for
a Convenience Class of General Unsecured Claims of $1,000 or less against the
Debtor. This Class is reasonable and necessary for administrative convenience.
Pursuant to sections 1123(a)(2) and (3) of the Bankruptcy Code, Article VI of
the Plan specifies all Classes of Claims and Interests that are not impaired
under the Plan and Article VII specifies the treatment of all Classes of Claims
and Interests, including the Classes that are impaired under the Plan. Pursuant
to Section 1123(a)(4) of the Bankruptcy Code, Article VII of the Plan also
provides the same treatment for each Claim or Interest within a particular
Class, unless the holder of a Claim or Interest agrees to less favorable
treatment of its Claim or Interest.
b.Section 1123(a)(5) -- Adequate Means for
Implementation of the Plan.
The Plan and, in particular, Articles VIII, IX, X and XIV thereof
provide, adequate means for its implementation. Those provisions relate to,
among other things: (i) the creation of the Creditors' Trust; (ii) the Merger;
(iii) the vesting of the Debtor's property in New Keene or the Creditors' Trust;
(iv) the cancellation of the Old Common Stock and the Other Interests; (v) the
issuance of the New Common Stock to the Creditors' Trust and the holders of
Class 7 Interests and, for certain of the following Classes (as well as
Administrative Expense Claims and Tax Claims), the distribution of Cash, in
satisfaction of Allowed Claims in Classes 1, 3 and 6; (vi) the adoption of the
Amended and Restated Certificate of Incorporation and the Amended and Restated
<PAGE>
By-laws; (vii) the filing of the Certificate of Merger; and (viii) entry by the
Debtor or New Keene into a number of agreements, including but not limited to,
the Creditors' Trust Agreement. The Debtor will have sufficient Cash to make all
payments required to be made on the Effective Date pursuant to the terms of the
Plan.
c.Section 1123(a)(6) -- Prohibition Against the
Issuance of Nonvoting Equity Securities.
Section 8.2 of the Plan provides that the Amended and Restated
Certificate of Incorporation shall contain a provision prohibiting the issuance
of nonvoting equity securities to the extent required by section 1123(a)(6) of
the Bankruptcy Code. Accordingly, the Plan satisfies the requirement of section
1123(a)(6) of the Bankruptcy Code that a plan of reorganization provide for an
appropriate distribution of voting power among the classes of securities
possessing voting power.
d.Section 1123(a)(7) -- Selection of Directors and Officers
in a Manner Consistent with the Interests of
Creditors and Equity Security Holders and Public
Policy.
(i)The initial directors and executive officers of
New Keene, the initial trustees of the Creditors' Trust and the initial members
of the Trust Advisory Committee shall be those persons identified on pages 41,
43 and 65 of the Disclosure Statement and at the Confirmation Hearing. Each such
director, officer, trustee and advisor will serve from and after the Effective
Date until his or her successor is duly elected or appointed and qualified or
until their earlier death, resignation, disqualification, removal or other
grounds in accordance with the terms of the Amended and Restated Certificate of
<PAGE>
Incorporation, the Amended and Restated By-laws, the Creditors' Trust Agreement
and the Delaware General Corporation Law, as applicable.
(ii)The Debtor, the Committee and/or the Legal
Representative have selected the initial executive officers and directors of New
Keene, the initial trustees of the Creditors' Trust and the initial members of
the Trust Advisory Committee in a manner consistent with the interests of the
holders of Claims, Demands and Interests and public policy.
e.Section 1123(b)(1) - (2) -- Impairment of Claims and
Interests and Assumption, Assumption and
Assignment or Rejection of Executory Contracts and
Unexpired Leases.
Pursuant to section 1123(b)(1) of the Bankruptcy Code, Article VI
of the Plan impairs or leaves unimpaired, as the case may be, each Class of
Claims and Interests. In accordance with section 1123(b)(2) of the Bankruptcy
Code, Article XIII of the Plan provides for the rejection of the executory
contracts and unexpired leases of the Debtor that have not been previously
assumed, assumed and assigned or rejected pursuant to section 365 of the
Bankruptcy Code and appropriate authorizing orders of the Bankruptcy Court or
that are not the subject of any motion regarding assumption, assumption and
assignment or rejection that is pending before the Bankruptcy Court on the
Effective Date.
f.Section 1123(b)(3)(A) -- Settlement of
Claims and Interests Held by the Debtor.
The Plan resolves all disputes between and among the Debtor, the
Committee and the Legal Representative through a global compromise and
settlement involving, inter alia, the release of certain claims and causes of
<PAGE>
action held by the Debtor on the Effective Date. As more fully set forth in the
Plan, the releases of estate claims against the Released Parties each represent
an appropriate settlement and compromise within the meaning of Bankruptcy Rule
9019. In particular, the parties to the global settlement agreed not to pursue
any avoidance or recovery actions relating to payments made in connection with
or pursuant to the MIC Program, the 1992 Employee Retention Program, the
Severance Policy, the Advisory Board or the Stock Dividends. Additionally, the
Debtor has agreed to dismiss with prejudice the Keene 27 Action and motions (i)
to hold a Committee representative in contempt and to seek compliance with
Bankruptcy Rule 2019 (ii) to disband or reconstitute the Committee, and (iii) to
establish voting procedures. These releases are an integral part of the Plan and
constitute critical components of an appropriate settlement and compromise,
consistent with Bankruptcy Rule 9019, which settlements are in the best
interests of the Debtor and its estate, New Keene, the Creditors' Trust and
holders of Claims, Demands and Interests.
g.Section 1123(b)(3)(B) -- Retention and
Enforcement by the Creditors' Trust of
Certain Claims and Interests Held by the
Debtor.
Section 17.3 of the Plan provides that, except as provided
therein, the Creditors' Trust shall obtain title to and have the exclusive right
to and may commence, enforce, prosecute, manage and/or settle against any Entity
all Causes of Action of the Debtor, including any and all claims and causes of
action arising under federal, state or other applicable law.
<PAGE>
h.Section 1123(b)(4) -- Sale of Property of the
Estate.
The Plan does not provide for the sale of all or substantially
all of the property of the estate. Therefore, section 1123(b)(4) of the
Bankruptcy Code is inapplicable to the Plan.
i.Section 1123(b)(5) -- Modification of Rights of
Holders of Claims Except Those Claims Secured
Only by Debtor's Principal Residence.
The Plan modifies the rights of certain of the Debtor's
creditors. However, the Debtor, a corporation organized under Delaware law, has
no secured creditors whose claims are secured only by a security interest in its
principal residence. Accordingly, insofar as section 1123(b)(5) of the
Bankruptcy Code is not duplicative of section 1123(b)(1) of the Bankruptcy Code,
it is inapplicable to the Plan.
j.Section 1123(b)(6) -- Other Provisions Not
Inconsistent with Applicable Provisions of
the Bankruptcy Code.
The Plan includes additional appropriate provisions that are not
inconsistent with applicable provisions of the Bankruptcy Code, including: (i)
the provisions of Articles IV, IX and XV of the Plan establishing the Creditors'
Trust and governing distributions on account of Allowed Claims, Demands and
Allowed Interests, particularly as to the timing and calculation of amounts to
be distributed and the costs thereof; (ii) the provisions of Article XVI of the
Plan establishing procedures for resolving Disputed Claims and making
distributions on account of such Disputed Claims once resolved; and (iii) the
<PAGE>
provisions of Article XVIII of the Plan regarding retention of jurisdiction by
the Bankruptcy Court and the District Court, as the case may be, over matters
subsequent to the Effective Date.
k.Section 524(g) -- The Creditors' Trust and
the Permanent Channeling Injunction.
At the time of filing of the Chapter 11 Case, the Debtor had been
named as a defendant in personal injury, wrongful death, and property damage
actions seeking recovery for damages allegedly caused by the presence of, or
exposure to, asbestos and asbestos- containing products. In accordance with
section 524(g) of the Bankruptcy Code, the Permanent Channeling Injunction is to
be implemented in connection with the establishment of the Creditors' Trust
pursuant to the Plan. The Creditors' Trust is:
(i) to assume the Debtor's liabilities with respect to
Asbestos-Related Claims and Demands within the meaning of section
524(g) of the Bankruptcy Code;
(ii) to be funded in part by the New Common Stock
and be entitled to dividends thereto in the future;
(iii) to own a majority of the New Common Stock; and
(iv) to use its assets and income to pay Asbestos-
Related Claims and Demands.
With respect to the Debtor's asbestos-related liabilities:
(i) in the absence of the confirmation of the Plan,
the Debtor is likely to be subject to substantial future Demands for
payment arising out of the same or similar conduct or events that gave
rise to the Asbestos-Related Claims and Demands that are addressed by
the Permanent Channeling Injunction;
<PAGE>
(ii) the actual amounts, numbers and timing of the
future Demands cannot be determined;
(iii) pursuit of such Demands outside the procedures
prescribed by the Plan is likely to threaten the Plan's purpose to
deal equitably with Asbestos-
Related Claims and present and future Demands;
(iv) the terms of the Permanent Channeling Injunction
sought to be implemented pursuant to the Plan, including all
provisions barring actions against the Protected Parties, pursuant to
section 524(g)(4)(A) of the Bankruptcy Code, are set forth in the Plan
and were disclosed in the Disclosure Statement supporting the Plan;
(v) the Plan establishes, in Classes 4A and B thereof
(Asbestos-Related Claims), separate classes of claimants whose Claims
are to be addressed by the Creditors' Trust;
(vi) the holders of Class 4A and 4B Claims, each voting
as a separate class, have both voted, by at least 75 percent (75%) of
those voting, in favor of the Plan;
(vii) the Creditors' Trust is designed to provide
reasonable assurance that the Creditors' Trust will value, and be in a
financial position to pay, Asbestos-Related Claims and Demands that
involve similar Claims in substantially the same manner;
(viii) the Legal Representative was appointed as part
of the proceedings leading to issuance of the Permanent Channeling
<PAGE>
Injunction for the purpose of protecting the rights of Entities that
might subsequently assert Demands that are addressed in the Permanent
Channeling Injunction and transferred to and paid by the Creditors'
Trust;
(ix) the Protected Parties are appropriate third
parties, as that term is applied in section 524(g)(a)(A)(ii) of the
Bankruptcy Code, and consist of (a) the Debtor, (b) New Keene, (c),
any Entity that, pursuant to the Plan or after the Effective Date,
becomes a direct or indirect transferee of, or successor to, any
assets of the Debtor, New Keene, or the Creditors' Trust (but only to
the extent that liability is asserted to exist by reason of it
becoming such a transferee or successor); (d) any Entity that,
pursuant to the Plan or after the Effective Date, makes a loan to New
Keene or the Creditors' Trust or to a successor to, or transferee of,
any assets of the Debtor, New Keene or the Creditors' Trust (but only
to the extent that liability is asserted to exist by reason of such
Entity becoming such a lender or to the extent any pledge of assets
made in connection with such a loan is sought to be upset or
impaired); (e) any Entity to the extent he, she, or it is alleged to
be directly or indirectly liable for the conduct of, Claims against,
or Demands on, the Debtor, New Keene or the Creditors' Trust on
account of Asbestos-Related Claims, or Demands, including, without
limitation, the Transactions Lawsuit Defendants, the Subscribing
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Individuals and the insurance carriers and sureties of the Corporate
Transactions Defendants in such insurance carriers' and sureties'
capacities as such; and (f) any of the Debtor's present subsidiaries
and each of its present and former officers, directors, agents,
employees, representatives, advisors, financial advisors, accountants
and attorneys; and
(x) identifying each Protected Party is fair and
equitable with respect to Entities that might subsequently assert
Demands against any such Protected Party, in light of the benefits
provided, or to be provided, to the Creditors' Trust by or on behalf
of the Debtor and any such Protected Party.
To further the procedures of the Creditors' Trust and pursuant to Sections
9.5 and 9.10 of the Plan, as of the Effective Date, (i) each Trustee and the
Trust Advisory Committee is deemed to be a party in interest within the meaning
of section 1109(b) of the Bankruptcy Code and (ii) the Creditors' Trust shall
be, and hereby is, deemed to be a successor to the Debtor and, therefore, a
Protected Party for all purposes of this Order and the successor to the
Committee with respect to any pending motions, contested matters, adversary
proceedings or appeals to which the Committee was a party as of the Effective
Date.
2. Section 1129(a)(2) -- Compliance with Applicable
Provisions of the Bankruptcy Code.
The Debtor has complied with all applicable provisions of the
Bankruptcy Code, as required by section 1129(a)(2) of the Bankruptcy Code,
including sections 1125 and 1126 of the Bankruptcy Code and Bankruptcy Rules
<PAGE>
3017 and 3018; and the Debtor and its directors, officers, employees, agents and
professionals have acted in "good faith", within the meaning of section 1125(e)
of the Bankruptcy Code.
3. Section 1129(a)(3) - Proposal of the Plan in Good Faith.
The Debtor proposed the Plan in good faith and not by any means
forbidden by law. In determining that the Plan has been proposed in good faith,
the Court has examined the totality of the circumstances surrounding the
formulation of the Plan. Based on the uncontroverted evidence presented at the
Confirmation Hearing, the Court finds and concludes that the Plan has been
proposed with the legitimate and honest purpose of reorganizing the Debtor's
business affairs, restructuring its asbestos-related liability and maximizing
the returns available to creditors. Consistent with the overriding purpose of
chapter 11 of the Bankruptcy Code, the Plan is designed to allow the Debtor to
reorganize by providing it with a capital structure that will allow it to
satisfy its non-asbestos obligations with sufficient liquidity and capital
resources and to fund necessary capital expenditures, free from the cloud of
asbestos liability. The assumption by the Creditors' Trust of Asbestos-Related
Claims and Demands and the Plan's compliance with section 524(g) is also
consistent with section 1129(a)(3). Moreover, the sufficiency of disclosure, the
votes tendered to accept the Plan, and the arm's-length negotiations among the
Debtor, the Committee and the Legal Representative leading to the Plan's
formulation, all provide independent evidence of the good faith of the Debtor in
proposing the Plan.
<PAGE>
4. Section 1129(a)(4) -- Approval of Certain
Payments as Reasonable.
Professionals or other Entities requesting compensation or
reimbursement of expenses pursuant to sections 327, 328, 330, 331, 503(b) and
1103 of the Bankruptcy Code for services rendered before the Effective Date
(including compensation requested pursuant to section 503(b)(3) and (4) of the
Bankruptcy Code by any professional or other Entity for making a substantial
contribution in the Chapter 11 Case) must file and serve an application for
final allowance of compensation and reimbursement of expenses no later than [45]
days after the last day of the calendar month in which the Effective Date
occurs, which applications the Bankruptcy Court will review for reasonableness
under sections 328 and 330 of the Bankruptcy Code and any applicable case law.
Pursuant to prior orders entered in the Chapter 11 Case, the Bankruptcy Court
has authorized the periodic payment of certain of the fees and expenses of
professionals incurred in connection with the Chapter 11 Case. All such fees and
expenses, however, remain subject to final review for reasonableness by the
Bankruptcy Court.
The compensation and other payments to the Consultants, the
Trustees and the Trust Advisory Commitee, the severance payments to the Debtor's
remaining employees, and the payments relating to New Keene, including, without
limitation, the proposed compensation of New Keene's chief executive officer,
either have been previously approved by the Bankruptcy Court, were adequately
disclosed in the Plan and Disclosure Statement and exhibits thereto or will be
disclosed prior to or at the Confirmation Hearing.
<PAGE>
Thus, all payments to be made for services or for costs and
expenses in or in connection with the Chapter 11 Case, or in connection with the
Plan and incident to the Chapter 11 Case, have been subjected, or are subject
to, the approval of the Court as reasonable.
5. Section 1129(a)(5) -- Disclosure of Identity and Affiliations of
Proposed New Keene Management, Proposed Trustees and Proposed TAC
Advisors of the Creditors' Trust, and Proposed Compensation of
Insiders is Consistent with the Interests of Creditors and Equity
Security Holders and Public Policy.
The Debtor has disclosed the identity and affiliations of the
proposed directors and officers of New Keene and the proposed trustees and TAC
advisors of the Creditors' Trust and the identity and the compensation of
insiders who will be employed or retained by New Keene. The appointment or
continuance of the proposed directors, officers, trustees and advisors is
consistent with the interests of the holders of Claims, Demands and Interests
and with public policy.
6. Section 1129(a)(6) -- Approval of Rate Changes.
The Debtor's current business does not involve the
establishment of rates over which any regulatory commission has or will have
jurisdiction after the Confirmation Date.
7. Section 1129(a)(7) -- Best Interests of Holders of
Claims and Interests.
With respect to each impaired Class of Claims or Interests for
the Debtor, each holder of a Claim or Interest in such impaired Class has
accepted the Plan or, as demonstrated in the Liquidation Analysis at Appendix B
of the Disclosure Statement and by supplemental evidence presented at the
Confirmation Hearing, will receive or retain under the Plan on account of such
<PAGE>
Claim or Interest property of a value, as of the Effective Date, that is not
less than the amount such holder would receive or retain if the Debtor was
liquidated on the Effective Date under chapter 7 of the Bankruptcy Code.
8. Section 1129(a)(8) -- Acceptance of the Plan by
Each Impaired Class.
Pursuant to sections 1124 and 1126 of the Bankruptcy Code, (a) as
indicated in Article VI of the Plan, Classes 1, 2, 3 and 5 are Classes of
unimpaired Claims; and (b) as indicated in the Declaration of Vote, all impaired
Classes, other than Class 8, have accepted the Plan. Because the Plan provides
that the holders of Allowed Interests in Class 8 will not receive or retain any
property on account of these Interests, this Class is deemed not to have
accepted the Plan pursuant to section 1126(g) of the Bankruptcy Code.
Notwithstanding the lack of compliance with section 1129(a)(8) of the Bankruptcy
Code with respect to Class 8, the Plan is confirmable because, as is more fully
set forth in Section I.B.15. of this Confirmation Order, the Plan satisfies
section 1129(b)(2)(c) of the Bankruptcy Code with respect to such Class.
9. Section 1129(a)(9) -- Treatment of Claims
Entitled to Priority Pursuant to Section 507(a)
of the Bankruptcy Code.
<PAGE>
The Plan provides for treatment of Administrative Expense Claims,
Tax Claims and Claims entitled to priority pursuant to sections 507(a)(3) - (8)
of the Bankruptcy Code in the manner required by section 1129(a)(9) of the
Bankruptcy Code.
10. Section 1129(a)(10) -- Acceptance By at Least One
Impaired Class.
As indicated in the Declaration of Vote and as reflected in the
record of the Confirmation Hearing, at least one Class of Claims that is
impaired under the Plan has accepted the Plan, determined without including any
acceptance of the Plan by any insider.
11. Section 1129(a)(11) -- Feasibility of the Plan.
Confirmation is not likely to be followed by the liquidation of,
or the need for further financial reorganization of, New Keene or the Creditors'
Trust. The procedures for administering and making distributions for
Asbestos-Related Claim and Demands by the Creditors' Trust are workable and
time-tested.
12. Section 1129(a)(12) -- Payment of Bankruptcy Fees.
Section 2.1 of the Plan provides that, on or before the
Effective Date, Administrative Expense Claims for fees payable pursuant to
section 1930 of title 28 of the United States Code, 28 U.S.C. 1930, will be paid
in Cash equal to the amount of such Administrative Expense Claims. While the
Debtor believes that it is current on its 1930 fees, it has the financial
wherewithal to pay, and will pay, any such fees, to the extent they are unpaid,
on the Effective Date.
13. Section 1129(a)(13) -- Retiree Benefits.
Consistent with Section 1114(a) of the Bankruptcy Code,
Section 14.5 of the Plan provides that, from and after the Effective Date, New
Keene will be obligated to pay retiree benefits, including the Other Retiree
Benefits, in accordance with the terms of the Pension Plan and any other
document governing the payment of such benefits, subject to any rights to amend,
modify or terminate all such retiree benefits under the terms of the Pension
Plan or the applicable document or applicable nonbankruptcy law.
<PAGE>
14. Bankruptcy Rule 3016(b).
The Plan is dated and identifies the entity submitting the Plan.
15. Section 1129(b) -- Confirmation of the Plan
Over the Nonacceptance of Class 8.
Pursuant to section 1129(b)(1) of the Bankruptcy Code, the Plan
is confirmable notwithstanding that the Other Interests in Class 8 are impaired
and that such Class is deemed to have rejected the Plan pursuant to section
1126(g) of the Bankruptcy Code. The Plan does not discriminate unfairly and is
fair and equitable with respect to the holders of Other Interests in Class 8.
There are no Claims or Interests junior to the Other Interests classified in
Class 8 and no Class of Claims senior to Class 8 is receiving more than full
payment on account of the Claims in such Class.
16. Section 1129(d).
The primary purpose of the Plan is not avoidance of taxes or
avoidance of the requirements of section 5 of the Securities Act of 1933 (the
"Securities Act"), and there has been no objection filed by any governmental
unit asserting such avoidance.
17. New Keene and Creditors' Trust as Successor
of the Debtor
New Keene and the Creditors' Trust each constitute a newly
organized successor of the Debtor under the Plan for purposes of sections
524(g)(3)(A), 1125(e) and 1145(a) of the Bankruptcy Code. The New Common Stock
is being issued by New Keene under the Plan in exchange for an Interest in the
<PAGE>
Debtor, or principally in exchange for a Claim against the Debtor and partly for
Cash or other property, within the meaning of section 1145(a)(1) of the
Bankruptcy Code.
C. SATISFACTION OF CONDITIONS TO CONFIRMATION
Each of the conditions precedent to the entry of this
Confirmation Order, as set forth in Section 12.1 of the Plan and enumerated, in
part, at Section I.B.1.k, has been satisfied.
D. CONDITIONS TO THE EFFECTIVE DATE
The Debtor has stated that it has no reason to believe that all
conditions to the Effective Date will not be satisfied or duly waived in
accordance with Sections 12.2 and 12.3 of the Plan.
II. CONCLUSIONS OF LAW
A. JURISDICTION AND VENUE
This Court has jurisdiction over this matter pursuant to 28 U.S.C. 157 and 1334.
The Debtor was and is qualified to be a debtor under section 109(a) of the
Bankruptcy Code. Venue of the Chapter 11 Case in the Southern District of New
York was proper as of the Petition Date, pursuant to 28 U.S.C. 1408, and
continues to be proper. By order of the District Court the automatic reference
affected by the District Court General Order of Reference, entered on July 10,
1984 by Acting Chief Judge Ward for the Southern District of New York in
accordance with 28 U.S.C. 157(a), was withdrawn solely with respect to
<PAGE>
considering the confirmation of the Plan and all related matters, pursuant to 28
U.S.C. 157(d) and sections 105(a), 524(g), 1129 and 1142 of the Bankruptcy Code.
B. MODIFICATIONS OF THE PLAN
The March 11 Plan, as amended by the Modifications, shall be and
hereby is, the Plan. The notice provided by the Debtor of the Modifications to
parties in interest as reflected in the Certificate of Service dated June 10,
1996, including without limitation the Committee, the Legal Representative, each
party who filed an objection to confirmation of the Plan and those parties on
the limited service list established in this Chapter 11 Case by Bankruptcy Court
Order Further Limiting Service Of Notice, entered on May 12, 1994, was adequate
and appropriate under the circumstances and, accordingly, shall be, and hereby
is, approved. The Modifications: (1) comply in all respects with section 1127 of
the Bankruptcy Code, Bankruptcy Rule 3019 and all other provisions of the
Bankruptcy Code; and (2) do not adversely change the treatment under the Plan of
any Claims or Interests. In light of the clarifying nature of each of the
Modifications and the discussions of the likelihood of certain of such
Modifications in the Disclosure Statement, no additional disclosure under
section 1125 of the Bankruptcy Code is required with respect to the
Modifications. Accordingly, pursuant to section 1127 of the Bankruptcy Code and
Bankruptcy Rule 3019, all holders of Claims and Interests that have accepted or
are conclusively presumed to have accepted the March 11 Plan are deemed to have
accepted the Plan.
C. EXEMPTIONS FROM SECURITIES LAWS
1.Pursuant to section 1125(e) of the Bankruptcy Code, the
Debtor's transmittal of Plan solicitation packages, its solicitation of
acceptances of the Plan and its issuance and distribution of New Common Stock
and any other securities pursuant to the Plan and New Keene's participation in
such activities are not and will not be governed by or subject to any otherwise
applicable law, rule or regulation governing the solicitation of acceptance or
rejection of a plan of reorganization or the offer, issuance, sale or purchase
of securities.
2.Pursuant to section 1145(a)(1) of the Bankruptcy Code, the
offering, issuance and distribution of New Common Stock and any other
distributions that may be deemed securities pursuant to the Plan shall be exempt
from section 5 of the Securities Act and any state or local law requiring
registration prior to the offering, issuance, distribution or sale of
securities.
3.Pursuant to and to the fullest extent permitted by
section 1145 of the Bankruptcy Code, the resale of any New Common Stock and any
other Plan distributions that may be deemed securities pursuant to the Plan
shall be exempt from section 5 of the Securities Act and any state or local law
requiring registration prior to the offering, issuance, distribution or sale of
securities.
<PAGE>
D. EXEMPTIONS FROM TAXATION
Pursuant to section 1146(c) of the Bankruptcy Code: (1) the
issuance, distribution, transfer or exchange of New Common Stock; (2) the
creation, modification, assignment, consolidation, filing or recording of any
mortgage, deed of trust, security agreement or similar instrument; (3) the
securing of additional indebtedness by such means or by other means or the
additional securing of existing indebtedness by such means or by other means
(whether in connection with the execution and delivery of the Creditors' Trust
Agreement, the New Keene Facility, the Registration Rights Agreement, the Share
Authorization Agreement or the Stock Incentive Plan or otherwise in furtherance
of, or in connection with, the Plan); (4) the creation, modification,
assignment, delivery, filing or recording of any lease or sublease; or (5) the
creation, modification, assignment, delivery, filing or recording of any deed or
other instrument of transfer under, in furtherance of, or in connection with,
the Plan, any other agreements or certificates of merger, consolidation,
dissolution or liquidation, deeds, bills of sale, assignments or other
instruments of transfer executed in connection with the Plan or this
Confirmation Order, or any transactions arising out of, contemplated by or in
any way related to the foregoing, whether occurring on or after the Effective
Date, shall not be subject to any document recording tax, stamp tax or stamp
act, conveyance fee, intangibles or similar tax, mortgage tax, real estate
transfer tax, mortgage recording tax or other similar tax or governmental
assessment, and the appropriate state or local governmental officials or agents
<PAGE>
shall be, and hereby are, directed to forego the collection of any such tax or
governmental assessment and to accept for filing and recordation any of the
foregoing instruments or other documents without the payment of any such tax or
governmental assessment.
E. APPROVAL OF THE SETTLEMENTS, DISCHARGES, RELEASES
AND INJUNCTIONS PROVIDED UNDER THE PLAN
1.Pursuant to sections 105 and 1123(b)(3) of the Bankruptcy Code
and Bankruptcy Rule 9019(a), the settlements, compromises, releases, discharges
and injunctions set forth in the Plan and implemented by this Confirmation Order
shall be, and hereby are, approved as an integral part of the Plan and are fair,
equitable, reasonable and in the best interests of each of the Debtor and its
estate, New Keene, the Creditors' Trust and holders of Claims, Demands and
Interests. In approving the releases, settlements and compromises of and from
such potential claims, the Court has considered: (a) the balance of the
likelihood of success of the claims asserted by the Debtor or other claimants
against the likelihood of success of the defenses or counterclaims possessed by
the Debtor, other claimants or other potential defendants; (b) the complexity,
cost and delay of litigation that would result in the absence of these releases,
settlements and compromises; (c) the small number and limited nature of
objections by any creditor or party in interest to the releases, settlements and
compromises and the acceptance of the Plan by an overwhelming majority of the
holders of Claims and Interests; and (d) that the Plan, which gives effect to
the releases, settlements and compromises, is the product of extensive
<PAGE>
arm's-length negotiations among the Debtor, the Committee, the Legal
Representative and numerous other parties in interest.
2.All settlements, compromises, releases, discharges and
injunctions of claims and causes of action against non-Debtor entities as set
forth in the Plan, which are approved herein as an integral part of the Plan and
are fair, equitable, reasonable and in the best interests of the Debtor and its
estate, New Keene, and holders of Claims, Demands and Interests shall be, and
hereby are, effective and binding on all persons and entities who, prior to the
filing of the Chapter 11 Case, may have had standing to assert such claims or
causes of action, and no person or entity will possess such standing to assert
such claims or causes of action after the Effective Date.
F. AUTHORIZATION OF CORPORATE ACTIONS
Pursuant to section 303 of the Delaware General Corporation Law
and section 1142(b) of the Bankruptcy Code, no action of the respective
directors, stockholders, or beneficiaries of the Debtor, New Keene or the
Creditors' Trust, as the case may be, shall be required to authorize the Debtor,
New Keene or the Creditors' Trust to: (a) enter into, execute, deliver, file,
adopt, amend or effectuate, as the case may be, (i) the Plan; and (ii) the
contracts, instruments, releases, and other agreements or documents to be
entered into, executed, delivered, filed, or amended in consummating the
foregoing (collectively, the "Plan Documents"), and following the Effective
<PAGE>
Date, each of the Plan Documents shall be a legal, valid and binding obligation
of New Keene and/or the Creditors' Trust, enforceable against New Keene and/or
the Creditors' Trust in accordance with and subject to their respective terms
and conditions, subject only to bankruptcy, insolvency and other similar laws
affecting creditors' rights generally, and subject also to general equitable
principles; and (b) engage in any of the transactions or other actions
contemplated by the Plan Documents or this Confirmation Order (the "Plan
Transactions") or in furtherance thereof, and the Plan Transactions shall be,
and hereby are, deemed to have occurred and be effective as provided in the Plan
and such activities shall be, and hereby are, authorized and approved in all
respects.
G. POSTCONFIRMATION REJECTIONS OF EXECUTORY
CONTRACTS OF UNEXPIRED LEASES
Each post-confirmation rejection of an executory contract or
unexpired lease pursuant to Section 13.1 of the Plan, shall be legal, valid and
binding upon the Debtor or New Keene and all non- Debtor parties to such
executory contract or unexpired lease, all to the same extent as if such
rejection had been effectuated pursuant to an appropriate authorizing order of
the Bankruptcy Court entered before the Confirmation Date under Section 365 of
the Bankruptcy Code.
H. COMPLIANCE WITH SECTION 524(g) OF THE BANKRUPTCY CODE AND
ISSUANCE OF THE PERMANENT CHANNELING INJUNCTION
As set forth in Section I.B.1.k of this Confirmation Order, the
Plan complies in all respects with the applicable requirements of section 524(g)
<PAGE>
of the Bankruptcy Code. The Creditors' Trust Documents are hereby approved and
the Permanent Channeling Injunction is hereby issued and is valid and
enforceable, subject to the expiration of the time to appeal this Confirmation
Order.
I. COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE
As set forth in Section I.B. of this Confirmation Order,
the Plan complies in all respects with the applicable requirements of section
1129 of the Bankruptcy Code.
III. ORDER
ACCORDINGLY, THE COURT HEREBY ORDERS, ADJUDGES AND
DECREES THAT:
A. CONFIRMATION OF THE PLAN
The Plan and each of its provisions shall be, and hereby are,
confirmed in each and every respect pursuant to Section 1129 of the Bankruptcy
Code; provided, however, that if there is any direct conflict between the terms
of the Plan and the terms of this Confirmation Order, the terms of this
Confirmation Order will control. All objections to, and statements and comments
regarding, the Plan, other than those withdrawn with prejudice in their entirety
prior to, or on the record at, the Confirmation Hearing, shall be, and hereby
are, overruled.
<PAGE>
B. EFFECTS OF CONFIRMATION
1. Immediate Effectiveness; Successors and Assigns.
Subject to the occurrence of the conditions to the Effective
Date, set forth in Section 12.2 of the Plan, being satisfied or waived, on the
Effective Date, the terms of the Plan shall be, and hereby are, deemed binding
upon the Debtor, New Keene, the Creditors' Trust, any and all holders of Claims,
Demands or Interests (irrespective of whether such Claims or Interests are
impaired under the Plan or whether the holders of such Claims or Interests
accepted, rejected or are deemed to have accepted or rejected the Plan), any and
all non-Debtor parties to executory contracts and unexpired leases with the
Debtor and any and all entities who are parties to or are subject to the
settlements, compromises, releases, discharges and injunctions described in the
Plan and the respective heirs, executors, administrators, successors or assigns,
if any, of any of the foregoing.
2. Continued Corporate Existence; Vesting of Assets
Subject to the occurrence of the Plan Transactions, the
Debtor will, as New Keene, continue to exist after the Effective Date as a
corporate entity, with all the powers of a corporation under applicable law and
without prejudice to any right to alter or terminate such existence (whether by
merger or otherwise) under applicable state law. Except as otherwise provided in
the Plan, as of the Effective Date, all property of the Debtor will vest in
either New Keene or the Creditors' Trust, free and clear of all Claims, Demands,
liens, charges, other encumbrances and Interests. On and after the Effective
<PAGE>
Date, New Keene and the Creditors' Trust may operate their respective businesses
or undertakings and may use, acquire and dispose of property without supervision
or approval by the Bankruptcy Court and free of any restrictions of the
Bankruptcy Code or Bankruptcy Rules, other than those restrictions expressly
imposed by the Plan or this Confirmation Order. Without limiting the foregoing,
New Keene and, as set forth in Articles II, IX and X of the Plan, the Creditors'
Trust may pay the charges that each incurs on or after the Effective Date for
professionals' fees, disbursements, expenses or related support service without
application to the Court.
3. Cancellation of Interests
On the Effective Date, all Old Common Stock and Other Interests
issued and outstanding or held in the Debtor's treasury shall be deemed
cancelled and extinguished and no consideration, other than the distribution of
New Common Stock to holders of Old Common Stock, as set forth in Article VIII of
the Plan, shall be delivered with respect thereto.
C. MATTERS RELATING TO IMPLEMENTATION OF THE PLAN
1. Certain Corporate Filings.
As of the time at which the conditions to the occurrence of the
Effective Date set forth in Section 12.2 of the Plan are satisfied or duly
waived, pursuant to the Delaware General Corporation Law, as applicable,
sections 1123(a) and 1142(b) of the Bankruptcy Code and any other applicable
law, the Debtor, New Keene or the Creditors' Trust shall be, and hereby are,
authorized to effectuate the Plan Transactions and make all filings and
<PAGE>
recordings in connection therewith, all as contemplated by the Plan, and in each
case in accordance with applicable terms of the Plan and this Confirmation
Order.
a.Implementation of the Plan Transactions.
(i)Pursuant to section 1142(b) of the Bankruptcy
Code and section 303 of the Delaware General Corporation Law, the Debtor, New
Keene or the Trustees, as the case may be, shall be, and hereby are, authorized
to effectuate the Plan and the Plan Transactions and to take any actions or
commence any proceedings provided for or contemplated by the Plan Documents or
this Confirmation Order, all without further action by their respective
directors, stockholders or beneficiaries, and with like effect as if such
actions had been taken by unanimous action of the respective directors,
stockholders and beneficiaries of the Debtor, New Keene or the Creditors' Trust,
as the case may be.
(ii)Without limiting the generality or effect of
Section III.C.1.(a)(i) above, pursuant to section 1142(b) of the Bankruptcy Code
and section 303 of the Delaware Corporation Law, the Debtor, New Keene or the
Trustees shall be, and hereby are, authorized to (I) cause to be filed with the
Delaware Secretary of State or other applicable state or local official any and
all certificates, agreements or plans of merger, consolidation, dissolution,
liquidation or amendment necessary or appropriate to effectuate the Plan
Transactions, including but not limited to, the creation and establishment of
the Creditors' Trust and the Merger (II) take or cause to be taken all such
other actions including the making of appropriate filings or recordings as may
<PAGE>
be required under appropriate provisions of the Delaware General Corporation Law
or any other applicable law, or as any of the Chairman, President, Vice
President, Secretary or Trustee (each, a "Responsible Officer") of the Debtor,
New Keene or the Creditors' Trust may determine are necessary or appropriate in
connection with the Plan Transactions. Each federal, state and local
governmental agency or department is authorized and directed to accept the
filing of any Plan Document. Without limiting the generality or effect of the
foregoing, this Confirmation Order shall be, and hereby is, declared to be in
recordable form and shall be accepted by any filing or recording officer or
authority of any applicable governmental authority or department without any
further orders, certificates or other supporting documents.
(iii)Each of the Responsible Officers of the Debtor,
New Keene or the Creditors' Trust shall be, and hereby is, authorized to
execute, deliver, file and have recorded the applicable Plan Documents, and to
take such other actions on behalf of such Debtor, New Keene or the Creditors'
Trust as such person may determine to be required under appropriate provisions
of the Delaware General Corporation Law or any other applicable law in
connection with the Plan Transactions, and, without limiting the generality or
effect of the foregoing, a Responsible Officer of the Debtor, New Keene or the
Creditors' Trust shall be, and hereby is, authorized to certify or attest to any
of the foregoing actions. The execution of any such document or the taking of
any such action shall be, and hereby is, deemed conclusive evidence of the
authority of such person to so act.
<PAGE>
2. Directors and Executive Officers of New Keene;
Employment-Related Agreements and Compensation Programs.
a.Directors and Officers of New Keene and Trustees
and Advisors of the Creditors' Trust.
(i)New Keene.
The appointment of the initial directors and
the chief executive officer of New Keene specified at Section I.B.5. of this
Confirmation Order as of and immediately following the Effective Date, shall be,
and hereby is, approved.
(ii)Creditors' Trust and Trust Advisory Committee.
The appointment of the initial Trustees of the
Creditors' Trust and the initial advisors of the Trust Advisory Committee,
specified at Section I.B.5 of this Confirmation Order, as of and immediately
following the Effective Date, shall be, and hereby is, approved. Each Trustee
and the Trust Advisory Committee shall be, and hereby is deemed to be, a party
in interest on the Effective Date within the meaning of section 1109(b) of the
Bankruptcy Code. On the Effective Date, the Creditors' Trust shall be, and
hereby is, deemed to be the successor to the Committee with respect to any
pending motions, contested matters, adversary proceedings or appeals to which
the Debtor or the Committee was a party as of the Effective Date.
(iii)Terms, Successors and Related Matters.
All persons serving as executive officers or
directors of New Keene, Trustees of the Creditors' Trust or advisors of the
Trust Advisory Committee shall serve in the capacities in which they are to
serve as of immediately following the Effective Date until their successors are
<PAGE>
duly elected or appointed and qualified in accordance with the terms of the
Amended Restated Certificate of Incorporation, the Amended and Restated Bylaws,
the Creditors' Trust Agreement or regulations or other similar constituent
documents and applicable corporation or similar law, or until the earlier of the
death, resignation or removal of any such director or officer or other grounds
in accordance thereof.
b.The Pension Plan and Other Retiree Benefits.
Upon consummation of the Plan, New Keene shall
maintain the Pension Plan and assume all liabilities relating to
the Other Retiree Benefits.
3. Authorization of Plan Transactions; Record Date;
and Executory Contracts and Unexpired Leases
and Dispute of Claims.
a.Pursuant to section 1142(b) of the Bankruptcy Code, the
Delaware General Corporation Law and other appropriate provisions of applicable
law, without further action by the Court or the stockholders or, except as
provided herein, board of directors of New Keene, on or after the Effective
Date, New Keene shall be, and hereby is, authorized and directed to execute,
deliver and perform its obligations under the New Common Stock and to take all
other actions and execute, deliver, record and file all other agreements,
instruments, releases, indentures, applications, registration statements,
reports and other documents as any of its Responsible Officers may determine are
necessary or appropriate in connection with the issuance and distribution of New
Common Stock under the Plan and the consummation of the Plan Transactions.
<PAGE>
b.The Record Date, as defined in the Plan, for purposes of
distribution of the New Common Stock, shall be, and hereby is, set at June 30,
1996 at 5:00 p.m.
c.The executory contract and unexpired lease provisions of
Article XIII of the Plan and the distribution and Disputed Claims provisions of
Article XVI of the Plan shall be, and hereby are, specifically approved.
D. PERMANENT CHANNELING INJUNCTION.
In connection with the creation of the Creditors' Trust and to
supplement the injunctive effect of a discharge under section 524 of the
Bankruptcy Code, the Permanent Channeling Injunction shall be, and hereby is,
issued and approved as of the Effective Date. Pursuant to the Permanent
Channeling Injunction all Entities are hereby permanently and forever stayed,
restrained and enjoined from taking any action for the purpose of, directly or
indirectly, collecting, recovering, or receiving payment of, on, or with respect
to any Asbestos-Related Claim or Demand (other than actions brought to enforce
any right or obligation under the Plan, any Exhibits to the Plan, or any other
agreement or instrument between the Debtor or New Keene and the Creditors'
Trust, which actions shall be in conformity and compliance with the provisions
hereof), including:
(a)commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, any thereof in a
judicial, arbitral, administrative, or other forum) against or
affecting any Protected Party or any property or interests in property
of any Protected Party;
<PAGE>
(b)enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or other
order against any Protected Party or any property or interests in
property of any Protected Party;
(c)creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any encumbrance against any Protected
Party or any property or interests in property of any Protected Party;
(d)setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
Protected Party or any property or interests in property of any
Protected Party; and
(e)proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the Creditors'
Trust, except in conformity and compliance therewith.
On and after the Effective Date, the Protected Parties, including
the Creditors' Trust, shall obtain the benefits of the Permanent Channeling
Injunction. Nothing herein shall preclude or impair the Creditors' Trust's
pursuit of the Causes of Action, as defined in the Plan.
E. THE CONVERSION OF THE COLEMAN INJUNCTION INTO A PERMANENT
INJUNCTION.
On and after the Effective Date, the Coleman Injunction shall be,
and hereby is, converted to a permanent injunction permanently and forever
staying, restraining and enjoining any Entity from continuing or commencing any
action or suit, with the exception of the Transactions Lawsuit, against the
Transactions Lawsuit Defendants.
F. CREDITORS' TRUST DOCUMENTS.
The Creditors' Trust Agreement and the Asbestos-Related Claims
Resolution and Distribution Procedures, as the same may be amended and modified
<PAGE>
by the terms thereof, shall be, and hereby are, approved in substantially the
form as admitted into evidence at the Confirmation Hearing.
G. DISMISSAL OF KEENE 27 ACTION.
On the Effective Date, the Keene 27 Action shall be dismissed
with prejudice and such dismissal shall be deemed to be in complete satisfaction
and release of all claims and causes of action that the Debtor may have against
any of the defendants in the Keene 27 Action. In consideration for such
dismissal and release, the Debtor, and its officers, directors, agents and
attorneys at the time the Keene 27 Action was commenced, shall be deemed
released from any claim or cause of action that the estate or any defendant in
the Keene 27 Action has or may have arising from or in any way, directly or
indirectly relating to the preparation, dissemination, discussion, filing and/or
prosecution of the Keene 27 Action and the Keene 27 Injunction shall be, and
hereby is, issued and approved to effectuate such release.
H. DISCHARGE, RELEASES AND INJUNCTION
a.Except as otherwise specifically provided by the Plan, the
distributions and rights that are provided in the Plan shall be in complete
satisfaction, release and, to the extent permitted by applicable law, discharge
of (i) all Claims and Demands against, liabilities of, liens on, obligations of
and Interests in the Debtor, New Keene or the Creditors' Trust or the assets and
properties of the Debtor, New Keene or the Creditors' Trust, whether known or
<PAGE>
unknown, and (ii) all causes of action, whether known or unknown, either
directly or derivatively through the Debtor or New Keene, against the Released
Parties based on the same subject matter as any Claim, Demand or Interest, in
each case, regardless of whether a proof of Claim or Interest was filed, whether
or not Allowed, and whether or not the holder of such Claim or Interest has
voted on the Plan, or based on any act or omission, transaction or other
activity or security, instrument or other agreement of any kind or nature
occurring, arising or existing prior to the Effective Date that was or could
have been the subject of any Claim, Demand or Interest, in each case, regardless
of whether a proof of Claim or Interest was filed, whether or not Allowed and
whether or not the holder of such Claim or Interest has voted on the Plan.
b.Except as otherwise specifically provided in the Plan, any
Entity accepting any distributions or rights pursuant to this Plan shall be
presumed conclusively to have released the Released Parties from any cause of
action based on the same subject matter as the Claim, Demand or Interest on
which the distribution or right is received to the full extent permitted by
applicable law. The satisfactions, releases and discharges set forth in Section
17.1 of the Plan shall also act as an injunction against any Entity commencing
or continuing any action, employment of process or act to collect, offset,
affect or recover any Claim, Demand, Interest or cause of action satisfied,
released or discharged hereunder; provided that the Plan shall not serve to
release or enjoin claims by the Creditors' Trust against (i) the Transactions
<PAGE>
Lawsuit Defendants in the Transactions Lawsuit; (ii) Bairnco Corporation in the
Bairnco NOL Action; (iii) Glenn W. Bailey in the Bailey Lawsuit (as to those
counts in the complaint not released under the Plan) and (iv) any insurance
carrier or surety that issued a policy or policies of insurance to, or on behalf
of, Keene or any of the above-referenced defendants. Except as set forth in the
Transactions Stipulation, all other injunctions or stays provided for in the
Chapter 11 Case pursuant to sections 105(a) or 362 of the Bankruptcy Code or
otherwise extant shall remain in full force and effect until the Effective Date.
I. EXCULPATION
Except as otherwise provided in the Plan, none of the Released
Parties shall have or incur any liability to any Entity for any act or omission
in connection with or arising out of the formulation, preparation,
dissemination, prosecution, confirmation, consummation, discussion,
implementation or administration of the Plan, the Disclosure Statement, any
contract, release, or other agreement or document created or entered into, the
property to be distributed under the Plan, or any other action taken or omitted
to be taken in connection with the Chapter 11 Case or the Plan, except for gross
negligence or willful misconduct, and in all respects shall be entitled to rely
upon the advice of counsel with respect to their duties and responsibilities
under the Plan.
J. ADDITIONAL ACTIONS IN FURTHERANCE OF THE PLAN.
<PAGE>
The approvals and authorizations specifically set forth
in this Confirmation Order are nonexclusive and are not intended to limit the
authority of the Debtor, New Keene, the Creditors' Trust or any Responsible
Officer to take any and all actions necessary or appropriate to implement,
effectuate and consummate the Plan Documents, the Plan Transactions, or this
Confirmation Order. Without limiting the generality or effect of any other
provision of this Confirmation Order, the Debtor, New Keene, and the Trustees
shall be, and they each hereby are, authorized and empowered, without action of
their respective boards of directors, stockholders or beneficiaries, to take any
and all such actions as any of their Responsible Officers may determine are
necessary or appropriate to implement, effectuate and consummate the Plan
Documents, the Plan Transactions, or this Confirmation Order. Each of the
Responsible Officers of each of Debtor, New Keene and the Creditors' Trust shall
be, and hereby is, authorized to execute, deliver, file or record such
contracts, instruments, releases, mortgages, deeds, assignments, leases,
applications, registration statements, reports or other agreements or documents
and take such other actions as such Responsible Officer may determine are
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan, the Creditors' Trust Agreement, the Transactions
Stipulation, this Confirmation Order and the Plan Transactions, all without
further application to or order of this Court and whether or not such actions or
documents are specifically referred to in the Plan, the Disclosure Statement,
the Disclosure Statement Order, this Confirmation Order or the Appendices or
<PAGE>
Exhibits to any of the foregoing, and any Responsible Officer of the Debtor, New
Keene or the Creditors' Trust shall be, and hereby is, authorized to certify or
attest to any of the foregoing actions.
K. CLAIMS BAR DATES
1. Bar Dates for Administrative Expense Claims
a.Fee Claims -- Professional Compensation.
Professionals or other entities requesting
compensation or reimbursement of expenses pursuant to Sections 327, 328, 330,
331 and 503(b) of the Bankruptcy Code (including compensation requested pursuant
to Section 503(b)(3) and (4) of the Bankruptcy Code by any professional or other
Entity for making a substantial contribution in the Chapter 11 Case) must file
and serve on New Keene, the Creditors' Trust and on such other entities who are
designated by the Bankruptcy Rules an application for final allowance of
compensation and reimbursement of expenses no later than [45] days after the
last day of the calendar month in which the Effective Date occurs.
b.No Bar Date for Ordinary Course Liabilities.
Holders of Administrative Expense Claims based
on obligations incurred by the Debtor in the ordinary course of its business
(other than Fee Claims) shall not be required to file or serve any request for
payment of such Claims and shall be paid in full by the Debtor or performed by
either New Keene or the Creditors' Trust, as the case may be, when due in the
<PAGE>
ordinary course of business and in accordance with the terms and conditions of
the particular agreements governing such obligations, if any.
2. Bar Date for Rejection Damages Claims
If the rejection of an executory contract or unexpired lease
pursuant to Section 13.1 of the Plan gives rise to a Claim by the other party or
parties to such contract or lease, such Claim shall be forevernt to Section 13.2
of the Plan shall be filed with the Bankruptcy Court within thirty (30) days of
such filing.
L. SUBSTANTIAL CONSUMMATION
The substantial consummation of the Plan, within the meaning of section
1127 of the Bankruptcy Code, shall be, and hereby is, deemed to have occurred on
the Effective Date.
M. RETENTION AND REFERRAL OF JURISDICTION
Except as set forth in the Transactions Stipulation,
following the entry of this Confirmation Order, jurisdiction over the Chapter 11
Case shall be referred back, for all purposes, to the Bankruptcy Court, pursuant
to 28 U.S.C. 157 and 1334, including jurisdiction over the matters set forth in
<PAGE>
Article 18.1 of the Plan; provided however, that exclusive jurisdiction shall
remain in this District Court for any proceeding involving the validity,
application, construction or modification of the Permanent Channeling
Injunction, pursuant to section 524(g)(2) of the Bankruptcy Code, in accordance
with Section 18.2 of the Plan.
N. NOTICE OF ENTRY OF CONFIRMATION ORDER, REJECTION CLAIM BAR
DATE AND FILING OF FINAL FEE AND EXPENSE APPLICATIONS
a.Pursuant to Bankruptcy Rules 2002(f)(7) and 3020(c), the Debtor
shall be, and hereby is, directed to serve a notice of (i) the entry of this
Confirmation Order, (ii) the bar date for filing Claims based on the rejection
of executory contracts or unexpired leases and (iii) the date for filing final
applications for compensation and reimbursement of expenses hereunder,
substantially in the form of Exhibit B attached hereto and incorporated herein
by reference (the "Confirmation Notice"), on all holders of Claims or Interests
and on such other parties in interest who were served with notice of the
Confirmation Hearing, no later than 14 days after the Confirmation Date;
provided, however, that the Debtor shall be obligated to serve the Confirmation
Notice only on the record holders of such Claims or Interests.
b.The Debtor shall be, and hereby is, directed to publish the
Confirmation Notice once in each of The New York Times (National edition), and
USA Today no later than 14 days after the Confirmation Date.
<PAGE>
THE BANKRUPTCY COURT, HAVING PARTICIPATED IN AND JOINTLY PRESIDED AT THE
CONFIRMATION HEARING, HAVING DETERMINED THAT THE PLAN FULLY COMPLIES WITH
SECTIONS 524(G) AND 1129 OF THE BANKRUPTCY CODE AND HAVING REVIEWED THE PROPOSED
FINDINGS OF FACT AND CONCLUSIONS OF LAW SET FORTH ABOVE, HEREBY RECOMMENDS ENTRY
OF THIS CONFIRMATION ORDER BY THE DISTRICT COURT.
/S/ Stuart M. Bernstein
- -------------------------------
THE HONORABLE STUART M. BERNSTEIN
United States Bankruptcy Judge
Dated:New York, New York
June 12, 1996 at 4:30p.m.
IT IS SO ORDERED.
Dated: New York, New York
June 12, 1996
at 4:30p.m.
/S/ Michael B. Mukasey
--------------------------------
THE HONORABLE MICHAEL B. MUKASEY
United States District Judge
<PAGE>
EXHIBIT A
TO
CONFIRMATION ORDER
Keene Corporation Fourth
Amended Plan of Reorganization
See EXHIBIT 99 (a) of this filing
<PAGE>
EXHIBIT B
TO
CONFIRMATION ORDER
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------X
In re :Civil Action No.
:96 CV 3492 (MBM)
KEENE CORPORATION, :
: Chapter 11
: Case No.
Debtor.: 93 B 46090 (SMB)
- -----------------------------------X
NOTICE OF ENTRY OF CONFIRMATION ORDER, DISTRIBUTION
PROCEDURES, REJECTION CLAIM BAR DATE AND FILING
ON FINAL FEE AND EXPENSE APPLICATIONS
NOTICE IS HEREBY GIVEN that, on June [ ], 1996 (the "Confirmation
Date"), the United States District Court for the Southern District of New York
entered an Order (the "Order") confirming the Fourth Amended Plan of
Reorganization of Keene Corporation, debtor and debtor-in-possession (the
"Debtor"), under chapter 11 of title 11, United States Code (the "Bankruptcy
Code"), dated as of March 11, 1996 and as modified at the hearing on
confirmation on June 12, 1996 (the "Plan").
1.Pursuant to sections 1141(d)(1) and 524 of the Bankruptcy Code,
the Plan, and the Order, the treatment of, and consideration received by,
holders of Allowed Claims, Demands and Allowed Interests (as defined in the
Plan) will be in full satisfaction, release and, to the extent permitted by
applicable law, discharge of their respective Claims or Demands against or
Interests in the Debtor or any of its assets or properties.
2.Pursuant to the Order, and except as otherwise provided for in
the Plan, any distribution under the Plan which is unclaimed after one (1) year
<PAGE>
following its delivery under the Plan, together with any interest or dividends
earned thereupon, shall become the property of, and be vested in (i) the
Creditors' Trust if such property was to be distributed on account of an Allowed
Administrative Expense Claim, an Allowed Tax Claim or an Allowed Class 1, 2, 3
or 6 Claim or (ii) New Keene if such property was to be distributed on account
of an Allowed Class 7 Common Stock Interest, and the holder of any Claim or
Interest in connection with such property shall be forever precluded and barred
from asserting any claim against the Creditors' Trust or New Keene or their
respective properties in connection with such Claim or Interest.
3.Distribution Procedures. If you are a holder of Old Common
Stock, you need not return any securities since, on the Effective Date of the
Plan, your Old Common Stock shall be automatically cancelled. Distributions of
New Common Stock under the Plan will be made by the Debtor or New Keene through
Continental Stock Transfer & Trust Company, the Disbursing Agent, to holders of
the Old Common Stock as of the record date of June 30, 1996 at 5:00 p.m., New
York time, and the Trustees of the Creditors' Trust. Distributions of cash under
the Plan to holders of Allowed Claims and the Trustees of the Creditors' Trust
will be made by the Debtor or New Keene. All such distributions under the Plan
will be made on the Effective Date of the Plan, or as soon thereafter as is
reasonably practicable, subject to compliance with certain terms and conditions
of the Plan.
4.Bar Dates for Rejection Claims. If the rejection of an
<PAGE>
executory contract or unexpired lease pursuant to the Plan gives rise to a Claim
by the non-Debtor party or parties to such contract or lease, such Claim shall
be forever barred and will not be enforceable against the Debtor, New Keene, the
Creditors' Trust, their respective successors or their respective properties
unless a proof of Claim is filed with the Bankruptcy Court on or before the
later to occur of: (a) thirty (30) days after the date of entry of an order of
the Bankruptcy Court approving such rejection or (b) thirty (30) days after
service of notice of such rejection, if such rejection occurs by expiration of
time fixed by the Bankruptcy Court.
5.Filing of Final Fee and Expense Applications.
Professionals or other entities requesting compensation or
reimbursement of expenses pursuant to Sections 327, 328, 330, 331
and 503(b) of the Bankruptcy Code (including compensation requested
pursuant to Section 503(b)(3) and (4) of the Bankruptcy Code by any
professional or other Entity for making a substantial contribution
in the Chapter 11 Case) must file and serve on New Keene, the
Creditors' Trust, the United States Trustee and on such other
entities who are designated by the Bankruptcy Rules, an application
for final allowance of compensation and reimbursement of expenses
<PAGE>
no later than 45 days after the last day of the calendar month in
which the Effective Date occurs.
Dated: June [__], 1996
BY ORDER OF THE COURT:
/s/ Michael B. Mukasey
United States District Judge
Edward S. Weisfelner
Janice B. Grubin
BERLACK, ISRAELS & LIBERMAN LLP
120 West 45th Street
New York, New York 10036
(212) 704-0100
Counsel to the Debtor
<PAGE>
EXHIBIT 99(d)
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
CHAPTER 11
KEENE CORPORATION,
Debtor. CASE NO. 93 B 46090 (SMB)
OPERATING REPORT FOR THE PERIOD
APRIL 28, 1996 TO MAY 25 1996
DEBTOR'S ADDRESS:
757 THIRD AVENUE SUITE 850
NEW YORK, NEW YORK 10017
PERIOD DISBURSEMENTS: $221,000
DEBTOR'S ATTORNEYS:
BERLACK, ISRAELS & LIBERMAN LLP
GENERAL COUNSEL
REPORT PREPARER:
TRACEY KARM
KEENE CORPORATION
PERIOD OPERATING PROFIT (LOSS): $(316,000)
The undersigned, having reviewed the attached report and being familiar
with the Debtor's financial affairs, verifies under penalty of perjury, that
the information contained therein is complete, accurate and truthful to the
best of my knowledge.
DATE SIGNATURE AND TITLE
6/17/96 /s/ Timothy E. Coyne
Indicate if this an amended statement by checking here.
_____ AMENDED STATEMENT
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
CHAPTER 11
KEENE CORPORATION,
Debtor. CASE NO. 93 B 46090 (SMB)
OPERATING REPORT FOR KEENE CORPORATION
FOR THE PERIOD APRIL 28, 1996 - MAY 25, 1996
THE DEBTOR HAS OBTAINED THE CONSENT OF THE U.S. TRUSTEE TO USE FISCAL
MONTHS IN ACCORDANCE WITH ITS NORMAL ACCOUNTING PRACTICE TO PREPARE ITS
FINANCIAL REPORTS.
ON JUNE 12, 1996, THE BANKRUPTCY COURT AND THE DISTRICT COURT
(COLLECTIVELY, THE "COURT")HELD A HEARING ON THE CONFIRMATION OF THE
DEBTOR'S FOURTH AMENDED PLAN OF REORGANIZATION, AS MODIFIED, (THE "PLAN"),
AT WHICH TIME THE COURT SIGNED AN ORDER CONFIRMING THE PLAN. THE PLAN
IS EXPECTED TO GO EFFECTIVE WITHIN 60 DAYS.
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Operating Report
For the Period April 28, 1996 - May 25, 1996
INDEX
PAGE #
Operating Results for the Period April 28, 1996-
May 25, 1996 1-3
Summary of Cash and Cash Equivalents and Investments
as of May 25, 1996 4
Receivables and Payables Summary as of May 25, 1996 5
Other Potential Recoveries as of May 25, 1996 6-8
Other Potential Payments as of May 25, 1996 9
Confirmation of Plan of Reorganization and
Related Matters as of May 25, 1996 10
Insurance Payment Report for the Period
April 28, 1996 - May 25, 1996 11
Taxes Paid Summary for the Period April 25, 1996-
May 25, 1996 12
Schedule of General Operating Expenses for the
Period April 28, 1996 - May 25, 1996 13
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Income Statement
For the Period April 28, 1996 - May 25, 1996
(Unaudited)
($000's)
<CAPTION>
INCOME
<S> <C> <C>
Investment Income $144
GENERAL & ADMINISTRATIVE EXPENSES
Salary, Wages, Benefits and Payroll Taxes 68
Rent and Utilities 26
Insurance 42
General Operating Expenses (See Page 13) 45
_____
Loss Before Reorganization Items, Income Taxes
and Equity in Earnings of Subsidiary (37)
Reorganization Items:
Debtor's Counsel Legal Fees $50
Creditors Committee Counsel Legal Fees 50
Other 150 250
______
Loss Before Income Taxes and Equity in Earnings of Subsidiary (287)
Income Tax Expense 36
______
Loss Before Equity in Earnings of Subsidiary (323)
Equity in Earnings of Subsidiary 7
______
NET LOSS $(316)
======
<FN>
1
</FN>
</TABLE>
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Balance Sheet
As of May 25, 1996
(Unaudited)
($000's)
<CAPTION>
ASSETS
<S> <C>
Current Assets
Cash and Cash Equivalents $7,398
Investments at Market 23,796
Accounts Receivable-Insurance Proceeds 15,000
Accounts Receivable-Surety Companies 3,308
Income Taxes Receivable 393
Investment Income Receivable 419
Due from Subsidiary (1) 561
Prepaid and Other Current Assets 152
_______
Total Current Assets 51,027
Net Fixed Assets 79
Investment in Subsidiary 7,149
Intangible Pension Asset 125
_______
TOTAL ASSETS $58,380
=======
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Current Liabilities
Accounts Payable - Trade $125
Uncleared Outstanding Checks 40
Accrued Expenses 524
_______
Total Current Liabilities 689
Liabilities Subject to Chapter 11 Proceedings
Accounts Payable - Trade (Pre-Petition) 406
Accounts Payable - Retained Professionals' Hold 2,863
FASB 5 Asbestos Litigation Reserve (Pre-Petition) 5,311
Accrued Expenses 6,768
_______
Total Liabilities Subject to Chapter 11 Proceedings 15,348
Long Term Minimum Pension Liability 2,539
STOCKHOLDERS' INVESTMENT
Common Stock 1
Paid-in-Capital 120,286
Retained Loss (78,058)
Unrealized loss on Investment Securities (11)
Additional Pension Liability in Excess of Unrecognized
Prior Service Cost (2,414)
_______
Total Stockholders' Investment 39,804
_______
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $58,380
=======
<FN>
(1) Subsidiary is included in the consolidated federal income tax return of
Keene. Substantially all of this amount represents subsidiary's federal income
tax liability computed as if a separate tax return was filed.
2
</FN>
</TABLE>
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Statement of Cash Flows
For the period April 28, 1996 - May 25, 1996
(Unaudited)
($000's)
<CAPTION>
RECEIPTS
<S> <C>
Investment Income $23
Other 4
______
Total Receipts 27
DISBURSEMENTS
Salary, Wages, Benefits and Payroll Taxes 54
Other General and Administrative Expenses
General Operating 85
Bankruptcy-related 82
______
Total Disbursements 221
Increase in Uncleared Outstanding Checks 11
______
Net Cash used in Operating Activities (183)
______
Maturity of Marketable Security 23
______
Net Cash provided by Investing Activities 23
______
Net Decrease in Cash and Cash Equivalents (160)
Cash and Cash Equivalents at Beginning of Period 7,558
______
Cash and Cash Equivalents at End of Period $7,398
======
<FN>
3
</FN>
</TABLE>
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Summary of Cash and Cash Equivalents and Investments
As of May 25, 1996
(Unaudited)
(000's)
<CAPTION>
Purchase Maturity Interest Market Amount
Bank Date Date Issue Rate Cost Value Pledged
<S> <C> <C> <C> <C> <C> <C> <C>
Chemical Bank On Demand Cash in Bank 45 45 -
Citibank On Demand Cash in Investment Accts 25 25 25
Bank of America - IL (1) On Demand Cash in Investment Accts 1 1 -
Bank of America - IL On Demand Horizon Treasury
Fund 5.0500% 7,217 7,217 -
_______ _______ ______
Total Bank of America - IL 7,218 7,218 -
_______ _______ ______
Fleet National Bank On Demand Fidelity Institutional
of Connecticut (2) Money Market 5.2200% 110 110 -
_______ _______ ______
Total Fleet National Bank
of Connecticut 110 110 -
_______ _______ ______
TOTAL CASH AND CASH EQUIVALENTS $7,398 $7,398 $25
======= ======= ======
Citibank 07-Apr-93 30-Sep-96 T-Note 7.0000% 91 85 85
Citibank 30-Sep-91 30-Sep-96 T-Note 7.0000% 236 239 239
Citibank 06-Oct-92 30-Sep-96 T-Note 7.0000% 93 85 85
_______ _______ ______
Total Citibank 420 409 409
_______ _______ ______
Bank of America - IL 07-Dec-95 06-Jun-96 T-Bill 5.1800% 9,981 10,241 -
Bank of America - IL 15-Feb-96 08-Aug-96 T-Bill 4.6900% 519 525 519
Bank of America - IL 13-Mar-96 08-Aug-96 T-Bill 4.8200% 2,160 2,182 2,160
Bank of America - IL 15-Feb-96 08-Aug-96 T-Bill 4.9650% 6,818 6,884 -
Bank of America - IL 30-Sep-93 30-Sep-96 T-Note 7.0000% 22 20 -
Bank of America - IL 30-Sep-91 30-Sep-96 T-Note 7.0000% 379 382 -
Bank of America - IL 30-Sep-91 30-Sep-96 T-Note 7.0000% 230 232 -
Bank of America - IL 07-Apr-93 30-Sep-96 T-Note 7.0000% 64 60 -
Bank of America - IL 29-Oct-91 31-Oct-96 T-Note 6.8750% 103 104 -
Bank of America - IL 02-Dec-91 30-Nov-96 T-Note 6.5000% 138 139 -
Bank of America - IL 31-Dec-91 31-Dec-96 T-Note 6.1250% 26 26 -
Bank of America - IL 20-May-93 28-Feb-98 T-Note 5.1250% 69 68 -
Bank of America - IL 15-Apr-93 31-Mar-98 T-Note 5.1250% 6 6 -
_______ _______ ______
Total Bank of America - IL 20,515 20,869 2,679
_______ _______ ______
Fleet National Bank
of Connecticut 15-Mar-96 19-Sep-96 T-Bill 5.0000% 2,872 2,901 556
_______ _______ ______
Total Fleet National Bank 2,872 2,901 556
of Connecticut
_______ _______ ______
LESS: T-BILL INTEREST IN MARKET VALUE (3) - 383 -
_______ _______ ______
TOTAL INVESTMENTS $23,807 $23,796 $3,644
======= ======= ======
GRAND TOTAL - CASH AND CASH
EQUIVALENTS AND INVESTMENTS $31,205 $31,194 $3,669
======= ======= ======
<FN>
(1) Formerly Continental Bank, N.A.
(2) Formerly Shawmut Bank Connecticut, N.A.
(3) T-Bills are purchased at a discount and as interest is earned over time the
market value of the T-Bills increases. For accounting purposes, interest
earned on T-Bills is classified as investment income receivable. It is
deducted from the market value on this schedule so that it is not accounted
for twice (once in the market value of the investments and once in
investment income receivable).
4
</FN>
</TABLE>
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Receivables and Payables Summary
As of May 25, 1996
(Unaudited)
($000's)
Accounts Receivable-Trade $0
Accounts Receivable-Insurance Proceeds $15,000
FACE VALUE OF POLICIES EXPECTED TO BE AVAILABLE FROM THE EXPECTED SUCCESSFUL
OUTCOME OF THE KEENE IV INSURANCE COVERAGE LITIGATION. HOWEVER, SUCCESSFUL
OUTCOME OF THE LITIGATION AND REALIZATION AND TIMING OF THE RECEIPT OF THIS
RECEIVABLE CAN NOT BE ASSURED.
Accounts Receivable-Surety Companies $3,308
AMOUNT OF CASH PROCEEDS RECEIVED BY SURETY COMPANIES FROM LETTER OF CREDIT
PRESENTMENTS IN EXCESS OF THE SURETY COMPANIES' APPEAL BOND OBLIGATIONS,
COSTS AND ATTORNEYS' FEES ASSOCIATED WITH THE ISSUANCE AND HONORING OF APPEAL
BONDS ON KEENE'S BEHALF. BY STIPULATION AND AGREED ORDERS, EACH SURETY
COMPANY HOLDING EXCESS CASH PROCEEDS MUST INVEST SUCH EXCESS PROCEEDS ON
KEENE'S BEHALF AND PERIODICALLY REMIT ANY INTEREST EARNED ON THE EXCESS
PROCEEDS TO KEENE.
Accounts Payable (Post-petition) $125
THE COMPANY DOES NOT AGE ITS ACCOUNTS PAYABLE. PAYMENTS ARE MADE IN THE
NORMAL TERMS.
5
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Other Potential Recoveries
(Unaudited)
As of May 25, 1996
The Debtor potentially might recover additional amounts as described below.
However, the recovery of these amounts is uncertain and no assurance can be
given at this time as to whether any recovery will ultimately be obtained and in
what amounts.
Insurance Issued by Insolvent Insurance Companies
Approximately $30 million of Keene's total aggregate available insurance
coverage applicable to asbestos-related claims is due from insolvent insurance
companies. Keene settled claims against certain state guaranty funds arising
from the lack of availability of the insurance coverage issued by the insolvent
insurance companies for a total aggregate payment of $9.5 million, which was
received in 1993 and 1994. In addition, Keene received a distribution of $1.4
million in 1995 from the liquidator of one insolvent insurance company. Keene
is continuing to pursue claims against the liquidators of the insolvent
insurance companies.
In 1993, prior to the filing of the Chapter 11 petition, Keene filed a
lawsuit against the Pennsylvania Insurance Guaranty Association ("PIGA") seeking
indemnification from PIGA for up to approximately $20 million of
asbestos-related payments made by Keene to Pennsylvania citizens as a result of
the lack of availability of the insurance coverage issued by the insolvent
insurance companies. This lawsuit is in the pre-trial phase.
Ten Year Net Operating Loss Carryback
Keene has carried back, and anticipates carrying back in the future,
federal tax net operating losses arising from asbestos-related litigation to
prior tax periods, which could generate federal tax refunds of as much as
approximately $32 million in the aggregate. However, approximately $30 million
of such refunds will be paid to Bairnco Corporation ("Bairnco"), Keene's former
parent company, because the refunds relate to tax periods in which Bairnco filed
consolidated federal tax returns for an affiliated group of companies of which
Keene was a member. Bairnco claims a legal right to such funds, which Bairnco
refuses to release to Keene. On September 9, 1994, Keene filed a lawsuit (the
"Bairnco NOL Lawsuit") in Bankruptcy Court against Bairnco seeking, among other
things, injunctive relief and a declaratory judgment that the approximately $30
million in refunds which are presently due, or are anticipated to become due, on
account of federal income taxes previously paid by Keene in the years 1983
through 1989 when Keene was a member of the Bairnco consolidated federal tax
return, are property of Keene's estate. On January 4, 1995, Keene obtained
Bankruptcy Court approval of an escrow arrangement with Bairnco, providing for
the segregation and investment of the refunds at issue in the Bairnco NOL
Lawsuit until the lawsuit is resolved. To date, federal tax refunds of
approximately $30 million have been received. Of the approximately $30 million
received, approximately $28.5 million has been received by Bairnco and placed in
escrow and approximately $1.5 million was received by Keene.
By stipulation and agreed order, Keene and the Official Committee of
Unsecured Creditors (the "Committee") agreed that the Bairnco NOL Lawsuit
originally filed by Keene would be prosecuted by the Committee for the benefit
of Keene's estate. On February 13, 1995, the Committee filed an amended
complaint substituting the Committee as the party plaintiff and alleging
additional counts. Pursuant to Stipulation and Order dated June 27, 1995, the
Committee filed a second amended complaint on July 5, 1995 alleging additional
counts.
On or about March 7, 1996, the Internal Revenue Service informed Keene that
it planned to amend its previously filed administrative expense claim from
approximately $3,500 to approximately $31.8 million as a protective filing
pending final approval by the Joint Committee on Taxation of the United States
Congress of the tax refunds at issue in the Bairnco NOL Lawsuit.
6
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Other Potential Recoveries
(Unaudited)
As of May 25, 1996
(Continued)
Co-Defendant Contributions
Keene has claims against co-defendants in asbestos litigation for
contribution or indemnification based on payments made by Keene under theories
of joint and several liability and other theories. Likewise, co-defendants in
asbestos litigation may have claims against Keene for contribution and
indemnification under joint and several liability and other theories. However,
the amounts of such potential contribution or indemnification claims cannot be
estimated at this time.
On June 20, 1995, as a direct result of Keene's active participation in the
proposed settlement of a class action brought by beneficiaries of the Manville
Personal Injury Settlement (the "Manville Trust") in Findley v. Falise, Keene
was initially allocated in excess of $3.8 million of the $35 million
Contribution Claim Fund established for claimants holding indemnification or
contribution claims against the Manville Trust as part of the settlement. This
allocation, however, is subject to the resolution of objections filed by certain
other co-defendants to the co-defendant allocation scheme. To date, Keene is
informed that it has been allocated at least $3.5 million, subject to an upward
adjustment to approximately $3.8 million if certain pending objections are
resolved in the Manville Trust's administrator's favor. Pursuant to the
governing distribution principles, Keene may use its portion of the $35 million
co-defendant settlement fund either for direct payments to individual asbestos
health claimants or for transfer to an asbestos creditors' trust.
Challenge to Bank of America Illinois (the "Bank") Claims
Upon the presentation of certain letters of credit issued by the Bank to
secure appeal bonds posted on Keene's behalf by certain sureties, the Bank filed
a motion for relief from the automatic stay to foreclose its asserted security
interests in Keene's book-entry United States Treasury securities (the
"Collateral") pledged against the Bank's issuance of letters of credit to
secure appeal bonds posted on Keene's behalf. In response to the Bank's motion,
the Committee challenged such security interests as not being properly
perfected, contending that the Bank's claims to these Keene assets should be
equitably subordinated or otherwise avoided.
In a Memorandum Decision and Order dated October 17, 1995, the Bankruptcy
Court denied the Bank relief from the automatic stay and directed, among other
things, that an evidentiary hearing be conducted to determine the intention of
the Bank and Keene concerning the creation of the security interests in the
Collateral and the ambiguous description of the Collateral in the related
security agreements. Pursuant to this decision and order and a November 30, 1995
Bankruptcy Court ruling, the Committee filed an adversary proceeding against the
Bank on December 1, 1995 seeking to avoid and recover certain allegedly
preferential transfers made by Keene for the Bank's benefit in connection with
Keene's granting the Bank security interests in the Collateral and challenging
the Bank's allegedly perfected security interests. Approximately $32 million was
at issue in this action.
On March 11, 1996, the Bank, the Debtor and the Committee announced that
they had settled all the disputes concerning the validity of the Bank's
security interests. The settlement provides for, among other things, the
Bank's payment of $0.2 million to the Keene estate and the Committee's
dismissal with prejudice of its adversary proceeding against the Bank and its
appeal of the October 17, 1995 Memorandum Decision and Order. On June 12, 1996,
the Bankruptcy Court approved the Settlement.
7
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Other Potential Recoveries
(Unaudited)
As of May 25, 1996
(Continued)
Transactions Lawsuits
Prior to September 1993, a number of lawsuits were filed, including two
lawsuits filed in federal court in New York (collectively, the "Prepetition
Transactions Lawsuits"), alleging that the sale of certain Keene assets during
the 1980s to certain subsidiaries of Bairnco, Keene's former parent company,
were not for fair value or were otherwise improper. Keene is not a named party
in some of the cases, although certain of its former and current officers and
directors are named defendants in some of the cases. The Prepetition
Transactions Lawsuits generally seek several forms of relief, including the
setting aside of the asset sales and the appointment of a receiver for those
assets, a declaration that Bairnco and certain of its present and former
subsidiaries are responsible for asbestos-related claims against Keene, the
imposition of a constructive trust on certain assets of Bairnco and certain of
Bairnco's present and former subsidiaries, compensatory damages in an
unspecified amount and attorneys' fees and costs.
By Orders dated April 15, 1994 and May 11, 1994, the Bankruptcy Court
appointed an examiner to investigate whether or not the claims or causes of
action asserted in the Prepetition Transactions Lawsuits were valid. The
examiner's preliminary report was released on September 23, 1994. The examiner
concluded, among other things, that there may arguably be valid claims or causes
of action related to the sale of some of the Keene assets to Bairnco. The
potential for any recovery arising from these claims or causes of action cannot
be accurately estimated at this time. By Stipulation of Settlement Regarding a
Consensual Plan of Reorganization for the Debtor, approved by the Bankruptcy
Court on March 28, 1995 (the "Stipulation"), Keene, the Committee and the Legal
Representative for Future Claimants agreed, among other things, that the
Committee would prosecute the claims or causes of actions investigated by the
examiner, subject to such terms and conditions deemed appropriate by the
Bankruptcy Court. By Order dated May 3, 1995 (the "May 3 Order") , the
prosecution of the claims or causes of action asserted in the Prepetition
Transactions Lawsuits was transferred to the Committee. On June 8, 1995, the
Committee filed a lawsuit in Bankruptcy Court on behalf of the Debtor, as
contemplated by the May 3 Order (the "Transactions Lawsuit"). The Transactions
Lawsuit names 21 corporate and individual defendants and alleges, among other
things, violations of the fraudulent conveyance laws, the New York Business
Corporation Law and the Racketeer Influenced and Corrupt Organizations Act, tort
liability based on theories of successor liability and veil piercing and breach
of fiduciary duties. The damages (including treble damages) and attorneys fees
and costs asserted in the various counts pleaded in the Transactions Lawsuit,
if aggregated, seek a total recovery in excess of $7 billion. At a hearing on
January 31, 1995, the Bankruptcy Court ruled, among other things, that the
Transactions Lawsuit would be stayed until March 11, 1996, with the exception
of certain discovery, and that Committee Counsel would be compensated for
prosecuting the lawsuit at its regular hourly rates subject to Bankruptcy Court
approval. On March 11, 1996, the Bankruptcy Court approved an agreement
relating to the Transactions Lawsuit which provided for, among other things, the
withdrawal of the action from the Bankruptcy Court to the District Court seventy
one days after the Bankruptcy Court confirms the Debtor's consensual plan of
reorganization.
Unjust Enrichment Lawsuit
On June 3, 1994, Keene filed a lawsuit in Bankruptcy Court against 27 law
firms alleging violations of federal anti-trust laws, the Racketeer Influenced
and Corrupt Organizations Act, professional ethics rules and fiduciary
obligations. The lawsuit seeks damages of $130 million along with treble
damages, punitive damages and attorneys' fees and costs, which, if awarded,
could bring the total recovery to up to $390 million. The Stipulation provides
for, among other things, the dismissal with prejudice of this lawsuit on the
effective date of a consensual plan of reorganization
8
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Other Potential Payments
(Unaudited)
As of May 25, 1996
The Debtor may be required to pay certain amounts as described below.
However, the payment of these amounts is uncertain and no assurance can be given
at this time as to the ultimate payments.
Secured Judgments
On the date of its Chapter 11 filing, approximately 60 non-final judgments
totaling approximately $22 million and a number of final judgments totaling
approximately $29 million were outstanding against Keene and secured by appeal
bonds or escrow arrangements. The appeal bonds were backed by letters of credit
issued by Bank of America Illinois (formerly Continental Bank, N.A.) or Fleet
National Bank of Connecticut (formerly Shawmut Bank Connecticut, N.A.). The
letters of credit were, in turn, secured by the pledge of certain Keene assets.
By two separate Orders dated January 13, 1994 and January 26, 1994, the
Bankruptcy Court authorized the payment of all final judgments. Accordingly,
the related appeal bonds were drawn, the related letters of credit, in turn,
were drawn and those assets pledged by Keene were liquidated or the escrow
accounts were released.
The non-final judgments are on appeal to higher courts, which appeals are
subject to the automatic bankruptcy stay. Motions for relief from the automatic
stay may be filed with the Bankruptcy Court for each individual non-final
judgment and, if granted, the appeal may be completed. If the result of any
appeal is adverse to Keene, the amount of the judgment may have to be paid,
resulting in the appeal bonds securing these judgments being drawn in payment
of these judgments, the letters of credit securing these appeal bonds, in turn,
being drawn and certain Keene assets being liquidated by the banks which issued
the letters of credit. To date, approximately 45 non-final judgments totaling
approximately $20 million were settled for the payment of approximately $13
million in the aggregate.
Avoidance Actions and Tolling Agreements
On or about November 28, 1995 and with the Bankruptcy Court's approval, the
Committee entered into tolling agreements with seven former and present
directors and officers of Keene. These agreements extend until December 3,
1996 the time for commencing actions against each for alleged liability to Keene
concerning, among other things, certain allegedly avoidable or recoverable
transfers. Mr. Bailey, Keene's former Chairman and President, did not sign a
tolling agreement and, as a consequence, the Committee was authorized by the
Bankruptcy Court to file an adversary proceeding against him. On December 1,
1995, the Committee filed its complaint against Mr. Bailey alleging a number of
grounds for liability. With limited exceptions, the claims that have been
tolled against two of Keene's former and present officers and all of Keene's
directors except Mr. Bailey, as well as the claims asserted against Mr. Bailey,
would be released on the effective date of the amended consensual plan of
reorganization filed on January 29, 1996 pursuant to the Stipulation.
9
<PAGE>
Keene Corporation
(Debtor-in-Possession)
Confirmation of Consensual Plan of Reorganization and Related Matters
(Unaudited)
As of May 25, 1996
On June 12, 1996, the Bankruptcy Court and the District Court (collectively,
the "Court") held a hearing on the confirmation of the Debtor's Fourth Amended
Plan of Reorganization, as modified, (the "Plan"), at which time the Court
signed an order confirming the Plan. The Plan is expected to go effective
within the next 60 days. Also, on June 12, 1996, the Bankruptcy Court signed a
case management order dismissing, among other things, the Unjust Enrichment
Lawsuit, subject to the occurrence of the effective date of the Plan.
10
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Insurance Payment Report
For the period April 28, 1996 - May 25, 1996
(Unaudited)
($000's)
<CAPTION>
Insurance Carrier Due Date Amounts Paid
<S> <C> <C> <C>
General Liability Transamerica Pre-paid 6/95-6/96 $-
Inland Marine
Property
Umbrella General Star National Pre-paid 6/95-6/96 -
Workers'
Compensation Paramount Pre-paid 6/95-6/96 -
Commercial
Crime The Hartford 3 Year Policy -
6/94 - 6/97
Directors
& Officers United Capitol Pre-paid 8/95-8/96 -
Executive Re
Specialty Pre-paid 8/95-8/96 -
Executive Re Additional discovery for
Specialty 8/90-8/94 period
Prepaid 8/95-8/98 -
___
TOTAL PAYMENTS $-
===
<FN>
11
</FN>
</TABLE>
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Taxes Collected, Received, Due or Withheld
For the period April 28, 1996 - May 25, 1996
(Unaudited)
($000's)
<CAPTION>
Taxes Withheld/Due Taxes Paid Date Paid
<CAPTION>
Gross Salaries
and Wages $45
<S> <C> <C> <C>
Total Federal Payroll
Taxes Withheld $13 $13 5/17/96
Total Employer Payroll Taxes 2 2 5/17/96
Total State Payroll Taxes Withheld 3 3 5/20/96
Total Local Payroll Taxes Withheld - - 5/20/96
___ ___
Totals $18 $18
=== ===
<FN>
12
</FN>
</TABLE>
<PAGE>
<TABLE>
Keene Corporation
(Debtor-in-Possession)
Schedule of General Operating Expenses
For the Period April 28, 1996 - May 25, 1996
(Unaudited)
($000)
<S> <C>
NORMAL COURSE CONSULTING $2
CORPORATE LEGAL FEES 1
STOCK TRANSFER FEES 2
DEPRECIATION 4
BUSINESS TRAVEL AND EXPENSES 4
DIRECTORS FEES 16
COMMUNICATIONS & POSTAGE 4
SUPPLIES & DUPLICATION 5
BANK FEES 1
OTHER EXPENSES 6
___
TOTAL $45
<FN>
13
</FN>
</TABLE>
