<PAGE>
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): December 12, 1997
Today's Man, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 0-20234 23-1743137
- ---------------------------- ------------ -------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
835 Lancer Drive
Moorestown, New Jersey 08057
-------------------------------
(Address of principal executive
offices, including zip code)
609-235-5656
--------------------------------------------------
Registrant's telephone number, including area code
<PAGE>
Item 3: Bankruptcy or Receivership.
On December 12, 1997, the United States Bankruptcy Court for the
District of Delaware (the "Court") confirmed the Second Amended Joint Plan of
Reorganization, as modified December 12, 1997 (the "Plan"), of Today's Man, Inc.
(the "Company") and affiliated debtors and debtors-in-possession. The effective
date of the Plan is expected to be on or after December 30, 1997. The following
summary of the Plan omits certain information set forth in the Plan. Any
statements contained herein concerning the Plan are not necessarily complete,
and in each such instance, reference is made to the Plan, a copy of which is
filed herewith as Exhibit 2.1. Each such statement is qualified in its entirety
by such reference. All capitalized terms used and not defined herein shall have
the respective meanings ascribed to them in the Plan.
The Plan generally provides for the following: all holders of Allowed
Administrative Expenses, Allowed Priority Tax Claims, Allowed Priority Claims,
Allowed Reclamation Claims, Allowed Secured Claims (other than the Bank Group)
and Allowed Convenience Class Claims will be paid in full in cash as soon as
practicable after the Effective Date. Based on the option elected by the holders
of the Bank Group Claim, they will receive cash in the aggregate amount of
approximately $21.9 million and 1.9 million shares of New Common Stock. In
addition, Allowed General Unsecured Claims will receive the full amount of their
Allowed Claim by a combination of cash and shares of New Common Stock, plus
their allocable share of the Interest Pool, which in the aggregate will provide
a recovery estimated to be equal to approximately 106% of their Allowed Claims.
The holder of the Allowed Barclay Subordinated Claim will receive the full
amount of the Barclay Subordinated Claim in a combination of cash and shares of
New Common Stock, plus its fixed allocable share of the Interest Pool. The
holder of the Allowed Feld Subordinated Claim will receive the full amount of
its claim, plus a fixed allocable share of the Interest Pool in the form of the
standard distribution provided to the General Unsecured Creditors; however, the
cash portion of such distribution will be in the form of a credit (the "Allowed
Feld Claim Credit"), which credit will be used by the holder of the Allowed Feld
Claim toward the purchase of shares of New Common Stock as part of the Equity
Investment.
Under the Plan, shareholders of record as of the close of business on
October 14, 1997 (the "Record Date") will receive for each share of Old Common
Stock: (i) one share of New Common Stock and (ii) 0.5 of a Warrant. Each whole
Warrant will entitle the holder to purchase one share of New Common Stock at an
exercise price of $2.70 per share at any time within two years after the
Issuance Date.
In connection with the Plan, the Company raised an aggregate of $13.1
million from: (i) a Rights Offering to existing shareholders and (ii) an Equity
Investment from a group led by Mr. David Feld (collectively, the "Equity
Offering"). In addition, the Company will sell $3.1 million of New Common Stock
to Mr. David Feld pursuant to the Equity Investment by acceptance of the Allowed
Feld Claim Credit.
<PAGE>
Pursuant to a commitment from Foothill Capital Corporation
("Foothill"), Foothill, as agent for itself and other lenders, will enter into
an Exit Financing Facility with the Company on or about the Effective Date of
the Plan. The Exit Financing Facility includes a $30,000,000 revolving credit
facility. This revolving credit facility provides for a $20,000,000 sublimit for
letters of credit issuances, bears interest at the lender's prime plus 0.5%,
expires in five years, and is secured by the assets of the Company.
Additionally, Foothill and the other lenders will provide the Company with a
$12,500,000 term loan with a face amount of $13,250,000. The term loan bears
interest at 11% and requires monthly principal reductions for 36 months. Both
the term loan and the revolving facility are cross-collateralized and
cross-guaranteed. The loan agreement will contain the usual and customary
financial covenants.
The total disbursements to satisfy all Claims under the Plan is
approximately $72.0 million. The Company will fund these disbursements through a
combination of cash on hand, a draw on the Foothill revolving credit facility,
if necessary, aggregating approximately $27.5 million, $16.3 million from the
Equity Offering, the $12.5 million term loan from Foothill and the issuance of
New Common Stock to the Creditors.
Pursuant to the Plan, the Company's Management Stock Option Plan will
become effective on the Effective Date. Under the Management Stock Option Plan,
the Company will be authorized to issue options to purchase 2,450,000 shares of
New Common Stock.
Set forth below is information with respect to the number of shares of
Common Stock currently outstanding and the number of shares to be issued or
issuable under the Plan:
Shares currently outstanding 10,861,005*
Shares to be issued pursuant to Rights 8,145,754**
Offering and Equity Investment
Shares Issuable to Creditors Under the Plan 8,318,241***
Subtotal 27,325,000
----------
Shares Issuable upon exercise of Warrants 5,430,503**
Shares authorized under Management Stock 2,450,000
Option Plan ----------
Total 35,205,503
==========
* Pursuant to the Plan, the Company will issue one share of New Common Stock for
each share of Old Common Stock outstanding on the Record Date.
** May be increased as a result of rounding of fractional shares.
***Estimated. Actual amount issued will depend on final resolution of disputed
claims.
<PAGE>
For financial information regarding the assets and liabilities of the
Company, refer to the Company's Quarterly Report on Form 10-Q for the quarter
ended November 1, 1997 (the "Third Quarter Form 10-Q"). The Third Quarter Form
10-Q reflects that the total assets of the Company were $99,818,200, and total
liabilities were $90,003,600 as of November 11, 1997.
7. Financial Statements and Exhibits
(a) Financial Statements of Business acquired.
Not applicable.
(b) Pro Forma Financial Information.
Not applicable
(c) Exhibits.
2.1 Debtor's Second Amended Joint Plan of Reorganization, as
modified on December 12, 1997.
<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.
TODAY'S MAN, INC.
By: /s/ Frank E. Johnson
-----------------------------------------------------
Frank E. Johnson, Executive Vice President and
Chief Financial Officer
Dated: December 23, 1997
<PAGE>
EXHIBIT 2.1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- ------------------------------
:
In re: : Chapter 11
:
FELD & FELD : Case No. 96-117 (HSB)
BENMOL, INC. : Case No. 96-118 (HSB)
D&L INC. : Case No. 96-119 (HSB)
F&S INTERNATIONAL, INC. : Case No. 96-120 (HSB)
TODAY'S MAN, INC. : Case No. 96-121 (HSB)
TODAY's MAN OUTLET, INC. : Case No. 96-122 (HSB)
: Jointly Administered
Debtors :
- ------------------------------:
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
MODIFIED AS OF DECEMBER 12, 1997
Counsel:
BLANK ROME COMISKY & McCAULEY
Howard T. Glassman
Raymond L. Shapiro
Regina Stango Kelbon
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
and
1220 Market Street, 8th Floor
Wilmington, De 19801
Counsel for Debtors and
Debtors-in-Possession
Dated: December 12, 1997
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
I. PREAMBLE.................................................................................................1
<S> <C>
ARTICLE 1.........................................................................................................1
A. Definitions.....................................................................................1
B. Rules for Interpreting Undefined Terms.........................................................13
C. Rules of Construction..........................................................................14
ARTICLE 2
PROVISIONS FOR THE TREATMENT OF ADMINISTRATIVE CLAIMSAND TAX PRIORITY CLAIMS............................14
2.1 Administrative Expense................................................................14
2.2 Priority Tax Claims...................................................................14
ARTICLE 3
CLASSIFICATION OF CLAIMS AND INTERESTS/ELIGIBILITY
TO VOTE.................................................................................................15
ARTICLE 4
IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTSIMPAIRED AND UNIMPAIRED BY THIS PLAN...................16
4.1 Designation of Unimpaired Classes.....................................................16
4.2 Designation of Impaired Claims and Interests..........................................16
4.3 Voting Classes........................................................................16
ARTICLE 5
TREATMENT OF CLAIMS AND INTERESTS.......................................................................16
5.1 Class 1 Claims - Priority Claims......................................................16
5.2 Class 2 Claims - Reclamation Claims...................................................16
5.3 Class 3 Claims - Secured Claims. ....................................................16
5.4 Class 4 Claims - Bank Group. .........................................................17
5.5 Class 5 - Convenience Claims..........................................................18
5.6 Class 6 - General Unsecured Claims....................................................19
5.7 Class 7 - Barclay's Subordinated Claim................................................20
5.8 Class 8 - Feld Subordinated Claim.....................................................21
5.9 Class 9 - Insured Claims..............................................................21
5.10 Class 10 - Intercompany Claims........................................................21
5.11 Class 11 - Interests (other than Feld Interest).......................................21
5.12 Class 12 - Feld's Interests...........................................................22
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ARTICLE 6
PROVISIONS OF EQUITY SECURITIES TO BE ISSUEDPURSUANT TO THE PLAN........................................22
<S> <C> <C>
6.1 New Common Stock......................................................................22
6.2 Warrants..............................................................................23
6.3 Equity Investment/Excess Commitment/Standby Purchase Agreement........................23
6.4 Rights Offering.......................................................................24
6.5 Standby Purchase Agreement............................................................26
6.6 Management Plan.......................................................................26
6.7 Directors and Officers................................................................26
ARTICLE 7
IMPLEMENTATION AND FUNDING OF THE PLAN..................................................................27
7.1 Equity Investment/Excess Commitment/Standby Purchase Agreement........................27
7.2 Rights Offering.......................................................................28
7.3 Substantive Consolidation.............................................................28
7.4 Exit Financing........................................................................28
7.5 DIP Facility..........................................................................28
7.6 Vesting of Property...................................................................28
7.7 Distributions under the Plan..........................................................28
7.8 Binding Effect of Plan on Disputed Claims.............................................31
7.9 Procedures for Resolving Disputed Claims..............................................31
7.10 Surrender and Cancellation of Notes, Instruments or Certificates Evidencing Claims
and Interests.........................................................................32
7.11 Compliance with Tax Requirements......................................................33
7.12 Certain Security Law Matters..........................................................34
7.13 Corporate Action......................................................................37
7.14 Further Acts..........................................................................38
7.15 Transfer Taxes........................................................................38
7.16 Capital Structure.....................................................................38
ARTICLE 8
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF INTERESTS.................................................39
8.1 Failure of a Class to Accept the Plan.................................................39
ARTICLE 9
CONDITIONS PRECEDENT....................................................................................39
9.1 Conditions to Confirmation............................................................39
9.2 Conditions to Effective Date..........................................................39
9.3 Effect of Failure of Effective Date...................................................40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE 10
EXECUTORY CONTRACTS.....................................................................................40
10.1 Assumption of Executory Contracts.....................................................40
10.2 Approval of Assumption or Rejection of Executory Contracts and Unexpired Leases.......41
10.3 Cure of Defaults......................................................................41
10.4 Deadline for Filing Rejection Damage Claims...........................................41
10.5 Objections............................................................................42
10.6 Rejection of Stock Option Plans.......................................................42
ARTICLE 11
EFFECT OF CONFIRMATION..................................................................................42
11.1 Discharge of All Claims and Interests and Releases....................................42
11.2 Indemnification Obligations...........................................................43
11.3 Injunction............................................................................43
11.4 Retention and Enforcement of Causes of Actions........................................44
11.5 Release of Subordination Rights.......................................................44
11.6 Bank Group Litigation.................................................................44
ARTICLE 12
RETENTION OF JURISDICTION...............................................................................44
12.1 Scope of Jurisdiction.................................................................44
ARTICLE 13
MODIFICATIONS OF THE PLAN...............................................................................45
13.1 Prior to Confirmation Date............................................................45
13.2 Prior to the Effective Date...........................................................45
13.3 After the Effective Date..............................................................45
ARTICLE 14
GENERAL PROVISIONS......................................................................................45
14.1 Headings..............................................................................45
14.2 Severability..........................................................................45
14.3 Governing Law.........................................................................45
14.4 Creditors' Committee..................................................................46
</TABLE>
<PAGE>
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE
- ------------------------------
:
In re: : Chapter 11
:
FELD & FELD : Case No. 96-117 (HSB)
BENMOL, INC. : Case No. 96-118 (HSB)
D&L INC. : Case No. 96-119 (HSB)
F&S INTERNATIONAL, INC. : Case No. 96-120 (HSB)
TODAY'S MAN, INC. : Case No. 96-121 (HSB)
TODAY's MAN OUTLET, INC. : Case No. 96-122 (HSB)
: Jointly Administered
Debtors :
- ------------------------------:
DEBTORS' SECOND AMENDED JOINT PLAN OF REORGANIZATION
MODIFIED AS OF DECEMBER 12, 1997
1. PREAMBLE
Feld & Feld, a Delaware corporation, Benmol, Inc., a Delaware
corporation, D&L, Inc., a Delaware corporation, F&S International, Inc., a New
Jersey corporation, Today's Man, Inc., a Pennsylvania corporation and Today's
Man Outlet, Inc., a Florida corporation, debtors and debtors-in-possession in
the above jointly administered case (collectively, "Debtors") hereby propose the
following "Second Amended Joint Plan of Reorganization" (the "Plan").
ARTICLE 1
A. Definitions. As used in this Plan the following terms shall
have the respective meanings assigned to them below, unless the context
otherwise requires:
1
<PAGE>
1.1 "Administrative Expense" means any right or entitlement to payment
that arises from a cost or expense of administration of the Estate allowed under
ss. 503(b) of the Bankruptcy Code that is entitled to priority under ss.
507(a)(1) of the Bankruptcy Code including, without limitation, fees payable
pursuant to 28 U.S.C. ss. 1930 and Professional Fees.
1.2 "Allowed Claim or Allowed Interest" means a Claim or Interest, as
the case may be, that (a) has been Scheduled by any Debtor as liquidated,
undisputed, and not contingent, and as to which no objection to the allowance
thereof has been interposed prior to the Effective Date; (b) has been timely
Filed and as to which no objection to the allowance thereof has been interposed
prior to the Effective Date; (c) has been Allowed either by settlement (as
permitted by the terms of the Plan) or by a Final Order (but only to the extent
Allowed); (d) is specified herein to be an Allowed Claim or Allowed Interest; or
(e) represents a portion of a liquidated Claim as reflected on the Debtors'
books and records. The term "Allowed" when used to modify a reference in the
Plan to any claim or class of claims shall mean a claim (or any claim in any
such class) that is so Allowed unless otherwise specified in the Plan, the
Confirmation Order or in the Final Order of the Bankruptcy Court allowing such
Claim. "Allowed Claim or Allowed ... Claim" shall not include interest on the
amount of such Claim from and after the Filing Date except as may be otherwise
determined by the Court with respect to Class 4 creditors electing Option II.
1.3 "Amended Articles" means the Amended and Restated Articles of
Incorporation of the Reorganized Entity as of the Effective Date substantially
in the form as set forth as an Exhibit to the Disclosure Statement.
1.4 "Amended By-laws" means the Amended and Restated By-laws of the
Reorganized Entity as of the Effective Date substantially in the form as set
forth as an Exhibit to the Disclosure Statement.
1.5 "Articles of Incorporation" means the amended certificate of
incorporation of Today's Man in effect immediately prior to the Effective Date.
2
<PAGE>
1.6 "Ballot" means the form to be distributed together with the
Disclosure Statement to (a) holders of Claims and Interests whose votes with
respect to this Plan are to be solicited for the purpose of indicating
acceptance or rejection of this Plan and (b) for the election of (a) the option
to purchase Basic Subscription Stock and Oversubscription Stock and (b) which
shall otherwise comply with the requirements of Bankruptcy Rule 3018.
1.7 "Bankruptcy Code" means Title 11 of the United States Code, 11
U.S.C. ss.ss. 101 et seq., as in effect on the Filing Date.
1.8 "Bankruptcy Court" means the United States Bankruptcy Court for the
District of Delaware, or such other court as may exercise jurisdiction over the
Case.
1.9 "Bankruptcy Rules" means collectively the Federal Rules of
Bankruptcy Procedure and the local rules of the Bankruptcy Court, as amended
from time to time, applicable to the Case.
1.10 "Bank Escrow" means the escrow account to be established for
holders of Classes 4A, 4B and/or 4C Claims who elect Option II.
1.11 "Bank Group" means NationsBank, N.A., the Bank of New York, N.A.,
and Fleet National Bank (formerly Shawmut Bank, N.A.).
1.12 "Bank Group Claim" means the Claim of the Bank Group in the amount
of $21.9 million.
1.13 "Bar Date" In the case of Claims, other than Administrative
Expenses, September 3, 1996.
1.14 "Barclay's Bank" means Barclay's Bank PLC.
1.15 "Barclay's Subordinated Claim" means the Claim of Barclay's Bank
PLC in the amount of $1,873,765 as of the Filing Date.
1.16 "Basic Subscription Rights" means the non-transferable right of a
Record Holder of Today's Man Common Stock (excluding David Feld) to purchase .75
shares of New Common Stock for each share of Common Stock held by such Record
Holder at $2.00 per share in accordance with the provisions set forth herein.
3
<PAGE>
1.17 "Basic Subscription Stock" means the 3,907,690 shares of New
Common Stock that are subject to the Basic Subscription Rights.
1.18 "Business Day" means any day, except Saturday, Sunday or any other
day in which commercial banks in New York, New York, are authorized by law to
close.
1.19 "By-Laws" means the amended by-laws of Today's Man in effect
immediately prior to the Effective Date.
1.20 "Case" means collectively the bankruptcy cases commenced by the
filing of the Debtors' voluntary petitions for relief under Chapter 11 of the
Bankruptcy Code on the Filing Date, bearing case numbers 96-117, 96-118, 96-119,
96-120, 96-121, 96-122 jointly administrated as case nos. 96-117 through 96-122.
1.21 "Cash" means legal tender of the United States for the payment of
public and private debts, including without limitation, cash, cash equivalents,
bank deposits, checks and other similar items.
1.22 "Cash Distribution Pool" means approximately $53 million, less the
Cash necessary to fund distributions on account of payment of Administration
Expenses, Priority Claims, Priority Tax Claims, Reclamation Claims, Secured
Claims, Convenience Claims and Class 4A, 4B and 4C Claims (or to fund the Bank
Escrow for Class 4A, 4B and/or 4C Claims), which amount may vary as described in
Section 7.7 herein.
1.23 "Causes of Action" means all actions, claims, choses in action and
causes of action, whether arising under the Code or other federal or state law,
including without limitation, any causes of action arising under Sections 544,
547, 548, 550, 551 or other sections of the Bankruptcy Code.
1.24 "Claim(s)" means a claim against any Debtor, whether or not
asserted, as defined in ss. 101(5) of the Bankruptcy Code arising at any time
before the Effective Date or relating to any event that occurred before the
Effective Date.
1.25 "Claimant" means the holder of a Claim.
4
<PAGE>
1.26 "Class" means a category, designated herein, of holders of Claims
or Interests.
1.27 "Collateral" means assets of Today's Man that are/were subject to
a lien.
1.28 "Company" means Today's Man, Inc.
1.29 "Confirmation" means the entry by the Bankruptcy Court of the
Confirmation Order.
1.30 "Confirmation Date" means the date on which the Confirmation Order
is entered by the clerk of the Bankruptcy Court on the docket.
1.31 "Confirmation Hearing" means the hearing held by the Bankruptcy
Court on confirmation of this Plan as it may be adjourned or continued from time
to time.
1.32 "Contingent Claim" means a Claim which is either contingent or
unliquidated on or immediately before the Effective Date.
1.33 "Confirmation Order" means the order of the Bankruptcy Court
entered in the Case confirming the Plan pursuant to ss. 1129 of the Bankruptcy
Code.
1.34 "Convenience Claims" means and includes any Claim which would
otherwise be a General Unsecured Claim that (i) is Allowed in an amount of
$1,000 or less and (ii) is Allowed in the amount greater than $1,000 but which
is reduced to $1,000 by the election of the holder thereof pursuant to the
holder's Ballot.
1.35 "Creditors' Committee" means the Official Committee of Unsecured
Creditors appointed in the Case pursuant to Section 1102(a) of the Bankruptcy
Code.
1.36 "Cure" means the distribution of Cash, or such other property as
may be agreed upon by the Debtor and the recipient thereto or ordered by the
Bankruptcy Court, as and to the extent required for the assumption of an
Executory Contract pursuant to the provisions of Section 365 of the Bankruptcy
Code.
5
<PAGE>
1.37 "Debtor" means each of the Debtors described in the preamble of
this Plan in their capacity as a debtor-in-possession under Sections 1107(a) and
1108 of the Bankruptcy Code.
1.38 "DIP Facility" means the $20 million DIP Revolving Credit Facility
with CIT Group/Business Credit, Inc. obtained post-petition.
1.39 "Director Stock Option Plan" means the Stock Option Plan for the
Company's directors adopted in 1992.
1.40 "Disclosure Statement" means the Disclosure Statement as amended,
modified, or supplemented (including all Exhibits and Schedules thereto or
referenced therein), describing this Plan prepared in accordance with Section
1125 of the Bankruptcy Code and approved by order of the Bankruptcy Court and
which has been distributed to holders of Claims and Interests whose votes with
respect to this Plan are being solicited.
1.41 "Disputed Claim or Disputed Interest" means a Claim or Interest,
or any portion of a Claim or Interest which is not an Allowed Claim or Allowed
Interest and the allowance or disallowance of which is not the subject of a
Final Order. Until such time as a Contingent Claim or unliquidated Claim becomes
fixed and absolute, such Claim shall be treated as a Disputed Claim and not as
an Allowed Claim, for purposes related to allocations and distribution under the
Plan.
1.42 "Distribution" means a distribution of Cash, Rights, New Common
Stock, Warrants or property to holders of Allowed Claims and Allowed Interests
pursuant to the terms of this Plan.
1.43 "Effective Date" means the later to occur of (a) the 11th day
after the Confirmation Date if no stay of the Confirmation Order is in effect or
(b) the Business Day on which all of the conditions set forth in Article 9 shall
have been satisfied or waived.
1.44 "Eligible Holder" means a holder of Old Common Stock as of the
close of business on the Record Date other than David Feld.
6
<PAGE>
1.45 "Eligible Rights Holder" means an Eligible Holder who has
exercised, in accordance with the terms of this Plan, all Basic Subscription
Rights issued to such holder by the Reorganized Today's Man pursuant to the
Plan.
1.46 "Employee Stock Option Plan" means the Company's Stock Option Plan
for employees adopted in 1992 pursuant to which certain Stock Options vested.
1.47 "Entity" means "entity" as such term is defined in 11 U.S.C. ss.
101(15).
1.48 "Equity Investment" means the commitment by the Equity Investment
Group to purchase an aggregate of 4,238,064 shares of New Common Stock at a
price of $2.00 per share.
1.49 "Equity Investment Group" means the group of investors, including
Mr. David Feld, who will purchase New Common Stock on substantially the same
terms as offered under the Rights Offering.
1.50 "Equity Pool" means the shares of New Common Stock for
distribution to Classes 6, 7 and 8 in accordance with Exhibit D-15 to the
Disclosure Statement (the number of which shares can vary depending on the
Option elected by Class 4 Creditors and the ultimate cash available in the Cash
Distribution Pool); provided however, that for every share of New Common Stock
substituted from the Equity Pool, cash will be added to the Cash Distribution
Pool in accordance with Section 7.7 herein.
1.51 "Escrow Agent" means First Union Bank, N.A, Trust Department or
such other trust company or other organization independent of Today's Man, Inc.
selected by Today's Man, Inc. who will receive the Rights Proceeds.
1.52 "Estate" means each of the estates created in the Case pursuant
to Section 541 of the Bankruptcy Code.
7
<PAGE>
1.53 "Excess Commitment" means the commitment of the Equity Investment
Group to purchase up to approximately $2,148,872 of New Common Stock, subject to
reduction (but not by more than $2,148,872) in the event and to the extent that
(a) the credit provided to David Feld under the Plan on account of the Allowed
Feld subordinated claim is less than $5,000,000 (the "Difference") and (b) he is
unable to obtain financing to fund the Difference.
1.54 "Executory Contract" means any contract (including, without
limitation, any unexpired lease to which the Debtor is a party) and which is
executory within the meaning of ss. 365 of the Bankruptcy Code.
1.55 "Exit Financing Facility" means the working capital credit
facility, term facility, and other financing necessary to fund the Plan on the
Effective Date in the approximate amount of $42.5 million and to be obtained by
the Reorganized Today's Man to meet its ordinary working capital requirements.
1.56 "Feld Interests" means the Interests owned by David Feld.
1.57 "Feld Subordinated Claim" means the Claim of David Feld in the
amount of $5,099,965 pursuant to a certain Replacement Subordinated Demand Note
executed by Today's Man in favor of David Feld.
1.58 "Filed" means filed with the clerk of the Bankruptcy Court.
1.59 "Filing Date" means February 2, 1996, the date a voluntary
Chapter 11 petition was Filed by each of the Debtors.
1.60 "Financial Projections" or "Projections" means the Company's
financial forecasts attached as an exhibit to the Disclosure Statement.
1.61 "Final Order" means an Order of the Bankruptcy Court (i) that has
not been reversed, modified, amended or stayed, and as to which the time to
appeal, petition for certiorari or seek review or rehearing has expired and as
to which no appeal, petition for certiorari, review or rehearing is pending or
(ii) as to which any right to appeal, petition for certiorari, review or
rehearing has been waived, or (iii) if any appeal, petition for certiorari,
review or rehearing thereof has been denied, the time to take any further
appeal, to petition for certiorari or further review or rehearing has expired.
<PAGE>
1.62 "General Unsecured Claim" means a Claim other than an
Administrative Expense, Priority Tax Claim, Priority Claim, Secured Claim,
Barclay's Subordinated Claim, Feld Subordinated Claim, Convenience Claim,
Insured Claim, Reclamation Claim, Bank Group Claim or Interests.
1.63 "Governmental Unit" means a "governmental unit" as such term is
defined in Bankruptcy Code Section 101(27).
1.64 "Impaired" means Impaired within the meaning of Section 1124 of
the Bankruptcy Code.
1.65 "Indemnity Agreement" means that certain Indemnity Agreement to be
executed by the Reorganized Entity in favor of a Option I Class 4 holder who
votes in favor of the Plan, substantially in the form as attached as Exhibit
D-14.
1.66 "Insured Claim" means any Claim arising from an incident or
occurrence that is, or may be covered by the Debtor's insurance policies,
including but not limited to, the Claims asserted by Gervacio Maldonado, Pedro
Maldonado, Manuel H. Maldonado, Nahir Zoe Maldonado, Melba Martinez, Yadirah
Haddock, Frances DeMezza, Marc Aaron, Marcellus Blair, Donald Griffin, Trudy
Holmes, Lee Johnson, Berty Kreisler, Christine Petillo, Taylor Bogart Jean and
Brian Bogart (guardian).
1.67 "Intercompany Claims" means any Claim against a Debtor by any
other Debtor.
1.68 "Interests" or "Equity Interests" means any "equity security" of
the Debtors defined in Section 101 of the Bankruptcy Code including without
limitation the Old Common Stock, excluding any Stock Options of the Debtors.
<PAGE>
1.69 "Interest Pool" means $2.875 million of value, which is the
combined value of the Cash and New Common Stock which is included as part of the
Equity Pool and the Cash Distribution Pool, and which represents approximately
50% of the estimated post-petition interest allocable to Classes 6,7 and 8 on
Allowed Claims. The allocation of the Interest Pool to creditors in Classes 6,
7, and 8 shall be based upon the ratio of such creditor's Allowed Claim to the
aggregate amount of Allowed Claims in Classes 6, 7 and 8 and the interest rate
applicable. Post-petition interest for Unsecured Creditors in Class 6,
calculated based upon approximately 50% of 6% per year of their Allowed Claims,
will be $2,115,362 in cash and constitutes 73.58% of the value of the whole
Interest Pool. The post-petition interest on the Barclay's Subordinated Claim is
calculated based upon approximately 50% of 16% per year of the Allowed Claim, at
the default rate under the applicable loan documents, which is $300,134 in cash
and constitutes 10.44% of the value of the whole Interest Pool. The
post-petition interest of the Feld Subordinated Claim is calculated based upon
approximately 50% of 9% per year of the Allowed Claim, which is $459,504 of New
Common Stock and constitutes 15.98% of the value of the whole Interest Pool. The
allocated share of the Interest Pool to Classes 7 and 8 is fixed as described
above and the allocated share to Class 6 may vary depending upon resolution of
Disputed Claims and the amount of Claims in such Class; provided however, to the
extent that Allowed Claims in Class 6 exceed the Debtors' estimate of
$35,217,078, a floor shall be added to the Interest Pool for Allowed Claims in
Class 6 to insure that Class 6 Unsecured Creditors will receive from the
Interest Pool cash in the amount of at least 6% of their Allowed Claims.
Notwithstanding the foregoing, the Debtors will only be obligated to contribute
a maximum of an additional $287,000, after application of unclaimed Cash
Distributions as described in Section 7.7 herein, to help make the Distribution
to Class 6 Unsecured Creditors from the Interest Pool reach 6% of their Allowed
Claims.
1.70 "Issuance Date" means the date on which the Reorganized Today's
Man distributes the Warrants under the Plan.
1.71 "Lien" shall have the meaning set forth inss.101(37) of the
Bankruptcy Code.
1.72 "Management Plan" means the Reorganized Today's Man Stock Option
Plan that is being implemented pursuant to this Plan.
1.73 "New Common Stock" means the common stock, no par value, of
Reorganized Today's Man to be issued by Reorganized Today's Man on or after the
Effective Date.
<PAGE>
1.74 "Old Common Stock" means the duly authorized and validly issued
shares of common stock of Today's Man, no par value, which are outstanding
immediately prior to the Effective Date.
1.75 "Order Approving Disclosure Statement" means the Order of the
Bankruptcy Court in which the Bankruptcy Court, among other things, (i) approves
the solicitation materials and the procedures for distributing such materials,
(ii) approves the form and manner of notice of the Confirmation Hearing, (iii)
establishes the Voting Deadline, (iv) Subscription Rights Expiration Date, (v)
approves the forms of Ballots, (vi) establishes the deadline for submitting
Ballots on the Plan, (vii) approves the procedure for tabulation of the votes,
and (viii) schedules the Confirmation Hearing.
1.76 "Oversubscription Rights" means the non-transferable rights of
Eligible Rights Holders under this Plan to purchase, subject to Proration,
Oversubscription Stock.
1.77 "Oversubscription Stock" means those shares of New Common Stock
that are subject to the Basic Subscription Rights but are not purchased through
the exercise of such Basic Subscription Rights.
1.78 "Plan" means this proposed Plan of Reorganization, as the same may
be amended from time to time, together with all addenda, exhibits, schedules and
other attachments hereto, all of which are incorporated herein by reference.
1.79 "Priority Claim(s)" means any Claim which is an unsecured claim
entitled to priority under ss. 507(a) of the Bankruptcy Code other than (i) an
Administrative Claim and (ii) a Priority Tax Claim.
1.80 "Priority Tax Claim" means an unsecured Claim of a Governmental
Unit for the payment of Taxes entitled to priority under ss. 507(a)(8) of the
Bankruptcy Code.
1.81 "Professional Fees" means a Claim of a Professional Person for
compensation or reimbursement of costs and expenses relating to services
incurred after the Filing Date and prior to and including the Confirmation Date.
<PAGE>
1.82 "Professional Person" means a person retained or to be compensated
pursuant to Bankruptcy Code Sections 326, 327, 328, 330, 503(b)(2) and (4), 1103
or 1107(b).
1.83 "Pro Rata" means (a) with respect to a distribution from the Cash
Distribution Pool for Classes 6, 7 or 8, the proportion that the dollar amount
of an Allowed Claim in Classes 6, 7 or 8 (numerator) bears to the aggregate
dollar amount estimated by the Debtors for all Allowed Claims in Classes 6, 7
and 8 (denominator); and (b) with respect to a distribution from the available
New Common Stock or Cash for Options II or III in Class 6, the proportion that
the dollar amount of an Allowed Claim (or the undisputed portion of a liquidated
Disputed Claim) in Class 6 electing Option II or III (numerator) bears to the
amount of cash or stock available for distribution based on the election of all
holders of Allowed Claims (or the undisputed portion of a liquidated Disputed
Claim) electing Option II or III (denominator).
1.84 "Proration" means the method set forth in this Plan for
apportioning the Oversubscription Stock among Eligible Rights Holders in the
event that there are insufficient shares of New Common Stock to satisfy all
exercised Oversubscription Rights.
1.85 "Purchasing Stockholders" means Eligible Holders that have
exercised Rights to purchase New Common Stock.
1.86 "Reclamation Claim" means any unpaid Claim arising out of a vendor
sale and delivery of goods to Today's Man, Inc. prior to the Filing Date and in
the ordinary course of such vendor's business, as to which goods the vendors
demanded in writing reclamation within 10 days after receipt of such goods by
Today's Man, Inc., and, at the time reclamation was demanded, Today's Man, Inc.
had such goods in its possession, with respect to which the vendor would have
been entitled to relief under Section 546(c) of the Bankruptcy Code if Today's
Man, Inc. had been insolvent at time of delivery of such goods; provided
however, that the treatment of Allowed Reclamation Claims in the Plan shall not
be deemed an admission of the insolvency of Today's Man, Inc. or evidence
thereof. Any reclamation claim that is not as of the Confirmation Date, an
Allowed Claim pursuant to a stipulation with the Debtor or not the subject of
pending adversary proceeding shall be treated in the Class of General Unsecured
Claims.
<PAGE>
1.87 "Record Date" or "Voting Record Date" means the close of business
on the day on which the Bankruptcy Court's Order approving the Disclosure
Statement is entered on the docket.
1.88 "Rejection Claim" means any Claim arising under ss.502(g) of the
Bankruptcy Code.
1.89 "Reorganized Entity" means each of the Debtors from and after the
Effective Date.
1.90 "Reorganized Today's Man" means Today's Man or any successor
thereto by merger, consolidation or otherwise on or after the Effective Date.
1.91 "Rights" means the right to purchase shares of New Common Stock to
be issued under this Plan and includes the Basic Subscription Rights and the
Oversubscription Rights.
1.92 "Standard Distribution" means and refers to Option I of the
options afforded Class 6 creditors, as described herein.
1.93 "Rights Offering" means the offering pursuant to this Plan of the
Rights.
1.94 "Rights Proceeds" means the Cash generated from the Rights
Offering.
1.95 "Schedules" means the Schedules Filed by each of the Debtors
pursuant to Bankruptcy Rule 1007(b), as the same may be amended from time to
time prior to the Effective Date.
1.96 "Scheduled" means and refers to information set forth in the
Schedules.
1.97 "SEC" means the United States Securities and Exchange Commission.
<PAGE>
1.98 "Secured Claim" means a Claim, including interest, fees and other
charges as determined pursuant to Bankruptcy Code Section 506(b) that is secured
by a Lien on property in which the Estate has an interest, or that is subject to
setoff under Bankruptcy Code Section 553, to the extent of the value of the
Claimant's interest in the Estate's interest in such property, or to the extent
of the amount subject to setoff, as applicable, as determined pursuant to
Bankruptcy Code Sections 506(a) and if applicable, Section 1129(b).
1.99 "Securities Act" means the Securities Act of 1933, 15 U.S.C. ss.
77(a) et seq., as amended and the rules and regulations promulgated thereunder.
1.100 "Standby Purchase Agreement" means the Agreement pursuant to
which the Standby Purchaser agrees to purchase the New Common Stock not
purchased in the Rights Offering after the fulfillment of subscription for New
Common Stock pursuant to the Excess Commitment and the exercise of
Oversubscription Rights.
1.101 "Standby Purchaser" means the Entity which has executed the
Standby Commitment in the form as substantially attached as an Exhibit to the
Disclosure Statement.
1.102 "Stock Option Plan for Non-Employee Directors" means the
Company's 1995 Stock Option Plan for the Non-Employee Directors pursuant to
which certain Stock Options vested.
1.103 "Stock Payment Escrow Account" means the escrow account to be
established in accordance with the Plan to receive payment for the Basic
Subscription Rights and Oversubscription Rights which will be held by the Escrow
Agent.
1.104 "Stock Options" means collectively the vested stock options of
the Company pursuant to the Employee Stock Option Plan, the Stock Option Plan
for Non-Employee Directors and the Director Stock Option Plan.
1.105 "Subscription Rights Expiration Date" means the same date as the
Voting Deadline.
1.106 "Taxes" means all taxes, charges, fees, levies or other
assessments by any federal, state, local or foreign taxing authority, including,
without limitation, income, excise, property, sales, transfer, use and
occupancy, business privilege, net profits, occupation and withholding taxes,
excluding any interest, penalties or additions attributable to or imposed on or
with respect to such taxes, charges, fees, levies or other assessments.
<PAGE>
1.107 "Ultimately Allowed Claim" means any Disputed Claim to the extent
that it becomes an Allowed Claim in accordance with the Plan.
1.108 "Unsecured Creditors" means the holders of General Unsecured
Claims.
1.109 "Voting Deadline" means the deadline for filing Ballots, as fixed
by the Bankruptcy Court in the Order Approving Disclosure Statement or as
otherwise ordered or extended by the Bankruptcy Court.
1.110 "Warrant" means a warrant issued by the Reorganized Today's Man
to purchase one share of New Common Stock at $2.70 per share exercisable within
two years after the Issuance Date.
B. Rules for Interpreting Undefined Terms. All terms used in this Plan
and not defined herein but that are defined in the Bankruptcy Code shall have
the respective meanings assigned to such terms in the Bankruptcy Code. All terms
used in this Plan and not defined herein or in the Bankruptcy Code but that are
defined in the Bankruptcy Rules or the local rules of the Bankruptcy Court shall
have the respective meanings assigned to such terms in the rules.
C. Rules of Construction. The words "herein," "hereof" and "hereunder"
and other words of similar import refer to the Plan as a whole and not to any
particular section, subsection or clause contained in the Plan unless the
context requires otherwise. Whenever from the context it appears appropriate,
each term stated in either the singular or the plural includes the singular and
the plural, and pronouns stated in the masculine, feminine or neuter gender
include the masculine, feminine and the neuter.
ARTICLE 2
PROVISIONS FOR THE TREATMENT OF ADMINISTRATIVE CLAIMS
AND TAX PRIORITY CLAIMS
The Claims against the Debtor covered in Article 2 are not designated
as Classes pursuant to Section 1123(a)(1) of the Bankruptcy Code. The holders of
such Claims are not entitled to vote on the Plan.
<PAGE>
2.1 Administrative Expense. Unless otherwise provided in the Plan and
unless any holder thereof agrees or has agreed to a different or less favorable
treatment, each holder of an Allowed Administrative Expense that has not been
satisfied during the pendency of the Chapter 11 case will receive, on account of
and in full satisfaction of such Allowed Administrative Expense, Cash equal to
the Allowed Amount of such Expense as soon as practicable following the latest
of (i) the Effective Date, (ii) if Disputed (or in the case of an Administrative
Expense for Professional Fees not yet allowed) upon entry of a Final Order
allowing such Administrative Expense and (iii) the date on which the
distribution to the holder of the Allowed Administrative Expense would have been
due and payable in the ordinary course of the business or under the terms of any
agreement giving rise to the Allowed Administrative Expense. All requests for
payment of Administrative Expense must be Filed by the earliest of the date set
forth in the Confirmation Order or within 60 days after the Effective Date or
the holders thereof shall be forever barred from asserting such Administrative
Expense against the Debtor. All final applications for allowance and
disbursement of Professional Fees must be filed within 60 days after the
Effective Date.
2.2 Priority Tax CLaims. Each holder of an Allowed Priority Tax Claim
shall receive Cash equal to the Allowed Amount of such Claim as soon as
practicable following the latest of (a) the Effective Date; (b) the date such
Priority Tax Claim becomes an Allowed Claim; or (c) the date agreed upon by the
Debtor and the holder of the Allowed Priority Tax Claim.
ARTICLE 3
CLASSIFICATION OF CLAIMS AND INTERESTS/ELIGIBILITY TO VOTE
For the purpose of voting on this Plan and receiving Distributions
thereunder, pursuant to Section 1122 of the Bankruptcy Code, Claims and
Interests are divided into the Classes set forth below. All Claims or Interests
except for Administrative Expenses and Tax Priority Claims of the kinds
specified in Sections 507(a)(1) and 507(a)(8) of the Bankruptcy Code, the
treatment of which is set forth in Article 2 hereof, are placed in the Classes
described below.
Class 1 Claims. Priority Claims.
<PAGE>
Class 2 Claims. Reclamation Claims.
Class 3 Claims. Secured Claims (other than the Bank Group).
Class 4 Claims. The Bank Group Claims.
Class 4A. Class 4A consists of the portion
of the Bank Group Claim held by
NationsBank and/or its assignee.
Class 4B. Class 4B consists of the portion
of the Bank Group Claim held by
Shawmut Bank (now Fleet National
Bank) and/or its assignee.
Class 4C. Class 4C consists of the portion
of the Bank Group Claim held by Bank
of New York and/or its assignee.
Class 5 Claims. Convenience Claims.
Class 6 Claims. General Unsecured Claims.
Class 7 Claims. Barclay's Subordinated Claim.
Class 8 Claims. Feld Subordinated Claim.
Class 9 Claims. Insured Claims.
Class 10 Claims. Intercompany Claims.
Class 11 Interests. Interests (other than Feld Interests).
Class 12 Interests. Feld Interests.
<PAGE>
ARTICLE 4
IDENTIFICATION OF CLASSES OF CLAIMS AND INTERESTS
IMPAIRED AND UNIMPAIRED BY THIS PLAN
4.1 Designation of Unimpaired Classes. Classes 1, 2 and 9 are
unimpaired, within the meaning of ss. 1124 of the Bankruptcy Code. In accordance
with ss. 1126(f) of the Bankruptcy Code, holders of Claims in these unimpaired
Classes are conclusively presumed to have accepted the Plan, and solicitation of
acceptances of the Plan from such Class members is not required.
4.2 Designation of Impaired Claims and Interests. Claims in Classes 3,
4A, 4B, 4C, 5, 6, 7, 8, and 10 are impaired. Interests in Classes 11 and 12 are
impaired.
4.3 Voting Classes. Classes 3, 4A, 4B, 4C, 5, 6, 7, 8, 10, 11 and 12
are entitled to vote to accept or reject this Plan.
ARTICLE 5
TREATMENT OF CLAIMS AND INTERESTS
5.1 Class 1 Claims - Priority Claims. Each holder of an Allowed
Priority Claim shall be paid the full amount of its Allowed Priority Claim in
Cash as soon as practicable following the latest of (a) the Effective Date; (b)
the date such Priority Claim becomes an Allowed Claim; and (c) such other date
as may be agreed upon by the Debtor and the holder of the Allowed Priority
Claim.
5.2 Class 2 Claims - Reclamation Claims. Each holder of an Allowed
Reclamation Claim shall be paid the full amount of its Allowed Reclamation Claim
in Cash as soon as practicable following the latest of (a) the Effective Date;
(b) the date such Reclamation Claim becomes an Allowed Claim; and (c) such other
date as may be agreed upon by the Debtor and the holder of the Allowed
Reclamation Claim.
<PAGE>
5.3 Class 3 Claims - Secured Claims. Each holder of an Allowed Secured
Claim shall retain their liens on and security interests in the Collateral
securing such Claims, and except to the extent that a holder of an Allowed
Secured Claim agrees to a different treatment, each Allowed Secured Claim shall
be reinstated and paid in accordance with terms of such agreements,
notwithstanding any contractual provision or applicable non-bankruptcy law that
entitles the holder of an Allowed Secured Claim to demand or receive payment of
such Allowed Secured Claim prior to the date of maturity from and after the
occurrence of a default. To the extent of any defaults under the contract and/or
with respect to any leases for which the underlying Collateral was returned
during the Chapter 11 case, each holder of such Claim (the "Deficiency Claim")
shall receive Cash in the full amount of such Allowed Claim as soon as
practicable following the latest of (a) the Effective Date; (b) the date such
Deficiency Claim becomes an Allowed Claim; and (c) such other date as may be
agreed upon by the Debtor and the holder of the Allowed Deficiency Claim. All
rights to legal fees, costs, and interest are hereby waived by the holder(s) of
the Class 3 Claims by accepting the treatment hereunder.
5.4 Class 4 Claims - Bank Group. Class 4 consists of the Bank Group
Claim and is divided into three (3) classes (Classes 4A, 4B, and 4C), one for
each member of the Bank Group or holder of that member's Claim. Classes 4A, 4B
and 4C are treated identically in the Plan. Class 4A consists of the portion of
the Bank Group Claim held by NationsBank and/or its assignee. Class 4B consists
of the portion of the Bank Group Claim held by Shawmut Bank (now Fleet Financial
Corp.) and/or its assigned. Class 4C consists of the portion of the Bank Group
Claim held by Bank of New York and/or its assignee. Each of the holders of the
Bank Group Claim may elect to be treated under either Option I or Option II
below. Under either option described below, the Debtors expressly reserve all
claims and causes of action against (a)the Bank Group, and (b)the holders of the
Bank Group Claim who vote against the Plan or who elect Option II, and such
claims and causes of action will not be affected in any way by the limited
waiver of defenses and setoffs and limited release set forth in Option I below.
<PAGE>
Option I. The Debtors waive defenses and setoffs to the face amount of
the Bank Group Claim only with respect to each holder of such claim who votes in
favor of the Plan and elects Option I, and not in favor of any other party,
including but not limited to the Bank Group. The Debtors also will not commence
any affirmative claims against any holder of the Bank Group Claim who votes in
favor of the Plan and elects Option I and will release any such holder from any
claims arising as a result of that holder's conduct after the assignment to it
of its part of the Bank Group Claim. This limited release is void to the extent
that it is determined to impair the Debtors' claims against any other party.
Each holder of the Bank Group Claim who votes in favor of the Plan and elects
Option I will receive as soon as practicable following the Effective Date (i)
Cash in the amount of $7,300,000 from the Cash Distribution Pool, (ii) 633,333
shares of New Common Stock, and (iii) the Indemnity Agreement, in full and
complete settlement of all its claims, including principal, interest, costs,
fees and expenses.
If the holders of Classes 4A, 4B and 4C vote in favor of the Plan and
elect Option I, upon written notice to the Debtors prior to the Confirmation
Hearing, and as consensually agreed upon by Classes 4A, 4B, and 4C, the cash and
stock distribution to Class 4 creditors will be allocated among such creditors
as directed in such notice and consent.
Option II. Any holder of a Bank Group Claim who votes against the Plan
or who elects Option II shall be deemed to continue to be a Disputed Claim and
shall receive the Allowed amount of that holder's share of the Bank Group Claim
as soon as practicable following the latest of (a) the Effective Date; (b) the
date such holder's share of the Bank Group Claim becomes an Allowed Claim; and
(c) such other date as may be agreed upon by the Debtors and such holder. The
Company shall deposit in escrow Cash from the Cash Distribution Pool in the
amount of $8,766,666 (the "Bank Escrow") for each holder who elects Option II or
otherwise votes against the Plan. Payment of such Allowed Claim will be paid
from the Bank Escrow and the Bank Group's pre-petition liens will attach to such
proceeds to the extent of the holder's secured claim, until avoided or otherwise
ordered by the Bankruptcy Court.
The Debtors will assert all affirmative claims, defenses and setoffs to
the Bank Group Claim with respect to the share of such claim of any holder who
votes against the Plan or elects Option II. In the event the Debtors are
unsuccessful in asserting such claims, defenses and setoffs, payment of the
Allowed Claim of the Bank Group Claim when it becomes an Ultimately Allowed
Claim will be paid from the Bank Escrow and to the extent insufficient, if
determined by a Final Order or by settlement of the parties, any additional
amounts will be made to such holder of the Bank Group Claim from the Cash
Distribution Pool or New Common Stock to be issued by the Reorganized Today's
Man valued at the then market value.
<PAGE>
5.5 Class 5 - Convenience Claims. Each Allowed Convenience Claim shall
receive Cash in an amount equal to 100% of such Allowed Convenience Claim as
soon as practicable following the latest of (a) the Effective Date; (b) the date
such Convenience Claim becomes an Allowed Claim; and (c) such other date as may
be agreed upon by the Debtor and the holder of the Allowed Convenience Claim.
5.6 Class 6 - General Unsecured Claims. Subject to the terms of Section
7.7 herein, each Allowed General Unsecured Claim shall receive the full amount
of its Allowed Claim plus its allocable share of the Interest Pool. The amount
and form of the unsecured creditor's actual distribution will depend upon
available cash in the Cash Distribution Pool and upon which of the three Options
the unsecured creditor elects and the extent to which the Options elected by
other unsecured creditors permit its full implementation. If no Option is
elected, the creditor will be deemed to have elected to receive its distribution
under Option I, the "Standard Distribution".
The three Options are:
Option I ("Standard Distribution")
Each Allowed General Unsecured Claim electing Option I shall receive
its Pro Rata share of the Cash Pool; the balance of its distribution will be
distributed from the Equity Pool in the form of New Common Stock valued at
approximately $2.38 to $2.48 per share for purposes of distributions (depending
on the options elected by Class 4 creditors and the amount of cash ultimately
available in the Cash Distribution Pool).
Option II ("Maximum Stock", to the extent available)
<PAGE>
Each Allowed General Unsecured Claim electing Option II shall receive
its share of the Equity Pool based on New Common Stock and in lieu of the cash
portion of the Standard Distribution, additional New Common Stock valued at
approximately $2.38 to $2.48 per share for purposes of distributions (depending
on the options elected by Class 4 creditors and the amount of cash ultimately
available in the Cash Distribution Pool), to the extent additional New Common
Stock is available, based on elections by other creditors holding Allowed Claims
(or as to the undisputed liquidated portion of liquidated Disputed Claims as
described in Section 7.7) in Class 6 to forego the stock distribution on their
Allowed General Unsecured Claims (or as to the undisputed liquidated portion of
liquidated Disputed Claims as described in Section 7.7) at $2.00 per additional
share and make available New Common Stock for distribution under this Option. To
the extent sufficient additional New Common Stock is not available, the
remaining portion of the creditors' Allowed General Unsecured Claim will be paid
in cash.
Option III ("Maximum Cash", to the extent available)
Each creditor holding an Allowed General Unsecured Claim electing
Option III shall receive its Pro Rata share of the Cash Distribution Pool; its
share of the Equity Pool valued at approximately $2.38 to $2.48 per share for
purposes of distributions (depending on the options elected by Class 4 creditors
and the amount of cash ultimately available in the Cash Distribution Pool), will
then be substituted at the rate at $2.00 per share for New Common Stock
distributable to that Option III creditor. The extent to which Option III will
be available will depend on the extent to which other creditors holding Allowed
Claims (or as to the undisputed liquidated portion of liquidated Disputed Claims
as described in Section 7.7) elect Option II, thereby freeing enough cash to
fund Option III. If sufficient cash is not available, the remainder of the
Option III creditors' distribution will be made in the form of New Common Stock
from the Equity Pool. Creditors electing to receive all cash under Option III
should be aware that, based on Salomon's valuation of the New Common Stock as
well as the agreed upon compromise value upon which distributions are being made
hereunder, they will receive less estimated value than they would recover under
Option I, and the creditors electing Option II will receive more estimated
value.
Creditors electing Option II or III must elect to replace all their
cash for New Common Stock under Option II or to replace all their New Common
Stock for cash under Option III, subject to allocation as described above.
<PAGE>
Notwithstanding the foregoing, Options II and III above are only
available and will be implemented only to the extent that such Options are not
subject to any SEC registration requirements. All distributions under the three
Options will be made as soon as practicable following the latest of the
(a)Effective Date; (b) the date such general unsecured claim becomes an Allowed
Claim; or (c) such other date as may be agreed to by the Debtor and the holder
of such Allowed Claim; provided however that the Debtors shall distribute the
undisputed liquidated portion of liquidated Disputed Claims in accordance with
Section 7.7 herein.
5.7 Class 7 - Barclay's Subordinated Claim. Subject to the terms of
Section 7.7 herein, the holder of the Allowed Barclay's Subordinated Claim shall
receive the full amount of the Allowed Barclay's Subordinated Claim plus its
allocable share of the Interest Pool calculated at the default rate, in the form
of the Standard Distribution provided a Class 6 Creditor, as soon as practicable
following the latest of (a) the Effective Date; (b) the date the Barclay's
Subordinated Claim becomes an Allowed Claim or (c) such other date as may be
agreed upon by the Debtor and the Holder of such Allowed Claim.
5.8 Class 8 - Feld Subordinated Claim. Subject to the terms of Section
7.7 herein, as soon as practicable following the Effective Date, the holder of
the Allowed Feld Subordinated Claim shall receive the full amount of the Allowed
Feld Subordinated Claim plus the holder's allocable share of the Interest Pool
calculated at the contract rate in the form of the Standard Distribution
provided a Class 6 creditor, provided however, that the cash portion of such
distribution shall be in the form of a credit, which credit can only be used by
the holder of the Allowed Feld Subordinated Claim toward the purchase of New
Common Stock as part of the Equity Investment. At such time as the Debtor
commences payments of cash distributions to Class 6 creditors, the credit shall
be issued to the holder of Class 8 Claim towards the Equity Investment.
5.9 Class 9 - Insured Claims. Each holder of an Allowed Insured Claim
shall have recourse solely to the proceeds of the Debtor's insurance policies,
if any, and shall receive no Distributions hereunder.
5.10 Class 10 - Intercompany Claims. On the Effective Date, all
Intercompany Claims shall survive Confirmation and remain in full force and
effect and enforceable in accordance with the terms
<PAGE>
of the underlying notes, but shall receive no Distribution of any kind under the
Plan and such claims shall be treated under Section 7.3 herein.
5.11 - Interests (other than Feld Interest).. Each Eligible Holder
shall receive the following distributions under the Plan:
(a) New Common Stock. Each Eligible Holder shall each receive
one share of New Common Stock in exchange for each share of Old Common Stock
held on the Record Date.
(b) Warrants. Each Eligible Holder shall receive .5 Warrants
for each share of Old Common Stock held by them on the Record Date. Each full
Warrant entitles the holder to purchase one share of New Common Stock at $2.70
per share exercisable within two years after the Issuance Date.
(c) Rights to Purchase Basic Subscription Stock and
Oversubscription Stock. Eligible Holders of Old Common Stock will also have the
right to elect to participate in the Rights Offering described in Article 6 of
the Plan.
Class 12 - Feld's Interests. The holder of the Allowed Feld Interest
shall receive one share of New Common Stock and .5 of a Warrant in exchange for
each share of Old Common Stock. The holder of the Allowed Feld Interest, is not
receiving Basic Subscription Rights. Instead, such holder, together with the
other members of the Equity Investment Group, pursuant to agreements to be
entered into with Today's Man, have committed to make the Equity Investment.
ARTICLE 6
PROVISIONS OF EQUITY SECURITIES TO BE ISSUED
PURSUANT TO THE PLAN
6.1 New Common Stock. The principal provisions of the New Common Stock
are as follows:
(a) Authorization: 100,000,000 shares;
(b) Par Value: none;
<PAGE>
(c) Voting: One (1) vote per share with no cumulative voting
rights;
(d) Subject to preference that may be applicable to any then
outstanding Preferred Stock, the holders of Common Stock are entitled, among
other things: (i) to share ratably in dividends if, when and as declared by the
Board of Directors out of funds legally available therefor; and (ii) in the
event of liquidation, dissolution or winding-up of the Reorganized Today's Man,
to share ratably in the distribution of assets legally available therefor, after
payment of debts and expenses.
(e) The holders of New Common Stock will not have any
preemptive rights to subscribe for additional shares of capital stock of the
Reorganized Today's Man.
(f) All shares of New Common Stock issued in exchange for
shares of Old Common Stock pursuant to the Plan will be fully paid and
nonassessable. All shares of New Common Stock issuable upon the exercise of
Rights and Warrants, when issued upon the proper exercise of the Rights and
Warrants and the payment of the purchase price or exercise price therefor, will
be fully paid and nonassessable. The rights, preferences and privileges of
holders of Common Stock are subject to the terms of any series of Preferred
Stock which the Reorganized Today's Man may issue in the future.
6.2 Warrants. The principal terms of the Warrants shall be as follows:
(a) Authorization and Issuance: 5,430,503 Warrants (which
amount may be increased by an amount not to exceed 6,000 Warrants to accommodate
the rounding up of fractional Warrants under the Plan), each of which shall be
exercisable for one share of New Common Stock, subject to adjustment, at any
time prior to expiration.
(b) Exercise Price: $2.70 per share, subject to adjustment.
(c) Expiration: 5:00 p.m. local time, on the second
anniversary of the Issuance Date.
(d) Redemption: The Warrants are not redeemable.
<PAGE>
(e) Voting Rights: None.
(f) Adjustment: The number of shares of New Common Stock
issuable upon exercise of the Warrants and the exercise price of the Warrants
are subject to adjustment in the event of: (i) a change in the Common Stock as a
result of a stock dividend or stock split or a subdivision, combination or
reclassification of shares; or (ii) certain mergers, consolidation or business
combinations involving the Reorganized Today's Man.
6.3 Equity Investment/Excess Commitment/Standby Purchase Agreement. The
members of the Equity Investment Group have committed to make the Equity
Investment and the Excess Commitment.
In the event that the Eligible Holders do not subscribe for all of the
3,907,690 shares of New Common Stock being offered pursuant to the Basic
Subscription Rights, then the remaining shares of New Common Stock shall be
allocated among the Equity Investment Group in accordance with their Excess
Commitment, and the Eligible Rights Holders who have exercised their
Oversubscription Rights as described in Section 6.4.
The commitments are irrevocable, except in the event that the Effective
Date of the Plan has not occurred on or before January 31, 1998, and are subject
to the satisfaction of certain conditions, including that the Plan as confirmed
has not been materially revised from the Plan as filed with the Bankruptcy Court
on September 26, 1997, as modified, that the Confirmation Order shall have been
entered and no stay of the Confirmation Order shall be in effect, that the
Debtors shall have received the proceeds of the Exit Financing Facility and that
the Equity Investment Group shall have received a legal opinion from Blank Rome
Comisky & McCauley as to certain matters.
<PAGE>
The Debtor, in its sole discretion, has the right to accept or reject
investment commitments in other than the order in which they are received, to
reject any investment commitment in whole or in part and to allot to the members
of the Equity Investment Group less than the full number of shares of New Common
Stock under subscription. The Debtor will undertake to register under the
Securities Act, as soon as practicable after the Effective Date, all of the New
Common Stock and Warrants held by the Equity Investment Group (including shares
of New Common Stock and Warrants received by such members in exchange for their
shares of Old Common Stock and including shares issuable upon exercise of the
Warrants) and to maintain such registration in effect for a period of up to two
(2) years.
6.4 Rights Offering
(a) Basic Subscription Rights. Eligible Holders collectively
have the right to elect to purchase 3,907,690 shares of New Common Stock at a
purchase price of $2.00 per share. Each Eligible Holder will receive the right
to purchase .75 shares of New Common Stock for each share of Old Common Stock
held by such Eligible Holder (the "Basic Subscription Right"). The Basic
Subscription Rights and the Oversubscription Rights discussed below are in
addition to the distributions such holders will otherwise receive pursuant to
Class 11 described in this Plan.
(b) Oversubscription Rights. In the event that the Eligible
Holders do not subscribe for all of the 3,907,690 shares of New Common Stock
being offered pursuant to the Basic Subscription Rights, then Eligible Rights
Holders, will have the right to exercise certain oversubscription rights (the
"Oversubscription Rights") which will entitle them to subscribe for a portion of
the Basic Subscription Stock not subscribed for by the Eligible Holders (the
"Oversubscription Rights") at a purchase price of $2.00 per share (the
"Oversubscription Right") subject to the sale of a portion of the
Oversubscription Stock to the Equity Investment Group pursuant to their Excess
Commitment.
If the aggregate number shares of New Common Stock subscribed for by
the Equity Investment Group pursuant to the Excess Commitment and the Eligible
Rights Holder pursuant to the exercise of Oversubscription Rights is greater
than the number of shares of New Common Stock available, then the
Oversubscription Stock will be allocated among the Equity Investment Group and
each Eligible Rights Holder in proportion to the number shares of Old Common
Stock held by the Equity Investment Group (which for this purpose shall be
deemed to be 5,650,752) and each Eligible Rights Holder bears to the total
number of shares of Old Common Stock held by the Equity Investment Group and all
Eligible Rights Holders exercising Oversubscription Rights.
<PAGE>
(c) Exercise of Rights and Payment of Purchase Price.
THE EXERCISE OF BASIC SUBSCRIPTION RIGHTS AND OVERSUBSCRIPTION RIGHTS IS
OPTIONAL AND NOT MANDATORY. PRIOR TO EXERCISING ANY SUCH RIGHTS, ELIGIBLE
HOLDERS ARE ADVISED TO CONSULT WITH THEIR FINANCIAL AND LEGAL ADVISORS.
The election to exercise the Basic Subscription Rights and
Oversubscription Rights to purchase New Common Stock must be made on or before
the Voting Deadline. The election must be made by marking the appropriate boxes
on the Ballot, and, once made, is irrevocable. In order to make the election to
purchase Basic Subscription Stock and Oversubscription Stock, an Eligible Holder
must indicate on the box provided on the Ballot the total amount of New Common
Stock which such holder wishes to purchase, including both Basic Subscription
Stock and Oversubscription Stock, to the extent available. Any number of shares
of New Common Stock, up to the full amount of 3,907,690 shares of New Common
Stock, can be elected, subject to payment therefor and subject to allocation
with respect to Oversubscription Stock in accordance with the terms of the Plan.
Payment for such shares of New Common Stock must be made by the Voting Deadline
and payable to the Escrow Agent and delivered to Logan & Company, Inc.
Parties who hold shares of Old Common Stock for the account of others,
such as brokers, trustees, or depositories may only exercise the Rights
enumerated herein upon receipt of instructions and appropriate payment or
guarantee thereof from the beneficial holders of such shares as of the Voting
Record Date.
The Rights Proceeds will be placed in the Stock Payment Escrow Account
and will be refunded without interest to the Eligible Holder in the event the
Plan is not confirmed. Any interest earned on such funds will become the
property of Today's Man.
<PAGE>
To calculate the amount of Basic Subscription Rights and
Oversubscription Rights, multiply the total number of shares of New Common Stock
such Eligible Holder elects to purchase, as noted on the Ballot in the boxes
provided, by $2.00. Full payment must be made on or prior to the Voting
Deadline. Payment by check must be included with the Ballot - do not send cash.
In the event that an election is not timely or properly made, such
holder will be deemed to have not made such election, and will receive only the
distribution(s) that such holder would have received had such election not been
made.
Within forty (40) days following the Voting Deadline, a notice of the
allocation of Basic Subscription Stock and Oversubscription Stock shall be
delivered to each Purchasing Stockholder at the address as set forth on the
Ballot. No Basic Subscription Stock or Oversubscription Stock will be
distributed to holders who have not made payment prior to the Voting Deadline.
After the Effective Date, and timely receipt of payment, the Reorganized Entity
will distribute each Purchasing Stockholder's allocation of such New Common
Stock. Payments in excess of the New Common Stock actually available for
purchase will be refunded without interest.
6.5 Standby Purchase Aggreement. Pursuant to the Standby Purchase
Agreement, any shares of New Common Stock not purchased in the Rights Offering
after the fulfillment of subscription for New Common Stock pursuant to the
Excess Commitment and the exercise of Oversubscription Rights will be purchased
by the Standby Purchaser pursuant to the Standby Purchase Agreement.
6.6 Management Plan. On the Effective Date, the Management Plan shall
become effective. By voting to accept the Plan, all holders of Claims or
Interests in Classes 4A, 4B, 4C, 6, 7, 8, 11 and 12 (who immediately following
the Effective Date shall comprise the shareholders of the Reorganized Today's
Man) shall be deemed to have ratified and approved the Management Plan.
6.7 Directors and Officers. On the Effective Date, the Directors of the
Reorganized Entity will be classified into the following Classes to serve until
the Annual Meeting of Shareholders in the year set forth opposite their names
and until his or her successor shall have been elected and shall qualify, even
though his or her term of office as herein provided has otherwise expired,
except in the event of his or her earlier resignation, removal or
disqualification:
<PAGE>
Name Term Expires
----------------------------- ---------------------
Class I
Leonard Wasserman 1998
Class II
Larry Feld 1999
Verna K. Gibson 1999
Class III
Ira Brind 2000
Bernard J. Korman 2000
Class IV
David Feld 2001
New Director 2001
The Committee shall select a member (the "New Director") to serve on
the Reorganized Entity's Board of Directors on the Effective Date until the
Reorganized Entity's Annual Meeting of Shareholders to be held in the year 2001.
The Committee's selection of such director shall be subject to approval of the
Company, which approval shall not unreasonably be withheld. Such director shall
be appointed to the Audit Committee.
On the Effective Date, the Officers of the Reorganized Entity in office
immediately prior to the Effective Date shall continue in office.
ARTICLE 7
IMPLEMENTATION AND FUNDING OF THE PLAN
<PAGE>
7.1 Equity Investment/Excess Commitement/Standby Purchase Agreement. On
or before the Effective Date and conditioned upon the Bankruptcy Court entering
the Confirmation Order, the investment and sale of shares of New Common Stock
contemplated by the Equity Investment, Excess Commitment and Standby Purchase
Agreement, if necessary, shall be consummated in accordance with the terms
hereof.
7.2 Rights Offering. On the Effective Date and as provided in the
Confirmation Order, the Escrow Agent shall deliver to the Reorganized Entity the
Rights Proceeds and the proceeds from Equity Investment in the Stock Payment
Escrow Account.
7.3 Substantive Consolidation. The Debtors will, to the extent deemed
appropriate, continue to maintain their separate corporate existence for all
purposes other than the treatment of Claims and Interests under the Plan. For
purposes of voting on the Plan and Distributions under the Plan, (i) all assets
and liabilities of the Debtors shall be treated as though they were merged into
and with the assets and liabilities of Today's Man, Inc., (ii) all guarantees of
any Debtor of the obligations of any other Debtor shall be deemed eliminated so
that any Claim against any Debtor and any guaranty thereof executed by any other
Debtor and any joint or several liability of any of the Debtors shall be deemed
to be one obligation of the consolidated Reorganized Entity, and (iii) each and
every Claim Filed or to be Filed in the Chapter 11 Case of any of the Debtors
shall be deemed Filed against the consolidated Debtors and shall be deemed one
Claim against or obligation of the consolidated Debtors.
7.4 Exit Financing. On or before the Effective Date, the Debtor shall
have received the proceeds of the Exit Financing Facility.
7.5 DIP Facility. On the Effective Date, the DIP Facility shall be paid
in full and/or replaced by the Exit Financing Facility.
7.6 Vesting of Property. In accordance with Sections 1123(a)(5) and
1141 of the Bankruptcy Code, except as otherwise specifically provided in the
Plan, on the Effective Date, title to all property of the Debtors' Estates shall
revest with the Reorganized Entity free and clear of all Liens, Claims and
Interests. Except as otherwise specifically provided in the Plan, the Debtors
shall be discharged as provided in Section 1141 of the Bankruptcy Code.
<PAGE>
7.7 Distributions under the Plan. On the Effective Date, the
Reorganized Entity shall fund the Cash Distribution Pool and deposit such funds
into an interest bearing trust account. The interest earned on such account
shall be the property of the Reorganized Entity. The Debtor will not make
Distributions to Class 4 creditors electing Option I without also funding the
Cash Distribution Pool.
Except as otherwise provided in the Plan, as soon as practicable
following the Effective Date, the Debtors shall distribute Cash, New Common
Stock and Warrants in accordance with the terms of the Plan. Each certificate
for shares of Old Common Stock outstanding immediately prior to the Effective
Date will on and after the Effective Date be deemed to represent the number of
shares of New Common Stock into which such shares have been reclassified on the
Effective Date pursuant to the Plan. Accordingly, the Company will not issue new
stock certificates to holders of Old Common Stock because their existing
certificates will represent shares of New Common Stock on and after the
Effective Date. The Company will issue New Common Stock certificates to the
purchaser of New Common Stock pursuant to the Equity Investment and the Rights
Offering. Distributions of New Common Stock to holders of Allowed Claims and
Allowed Interests shall occur simultaneously, except as provided above and in
Section 7.10(b) herein.
The Debtors reserve the right to increase the Cash Distribution Pool
and decrease the Equity Pool for unsecured creditors so as to provide a greater
part of the Class 6, 7 and 8 distribution in Cash. This will be accomplished by
a substitution of New Common Stock from the Equity Pool with cash in the Cash
Distribution Pool at the share price set forth in the chart attached as Exhibit
D-15 to the Disclosure Statement. Prior to the Confirmation Hearing, the Debtors
will advise the Committee of the amount of cash from operations that will be
placed in the Cash Distribution Pool. In addition, the Debtors will not increase
the Cash Distribution Pool by more than $1.7 million, provided that the
aggregate amount of Allowed Claims and Allowed Expenses do not exceed $68.5
million. To the extent resolution of Disputed Claims results in Allowed Claims
and Allowed Expenses in excess of $68.5 million, the Debtors shall have the
right to increase the Cash Distribution Pool and/or the Equity Pool to fund such
increased amounts.
<PAGE>
For purposes of calculating the cash available for distribution from
the Cash Distribution Pool for unsecured creditors, the Debtors will reserve
amounts reasonably necessary to cover anticipated unpaid professional fees and
unpaid Administrative Expenses, not yet Allowed. The Debtors will advise the
Committee of the amount for which they are reserving prior to the Confirmation
Hearing. The Debtors will distribute the undisputed liquidated portion of
liquidated Disputed Claims to Classes 6, 7 and 8, which amounts, for such
purposes, shall be determined by the Debtors in accordance with the Debtors'
books and records. Notwithstanding the foregoing, the Debtors shall not make any
distributions on any unliquidated Claims, including but not limited to any
Rejection Claims, until such Claims become Ultimately Allowed Claims.
If the Effective Date has occurred but the Debtors fail to make
Distributions (including, without limitation, the initial distribution from the
Interest Pool) to the holders of Allowed Claims in Classes 6 and 7 on or before
January 31, 1998, then interest will accrue from February 1, 1998 on the Allowed
Claims in Class 6 at 8% per annum and for Class 7 at the default rate in the
loan documents and as to Class 8 at the greater of 8% or the contract rate in
the Class 8 loan documents. For such purposes, Distributions shall be deemed
made on the date checks and stock certificates are deposited into the first
class mail, postage pre-paid.
<PAGE>
Unless all Disputed Claims shall have become Ultimately Allowed Claims,
the Debtors shall make an initial distribution and a subsequent distribution of
the creditors' allocable share of the Interest Pool. Since the Interest Pool is
a fixed value for all Allowed General Unsecured Claims in Class 6, 7 and 8, the
Debtors will make an initial distribution to Classes 6 of the allocable share of
the Interest Pool (and a single distribution of a fixed allocation to Classes 7
and 8) and then a subsequent distribution to Class 6 creditors after all
Disputed Claims are ultimately resolved and allowed, to the extent that there is
any additional value available to be distributed to Class 6 creditors as their
allocable share of the Interest Pool. The cash portion of the unclaimed
Distributions to Class 6 Creditors and the value of the stock portion of
unclaimed Distributions to Class 6 creditors shall not revert to the Reorganized
Entity and shall be available, and deposited into the Interest Pool and
distributed on a pro rata basis to Class 6 Creditors who have claimed their
Distributions (within 15 days of the first anniversary of the Effective Date) to
increase Class 6 Creditor recoveries. To the extent that the Allowed Claims of
Class 6 Creditors are less than $35.2 million, thirty percent (30%) of the first
$1 million of savings shall not revert to the Reorganized Entity and shall be
deposited into the Interest Pool and distributed to Class 6 Creditors on a pro
rata basis to increase recoveries up to a maximum of 112% of Allowed Claims. The
Debtors shall deposit such savings into the Interest Pool in either cash or New
Common Stock valued at $2.38 per share, in the Debtor's sole discretion. To the
extent there remains undistributed cash in the Cash Distribution Pool and/or New
Common Stock after all Allowed Claims (including Ultimately Allowed Claims) and
Allowed Expenses are paid in accordance with the Plan, such excess funds and/or
stock shall be returned to the Reorganized Entity.
7.8 Binding Effect of Plan on Disputed Claims. Except as otherwise
provided in the Plan, recipients of Distributions in respect of Allowed Claims
or Disputed Claims that become Ultimately Allowed Claims shall be bound,
obligated and governed in all respects by the Plan.
7.9 Procedures for Resolving Disputed Claims.
(a) Objections to Claims.
Unless an Order of the Bankruptcy Court provides otherwise,
only the Reorganized Entity shall have the authority to file objections to
Claims after the Confirmation Date. The Reorganized Entity may object to a Claim
by filing an objection with the Bankruptcy Court and serving such objection upon
the holder of such Claim until the Effective Date or within such other period as
may be ordered by the Bankruptcy Court, provided that the Debtor can move the
Bankruptcy Court at any time to extend the deadline without notice or a hearing.
(b) Procedure.
<PAGE>
Unless otherwise ordered by the Bankruptcy Court or agreed to
by written stipulation of the Debtors or the Reorganized Entity or until an
objection thereto by the Debtors or the Reorganized Entity is withdrawn, the
Debtors or the Reorganized Entity shall litigate the merits of each Disputed
Claim until determined by a Final Order provided, however, that (a) prior to the
Effective Date, the Debtors upon Bankruptcy Court approval and (b) after the
Effective Date, the Reorganized Entity, without Bankruptcy Court approval, may
compromise and settle any objection to any Disputed Claim.
(c) Payments and Distributions With
Respect to Disputed Claims.
No payments or distributions shall be made in respect of a
Disputed Claim until such Disputed Claim becomes an Ultimately Allowed Claim,
provided that the undisputed portion of liquidated Disputed Claims shall be paid
and distributed as provided in Section 7.7 herein.
(d) Timing of Payments and Distributions
With Respect to Disputed Claims.
Except as otherwise provided in the Plan, payments and
Distributions with respect to each Disputed Claim or Disputed Interest that
becomes an Ultimately Allowed Claim or Allowed Interest shall be commenced by
the Reorganized Entity on or as soon as practicable after the Effective Date,
but in no event later than either (i) 45 days after the Effective Date or (ii)
30 days after the date a Disputed Claim becomes an Ultimately Allowed Claim,
whichever is later. Holders of Disputed Claims that become Ultimately Allowed
Claims shall be bound, obligated and governed in all respects by the Plan.
(e) No Fractional Shares, Warrants or Rights.
No fractional shares of New Common Stock, Warrants or Rights
to purchase fractional shares shall be issued pursuant to the Plan. Fractional
shares, Warrants or Rights shall be aggregated with respect to each entitled
recipient and then rounded to the next greater or lower number as follows: (a)
fractions of .5 or greater shall be rounded to the next greater whole number,
and (b) fractions of less than .5 shall be rounded to the next lesser whole
number. All calculations shall be made on the basis of the beneficial ownership
of all Allowed Claims and Interests.
<PAGE>
7.10 Surrender and Cancellation of Notes, Instruments or Certificates
evidencing Claims and Interest. Except as otherwise provided herein, on the
Effective Date, any note, instrument or certificate erests evidencing a Claim or
an Interest outstanding immediately prior to the Effective Date shall be
canceled.
(a) Surrender of Notes or Instruments Evidencing Claims.
In order for the holder of canceled notes or instruments
evidencing an Allowed Claim or an Allowed Interest to receive a distribution
under the Plan, each such holder must surrender such canceled note or instrument
to the Debtors within six (6) months of the Effective Date whereupon the Debtors
shall distribute the appropriate consideration therefor in accordance with the
terms of the Plan. No Distribution under the Plan shall be made to or on behalf
of any holder of an Allowed Claim evidenced by a canceled note or instrument
unless and until such canceled note or instrument is received by the Debtors. If
any canceled note or instrument has been lost or destroyed, the holder must
deliver to the Debtors an affidavit of loss or destruction, as well as an
agreement to indemnify the Debtors in form and substance reasonably satisfactory
to the Debtors in respect of such canceled security under the Plan. Any holder
of an Allowed Claim that fails to surrender a canceled note or instrument or
deliver an affidavit and indemnity agreement shall be deemed to have no further
Claim and shall not participate in any Distributions under the Plan.
<PAGE>
(b) Certificates Evidencing an Interest. At the close of
business on the Effective Date, each issued and outstanding share of Old Common
Stock held of record will automatically, without any further action by the
record holder thereof or by Reorganized Today's Man, be deemed canceled and
exchanged for one validly issued, fully paid and nonassessable share of New
Common Stock (and each share of Old Common Stock held as a treasury share will
automatically, without any further action by Reorganized Today's Man, be deemed
canceled and exchanged for one such treasury share of New Common Stock). Each
certificate for shares of Old Common Stock outstanding immediately prior to the
Effective Date will on and after the Effective Date be deemed to represent the
number of shares of New Common Stock into which such shares have been
reclassified on the Effective Date pursuant to the Plan. Accordingly, holders of
certificates of Old Common Stock need not surrender such certificates because
such certificates will represent shares of New Common Stock on and after the
Effective Date. If any certificates representing shares of Old Common Stock have
been lost or destroyed, the holder must deliver to the transfer agent an
affidavit of loss or destruction, as well as an agreement to indemnify the
Reorganized Today's Man and transfer agent, in form and substance reasonably
satisfactory to the Reorganized Today's Man and the transfer agent, and/or, if
requested, in the Reorganized Today's Man's reasonable judgment, a surety bond,
the amount and form of which shall be satisfactory to the Reorganized Today's
Man and the transfer agent, from a surety company satisfactory to the
Reorganized Today's Man and the transfer agent.
7.11 Compliance with Tax Requirements. In connection with each
distribution with respect to which the filing of an information return (such as
an Internal Revenue Service Form 1099 or 1042) and/or withholding is required,
the Debtor shall file such information return with the Internal Revenue Service
or other taxing authority and provide any required statements in connection
therewith to the recipients of such distributions, and/or effect any such
withholding of cash or property. With respect to any Entity from which a tax
identification number, certified tax identification number or other tax
information required by law to avoid withholding has not been received by the
Debtors, the Debtors shall withhold the amount required by law to be withheld
and distribute the balance to such Entity.
7.12 Certain Security Law Matters.
(a) Generally.
<PAGE>
The Confirmation Order will authorize the issuance of the New
Common Stock (including New Common Stock to be issued to the Creditors, and
Equity Investment Group and issuable on exercise of the Rights and Warrants) and
the Rights and Warrants (collectively, the "New Securities") issued under the
Plan. The New Securities distributed to holders of Claims and Interests will be
issued without registration under the Securities Act, or under any state or
local law, in reliance on the exemptions set forth in Section 1145 of the
Bankruptcy Code. The New Common Stock to be sold to the Equity Investment Group
pursuant to the Equity Investment, and the Standby Purchaser, pursuant to the
Standby Purchase Agreement, will be sold without registration under the
Securities Act in reliance on the exemption under Section 4(2) of the Securities
Act.
Section 1145 of the Bankruptcy Code exempts from federal and
state securities laws the offer or sale under a plan of reorganization of a
security of a debtor in exchange for a claim against or an interest in the
debtor or principally in such exchange and partly for cash or property. Today's
Man believes that the initial issuance of New Securities to the holders of
Claims and Interests (and the issuance of New Common Stock upon the exercise of
Rights or Warrants) will satisfy the requirements of Section 1145 of the
Bankruptcy Code.
(b) Resale Considerations.
The resale or disposition by the recipients of the New
Securities (other than by the members of the Equity Investment Group) will be
exempt from registration under the Securities Act if the recipients are not
deemed to be "underwriters" under Section 1145(b) of the Bankruptcy Code.
Section 1145(b) of the Bankruptcy Code defines four types of underwriters: (a) a
person who purchases a Claim against, interest in, or Claim for administrative
expense in the case concerning, a debtor with a view to distributing any
security received in exchange for that Claim or Interest; (b) a person who
offers to sell securities offered or sold under a plan for the holders of those
securities; (c) a person who offers to buy securities offered or sold under a
plan from the holders of those securities if the offer is (i) made with a view
to distribution of the securities, and (ii) made under an agreement made in
connection with the plan, with the consummation of the plan or the offer or sale
of securities under the plan; and (d) a person who is an "issuer" with respect
to the securities as the term "issuer" is defined in Section 2(11) of the
Securities Act.
<PAGE>
Under Section 2(11) of the Securities Act, an "issuer" will
include any person directly or indirectly controlling or controlled by Today's
Man, or any person under direct or indirect common control with Today's Man (an
"Affiliate"). Whether a person is an Affiliate, and therefore an "underwriter"
with respect to Today's Man for purposes of Section 1145(b) of the Bankruptcy
Code will depend on a number of factors. These factors include: (a) the person's
equity interest in Today's Man; (b) the distribution and concentration of other
equity interests in Today's Man; (c) whether the person is an officer or
director of Today's Man; (d) whether the person, either alone or acting in
concert with others, has a contractual or other relationship giving that person
power over management policies and decisions of Today's Man; and (e) whether the
person actually has that power notwithstanding the absence of formal indicia of
control. An officer or director of Today's Man or the holder of 10% or more of
the outstanding stock of Today's Man may be deemed an Affiliate.
To the extent that a person deemed to be an "underwriter"
receives New Securities, resales by that person would not be exempted by Section
1145 of the Bankruptcy Code from registration under the Securities Act except in
"ordinary trading transactions" (within the meaning of Section 1145(b)(1) of the
Bankruptcy Code).
The Bankruptcy Code does not define the term "ordinary trading
transactions," and the SEC has not given definitive guidance with respect to the
proper construction of the term. In a no-action letter, the staff of the SEC
has, however, concurred in the view that a transaction will be an "ordinary
trading transaction" if it is carried out on an exchange or in the
over-the-counter market at a time when the issuer of the traded securities is a
reporting company under the Securities Exchange Act of 1934 (the "Exchange Act")
and does not involve any of the following factors:
(a) either (i) concerted action by two or more recipients of
securities issued under a plan of reorganization in connection with the sale of
those securities, or (ii) concerted action by distributors on behalf of one or
more such recipients in connection with sales; or
<PAGE>
(b) the preparation or use of informational documents
concerning the offering of plan securities to assist in the resale of the plan
securities, other than the disclosure statement approved in connection with the
plan (and any supplement thereto) and documents filed with the SEC by the debtor
or the reorganized company pursuant to the Exchange Act; or
(c) special compensation to brokers or dealers in connection
with the sale of the securities designed as a special incentive to resell the
securities, other than compensation that would be paid pursuant to arms-length
negotiations between a seller and a broker or dealer, each acting unilaterally,
that is not greater than the compensation that would be paid for a routine
similar-sized sale of similar securities of a similar issuer.
In addition, a person deemed to be an "underwriter" solely
because he is an Affiliate may be able to sell securities without registration,
in accordance with Rule 144 under the Securities Act, which permits public sales
of securities received pursuant to a plan by statutory underwriters subject to
volume limitations and certain other conditions. Based on the views of the SEC
expressed in no-action letters, a person deemed to be an underwriter solely
because he is an Affiliate may be able to sell securities without registration
in accordance with Rule 144, without complying with the holding period
requirement of Rule 144(d).
Because of the complex, subjective nature of the question whether a
particular holder may be an underwriter, Today's Man makes no representation
concerning the ability of any person to dispose of the New Securities. Today's
Man has not sought a "no-action" letter from the SEC or any state securities
commission with respect to any matter discussed herein. Today's Man recommends
that recipients of New Securities under the Plan consult with their own counsel
concerning the limitations on their ability to dispose of the New Securities
under federal and state securities laws.
(c) Registration of Equity Investment
Group Limitation on Resale.
<PAGE>
The Company will undertake to register for resale under the Securities
Act, as soon as practicable after the Effective Date, all of the New Common
Stock and Warrants (including shares of New Common Stock received by such member
in exchange for their shares of Old Common Stock, including shares of New Common
Stock issuable upon exercise of the Warrants) held by the Equity Investment
Group and the Standby Purchaser, if any, and to maintain such registration in
effect for a period of up to two (2) years.
Each member of the Equity Investment Group and the Standby
Purchaser have severally agreed that, notwithstanding the effectiveness of such
registration statement, during the two-year period beginning on the Effective
Date, without the prior written consent of the Company, they will not directly
or indirectly sell assign, transfer or dispose of shares of New Common Stock or
Warrants beneficially owned by them in excess of the volume limitations of Rule
144(e)(1) promulgated under the Securities Act. In general, under Rule 144 as
currently in effect, a person (or persons whose shares are aggregated) would be
entitled to sell within any three-month period a number of shares that does not
exceed the greater of: (i) one percent of the number of shares of Common Stock
then outstanding or (ii) the average weekly trading volume of the New Common
Stock in the over-the-counter market during the four calendar weeks immediately
preceding the proposed sale.
(d) Exchange Act Registration.
It is currently contemplated that the New Common Stock and the Warrants
will be registered pursuant to Section 12(g) of the Exchange Act by the
Effective Date. Today's Man will file with the SEC, among other things, Annual
Reports on Form 10-K, Quarterly Reports on Form 10-Q and other information.
(e) Nasdaq Listing.
The Plan provides that Today's Man will use its reasonable
efforts to have the New Common Stock and Warrants listed on the NASDAQ National
Market prior to the distribution thereof.
(f) Transfer Agent and Registrar.
The transfer agent and registrar for the New Common Stock and
the Warrants will be StockTrans, Inc., Ardmore, Pennsylvania.
<PAGE>
7.13 Corporate Action. On the Effective Date, the cancellation of the
Old Common Stock, the issuance of New Common Stock and Warrants, the
continuation in office of officers and directors and, in the case of directors,
for the terms provided herein, the adoption of Amended Articles and Amended
By-laws, the adoption of the Management Plan and the other matters provided in
the Plan involving the corporate structure of the Reorganized Entity shall be
deemed to have occurred and shall be in effect from and after the Effective Date
pursuant to Section 1902 of the Pennsylvania Business Corporate Law of 1988, as
amended, without any requirement or further action by the shareholders or
directors of the Reorganized Today's Man. As to each Reorganized Entity (other
than the Reorganizing Today's Man) such action will be automatic under the
corporate law under which such entity was incorporated.
The Amended Articles and the Amended Bylaws shall be effective on the
Effective Date and shall provide among other things as follows: (a) the number
of shares of New Common Stock authorized for issuance is 100,000,000 shares, (b)
the number of shares of Preferred Stock authorized for issuance is 5,000,000
shares, (c) that the Company will not issue nonvoting capital stock to the
extent prohibited by Section 1123(a)(6) of the Bankruptcy Code, (d) the
shareholder vote required to approve amendments to the Amended Articles and
Amended Bylaws that have not been approved by a majority of the incumbent
directors (as defined therein) or to remove directors for cause shall be at
least 65% of the votes cast by shareholders and (e) the provision prohibiting
shareholders from calling a special meeting of shareholders has been amended to
entitle the shareholders entitled to cast at least 60% of the votes entitled to
be cast by all shareholders to call a special meeting of shareholders.
7.14 Further Acts. To the fullest extent permitted by ss. 1142 of the
Bankruptcy Code, Debtor shall have the right to apply to the Bankruptcy Court
for an order excusing compliance with any otherwise applicable non-bankruptcy
law or directing any Person to execute and deliver any instrument or perform any
other act; provided, however, that without the consent of the affected Person or
Persons, no such order shall modify or impair any right, title, privilege or
remedy expressly provided or reserved under this Plan.
<PAGE>
7.15 Transfer Taxes. In accordance with ss. 1146(c) of the Bankruptcy
Code, the Reorganized Entity shall not be liable for any stamp tax or similar
tax on the transfer of any property under the Plan. The Broadway Lease Rejection
Agreement for the Broadway Lease is hereby made part of the Plan and pursuant to
ss. 1146(c) is hereby exempt from transfer taxes. Upon confirmation of the Plan,
the escrow agent shall release the $50,000 held in escrow to the Reorganized
Today's Man.
7.16 Capital Structure. Debtors shall not prior to the Effective Date
(i) change the capital structure of the Debtors or the Reorganized Entity; (ii)
borrow additional funds, except in the ordinary course of business; (iii)
conduct any business outside of the ordinary course of business;(iv) allow the
cash in the Reorganized Entity to fall below $3 million; and (v) allow the
combination of cash plus inventory less payables to be less than the net
projections (as attached to the First Amended Disclosure Statement), if the
Debtors elect to increase the Cash Distribution Pool and decrease the Equity
Pool, as described in Section 7.7 herein. The actual value of the inventory will
be determined on the same basis and on the same criteria as used in the
projections.
ARTICLE 8
EFFECT OF REJECTION BY ONE OR MORE CLASSES OF INTERESTS
8.1 Failure of a Class to Accept the Plan. If any impaired Class fails
to accept this Plan in satisfaction of the requirement of ss. 1129(a)(8) of the
Bankruptcy Code, Debtor reserves the right to request that the Bankruptcy Court
confirm this Plan by cramdown in accordance with ss. 1129(b) of the Bankruptcy
Code.
ARTICLE 9
CONDITIONS PRECEDENT
9.1 Condition to Confirmation. Confirmation of the Plan is conditioned
on the following conditions precedent:
(a) Fulfillment of the Rights Offering commitments and
the Equity Investment, Excess Commitment, and Standby Purchase Agreement, if
necessary; and
<PAGE>
(b) Commitment for Exit Financing Facility.
9.2 Conditions to Effective Date. The effectiveness of the Plan and the
occurrence of the Effective Date shall be subject to satisfaction of the
following conditions precedent:
(a) The Confirmation Order shall have been entered and no
stay of the Confirmation Order shall be in effect; and
(b) Each of the conditions precedent to the obligations of the
Equity Investment and the purchase and sale of the shares of New Common Stock
contemplated thereby shall have been fulfilled; and
(c) If required by the Bankruptcy Court, entry of a separate
order directing the limited substantive consolidation in accordance with the
terms of the Plan, or otherwise such provisions shall be contained in the
Confirmation Order; and
(d) The Debtors shall have received the proceeds of the Exit
Financing Facility, the Equity Investment, the Rights Proceeds and the proceeds
of the Excess Commitment and Standby Purchase Agreement, if necessary; and
(e) The aggregate amount of all Allowed Claims shall not
exceed $68.5 million and the aggregate amount of all Disputed Claims (other than
Insured Claims, Intercompany Claims and duplicate Claims) shall not exceed $3.0
million (excluding Claims for post-petition interest).
The Debtors shall have and expressly reserve the right to
waive any of the above conditions to the occurrence of the Effective Date
without notice and hearing.
<PAGE>
9.3 Effect of Failure of Effective Date. If the Effective Date does not
occur and Distributions with respect to Allowed Claims in Classes 6 and 7 are
not made by the earlier of sixty (60) days after the entry of the Confirmation
Order or March 15, 1998, then, (a) the Confirmation Order shall be vacated, (b)
no Distributions under the Plan shall be made, (c) the Debtor and all holders of
Claims and Interests shall be restored to the status quo ante as of the day
immediately preceding the Confirmation Date as though the Confirmation Date
never occurred; (d) the proceeds of the Rights Offering, Equity Investment and
Standby Purchase Agreement shall be returned to their respective parties without
interest; (e) the Debtors' obligations with respect to the Claims and Interests
shall remain unchanged and nothing contained herein shall constitute or be
deemed a waiver or release of any Claims or Interests by or against the Debtor
or any other Entity or to prejudice in any manner the rights of the Debtors or
any Entity in any further proceeding involving the Debtor; and (f) the Plan
shall be deemed null and void.
ARTICLE 10
EXECUTORY CONTRACTS
10.1 Assumption of Executory Contracts. All Executory Contracts, which
have not been rejected or which are not the subject of a motion to reject
pending on the Confirmation Date or which the Plan does not specifically provide
for its rejection, shall be deemed to have been assumed by the Reorganized
Entity on the Effective Date. Each of the Debtor's insurance policies which are
presently in effect, and any agreements, documents or instruments relating
thereto, including without limitation any retrospective premium rating plans
relating to such policies are Executory Contracts. Notwithstanding the
foregoing, Distributions under the Plan to a holder of a Claim covered by any
insurance policies or related agreements, documents or instruments that are
assumed hereunder shall be in accordance with the treatment provided under the
Plan. Nothing contained herein shall constitute or may be deemed a waiver of any
Cause of Action that the Debtors may hold against any Entity under the Debtors'
policies of insurance.
<PAGE>
10.2 Approval of Assumption or Rejection of Executory Contracts and
Unexpired Leases. Entry of the Confirmation Order shall constitute (i) the
approval pursuant to Section 365(a) and 1123(b)(2) of the Bankruptcy Code of the
assumption of the Executory Contracts assumed pursuant to the Plan, (ii) the
extension of time pursuant to Section 365(d)(4) of the Bankruptcy Code within
which the Debtors may assume or reject the Executory Contracts specified in the
Plan from the date of entry of an order approving the assumption or rejection of
such Executory Contracts and (iii) the approval pursuant to Sections 365(a) and
1123(b)(2) of the Bankruptcy Code of the rejection of Executory Contracts, if
any, rejected pursuant to the Plan.
10.3 Cure of Defaults. Except as otherwise agreed to by the parties,
within 60 days after the Effective Date or as soon thereafter as is practicable,
the Reorganized Entity shall Cure all undisputed defaults under the Executory
Contracts assumed pursuant to this Plan in accordance with Section 365(b)(1) of
the Bankruptcy Code. All disputed defaults that are required to be cured shall
be cured either within 30 days of entry of the Final Order determining the
amount, if any, of the Reorganized Entity's liability with respect thereto or as
may be otherwise agreed to by the parties.
10.4 Deadline for Filing Rejection Damage Claims. All Claims arising
from rejection of Executory Contracts shall be forever barred unless a Rejection
Claim is duly and timely Filed with the Bankruptcy Court. Any Rejection Claim
shall be classified in the Class of General Unsecured Claims pursuant to 11
U.S.C. ss. 502(g) of the Bankruptcy Code. Unless otherwise provided by an Order
of the Bankruptcy Court, a proof of claim against the Debtor arising from the
rejection of any Executory Contract pursuant to an Order entered after the Bar
Date, as applicable to such claim, must be Filed with the Bankruptcy Court
within (a) the time period established by the Bankruptcy Court in the Order
approving such rejection or (b) if no such period is or was established 30 days
after the date of entry of a Final Order approving such rejection. Any entity
that fails to file a proof of its Claim arising from such rejection within this
time period shall be forever barred from asserting a Claim against the
Reorganized Entity.
10.5 Objections. Notwithstanding any provision in this Plan to the
contrary, the Debtor or the Reorganized Entity may file an objection with the
Bankruptcy Court to any Rejection Claim duly Filed, on the later of 60 days
after Confirmation or such date as may be set by the Bankruptcy Court.
<PAGE>
10.6 Rejection of Stock Option Plans. On the Effective Date, the
Employee Stock Option Plan, the Director Stock Option Plan and the Employee
Stock Option Plan for Non-Employee Directors shall be terminated and the stock
options granted thereunder shall be canceled. Upon the Effective Date, any
Rejection Claim arising from rejection of any Stock Options is extinguished and
discharged.
ARTICLE 11
EFFECT OF CONFIRMATION
11.1 Discharge of All Claims and Interests and Releases. Except as
otherwise specifically provided in the Plan, the confirmation of the Plan and
the acceptance of distributions by holders of Claims and Interests and the
rights provided to holders of Claims and Interests in the Plan shall be in
complete satisfaction, discharge and release of the Debtors and the Reorganized
Entity from (i) all Claims and Causes of Action against, liabilities of, liens
on, obligations of, and interest in the Debtors or Reorganized Entity or the
assets and properties of the Debtors or Reorganized Entity, including any debt
of the kind specified in Sections 502(g), 502(h) and 502(i) of the Bankruptcy
Code, whether known or unknown, and (ii) all Causes of Action, whether known or
unknown, either directly or indirectly through the Debtors or Reorganized Entity
against the Debtors or Reorganized Entity, successors and assigns of the Debtors
or Reorganized Entity, the Creditors' Committee and all of their respective
present and former directors, officers, shareholders, agents, members,
attorneys, auditors, advisors, financial advisors and employees based on the
same subject matter as any Claim or Interest in each case; regardless of whether
a proof of Claim or Interest is Filed or is deemed Filed, whether or not the
Claim or Interest is allowed, and whether or not the holder of such Claim or
Interest has voted on the Plan or based upon any act, omission, transaction or
other activity or any security, instrument or other agreement of any kind or
nature occurring, arising or existing prior to the Effective Date that relates
in any way to the Debtors, the Debtors' property or the Plan.
Any Entity accepting any distribution under the Plan shall be presumed
conclusively to have released the Debtors and the Reorganized Entity, successors
and assigns of the Debtors and the Reorganized Entity, the Creditors' Committee
and all such parties' respective present and former director, officers,
shareholders, members, attorneys, auditors, advisors, financial advisors and
employees from any Causes of Action that relate in any way to the Debtors, the
Debtors' property, the Cases or the Plan.
<PAGE>
The releases contained in the Plan shall be enforceable as a matter of
contract against any Entity that accepts any distribution under the Plan,
including any Entity which may hereafter assert a Claim for contribution and/or
indemnification against the Reorganized Entity with respect to pre-petition acts
as well as pre-confirmation acts. The third party release provisions address the
problem that exists under the decision of the United States Court of Appeals for
the Third Circuit in In re Frenville, 744 F.2d 332 (3d Cir. 1984), cert. denied,
469 U.S. 1160 (1985), which would permit third parties to assert claims for
contribution and/or indemnification against the Reorganized Entity with respect
to pre-petition acts as well as pre-confirmation acts.
11.2 Indemnification Obligations. The obligations of the Debtors to
defend, indemnify, reimburse or limit the liability of their present and any
former directors, officers or employees that were directors, officers or
employees, respectively, against any Claims or obligations pursuant to the
Debtors' Articles of Incorporation or By-laws, applicable state law or specific
agreement or any combination of the foregoing, shall survive confirmation of the
Plan, remain unaffected thereby and shall not be discharged irrespective of
whether indemnification, defense, reimbursement or limitation is owed in
connection with an Event occurring before, on or after the Filing Date.
11.3 Injunction. Except as provided in the Plan or the Confirmation
Order, the Confirmation Order shall constitute and provide that the
satisfactions, releases and discharges set forth in the Plan shall also act as
an injunction by the Bankruptcy Court against any Entity commencing or
continuing any action, employment of process or to collect, offset, effect or
recover any Claim or any matter related thereto, or arising thereunder,
satisfied, released or discharged under the Plan against any direct or indirect
successor or assign of the Debtors or Reorganized Entity, any direct or indirect
transferee of any property of the Debtors or Reorganized Entity distributed
under the Plan, the Creditors' Committee and their respective present and former
directors, officers, shareholders, agents, members, attorneys, auditors,
advisors, financial advisors or employees.
<PAGE>
11.4 Retention and Enforcement of Causes of Actions. Other than for
Causes of Actions that have been settled by the Plan, pursuant to Section
1123(b)(3) of the Bankruptcy Code, the Reorganized Entity will retain and have
the exclusive right to enforce against any Entity any and all Causes of Action
of any or all of the Debtors that arose before the Effective Date.
11.5 Release of Subordination Rights. Each holder of a Claim against or
Interest in the Debtors, (a) by virtue of the acceptance of deemed acceptance of
the Plan by the requested majority in number and amount of members of a Class,
or (b) by virtue of the acceptance or deemed acceptance of the Plan by such
holder, or (c) by the acceptance by such holder of any payment made or
consideration given under the Plan, waives, releases and relinquishes any and
all rights and benefits arising under any subordination agreements, including
those with respect to the payments and distributions of consideration made or to
be made under the Plan or otherwise to any other holder of a Claim against, or
Interest in, the Debtors.
11.6 Bank Group Litigation. The Debtors intend to assert the claims and
causes of action against the Bank Group as indicated in the treatment of the
Bank Group Claim described herein. These claims and causes of action may be
asserted either before or after the Effective Date of the Plan in an appropriate
forum, which may include the Bankruptcy Court. The Debtors do not seek to settle
(a) their objections to the Bank Group's Claim, whether asserted by the Bank
Group or any transferee except as set forth in Section 5.4; or (b) any causes of
action against the Bank Group based on the Bank Group's prepetition conduct,
including but not limited to the Bank Group's failure to advance funds as
required under the Bank Group loan documents.
<PAGE>
ARTICLE 12
RETENTION OF JURISDICTION
12.1 Scope of Jurisdiction. Until entry of a Final Order closing this
case, the Bankruptcy Court shall have exclusive jurisdiction over all matters
arising under, arising in, or relating to, without limitation, the Case, the
Plan, the Rights Offering, the Exit Financing Facility, the Equity Investment,
the Excess Commitment, the Standby Purchase Commitment, to the full extent
permitted by 28 U.S.C. ss.1334 to hear, and to the full extent permitted by 28
U.S.C. ss. 157 to determine all proceedings in respect thereof.
ARTICLE 13
MODIFICATIONS OF THE PLAN
13.1 Prior to Confirmation Date. Debtors, in their sole discretion, may
amend, modify, revoke or withdraw the Plan at any time prior to the Confirmation
Date. If the Debtors revoke or withdraw the Plan, then the Plan shall be deemed
null and void and nothing contained herein shall be deemed to constitute a
waiver or release of any Claims by or against the Debtors for any other Person
or to prejudice in any manner the rights of the Debtors or any Person in any
further proceedings involving the Debtors.
13.2 Prior to the Effective Date. Debtors may amend or modify this Plan
in accordance with ss. 1127 of the Bankruptcy Code at any time on or prior to
the Effective Date.
13.3 After the Effective Date. After the Effective Date, Debtors may
propose amendments to the Plan for approval by the Bankruptcy Court.
ARTICLE 14
GENERAL PROVISIONS
14.1 Headings. The headings in the Plan are for convenience of
reference only and shall not limit or otherwise affect the meaning of the Plan.
14.2 Severability. Should any provision of this Plan be determined to
be unenforceable for any reason, such determination shall in no way limit or
affect the enforceability or operative effect of any other provision of the
Plan.
14.3 Governing Law. Except to the extent the Bankruptcy Code is
applicable, the rights and obligations arising under the Plan shall be governed
and enforced in accordance with the laws of the State of Pennsylvania, provided
however, that the corporate law of the applicable state of a Reorganized Entity
that is not organized under Pennsylvania law shall govern such entity with
respect to corporate law matters.
<PAGE>
14.4 Creditors' Committee. On the Effective Date, the duties of the
Creditors' Committee shall terminate and the Creditors' Committee shall be
deemed dissolved; provided however, that the Creditors' Committee shall survive
for the sole narrow purpose of enforcing provisions of the Plan until the Plan
is Substantially Consummated.
Dated: December 12, 1997 Respectfully submitted,
FELD & FELD
By:/s/Barry S. Pine
------------------------
Barry S. Pine, Assistant
Secretary and Controller
BENMOL, INC.
By:/s/Barry S. Pine
------------------------
Barry S. Pine, Assistant
Secretary and Controller
D&L INC.
By:/s/Barry S. Pine
------------------------
Barry S. Pine, Assistant
Secretary and Controller
F&S INTERNATIONAL, INC.
By:/s/Barry S. Pine
------------------------
Barry S. Pine, Assistant
Secretary and Controller
[SIGNATURES CONTINUED ON FOLLOWING PAGE]
<PAGE>
[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
TODAY'S MAN, INC.
By:/s/Barry S. Pine
-------------------------------------
Barry S. Pine, Vice President,
Controller, Chief Accounting Officer
TODAY'S MAN OUTLET, INC.
By: /s/ Barry S. Pine
-------------------------------------
Barry S. Pine, Assistant Secretary
Counsel:
BLANK ROME COMISKY & McCAULEY
Howard T. Glassman
Raymond L. Shapiro
Regina Stango Kelbon
One Logan Square
Philadelphia, PA 19103-6998
(215) 569-5500
and
1220 Market Street, 8th Floor
Wilmington, De 19801
Counsel for Debtors and
Debtors-in-Possession
