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SECURITIES AND EXCHANGE COMMISSION
Under the
Securities Act of 1933
New York | 5661 | 43-0197190 | ||
(State or other jurisdiction of | (Primary standard industrial | (I.R.S. employer | ||
incorporation or organization) | classification code number) | identification number) |
8300 Maryland Avenue
St. Louis, Missouri 63105
(314) 854-4000
(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)
Senior Vice President, General Counsel and Corporate Secretary
Brown Shoe Company, Inc.
8300 Maryland Avenue
St. Louis, Missouri 63105
(314) 854-4000
(Address, including zip code, and telephone number, including area code, of principal executive
offices of each registrant)
Robert J. Endicott, Esq.
Bryan Cavellp
211N. Broadway
One Metropolitan Square, Suite 3600
St. Louis, Missouri 63102
Tel: 314-259-2000
Fax: 314-259-2020
Large accelerated filero | Accelerated filerþ | Non-accelerated filero | Smaller reporting companyo | |||
(Do not check if a smaller reporting company) |
Proposed Maximum | Proposed maximum | |||||||||||||
Amount to be | Offering Price Per | aggregate offering | ||||||||||||
Title of each class of securities to be registered | registered | Unit(1) | price(1) | Amount of registration fee | ||||||||||
7⅛% Senior Notes due 2019 | $200,000,000 | 100% | $200,000,000 | $23,220 | ||||||||||
Guarantees of the 7⅛% Senior Notes due 2019 | — | — | — | (2) | ||||||||||
(1) | Estimated pursuant to Rule 457(f) solely for the purpose of calculating the registration fee. | |
(2) | Pursuant to Rule 457(n), no separate fee is payable with respect to the guarantees of the Senior Notes being registered. |
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State or otherjurisdiction | Primary standard | |||||||||||
Exact name of each registrant as specified | of incorporation or | industrialclassification | I.R.S. employer | |||||||||
in its respective charter | organization | code number | identification number | |||||||||
Sidney Rich Associates, Inc.* | Missouri | 5139 | 43-0910619 | |||||||||
Brown Group Retail, Inc.* | Pennsylvania | 5661 | 25-1323027 | |||||||||
Brown Shoe International Corp.* | Delaware | 5139 | 43-1375891 | |||||||||
Buster Brown & Co.* | Missouri | 5139 | 43-1661024 | |||||||||
Bennett Footwear Group LLC* | Delaware | 5139 | 04-3437154 | |||||||||
American Sporting Goods Corporation* | Delaware | 5139 | 13-3191696 | |||||||||
The Basketball Marketing Company, Inc.* | Delaware | 5139 | 23-2727003 | |||||||||
Edelman Shoe, Inc.* | Delaware | 5139 | 20-0440392 | |||||||||
Shoes.com, Inc.* | Delaware | 5661 | 95-4781822 | |||||||||
Brown Shoe Company of Canada Ltd** | Canada | 5661 | Not applicable |
* | Address, including zip code, and telephone number, including area code, of principal executive offices are the same as those of Brown Shoe Company, Inc., a New York corporation. | |
** | The address, including zip code, of principal executive offices is 1857 Rogers Road, Perth, Ontario, Canada, K7H3E8, and the telephone number, including area code, of principal executive offices is 613-267-2000. |
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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.
• | We will exchange all original notes that are validly tendered and not withdrawn prior to the expiration of the exchange offer. | ||
• | You may withdraw tenders of original notes at any time prior to the expiration of the exchange offer. | ||
• | We believe that the exchange of original notes for exchange notes will not be a taxable event for U.S. federal income tax purposes. | ||
• | The form and terms of the exchange notes are identical in all material respects to the form and terms of the original notes, except that (i) the exchange notes are registered under the Securities Act, (ii) the transfer restrictions and registration rights applicable to the original notes do not apply to the exchange notes, and (iii) the exchange notes will not contain provisions relating to liquidated damages relating to our registration obligations. |
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• | the terms “Company,” “we,” “us,” “Brown Shoe,” and “our” refer to Brown Shoe Company, Inc. and its subsidiaries; when such terms refer to the Company as of any date prior to February 17, 2011, ASG is not included within the meaning of the terms unless otherwise indicated; | ||
• | the term “ASG” refers to American Sporting Goods Corporation and its subsidiaries; | ||
• | the term “Notes” refers to, collectively, the original notes and the exchange notes; | ||
• | references to “our acquisition of ASG” refers to the acquisition by one of our subsidiaries of all of the outstanding capital stock of ASG from the ASG stockholders, the related exercise by the loan parties under our revolving credit facility of the $150.0 million “designated event accordion feature” to fund the acquisition of the ASG capital stock, and the increase of the aggregate amount available under the revolving credit facility from $380.0 million to $530.0 million, all effective as of February 17, 2011. See “Description of Certain Indebtedness”; | ||
• | references to our fiscal years are to the twelve months ended on the Saturday nearest to January 31 of the applicable year (for example, “fiscal year 2010” is the 52-week period ended January 29, 2011); all of our fiscal years included 52 weeks, except for fiscal 2006, which included 53 weeks; references to ASG’s fiscal years are to the twelve months ended December 31 of the applicable year; | ||
• | the term “83/4% Notes” refers to our 83/4% Senior Notes due 2012, all of which were either repurchased by us in the Tender Offer or which were redeemed by us on June 10, 2011; and | ||
• | the term “Tender Offer” refers to the cash tender offer for all of our outstanding 83/4% Notes, which we launched on April 27, 2011 and which expired at 5:00 p.m., New York City time on May 25, 2011. |
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• | changing consumer demands, which may be influenced by consumers’ disposable income, which in turn can be influenced by general economic conditions; | ||
• | potential disruption to the Company’s business and operations as it integrates ASG into its business; | ||
• | potential disruption to the Company’s business and operations as it implements its information technology initiatives; | ||
• | the Company’s ability to utilize its new information technology system to successfully execute its strategies, including integrating ASG’s business; | ||
• | intense competition within the footwear industry; | ||
• | our ability to anticipate and respond to rapidly changing fashion trends and purchasing patterns particularly as it may impact certain periods such the back-to-school period in our fiscal third quarter; | ||
• | customer concentration and increased consolidation in the retail industry; | ||
• | political and economic conditions or other threats to the continued and uninterrupted flow of inventory from China, where ASG has manufacturing facilities and both ASG and Brown Shoe rely heavily on third-party manufacturing facilities for a significant amount of their inventory; | ||
• | the Company’s ability to recruit and retain senior management and other key associates; | ||
• | the Company’s ability to attract and retain licensors and protect intellectual property rights; | ||
• | the Company’s ability to secure/exit leases on favorable terms; | ||
• | the Company’s ability to maintain relationships with current suppliers; | ||
• | compliance with applicable laws and standards with respect to lead content in paint and other product safety issues; | ||
• | the Company’s ability to source product at a pace consistent with increased demand for footwear; and | ||
• | the impact of rising prices in a potentially inflationary global environment. |
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• | Opening new stores in targeted markets, including an expected five net new stores in fiscal 2011 and 25 net new stores in fiscal 2012 and 2013; | ||
• | Enforcing stricter opening and closing criteria leading to new stores performing at over $200 per square foot, while closing underperforming stores; | ||
• | Reaching target consumers through innovative marketing, including in-store media campaigns and strengthening “Make Today Famous” across all customer touchpoints; | ||
• | Working with our suppliers to provide compelling branded value-priced footwear, including current styles and exclusive offerings; | ||
• | Providing a convenient, consumer-oriented shopping experience; and |
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• | Strengthening position as the destination for fitness and healthy living footwear in the family channel. |
• | Continuing to focus on healthy living and contemporary fashion; | ||
• | Increasing the style component of our offerings and delivering compelling product to build brand preference; | ||
• | Continuing to add design talent to meet the changing demands of the consumer; | ||
• | Increasing floor space with our existing retail customers and penetrating new retail accounts; and | ||
• | Strengthening brand awareness among retailers and consumers through continued marketing and brand-building activities. |
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The Exchange Offer | We are offering to exchange up to $200,000,000 aggregate principal amount of our new 7⅛% Senior Notes due 2019, which have been registered under the Securities Act, in exchange for your original notes. The form and terms of these exchange notes are identical in all material respects to the original notes. The exchange notes, however, will not contain transfer restrictions and registration rights applicable to the original notes. To exchange your original notes, you must properly tender them, and we must accept them. We will accept and exchange all original notes that you validly tender and do not validly withdraw. We will issue registered exchange notes promptly after the expiration of the exchange offer. | |
Resale of exchange notes | Based on interpretations by the staff of the SEC as detailed in a series of no-action letters issued to third parties, we believe that, as long as you are not a broker-dealer, the exchange notes offered in the exchange offer may be offered for resale, resold or otherwise transferred by you without compliance with the registration and prospectus delivery requirements of the Securities Act as long as: |
• | you are acquiring the exchange notes in the ordinary course of your business; | ||
• | you are not participating, do not intend to participate in and have no arrangement or understanding with any person to participate in a “distribution” of the exchange notes; and | ||
• | you are not an “affiliate” of ours within the meaning of Rule 405 of the Securities Act. |
If any of these conditions is not satisfied and you transfer any exchange notes issued to you in the exchange offer without delivering a proper prospectus or without qualifying for a registration exemption, you may incur liability under the Securities Act. Moreover, our belief that transfers of exchange notes would be permitted without registration or prospectus delivery under the conditions described above is based on SEC interpretations given to other, unrelated issuers in similar exchange offers. We cannot assure you that the SEC would make |
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a similar interpretation with respect to our exchange offer. We will not be responsible for or indemnify you against any liability you may incur under the Securities Act. | ||
Any broker-dealer that acquires exchange notes for its own account in exchange for original notes must represent that the original notes to be exchanged for the exchange notes were acquired by it as a result of market-making activities or other trading activities and acknowledge that it will deliver a prospectus meeting the requirements of the Securities Act in connection with any offer to resell, resale or other retransfer of the exchange notes. However, by so acknowledging and by delivering a prospectus, such participating broker-dealer will not be deemed to admit that it is an “underwriter” within the meaning of the Securities Act. During the period ending 180 days after the consummation of the exchange offer, subject to extension in limited circumstances, a participating broker-dealer may use this prospectus for an offer to sell, a resale or other retransfer of exchange notes received in exchange for original notes which it acquired through market-making activities or other trading activities. | ||
Expiration Date | The exchange offer will expire at 5:00 p.m., New York City time, on , 2011, unless we extend the expiration date. | |
Accrued Interest on the Exchange Notes and the Original Notes | The exchange notes will bear interest from the most recent date to which interest has been paid on the original notes or, if no interest has been paid, from the date of original issuance of the original notes. If your original notes are accepted for exchange, then you will receive interest on the exchange notes and not on the original notes. Any original notes not tendered will remain outstanding and continue to accrue interest according to their terms. | |
Conditions | The exchange offer is subject to customary conditions. We may assert or waive these conditions in our sole discretion. If we materially change the terms of the exchange offer, we will resolicit tenders of the original notes. See “The Exchange Offer—Conditions to the Exchange Offer” for more information regarding conditions to the exchange offer. | |
Procedures for Tendering Original Notes | Each holder of original notes that wishes to tender their original notes must either: |
• | complete, sign and date the accompanying letter of transmittal or a facsimile copy of the letter of transmittal, have the signatures on the letter of transmittal guaranteed, if required, and deliver the letter of transmittal, together with any other required documents (including the original notes), to the exchange agent; or | ||
• | if original notes are tendered pursuant to book-entry procedures, the tendering holder must deliver a completed and |
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duly executed letter of transmittal or arrange with The Depository Trust Company, or DTC, to cause an agent’s message to be transmitted with the required information (including a book-entry confirmation) to the exchange agent; or | |||
• | comply with the procedures set forth below under “—Guaranteed Delivery Procedures.” |
Holders of original notes that tender original notes in the exchange offer must represent that the following are true: |
• | the holder is acquiring the exchange notes in the ordinary course of its business; | ||
• | the holder is not participating in, does not intend to participate in, and has no arrangement or understanding with any person to participate in a “distribution” of the exchange notes; and | ||
• | the holder is not an “affiliate” of us within the meaning of Rule 405 of the Securities Act. |
Do not send letters of transmittal, certificates representing original notes or other documents to us or DTC. Send these documents only to the exchange agent at the appropriate address given in this prospectus and in the letter of transmittal. We could reject your tender of original notes if you tender them in a manner that does not comply with the instructions provided in this prospectus and the accompanying letter of transmittal. See “Risk Factors—There are significant consequences if you fail to exchange your original notes” for further information. |
Special Procedures for | ||
Tenders by Beneficial Owners of Original Notes | If: |
• | you beneficially own original notes; | ||
• | those notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee; and | ||
• | you wish to tender your original notes in the exchange offer, |
please contact the registered holder as soon as possible and instruct it to tender on your behalf and comply with the instructions set forth in this prospectus and the letter of transmittal. | ||
Guaranteed Delivery Procedures | If you hold original notes in certificated form or if you own original notes in the form of a book-entry interest in a global note deposited with the trustee, as custodian for DTC, and you wish to tender those original notes but: |
• | your original notes are not immediately available; | ||
• | time will not permit you to deliver the required documents to |
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the exchange agent by the expiration date; or | |||
• | you cannot complete the procedure for book-entry transfer on time, |
you may tender your original notes pursuant to the procedures described in “The Exchange Offer—Procedures for Tendering Original Notes—Guaranteed Delivery.” | ||
Withdrawal Rights | You may withdraw your tender of original notes under the exchange offer at any time before the exchange offer expires. Any withdrawal must be in accordance with the procedures described in “The Exchange Offer—Withdrawal Rights.” | |
Effect on Holders of Outstanding Original Notes | As a result of making this exchange offer, and upon acceptance for exchange of all validly tendered original notes, we will have fulfilled our obligations under the registration rights agreement. Accordingly, there will be no liquidated or other damages payable under the registration rights agreement if original notes were eligible for exchange, but not exchanged, in the exchange offer. | |
If you do not tender your original notes or we reject your tender, your original notes will remain outstanding and will be entitled to the benefits of the indenture governing the notes. Under such circumstances, you would not be entitled to any further registration rights under the registration rights agreement, except under limited circumstances. Existing transfer restrictions would continue to apply to the original notes. | ||
Any trading market for the original notes could be adversely affected if some but not all of the original notes are tendered and accepted in the exchange offer. | ||
Material U.S. Federal Income and Estate Tax Consequences | Your exchange of original notes for exchange notes should not be treated as a taxable event for U.S. federal income tax purposes. See “Material U.S. Federal Income and Estate Tax Consequences.” | |
Use of Proceeds | We will not receive any proceeds from the exchange offer or the issuance of the exchange notes. We have used a portion of the net proceeds of the offering of the original notes to fund the repurchase, repayment or other discharge of all of our $150 million in principal amount 83/4% Notes. We have used the remaining net proceeds from the offering of the original notes for general corporate purposes, including to repay amounts outstanding under our existing revolving credit facility. |
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Acceptance of Original Notes and Delivery of Original Notes | We will accept for exchange any and all original notes properly tendered prior to the expiration of the exchange offer. We will complete the exchange offer and issue the exchange notes promptly after the expiration date. | |
Exchange Agent | Wells Fargo Bank, National Association is serving as exchange agent for the exchange offer. The address and telephone number of the exchange agent are provided in this prospectus under “The Exchange Offer—Exchange Agent” and in the letter of transmittal. |
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• | will have been registered under the Securities Act; | ||
• | will not bear restrictive legends restricting their transfer under the Securities Act; | ||
• | will not be entitled to the registration rights that apply to the original notes; and | ||
• | will not contain provisions relating to an increase in the interest rate borne by the original notes under circumstances related to the timing of the exchange offer. |
Issuer | Brown Shoe Company, Inc. | |
Securities | $200.0 million in principal amount of 7⅛% senior notes due 2019. | |
Maturity | May 15, 2019. | |
Interest | Annual rate: 7⅛%. | |
Payment frequency: every six months on May 15 and November 15. First payment: November 15, 2011. | ||
Denominations | Minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. | |
Ranking | The notes will be our general unsecured unsubordinated obligations. Accordingly, they will rank: |
• | equally with all of our existing and future unsecured unsubordinated debt; | ||
• | effectively subordinated to our existing and future secured debt to the extent of the assets securing such debt, including all borrowings under our existing revolving credit agreement; | ||
• | senior to of any of our existing or future subordinated debt; and | ||
• | structurally behind all of the liabilities of our subsidiaries that are not guarantors, including trade payables. |
Assuming we had completed the acquisition of ASG, the offering of the original notes, and the repurchase or redemption of all of the 83/4% Notes described in this prospectus, all as of April 30, 2011, we would have had $443.2 million of debt outstanding, $244.7 million of which would have been secured debt. As of April 30, 2011, our non-guarantor subsidiaries had liabilities of $96.6 million. | ||
Guarantees | The notes will be initially guaranteed on a senior unsecured basis |
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by each of our restricted subsidiaries that is an obligor or guarantor under our existing revolving credit facility. | ||
The guarantees will be general unsecured unsubordinated obligations of the guarantors. Accordingly, they will rank equally with all unsecured unsubordinated debt of the guarantors, effectively subordinated to all secured debt of the guarantors to the extent of the assets securing such debt (including the guarantees by the guarantors of obligations under our existing revolving credit agreement), and senior to all existing and future subordinated debt of the guarantors. | ||
Optional Redemption | Prior to May 15, 2014, we may redeem some or all of the notes at a redemption price equal to the sum of the principal amount of the notes to be redeemed, plus accrued and unpaid interest, plus a “make whole” premium specified in this prospectus. We may redeem some or all of the notes at any time on or after May 15, 2014 at the redemption prices described in this prospectus under the caption “Description of Notes—Optional Redemption.” | |
In addition, on or before May 15, 2014, we may redeem up to 35% of the notes with the net cash proceeds from certain equity offerings at the redemption price listed in “Description of Notes—Optional Redemption.” However, we may only make such redemptions if at least 65% of the aggregate principal amount of notes issued under the indenture remains outstanding immediately after the occurrence of such redemption. | ||
Change of Control | If we experience specific kinds of changes in control, we must offer to purchase the notes at 101% of their face amount, plus accrued interest. | |
Certain Covenants | The indenture governing the notes will, among other things, limit our ability and the ability of our restricted subsidiaries to: |
• | borrow money or sell preferred stock; | ||
• | create liens; | ||
• | pay dividends on or redeem or repurchase stock; | ||
• | make certain types of investments; | ||
• | sell stock in our restricted subsidiaries; | ||
• | restrict dividends or other payments from subsidiaries; | ||
• | enter into transactions with affiliates; | ||
• | issue guarantees of debt; and | ||
• | sell assets or merge with other companies. |
Certain of these covenants will be suspended if the notes are assigned an investment grade rating by both S&P and Moody’s |
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and no default has occurred and is continuing. If either rating on the notes should subsequently decline to below investment grade, the suspended covenants will be reinstated. These covenants contain important exceptions, limitations and qualifications. For more details, see “Description of Notes.” | ||
Absence of an Established Public Market for the Exchange Notes | The exchange notes will be new securities for which there is currently no market. We do not intend to apply for a listing of the exchange notes on any securities exchange. Accordingly, we cannot assure you that a liquid market for the exchange notes will develop or be maintained. | |
Trustee | Wells Fargo Bank, National Association | |
Governing Law | The indenture and the notes will be governed by, and construed in accordance with, the laws of the State of New York. | |
Risk Factors | See “Risk Factors,” beginning on page 19 of this prospectus and the other information in or incorporated by reference in this prospectus for a discussion of factors you should consider carefully before deciding to invest in the notes. |
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Fiscal Quarter Ended (2) | ||||||||||||||||||||
Fiscal Year Ended (1) | May 1, | April 30, | ||||||||||||||||||
January 31, | January 30, | January 29, | 2010 | 2011 | ||||||||||||||||
2009 | 2010 | 2011 | (Unaudited) | (Unaudited) | ||||||||||||||||
(dollars in millions) | (dollars in millions) | |||||||||||||||||||
Statement of Earnings Data: | ||||||||||||||||||||
Net sales | $ | 2,276.4 | $ | 2,242.0 | $ | 2,504.1 | $ | 597.7 | $ | 624.6 | ||||||||||
Cost of goods sold | 1,394.2 | 1,338.9 | 1,500.5 | 350.1 | 374.8 | |||||||||||||||
Gross profit | 882.2 | 903.1 | 1,003.6 | 247.6 | 249.8 | |||||||||||||||
Selling and administrative expenses | 851.8 | 859.7 | 923.0 | 224.6 | 235.5 | |||||||||||||||
Restructuring and other special charges, net | 54.3 | 11.9 | 7.9 | 1.7 | 1.7 | |||||||||||||||
Impairment of goodwill and intangible assets | 149.2 | — | — | — | — | |||||||||||||||
Equity in net loss of nonconsolidated affiliate | 0.2 | — | — | — | — | |||||||||||||||
Operating (loss) earnings | (173.3 | ) | 31.5 | 72.7 | 21.3 | 12.6 | ||||||||||||||
Interest expense | (17.1 | ) | (20.2 | ) | (19.7 | ) | (4.5 | ) | (6.7 | ) | ||||||||||
Interest income | 1.8 | 0.4 | 0.2 | — | 0.1 | |||||||||||||||
(Loss) earnings before income taxes | (188.6 | ) | 11.7 | 53.2 | 16.8 | 6.0 | ||||||||||||||
Income tax benefit (provision) | 53.8 | (1.3 | ) | (16.1 | ) | (6.3 | ) | (2.4 | ) | |||||||||||
Net (loss) earnings | $ | (134.8 | ) | $ | 10.4 | $ | 37.1 | $ | 10.5 | $ | 3.6 | |||||||||
Less: Net (loss) earnings attributable to noncontrolling interests | (1.6 | ) | 0.9 | (0.1 | ) | 0.5 | (0.1 | ) | ||||||||||||
Net (loss) earnings attributable to Brown Shoe Company, Inc. | $ | (133.2 | ) | $ | 9.5 | $ | 37.2 | $ | 10.0 | $ | 3.7 | |||||||||
Other Financial Data: | ||||||||||||||||||||
Net cash provided by (used for) | ||||||||||||||||||||
Operating activities | $ | 34.3 | $ | 118.1 | $ | (2.3 | ) | $ | 42.1 | $ | 3.7 | |||||||||
Investing activities | (81.1 | ) | (50.0 | ) | (54.8 | ) | (11.3 | ) | (163.2 | ) | ||||||||||
Financing activities | 79.0 | (30.0 | ) | 57.3 | (97.6 | ) | 85.7 | |||||||||||||
Depreciation and amortization | 54.9 | 51.1 | 50.3 | 12.3 | 14.3 | |||||||||||||||
Purchases of property and equipment | 60.4 | 24.9 | 30.8 | (5.1 | ) | (7.1 | ) | |||||||||||||
Capitalized software | 16.3 | 25.1 | 24.0 | (6.2 | ) | (2.6 | ) | |||||||||||||
Ratio of Earnings to Fixed Charges (3) | N/A | 1.22 | x | 2.09 | x | 2.39 | x | 1.45 | x | |||||||||||
Pro Forma Ratio of Earnings to Fixed Charges (3) (4) | 2.22 | x | 1.73 | x | ||||||||||||||||
Balance Sheet Data (at end of period): | ||||||||||||||||||||
Cash and cash equivalents | $ | 86.9 | $ | 125.8 | $ | 126.5 | $ | 59.5 | $ | 54.2 | ||||||||||
Working capital | 279.3 | 294.2 | 296.4 | 307.4 | 198.7 | |||||||||||||||
Total assets | 1,026.0 | 1,040.2 | 1,148.0 | 954.4 | 1,240.6 | |||||||||||||||
Total debt | 262.5 | 244.5 | 348.0 | 150.0 | 438.0 | |||||||||||||||
Total shareholders’ equity | 402.2 | 411.2 | 415.9 | 420.2 | 419.8 | |||||||||||||||
Operating Data: | ||||||||||||||||||||
Number of stores (at end of period): | ||||||||||||||||||||
Famous Footwear | 1,138 | 1,129 | 1,110 | 1,134 | 1,112 | |||||||||||||||
Specialty Retail | 306 | 282 | 259 | 269 | 252 | |||||||||||||||
Same store sales change (5): | ||||||||||||||||||||
Famous Footwear | (4.7 | )% | 0.5 | % | 10.5 | % | 15.5 | % | (3.9 | )% | ||||||||||
Specialty Retail | (3.4 | )% | 0.8 | % | 6.6 | % | 16.2 | % | (1.0 | )% |
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(1) | All fiscal years include 52 weeks. | |
(2) | Each fiscal quarter includes 13 weeks. | |
(3) | For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income (loss) before income taxes and fixed charges, and fixed charges consist of interest expense, capitalized interest, amortization of debt issuance costs and the portion of operating lease rentals deemed representative of the interest factor. In the fiscal year ended January 31, 2009, earnings were insufficient to cover fixed charges by $188.8 million. | |
(4) | Pro forma ratio of earnings to fixed charges reflects the acquisition of ASG as if it occurred on January 31, 2010. | |
(5) | Same store sales changes are calculated by comparing the sales in stores that have been open at least 13 months. This method avoids the distorting effect that grand opening sales have in the first month of operation. Relocated stores are treated as new stores. Closed stores are excluded from the calculation. Same store sales is not a measure of financial performance under GAAP. Same store sales is not calculated in the same manner by all companies and accordingly is not necessarily comparable to similarly entitled measures of other companies and may not be an appropriate measure for performance relative to other companies. |
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Fiscal Year Ended | ||||||||
December 31, | December 31, | |||||||
2009 | 2010 | |||||||
(dollars in millions) | ||||||||
Statement of Income Data: | ||||||||
Revenues, net | $ | 176.2 | $ | 231.7 | ||||
Cost of sales | 113.2 | 144.2 | ||||||
Gross profit | 63.0 | 87.5 | ||||||
Selling, general and administrative expenses | 58.4 | 62.0 | ||||||
Other expenses, net | 2.6 | 0.6 | ||||||
Interest expense | 1.1 | 0.7 | ||||||
Interest and miscellaneous income | — | (0.6 | ) | |||||
Earnings before income taxes | 0.9 | 24.8 | ||||||
Income tax provision | 0.5 | 9.8 | ||||||
Net income | $ | 0.4 | $ | 15.0 | ||||
Noncontrolling interest in (income) loss of consolidated subsidiaries | (0.1 | ) | 0.2 | |||||
Net income attributable to American Sporting Goods Corporation and Subsidiaries | $ | 0.3 | $ | 15.2 | ||||
Other Financial Data: | ||||||||
Net cash provided by (used in) | ||||||||
Operating activities | $ | 7.8 | $ | 19.1 | ||||
Investing activities | (0.9 | ) | (4.6 | ) | ||||
Financing activities | (3.1 | ) | (14.5 | ) | ||||
Depreciation and amortization | 4.3 | 4.0 | ||||||
Purchases of property, plant and equipment | 2.2 | 4.6 | ||||||
Balance Sheet Data (at end of period): | ||||||||
Cash and cash equivalents | $ | 5.3 | $ | 5.9 | ||||
Working capital | 37.2 | 53.0 | ||||||
Total assets | 106.4 | 114.9 | ||||||
Total debt and capital lease obligations | 26.1 | 11.6 | ||||||
Total stockholders’ equity | 56.4 | 72.0 |
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Fiscal Year Ended | Fiscal Quarter Ended | |||||||
January 29, 2011 | April 30, 2011 | |||||||
(dollars in millions) | ||||||||
Statement of Earnings Data: | ||||||||
Net sales | $ | 2,718.6 | $ | 632.6 | ||||
Cost of goods sold | 1,638.9 | 377.4 | ||||||
Gross profit | 1,079.7 | 255.2 | ||||||
Selling and administrative expenses | 980.1 | 238.1 | ||||||
Restructuring and other special charges, net | 6.8 | 0.2 | ||||||
Operating earnings | 92.8 | 16.9 | ||||||
Interest expense | (25.6 | ) | (7.0 | ) | ||||
Interest income | 0.3 | 0.1 | ||||||
Earnings before income taxes | 67.5 | 10.0 | ||||||
Income tax provision | (21.7 | ) | (3.4 | ) | ||||
Net earnings | $ | 45.8 | $ | 6.6 | ||||
Net loss attributable to non controlling interests | (0.4 | ) | — | |||||
Net earnings attributable to Brown Shoe Company, Inc. | $ | 46.2 | $ | 6.6 | ||||
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Fiscal Year Ended | Fiscal Quarter Ended | |||||||
January 29, 2011 | April 30, 2011 | |||||||
(dollars in millions) | ||||||||
Balance Sheet Data (at end of period): | ||||||||
Cash and cash equivalents | $ | 132.4 | ||||||
Working capital | 201.9 | |||||||
Total assets | 1,350.8 | |||||||
Total debt (1) | 510.2 | |||||||
Total shareholders’ equity | 410.7 | |||||||
Other Financial Data: | ||||||||
Depreciation and amortization | $ | 56.3 | $ | 14.6 | ||||
Purchases of property and equipment | 35.4 | 7.1 | ||||||
Capitalized software | 24.0 | 2.6 | ||||||
Net loss attributable to noncontrolling interests | (0.4 | ) | — | |||||
Net earnings attributable to Brown Shoe Company, Inc. | 46.2 | 6.6 |
(1) | Total debt is defined as long-term debt plus borrowings under revolving credit agreement. |
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• | make it more difficult for us to satisfy our obligations under the notes; | ||
• | increase our vulnerability to general adverse economic and industry conditions; | ||
• | require us to dedicate a substantial portion of our cash flow from operations to make interest and principal payments on our debt, thereby limiting the availability of our cash flow to fund future capital expenditures, working capital and other general corporate requirements; | ||
• | limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; | ||
• | place us at a competitive disadvantage compared with competitors that have less debt; and | ||
• | limit our ability to borrow additional funds, even when necessary to maintain adequate liquidity. |
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• | sales of assets; | ||
• | sales of equity; and/or | ||
• | negotiations with our lenders to restructure the applicable debt. |
• | incur additional debt and issue preferred stock; | ||
• | create liens; | ||
• | redeem and/or prepay certain debt; | ||
• | pay dividends on our stock or repurchase stock; | ||
• | make certain investments; | ||
• | engage in specified sales of assets; | ||
• | enter into transactions with affiliates; | ||
• | enter new lines of business; | ||
• | engage in consolidations, mergers and acquisitions; | ||
• | make certain capital expenditures; and | ||
• | restrict our subsidiaries’ ability to pay dividends and make other distributions. |
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• | incurred this debt with the intent of hindering, delaying or defrauding current or future creditors; or | ||
• | received less than reasonably equivalent value or fair consideration for incurring this debt and the guarantor: |
– | was insolvent or was rendered insolvent by reason of the related financing transactions; | ||
– | was engaged, or about to engage, in a business or transaction for which its remaining assets constituted unreasonably small capital to carry on its business; or | ||
– | intended to incur, or believed that it would incur, debts beyond its ability to pay these debts as they mature, as all of the foregoing terms are defined in or interpreted under the relevant fraudulent transfer or conveyance statutes, |
• | it could not pay its debts or contingent liabilities as they become due; | ||
• | the sum of its debts, including contingent liabilities, is greater than its assets, at fair valuation; or | ||
• | the present fair saleable value of its assets is less than the amount required to pay the probable liability on its total existing debts and liabilities, including contingent liabilities, as they become absolute and mature. |
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• | will not be insolvent or rendered insolvent by the incurrence; | ||
• | will have sufficient capital to run our or their businesses effectively; and | ||
• | will be able to pay obligations on the notes and the guarantees as they mature or become due. |
• | make restricted payments; | ||
• | incur debt; | ||
• | engage in transactions with affiliates; and | ||
• | engage in certain sales of assets and make offers to repurchase notes. |
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• | manufacturing capacity in China may shift from footwear to other industries with manufacturing margins that are perceived to be higher; | ||
• | growth in domestic footwear consumption in China could lead to a significant decrease in factory space available for the manufacture of footwear to be exported; and | ||
• | currently, many footwear manufacturers in China are facing labor shortages as migrant workers seek better wages and working conditions in other industries and vocations. |
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• | inflation or changes in political and economic conditions; | ||
• | unstable regulatory environments; | ||
• | changes in import and export duties; | ||
• | domestic and foreign customs and tariffs; | ||
• | potentially adverse tax consequences; | ||
• | trade restrictions; | ||
• | restrictions on the transfer of funds into or out of China; | ||
• | labor unrest and/or shortages; and | ||
• | logistical and communications challenges. |
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April 30, 2011 | ||||||||
Pro Forma, | ||||||||
Actual | As Adjusted | |||||||
(dollars in millions) | ||||||||
Cash and cash equivalents | $ | 54.2 | $ | 54.2 | ||||
Total debt | ||||||||
Existing revolving credit agreement | $ | 288.0 | $ | 244.7 | ||||
Existing 83/4% Notes due 2012 | 150.0 | — | ||||||
7⅛% Senior Notes due 2019 | — | 198.5 | ||||||
Total debt | 438.0 | 443.2 | ||||||
Total shareholders’ equity | 419.8 | 419.2 | (1) | |||||
Total capitalization | $ | 857.8 | $ | 862.4 | ||||
(1) | Reflects the following charges in connection with the repayment of our existing 83/4% Notes: i) a $0.4 million charge, net of $0.2 million tax benefit, related to the write-off of deferred financing costs and ii) a $0.2 million charge, net of $0.2 million tax benefit, related to the tender premium incurred. Excludes the impact of call premium that would have been paid as of April 30, 2011 if Notes had been redeemed on that date and any other debt retirement charges in connection with the repayment of our existing 83/4% Notes. |
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Fiscal Year Ended | Fiscal Quarter Ended | |||||||||||||||||||||||||||
February 3, | February 2, | January 31, | January 30, | January 29, | May 1, | April 30, | ||||||||||||||||||||||
2007 | 2008 | 2009 | 2010 | 2011 | 2010 | 2011 | ||||||||||||||||||||||
Ratio of earnings to fixed charges(1) | 3.30x | 3.09x | — | 1.22x | 2.09x | 2.39x | 1.45x |
(1) | For purposes of calculating the ratio of earnings to fixed charges, earnings consist of income (loss) before income taxes and fixed charges, and fixed charges consist of interest expense, capitalized interest, amortization of debt issuance costs and the portion of operating lease rentals deemed representative of the interest factor. In the fiscal year ended January 31, 2009, earnings were insufficient to cover fixed charges by $188.8 million. |
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• | file a registration statement relating to a registered exchange offer for the original notes with the SEC no later than 90 days after the date of the issuance of the original notes; | ||
• | use our commercially reasonable efforts to cause the SEC to declare the registration statement effective under the Securities Act no later than 180 days after the date of the issuance of the original notes; and | ||
• | commence and use our commercially reasonable efforts to consummate the exchange offer no later than the 30th business day after the registration statement was declared effective by the SEC. |
• | will be registered under the Securities Act; | ||
• | will not bear restrictive legends restricting their transfer under the Securities Act; | ||
• | will not be entitled to the registration rights that apply to the original notes; and | ||
• | will not contain provisions relating to liquidated damages in connection with the original notes under circumstances related to the timing of the exchange offer. |
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• | to delay the acceptance of the original notes; | ||
• | to terminate the exchange offer and not accept any original notes for exchange if we determine that any of the conditions to the exchange offer have not occurred or have not been satisfied; | ||
• | to extend the expiration date of the exchange offer and retain all original notes tendered in the exchange offer other than those notes properly withdrawn; and | ||
• | to waive any condition or amend the terms of the exchange offer in any manner. |
• | you have full power and authority to tender, exchange, sell, assign and transfer original notes; | ||
• | we will acquire good, marketable and unencumbered title to the tendered original notes, free and clear of all liens, restrictions, charges and other encumbrances; and | ||
• | the original notes tendered for exchange are not subject to any adverse claims or proxies. |
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• | transmit a properly completed and duly executed letter of transmittal, including all other documents required by such letter of transmittal (including original notes), to the exchange agent, Wells Fargo Bank, National Association at the address set forth below under the heading “—Exchange Agent”; | ||
• | if original notes are tendered pursuant to the book-entry procedures set forth below, the tendering holder must deliver a completed and duly executed letter of transmittal or arrange with DTC to cause an agent’s message to be transmitted with the required information (including a book-entry confirmation), to the exchange agent at the address set forth below under the heading “—Exchange Agent,” or | ||
• | comply with the provisions set forth below under “—Guaranteed Delivery.” |
• | the exchange agent must receive the certificates for the original notes and the letter of transmittal; | ||
• | the exchange agent must receive a timely confirmation of the book-entry transfer of the original notes being tendered into the exchange agent’s account at DTC, along with the letter of transmittal or an agent’s message; or | ||
• | the holder must comply with the guaranteed delivery procedures described below. |
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• | by a registered holder of original notes who has not completed the box entitled “Special Issuance Instructions” or “Special Delivery Instructions” on the letter of transmittal; or | ||
• | for the account of an eligible institution. |
• | a bank; | ||
• | a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; | ||
• | a credit union; | ||
• | a national securities exchange, registered securities association or clearing agency; or | ||
• | a savings association. |
• | the letter of transmittal or a facsimile thereof, or an agent’s message in lieu of the letter of transmittal, with any required signature guarantees and any other required documents must be transmitted to and received by the exchange agent prior to the expiration date at the address given below under “—Exchange Agent”; or |
• | the guaranteed delivery procedures described below must be complied with. |
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• | the tender is made by or through an eligible institution; |
• | the eligible institution delivers a properly completed and duly executed notice of guaranteed delivery, substantially in the form provided, to the exchange agent on or prior to the expiration date: |
– | setting forth the name and address of the holder of the original notes being tendered and the amount of the original notes being tendered; | ||
– | stating that the tender is being made; and | ||
– | guaranteeing that, within three (3) New York Stock Exchange trading days after the date of execution of the notice of guaranteed delivery, the certificates for all physically tendered original notes, in proper form for transfer, or a book-entry confirmation, as the case may be, together with a properly completed and duly executed letter of transmittal, or an agent’s message, with any required signature guarantees and any other documents required by the letter of transmittal, will be deposited by the eligible institution with the exchange agent; and |
• | the exchange agent receives the certificates for the original notes, or a confirmation of book-entry transfer, and a properly completed and duly executed letter of transmittal, or an agent’s message in lieu thereof, with any required signature guarantees and any other documents required by the letter of transmittal within three (3) New York Stock Exchange trading days after the notice of guaranteed delivery is executed for all such tendered original notes. |
• | to reject any tenders determined to be in improper form or unlawful; |
• | to waive any of the conditions of the exchange offer; and |
• | to waive any condition or irregularity in the tender of original notes by any holder, whether or not we waive similar conditions or irregularities in the case of other holders. |
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• | the exchange notes acquired in the exchange offer are being obtained in the ordinary course of business of the person receiving the exchange notes, whether or not that person is the holder; | ||
• | neither the holder nor any other person receiving the exchange notes is engaged in, intends to engage in or has an arrangement or understanding with any person to participate in a “distribution” (as defined under the Securities Act) of the exchange notes; and | ||
• | neither the holder nor any other person receiving the exchange notes is an “affiliate” (as defined under the Securities Act) of Brown Shoe. |
• | may not rely on the applicable interpretations of the staff of the SEC referred to above; and |
• | must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. |
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• | specify the name of the person tendering the original notes to be withdrawn; | ||
• | identify the original notes to be withdrawn, including the total principal amount of original notes to be withdrawn; | ||
• | where certificates for original notes are transmitted, list the name of the registered holder of the original notes if different from the person withdrawing the original notes; | ||
• | contain a statement that the holder is withdrawing his election to have the original notes exchanged; and | ||
• | be signed by the holder in the same manner as the original signature on the letter of transmittal by which the original notes were tendered, including any required signature guarantees, or be accompanied by documents of transfer to have the trustee with respect to the original notes register the transfer of the original notes in the name of the person withdrawing the tender. |
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Registered & Certified Mail: | Regular Mail or Courier: | In Person by Hand Only: | ||
Wells Fargo Bank, National | Wells Fargo Bank, National | Wells Fargo Bank, National | ||
Association | Association | Association | ||
Corporate Trust Operations | Corporate Trust Operations | Corporate Trust Services | ||
MAC N9303-121 | MAC N9303-121 | Northstar East Building— | ||
P.O. Box 1517 | 6th St & Marquette Avenue | 12th Floor | ||
Minneapolis, MN 55480 | Minneapolis, MN 55479 | 608 Second Avenue South Minneapolis, MN 55402 |
Attention: Corporate Trust Operations
Telephone: (800) 344-5128
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• | such exchange notes are acquired in the ordinary course of such holder’s business; and |
• | such holder, other than broker-dealers, has no arrangement or understanding with any person to participate in the distribution of the exchange notes. |
• | it is not an affiliate of Brown Shoe; |
• | it is not engaged in, and does not intend to engage in, a distribution of the exchange notes and has no arrangement or understanding to participate in a distribution of exchange notes; and |
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• | it is acquiring the exchange notes in the ordinary course of its business. |
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• | are general unsecured obligations of the Company; | ||
• | are effectively subordinated to all existing and future secured obligations of the Company, including the obligations of the Company under the Credit Agreement, to the extent of the assets securing such obligations, and to all existing and future liabilities of the Company’s subsidiaries that are not Guarantors, to the extent of the assets of such subsidiaries; | ||
• | arepari passuin right of payment with all existing and future unsecured, unsubordinated obligations of the Company; | ||
• | will rank senior in right of payment to any future unsecured obligations of the Company that are, by their terms, expressly subordinated in right of payment to the Notes; and | ||
• | are guaranteed by the Guarantors. |
• | the Company would have had $443.2 million of consolidated indebtedness outstanding, $244.7 million of which would have been secured indebtedness; and |
• | the Company’s Subsidiaries that are not Guarantors would have had $96.6 million of liabilities. |
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• | is a general unsecured obligation of the Guarantor; | ||
• | is effectively subordinated to all existing and future secured obligations of the Guarantor, including the Guarantee of the Guarantor under the Credit Agreement; | ||
• | ispari passuin right of payment with all existing and future unsecured, unsubordinated obligations of the Guarantor; and | ||
• | will rank senior in right of payment to any future unsecured obligations of the Guarantor that are, by their terms, expressly subordinated in right of payment to the Guarantee. |
• | 100% of the aggregate principal amount of the Notes to be redeemed, together with accrued and unpaid interest and Additional Interest, if any, to the date of redemption, and |
• | the sum of the present values of the principal of the Notes being redeemed plus scheduled payments of interest (not including any portion of such payments of interest accrued as of the date of redemption) from the date of redemption to May 15, 2014 discounted to the redemption date (assuming the Notes are redeemed on May 15, 2014) on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 50 basis points, together with accrued and unpaid interest and Additional Interest, if any, to the date of redemption. |
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(1) | at least 65% of the aggregate principal amount of Notes issued under the Indenture (including any Additional Notes) remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company or its Subsidiaries); and |
(2) | the redemption must occur within 45 days of the date of the closing of such Equity Offering. |
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Year | Percentage | |||
2014 | 105.344 | % | ||
2015 | 103.563 | % | ||
2016 | 101.781 | % | ||
2017 and thereafter | 100.000 | % |
(1) | if the Notes are listed on any national securities exchange, in compliance with the requirements of such principal national securities exchange; or | ||
(2) | if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate. |
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(1) | accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer; |
(2) | deposit with the Paying Agent an amount equal to the Change of Control Payment in respect of all Notes or portions thereof so tendered; and |
(3) | deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company. |
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(1) | the Company (or the Restricted Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the assets or Equity Interests issued or sold or otherwise disposed of; and |
(2) | at least 75% of the consideration therefor received by the Company or such Restricted Subsidiary is in the form of cash, Cash Equivalents or Replacement Assets or a combination of the foregoing. For purposes of this provision, each of the following shall be deemed to be cash: |
(a) | any liabilities (as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet) of the Company or any Restricted Subsidiary (other than contingent liabilities, Indebtedness that is by its termspari passuwith, or subordinated to, the Notes or any Note Guarantee and liabilities to the extent owed to the Company or any Affiliate of the Company) that are assumed by the transferee of any such assets or Equity Interests pursuant to a written assignment and assumption agreement that releases the Company or such Restricted Subsidiary from further liability therefor; | ||
(b) | any securities, notes or other obligations received by the Company or any such Restricted Subsidiary from such transferee that are converted by the Company or such Restricted Subsidiary into cash within 180 days after the date of such Asset Sale (to the extent of the cash received in that conversion); and | ||
(c) | any Designated Non-cash Consideration received by the Company or any of its Restricted Subsidiaries in such Asset Sale having an aggregate Fair Market Value, taken together with all other Designated Non-cash Consideration received pursuant to this clause (c) that is at that time outstanding, not to exceed $50.0 million. |
(1) | to repay Indebtedness secured by such assets; |
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(2) | to purchase Replacement Assets (or enter into a binding agreement to purchase such Replacement Assets;providedthat (x) such purchase is consummated within 60 days after the date of such binding agreement and (y) if such purchase is not consummated within the period set forth in subclause (x), the Net Proceeds not so applied will be deemed to be Excess Proceeds (as defined below)); or |
(3) | any combination of the foregoing. |
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(a) | the Notes have been rated Investment Grade; and |
(b) | no Default or Event of Default has occurred and is continuing under the indenture, |
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(A) | The Company will not, and will not permit any of its Restricted Subsidiaries to, directly or indirectly: |
(i) | declare or pay (without duplication) any dividend or make any other payment or distribution on account of the Company’s or any of its Restricted Subsidiaries’ Equity Interests (including, without limitation, any payment in connection with any merger or consolidation involving the Company or any of its Restricted Subsidiaries) or to the direct or indirect holders of the Company’s or any of its Restricted Subsidiaries’ Equity Interests in their capacity as such (other than dividends, payments or distributions (x) payable in Equity Interests (other than Disqualified Stock) of the Company or (y) to the Company or a Restricted Subsidiary of the Company); | ||
(ii) | purchase, redeem or otherwise acquire or retire for value (including, without limitation, in connection with any merger or consolidation involving the Company) any Equity Interests of the Company or any Restricted Subsidiary thereof held by Persons other than the Company or any of its Wholly Owned Restricted Subsidiaries; | ||
(iii) | make any payment on or with respect to, or purchase, redeem, defease or otherwise acquire or retire for value any Indebtedness that is subordinated to the Notes or the Note Guarantees, except (a) a payment of interest or principal at the Stated Maturity thereof or (b) the purchase, repurchase, redemption, defeasance or other acquisition or retirement of any such Indebtedness in anticipation of satisfying a sinking fund obligation, principal installment or final maturity, in each case due within one year of the date of such purchase, repurchase, redemption, defeasance or other acquisition or retirement; or | ||
(iv) | make any Restricted Investment (all such payments and other actions set forth in clauses (1) through (4) above being collectively referred to as “Restricted Payments”), |
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(1) | no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof; and | ||
(2) | the Company would, at the time of such Restricted Payment and after giving pro forma effect thereto as if such Restricted Payment had been made at the beginning of the applicable four-quarter period, have been permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described below under the caption “—Incurrence of Indebtedness”; and | ||
(3) | such Restricted Payment, together with the aggregate amount of all other Restricted Payments made by the Company and its Restricted Subsidiaries commencing on and after January 30, 2011 (excluding Restricted Payments permitted by clauses (2), (3), (4), (5), (6) and (9) of the next succeeding paragraph (B)), is less than the sum, without duplication, of: |
(a) | 50% of the Consolidated Net Income of the Company for the period (taken as one accounting period) commencing on and after January 30, 2011 to the end of the Company’s most recently ended fiscal quarter for which internal financial statements are available at the time of such Restricted Payment (or, if such Consolidated Net Income for such period is a deficit, less 100% of such deficit),plus | ||
(b) | 100% of the aggregate net cash proceeds or the Fair Market Value of property other than cash received by the Company since January 30, 2011 as a contribution to its common equity capital or from the issue or sale of Equity Interests (other than Disqualified Stock) of the Company or from the Incurrence of Indebtedness of the Company that has been converted into or exchanged for such Equity Interests (other than Equity Interests sold to, or Indebtedness held by, a Subsidiary of the Company),plus | ||
(c) | with respect to Restricted Investments made by the Company and its Restricted Subsidiaries commencing on and after January 30, 2011, an amount equal to the net reduction in such Restricted Investments in any Person resulting from repayments of loans or advances, or other transfers of assets, in each case to the Company or any Restricted Subsidiary or from the net cash proceeds from the sale of any such Restricted Investment (except, in each case, to the extent any such payment or proceeds are included in the calculation of Consolidated Net Income), from the release of any Guarantee (except to the extent any amounts are paid under such Guarantee) or from redesignations of Unrestricted Subsidiaries as Restricted Subsidiaries, not to exceed, in each case, the amount of Restricted Investments previously made by the Company or any Restricted Subsidiary in such Person or Unrestricted Subsidiary commencing on and after January 30, 2011. |
(B) | The preceding provisions will not prohibit, so long as, in the case of clauses (7), (8), and (11) below, no Default has occurred and is continuing or would be caused thereby: |
(1) | the payment of any dividend within 60 days after the date of declaration thereof, if at said date of declaration such payment would have complied with the provisions of the Indenture; | ||
(2) | the payment of any dividend by a Restricted Subsidiary of the Company to the holders of its Common Stock on a pro rata basis; | ||
(3) | the redemption, repurchase, retirement, defeasance or other acquisition of any subordinated Indebtedness of the Company or any Guarantor or of any Equity Interests of the Company |
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or any Restricted Subsidiary in exchange for, or out of the net cash proceeds of a contribution to the common equity of the Company or a substantially concurrent sale (other than to a Subsidiary of the Company) of, Equity Interests (other than Disqualified Stock) of the Company;providedthat the amount of any such net cash proceeds that are utilized for any such redemption, repurchase, retirement, defeasance or other acquisition will be excluded from clause (3)(b) of the preceding paragraph (A); | |||
(4) | the repayment, defeasance, redemption, repurchase or other acquisition of subordinated Indebtedness of the Company or any Guarantor with the net cash proceeds from an Incurrence of Permitted Refinancing Indebtedness; | ||
(5) | Investments acquired as a capital contribution to, or in exchange for, or out of the net cash proceeds of a substantially concurrent offering of, Equity Interests (other than Disqualified Stock) of the Company;providedthat the amount of any such net cash proceeds that are utilized for any such acquisition or exchange shall be excluded from clause (3)(b) of the preceding paragraph (A); | ||
(6) | the purchase, repurchase, redemption, acquisition or retirement for value of any Capital Stock of the Company upon the exercise of warrants, options or similar rights if such Capital Stock constitutes all or a portion of the exercise price or is surrendered in connection with satisfying any federal or state income tax obligation incurred in connection with such exercise;providedthat no cash payment in respect of such purchase, repurchase, redemption, acquisition, retirement or exercise shall be made by the Company or any Restricted Subsidiary thereof; | ||
(7) | the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former employee, officer, director or consultant of the Company (or any of its Restricted Subsidiaries) or their respective estates, spouses, former spouses or family members pursuant to the terms of any employee equity subscription agreement, stock option agreement or similar agreement entered into in the ordinary course of business;providedthat the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests in any fiscal year will not exceed $5.0 million; | ||
(8) | the declaration and payment of cash dividends on the Company’s issued and outstanding Common Stock in an amount not to exceed $0.45 per share (as adjusted for stock splits and similar transactions after the Issue Date) per fiscal year;provided that the aggregate amount of all dividends declared or paid pursuant to this clause (8) shall not exceed $18.0 million in any fiscal year; | ||
(9) | the payment of any contingent consideration or purchase price adjustment and any payment under any indemnification obligation, in each case, pursuant to the terms of the Stock Purchase Agreement (including the Earn-out Agreement delivered in connection with the Stock Purchase Agreement and as in effect on the Issue Date); | ||
(10) | the payment of cash in lieu of the issuance of fractional shares of Equity Interests upon conversion or exchange of securities convertible into or exchangeable for Equity Interests of the Company;providedthat any such cash payment shall not be for the purpose of evading the limitations of this covenant (as determined in good faith by the Board of Directors of the Company); and |
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(11) | other Restricted Payments not otherwise permitted pursuant to this covenant in an aggregate principal amount since the Issue Date not to exceed $75.0 million. |
(1) | the Incurrence by the Company of Indebtedness under Credit Facilities (and the Incurrence by the Guarantors of Guarantees thereof) in an aggregate principal amount at any one time outstanding pursuant to this clause (1) (with letters of credit being deemed to have a principal amount equal to the maximum potential liability of the Company and its Restricted Subsidiaries thereunder) not to exceed the greater of (x) $680.0 million, and (y) the Borrowing Base on such date of Incurrence; | ||
(2) | the Incurrence of Existing Indebtedness; | ||
(3) | the Incurrence by the Company and the Guarantors of Indebtedness represented by the Notes and the related Note Guarantees to be issued on the Issue Date; | ||
(4) | the Incurrence by the Company or any Restricted Subsidiary of the Company of Indebtedness represented by Capital Lease Obligations, mortgage financings or purchase money obligations, in each case, Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of property, plant or equipment used in the business of the Company or such Restricted Subsidiary, in an aggregate principal amount, including all Permitted Refinancing Indebtedness Incurred to refund, refinance or replace any Indebtedness Incurred pursuant to this clause (4), not to exceed at any time outstanding the greater of (x) $40.0 million and (y) 7.5% of the Company’s Consolidated Net Tangible Assets on such date of Incurrence; | ||
(5) | the Incurrence by the Company or any Restricted Subsidiary of the Company of Permitted Refinancing Indebtedness in exchange for, or the net proceeds of which are used to refund, refinance or replace Indebtedness (other than intercompany Indebtedness) that was permitted by the Indenture to be Incurred under the first paragraph of this covenant or clauses (2), (3), (4), (5) or (15) of this paragraph; | ||
(6) | the Incurrence by the Company or any of its Restricted Subsidiaries of intercompany Indebtedness owing to and held by the Company or any of its Restricted Subsidiaries;provided,however, that: |
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(a) | if the Company or any Guarantor is the obligor on such Indebtedness, such Indebtedness must be unsecured and expressly subordinated to the prior payment in full in cash of all Obligations with respect to the Notes, in the case of the Company, or the Note Guarantee, in the case of a Guarantor; | ||
(b) | Indebtedness owed to the Company or any Guarantor must be evidenced by an unsubordinated promissory note, unless the obligor under such Indebtedness is the Company or a Guarantor; | ||
(c) | (i) any subsequent issuance or transfer of Equity Interests that results in any such Indebtedness being held by a Person other than the Company or a Restricted Subsidiary thereof and (ii) any sale or other transfer of any such Indebtedness to a Person that is not either the Company or a Restricted Subsidiary thereof, will be deemed, in each case, to constitute an Incurrence of such Indebtedness by the Company or such Restricted Subsidiary, as the case may be, that was not permitted by this clause (6); |
(7) | the Guarantee by the Company or any of the Guarantors of Indebtedness of the Company or a Restricted Subsidiary of the Company that was permitted to be Incurred by another provision of this covenant; | ||
(8) | the Incurrence by the Company or any of its Restricted Subsidiaries of Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, and that do not increase the Indebtedness of the obligor outstanding at any time other than as a result of fluctuations in interest rates, commodity prices or foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder; | ||
(9) | the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, or Guarantees or letters of credit, surety bonds or performance bonds securing any obligations of the Company or any of its Restricted Subsidiaries pursuant to such agreements, in any case Incurred in connection with the disposition of any business, assets or Capital Stock of any Restricted Subsidiary (other than Guarantees of Indebtedness Incurred by any Person acquiring all or any portion of such business, assets or Capital Stock of such Restricted Subsidiary for the purpose of financing such acquisition), so long as the principal amount does not exceed the gross proceeds actually received by the Company or any Restricted Subsidiary thereof in connection with such disposition; | ||
(10) | the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument drawn against insufficient funds in the ordinary course of business,provided,however, that such Indebtedness is extinguished within five Business Days of its Incurrence; | ||
(11) | the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit in respect of workers’ compensation claims or self-insurance obligations or bid, performance or surety bonds (in each case other than for an obligation for borrowed money); | ||
(12) | the Incurrence by the Company or any of its Restricted Subsidiaries of Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of |
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business;providedthat, upon the drawing of such letters of credit or the Incurrence of such Indebtedness, such obligations are reimbursed within 30 days following such drawing or Incurrence; | |||
(13) | the Incurrence by the Company of Indebtedness to the extent that the net proceeds thereof are promptly deposited to defease or to satisfy and discharge the Notes; | ||
(14) | the incurrence of any Indebtedness by a Receivables Subsidiary that is not recourse to the Company or any other Restricted Subsidiary of the Company (other than Standard Securitization Undertakings) incurred in connection with a Qualified Receivables Transaction; or | ||
(15) | the Incurrence by the Company or any of its Restricted Subsidiaries of additional Indebtedness in an aggregate principal amount (or accreted value, as applicable) at any time outstanding, including all Permitted Refinancing Indebtedness Incurred to refund, refinance or replace any Indebtedness Incurred pursuant to this clause (15), not to exceed the greater of (x) $40.0 million and (y) 7.5% of the Company’s Consolidated Net Tangible Assets on such date of Incurrence. |
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(1) | pay dividends or make any other distributions on its Capital Stock (or with respect to any other interest or participation in, or measured by, its profits) to the Company or any of its Restricted Subsidiaries or pay any liabilities owed to the Company or any of its Restricted Subsidiaries; | ||
(2) | make loans or advances to the Company or any of its Restricted Subsidiaries; or | ||
(3) | transfer any of its properties or assets to the Company or any of its Restricted Subsidiaries. |
(1) | existing under, by reason of or with respect to the Credit Agreement, Existing Indebtedness or any other agreements in effect on the Issue Date and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof,providedthat the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, than those contained in the Credit Agreement, Existing Indebtedness or such other agreements, as the case may be, as in effect on the Issue Date; | ||
(2) | set forth in the Indenture, the Notes and the Note Guarantees; | ||
(3) | existing under, by reason of or with respect to applicable law; | ||
(4) | with respect to any Person or the property or assets of a Person acquired by the Company or any of its Restricted Subsidiaries existing at the time of such acquisition and not incurred in connection with or in contemplation of such acquisition, which encumbrance or restriction is not applicable to any Person or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired and any amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacements or refinancings thereof,providedthat the encumbrances and restrictions in any such amendments, modifications, restatements, renewals, extensions, supplements, refundings, replacement or refinancings are no more restrictive, taken as a whole, than those in effect on the date of the acquisition; | ||
(5) | in the case of clause (3) of the first paragraph of this covenant: |
(A) | that restrict in a customary manner the subletting, assignment or transfer of any property or asset that is subject to a lease, license, conveyance or contract or similar property or asset, | ||
(B) | existing by virtue of any transfer of, agreement to transfer, option or right with respect to, or Lien on, any property or assets of the Company or any Restricted Subsidiary thereof not otherwise prohibited by the Indenture or |
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(C) | arising or agreed to in the ordinary course of business, not relating to any Indebtedness, and that do not, individually or in the aggregate, detract from the value of property or assets of the Company or any Restricted Subsidiary thereof in any manner material to the Company or any Restricted Subsidiary thereof; |
(6) | existing under, by reason of or with respect to any agreement for the sale or other disposition of all or substantially all of the Capital Stock of, or property and assets of, a Restricted Subsidiary that restrict distributions by that Restricted Subsidiary pending such sale or other disposition; | ||
(7) | restrictions on cash or other deposits or net worth imposed by customers or required by insurance, surety or bonding companies, in each case, under contracts entered into in the ordinary course of business; and | ||
(8) | any Purchase Money Note, or other Indebtedness or contractual requirements of a Receivables Subsidiary in connection with a Qualified Securitization Transaction;provided that such restrictions only apply to such Receivables Subsidiary. |
(1) | either: (a) the Company is the surviving corporation; or (b) the Person formed by or surviving any such consolidation or merger (if other than the Company) or to which such sale, assignment, transfer, conveyance or other disposition will have been made (i) is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia and (ii) assumes all the obligations of the Company under the Notes, the Indenture and the Registration Rights Agreement pursuant to agreements reasonably satisfactory to the Trustee; | ||
(2) | immediately after giving effect to such transaction, no Default or Event of Default exists; | ||
(3) | the Company or the Person formed by or surviving any such consolidation or merger (if other than the Company), or to which such sale, assignment, transfer, conveyance or other disposition shall have been made, will, on the date of such transaction after giving pro forma effect thereto and any related financing transactions as if the same had occurred at the beginning of the applicable four-quarter period, be permitted to Incur at least $1.00 of additional Indebtedness pursuant to the Fixed Charge Coverage Ratio test set forth in the first paragraph of the covenant described above under the caption “—Incurrence of Indebtedness”; | ||
(4) | each Guarantor, unless such Guarantor is the Person with which the Company has entered into a transaction under this covenant, will have by supplemental indenture confirmed its obligations under the Notes and the Indenture; and | ||
(5) | the Company delivers to the Trustee an Officers’ Certificate (attaching the arithmetic computation to demonstrate compliance with clause (3) above) and an Opinion of Counsel stating that such transaction and such agreement complies with this covenant and that all conditions precedent provided for herein relating to such transaction have been complied with. |
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(1) | such Affiliate Transaction is on terms that are no less favorable to the Company or the relevant Restricted Subsidiary than those that would have been obtained in a comparable arm’s-length transaction by the Company or such Restricted Subsidiary with a Person that is not an Affiliate of the Company or any of its Restricted Subsidiaries; and |
(2) | the Company delivers to the Trustee: |
(a) | with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $3.5 million, an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this covenant; and | ||
(b) | with respect to any Affiliate Transaction or series of related Affiliate Transactions involving aggregate consideration in excess of $20.0 million, either (x) a Board Resolution set forth in an Officers’ Certificate certifying that such Affiliate Transaction or series of related Affiliate Transactions complies with this covenant and that such Affiliate Transaction or series of related Affiliate Transactions has been approved by a majority of the disinterested members of the Board of Directors of the Company or (y), an opinion as to the fairness to the Company or such Restricted Subsidiary of such Affiliate Transaction or series of related Affiliate Transactions from a financial point of view issued by an independent accounting, appraisal or investment banking firm of national standing. |
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(1) | transactions between or among the Company and/or its Restricted Subsidiaries; | ||
(2) | payment of reasonable and customary fees to, and reasonable and customary indemnification and similar payments on behalf of, directors of the Company or any of its Restricted Subsidiaries; | ||
(3) | Restricted Payments that are permitted by the provisions of the Indenture described above under the caption “—Restricted Payments”; | ||
(4) | any sale of Capital Stock (other than Disqualified Stock) of the Company; | ||
(5) | transactions pursuant to agreements or arrangements in effect on the Issue Date and described in this prospectus, or any amendment, modification, or supplement thereto or replacement thereof, as long as such agreement or arrangement, as so amended, modified, supplemented or replaced, taken as a whole, is not more disadvantageous to the Company and its Restricted Subsidiaries than the original agreement or arrangement in existence on the Issue Date; | ||
(6) | any employment, consulting, service or termination agreement, or reasonable and customary indemnification arrangements, entered into by the Company or any of its Restricted Subsidiaries with officers and employees of the Company or any of its Restricted Subsidiaries that are Affiliates of the Company and the payment of compensation to such officers and employees (including amounts paid pursuant to employee benefit plans, employee stock option or similar plans), so long as such agreement, arrangement or payment have been approved by a majority of the disinterested members of the Board of Directors of the Company (or by the Company’s Compensation Committee so long as such committee satisfies applicable independence tests under federal securities laws and the primary exchange on which the Company’s Common Stock is listed); | ||
(7) | transactions with a Person that is an Affiliate of the Company solely because the Company, directly or indirectly, owns Equity Interests in, or controls, such Person; and | ||
(8) | commission, payroll, travel and similar advances to officers and employees of the Company or any of its Restricted Subsidiaries made consistent with past practices. |
(1) | any Guarantee by the Company or any Restricted Subsidiary thereof of any Indebtedness of the Subsidiary being so designated will be deemed to be an Incurrence of Indebtedness by the Company or such Restricted Subsidiary (or both, if applicable) at the time of such designation, and such Incurrence of Indebtedness would be permitted under the covenant described above under the caption “—Incurrence of Indebtedness”; |
(2) | the aggregate Fair Market Value of all outstanding Investments owned by the Company and its Restricted Subsidiaries in the Subsidiary being so designated (including any Guarantee by the Company or any Restricted Subsidiary of any Indebtedness of such Subsidiary) will be deemed |
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to be a Restricted Investment made as of the time of such designation and that such Investment would be permitted under the covenant described above under the caption “—Restricted Payments”; |
(3) | such Subsidiary does not hold any Liens on any property of the Company or any Restricted Subsidiary thereof; |
(4) | the Subsidiary being so designated: |
(a) | is not party to any agreement, contract, arrangement or understanding with the Company or any Restricted Subsidiary of the Company unless the terms of any such agreement, contract, arrangement or understanding are no less favorable to the Company or such Restricted Subsidiary than those that might be obtained at the time from Persons who are not Affiliates of the Company; | ||
(b) | is a Person with respect to which neither the Company nor any of its Restricted Subsidiaries has any direct or indirect obligation (i) to subscribe for additional Equity Interests or (ii) to maintain or preserve such Person’s financial condition or to cause such Person to achieve any specified levels of operating results; and | ||
(c) | has not Guaranteed or otherwise directly or indirectly provided credit support for any Indebtedness of the Company or any of its Restricted Subsidiaries, except to the extent such Guarantee or credit support would be released upon such designation; and |
(5) | no Default or Event of Default would be in existence following such designation. |
(1) | such designation will be deemed to be an Incurrence of Indebtedness by a Restricted Subsidiary of the Company of any outstanding Indebtedness of such Unrestricted Subsidiary and such designation will only be permitted if such Indebtedness is permitted under the covenant described under the caption “—Incurrence of Indebtedness,” calculated on a pro forma basis as if such designation had occurred at the beginning of the applicable four-quarter reference period; |
(2) | all outstanding Investments owned by such Unrestricted Subsidiary will be deemed to be made as of the time of such designation and such designation will only be permitted if such Investments would be permitted under the covenant described above under the caption “—Restricted Payments”; |
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(3) | all Liens upon property or assets of such Unrestricted Subsidiary existing at the time of such designation would be permitted under the caption “—Liens”; and |
(4) | no Default or Event of Default would be in existence following such designation. |
(1) | immediately after giving effect to that transaction, no Default or Event of Default exists; and | ||
(2) | either: |
(a) | the Person acquiring the property in any such sale or disposition or the Person formed by or surviving any such consolidation or merger (if other than the Guarantor) is organized or existing under the laws of the United States, any state thereof or the District of Columbia and assumes all the obligations of that Guarantor under the Indenture, its Note Guarantee and the Registration Rights Agreement pursuant to a supplemental indenture satisfactory to the Trustee; or | ||
(b) | such sale or other disposition or consolidation or merger complies with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales.” |
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(1) | in connection with any sale or other disposition of the Capital Stock of a Guarantor to a Person that is not (either before or after giving effect to such transaction) a Restricted Subsidiary of the Company, if after giving effect to such sale or other disposition such Guarantor is no longer a Restricted Subsidiary of the Company and such sale of such Capital Stock of that Guarantor complies with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales”; | ||
(2) | if the Company properly designates any Restricted Subsidiary that is a Guarantor as an Unrestricted Subsidiary under the Indenture; | ||
(3) | solely in the case of a Note Guarantee created after the Issue Date pursuant to the first paragraph of this covenant, upon the release or discharge of the Guarantee which resulted in the creation of such Note Guarantee pursuant to this covenant, except a discharge or release by or as a result of payment under such Guarantee; or | ||
(4) | upon the legal defeasance or covenant defeasance or the satisfaction and discharge of the Indenture, in each case, in compliance with the terms of the terms of the Indenture. |
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(1) | all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report on the annual financial statements by the Company’s certified independent accountants; and | ||
(2) | all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports; |
(1) | default for 30 days in the payment when due of interest on, or Additional Interest with respect to, the Notes; | ||
(2) | default in payment when due (whether at maturity, upon acceleration, redemption or otherwise) of the principal of, or premium, if any, on the Notes; | ||
(3) | failure by the Company or any of its Restricted Subsidiaries to comply with the provisions described under the captions “—Repurchase at the Option of Holders—Change of Control,” “—Repurchase at the Option of Holders—Asset Sales” or “—Certain Covenants—Merger, Consolidation or Sale of Assets”; |
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(4) | failure by the Company or any of its Restricted Subsidiaries for 45 days after written notice by the Trustee or Holders representing 25% or more of the aggregate principal amount of Notes outstanding to comply with any of the other agreements in the Indenture; | ||
(5) | default under any mortgage, indenture or instrument under which there may be issued or by which there may be secured or evidenced any Indebtedness for money borrowed by the Company or any of its Restricted Subsidiaries (or the payment of which is Guaranteed by the Company or any of its Restricted Subsidiaries) whether such Indebtedness or Guarantee now exists, or is created after the Issue Date, if that default: |
(a) | is caused by a failure to make any payment when due at the final maturity of such Indebtedness (a “Payment Default”); or | ||
(b) | results in the acceleration of such Indebtedness prior to its express maturity, | ||
and, in each case, the principal amount of any such Indebtedness, together with the principal amount of any other such Indebtedness under which there has been a Payment Default or the maturity of which has been so accelerated, aggregates $25.0 million or more; |
(6) | failure by the Company or any of its Restricted Subsidiaries to pay final judgments (to the extent such judgments are not paid or covered by insurance provided by a reputable carrier that has the ability to perform and has acknowledged coverage in writing) aggregating in excess of $25.0 million, which judgments are not paid, discharged or stayed for a period of 60 days after such judgments have become final and non-appealable; | ||
(7) | except as permitted by the Indenture, any Note Guarantee of a Guarantor that is a Significant Subsidiary, or the Note Guarantees of any group of Guarantors that, taken together, would constitute a Significant Subsidiary, shall be held in any judicial proceeding to be unenforceable or invalid or shall cease for any reason to be in full force and effect or any Guarantor, or any Person acting on behalf of any Guarantor, shall deny or disaffirm its obligations under its Note Guarantee; and | ||
(8) | certain events of bankruptcy or insolvency with respect to the Company, any Guarantor or any Significant Subsidiary of the Company (or any Restricted Subsidiaries that together would constitute a Significant Subsidiary). |
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(1) | the Holder gives the Trustee written notice of a continuing Event of Default; | ||
(2) | the Holders of at least 25% in aggregate principal amount of outstanding Notes make a written request to the Trustee to pursue the remedy; | ||
(3) | such Holder or Holders offer the Trustee indemnity satisfactory to the Trustee against any costs, liability or expense; | ||
(4) | the Trustee does not comply with the request within 60 days after receipt of the request and the offer of indemnity; and | ||
(5) | during such 60-day period, the Holders of a majority in aggregate principal amount of the outstanding Notes do not give the Trustee a direction that is inconsistent with the request. |
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(1) | the rights of Holders of outstanding Notes to receive payments in respect of the principal of, or interest or premium and Additional Interest, if any, on such Notes when such payments are due from the trust referred to below; | ||
(2) | the Company’s obligations with respect to the Notes concerning issuing temporary Notes, registration of Notes, mutilated, destroyed, lost or stolen Notes and the maintenance of an office or agency for payment and money for security payments held in trust; | ||
(3) | the rights, powers, trusts, duties and immunities of the Trustee, and the Company’s and the Guarantors’ obligations in connection therewith; and | ||
(4) | the Legal Defeasance provisions of the Indenture. |
(1) | the Company must irrevocably deposit with the Trustee, in trust, for the benefit of the Holders of the Notes, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient, in the opinion of a nationally recognized firm of independent public accountants, investment bank or appraisal firm expressed in a written certificate of such firm of independent public accountants, investment bank or appraisal firm to the Trustee, to pay the principal of, or interest and premium and Additional Interest, if any, on the outstanding Notes on the Stated Maturity or on the applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date; | ||
(2) | in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that (a) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (b) since the Issue Date, there has been a change in the applicable federal income tax law, in either case to the effect that, and based thereon such Opinion of Counsel shall confirm that, the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such Legal Defeasance had not occurred; | ||
(3) | in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably acceptable to the Trustee confirming that the Holders of the outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to federal income tax on the same |
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amounts, in the same manner and at the same times as would have been the case if such Covenant Defeasance had not occurred; | |||
(4) | no Default or Event of Default shall have occurred and be continuing either: (a) on the date of such deposit; or (b) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time in the period ending on the 123rd day after the date of deposit; | ||
(5) | such Legal Defeasance or Covenant Defeasance will not result in a breach or violation of, or constitute a default under any material agreement or instrument to which the Company or any of its Subsidiaries is a party or by which the Company or any of its Subsidiaries is bound; | ||
(6) | the Company must have delivered to the Trustee an Opinion of Counsel to the effect that, (1) assuming no intervening bankruptcy of the Company or any Guarantor between the date of deposit and the 123rd day following the deposit and assuming that no Holder is an “insider” of the Company under applicable bankruptcy law, after the 123rd day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, including Section 547 of the United States Bankruptcy Code and Section 15 of the New York Debtor and Creditor Law and (2) the creation of the defeasance trust does not violate the Investment Company Act of 1940; | ||
(7) | the Company must deliver to the Trustee an Officers’ Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders of Notes over the other creditors of the Company with the intent of defeating, hindering, delaying or defrauding creditors of the Company or others; | ||
(8) | if the Notes are to be redeemed prior to their Stated Maturity, the Company must deliver to the Trustee irrevocable instructions to redeem all of the Notes on the specified redemption date; and | ||
(9) | the Company must deliver to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that all conditions precedent relating to the Legal Defeasance or the Covenant Defeasance have been complied with. |
(1) | reduce the principal amount of Notes whose Holders must consent to an amendment, supplement or waiver; | ||
(2) | reduce the principal of or change the fixed maturity of any Note or reduce the premium payable upon the redemption of any Note or change the time at which any Note may be redeemed as |
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described under “—Optional Redemption” (excluding for greater certainty any notice periods with respect to Notes that are otherwise redeemable); | |||
(3) | reduce the rate of or change the time for payment of interest on any Note; | ||
(4) | waive a Default or Event of Default in the payment of principal of, or interest, or premium or Additional Interest, if any, on, the Notes (except a rescission of acceleration of the Notes by the Holders of at least a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration); | ||
(5) | make any Note payable in money other than U.S. dollars; | ||
(6) | make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Notes to receive payments of principal of, or interest or premium or Additional Interest, if any, on, the Notes; | ||
(7) | release any Guarantor from any of its obligations under its Note Guarantee or the Indenture, except in accordance with the terms of the Indenture; | ||
(8) | impair the right to institute suit for the enforcement of any payment on or with respect to the Notes or the Note Guarantees; | ||
(9) | amend, change or modify the obligation of the Company to make and consummate an Asset Sale Offer with respect to any Asset Sale in accordance with the covenant described under the caption “Repurchase at the Option of Holders—Asset Sales” after the obligation to make such Asset Sale Offer has arisen, or the obligation of the Company to make and consummate a Change of Control Offer in the event of a Change of Control in accordance with the covenant described under the caption “Repurchase at the Option of Holders—Change of Control” after such Change of Control has occurred, including, in each case, amending, changing or modifying any definition relating thereto; | ||
(10) | except as otherwise permitted under the covenants described under the captions “—Certain Covenants—Merger, Consolidation and Sale of Assets” and “—Certain Covenants—Guarantees,” consent to the assignment or transfer by the Company or any Guarantor of any of their rights or obligations under the Indenture; | ||
(11) | amend or modify any of the provisions of the Indenture or the related definitions affecting the ranking of the Notes or any Note Guarantee in any manner adverse to the Holders of the Notes or any Note Guarantee; or | ||
(12) | make any change in the preceding amendment and waiver provisions. |
(1) | cure any ambiguity, defect or inconsistency; | ||
(2) | provide for uncertificated Notes in addition to or in place of certificated Notes; |
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(3) | provide for the assumption of the Company’s or any Guarantor’s obligations to Holders of Notes in the case of a merger or consolidation or sale of all or substantially all of the Company’s or such Guarantor’s assets; | ||
(4) | make any change that would provide any additional rights or benefits to the Holders of Notes or that does not materially adversely affect the legal rights under the Indenture of any such Holder; | ||
(5) | comply with requirements of the Commission in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act; | ||
(6) | comply with the provisions described under “—Certain Covenants—Guarantees”; | ||
(7) | comply with the rules of any applicable securities depositary; | ||
(8) | evidence and provide for the acceptance of appointment by a successor Trustee; | ||
(9) | provide for the issuance of Additional Notes in accordance with the Indenture; or | ||
(10) | conform the text of the Indenture, the Note Guarantees, or the Notes to any provision of this Description of Notes to the extent that such provision in this Description of Notes was intended to be a verbatim recitation of a provision of the Indenture, the Note Guarantees or the Notes. |
(1) | either: |
(a) | all Notes that have been authenticated (except lost, stolen or destroyed Notes that have been replaced or paid and Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Company) have been delivered to the Trustee for cancellation; or | ||
(b) | all Notes that have not been delivered to the Trustee for cancellation have become due and payable by reason of the mailing of a notice of redemption or otherwise or will become due and payable within one year and the Company or any Guarantor has irrevocably deposited or caused to be deposited with the Trustee as trust funds in trust solely for the benefit of the Holders, cash in U.S. dollars, non-callable Government Securities, or a combination thereof, in such amounts as will be sufficient without consideration of any reinvestment of interest, to pay and discharge the entire indebtedness on the Notes not delivered to the Trustee for cancellation for principal, premium and Additional Interest, if any, and accrued interest to the date of maturity or redemption; |
(2) | no Default or Event of Default shall have occurred and be continuing on the date of such deposit referred to in clause (1)(b) above or shall occur as a result of such deposit and such deposit will not result in a breach or violation of, or constitute a default under, any other instrument to which the Company or any Guarantor is a party or by which the Company or any Guarantor is bound; | ||
(3) | the Company or any Guarantor has paid or caused to be paid all sums payable by it under the Indenture; and |
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(4) | the Company has delivered irrevocable instructions to the Trustee under the Indenture to apply the deposited money referred to in clause (1)(b) above toward the payment of the Notes at maturity or the redemption date, as the case may be. |
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(1) | upon deposit of the Global Notes, DTC will credit the accounts of Participants designated by the Initial Purchasers with portions of the principal amount of the Global Notes; and |
(2) | ownership of these interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Notes). |
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(1) | any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to or payments made on account of beneficial ownership interest in the Global Notes or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Notes; or |
(2) | any other matter relating to the actions and practices of DTC or any of its Participants or Indirect Participants. |
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(1) | DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act, and in each case the Company fails to appoint a successor depositary; | ||
(2) | the Company, at its option, notifies the Trustee in writing that it elects to cause the issuance of Certificated Notes (DTC has advised the Company that, in such event, under current DTC practices, DTC would notify its participants of the Company’s request, but will only withdraw beneficial interests from a Global Note at the request of each DTC participant); or | ||
(3) | there shall have occurred and be continuing a Default or Event of Default with respect to the Notes and DTC requests Certificated Notes. |
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(1) | the sale, lease, conveyance or other disposition of any property or assets of the Company or any Restricted Subsidiary thereof other than a transaction governed by the provisions of the Indenture described above under the caption “—Repurchase at the Option of Holders—Change of Control” and/or the provisions described above under the caption “—Certain Covenants—Merger, Consolidation or Sale of Assets”; and |
(2) | the issuance of Equity Interests by any of the Company’s Restricted Subsidiaries or the sale by the Company or any Restricted Subsidiary thereof of Equity Interests in any of its Subsidiaries (other than directors’ qualifying shares and shares issued to foreign nationals to the extent required by applicable law). |
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(1) | any single transaction or series of related transactions that involves assets having a Fair Market Value of less than $5.0 million; | ||
(2) | a sale, lease, conveyance or other disposition of assets between or among the Company and its Restricted Subsidiaries; | ||
(3) | an issuance of Equity Interests by a Restricted Subsidiary of the Company to the Company or to another Restricted Subsidiary; | ||
(4) | the sale, lease, sublease, license or sublicense or consignment of equipment, inventory, accounts receivable or other assets in the ordinary course of business; | ||
(5) | any sale of accounts receivable, or participations therein, in connection with any Qualified Receivables Transaction; | ||
(6) | the licensing of intellectual property to third Persons on reasonable and customary terms in the ordinary course of business consistent with past practice;providedthat such licensing does not materially interfere with the business of the Company or any of its Restricted Subsidiaries; | ||
(7) | the sale or other disposition of Cash Equivalents; | ||
(8) | dispositions of accounts receivable in connection with the compromise, settlement or collection thereof in the ordinary course of business or in bankruptcy or similar proceedings; | ||
(9) | a Restricted Payment that is permitted by the covenant described above under the caption “—Certain Covenants—Restricted Payments” and any Permitted Investment; | ||
(10) | any sale or disposition of any property or equipment that has become damaged, worn out, obsolete or otherwise unsuitable for use in connection with the business of the Company or its Restricted Subsidiaries; and | ||
(11) | the creation of a Lien not prohibited by the Indenture. |
(1) | with respect to a corporation, the board of directors of the corporation or, except in the context of the definitions of “Change of Control” and “Continuing Directors,” a duly authorized committee thereof; | ||
(2) | with respect to a partnership, the Board of Directors of the general partner of the partnership; and |
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(3) | with respect to any other Person, the board or committee of such Person serving a similar function. |
(1) | in the case of a corporation, corporate stock; | ||
(2) | in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of corporate stock; | ||
(3) | in the case of a partnership or limited liability company, partnership or membership interests (whether general or limited); and | ||
(4) | any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. |
(1) | United States dollars or, in the case of any Restricted Subsidiary organized under the laws of any jurisdiction outside the United States, such local currencies held by such Restricted Subsidiary from time to time in the ordinary course of business; | ||
(2) | securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality thereof (providedthat the full faith and credit of the United States is pledged in support thereof), maturing, unless such securities are deposited to defease any Indebtedness, not more than one year from the date of acquisition; | ||
(3) | commercial paper having one of the two highest ratings obtainable from Moody’s or S&P and in each case maturing within 90 days after the date of acquisition; |
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(4) | certificates of deposit and eurodollar time deposits with maturities of one year or less from the date of acquisition, bankers’ acceptances with maturities not exceeding one year and overnight bank deposits, in each case (x) with any commercial bank organized under the laws of the United States, Canada or the United Kingdom (or any state, province or territory thereof) or any foreign branch thereof having capital and surplus aggregating at least $100.0 million or (y) insured by any nation or government, any state, province, municipality or other political subdivision thereof, any central bank (or similar monetary or regulatory authority) thereof, any entity exercising executive, legislative, judicial, regulatory, or administrative functions of or pertaining to government, and any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of the foregoing, and any department, agency, board, commission, tribunal, committee or instrumentality of any of the foregoing; | ||
(5) | mutual funds substantially all of the assets of which constitute Cash Equivalents of the kinds described in clauses (1) through (4) of this definition; | ||
(6) | deposit accounts in the ordinary course of business with financial institutions (A) located in the United States of America, Canada or the United Kingdom and (B) located in a jurisdiction other than the United States of America, Canada or the United Kingdom in an amount not in excess of $20.0 million in the aggregate; and | ||
(7) | fully collateralized repurchase obligations of any commercial bank organized under the laws of the United States of America or any state thereof, having capital and surplus aggregating at least $100.0 million, having a term of not more than 30 days, with respect to securities issued or fully guaranteed by the government of the United States of America. |
(1) | the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of the Company and its Restricted Subsidiaries, taken as a whole, to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act); | ||
(2) | the adoption of a plan relating to the liquidation or dissolution of the Company; | ||
(3) | any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) becomes the Beneficial Owner, directly or indirectly, of 50% or more of the voting power of the Voting Stock of the Company; | ||
(4) | the first day on which a majority of the members of the Board of Directors of the Company are not Continuing Directors; or | ||
(5) | the Company consolidates with, or merges with or into, any Person, or any Person consolidates with, or merges with or into the Company, in any such event pursuant to a transaction in which any of the outstanding Voting Stock of the Company or such other Person is converted into or exchanged for cash, securities or other property, other than any such transaction where (A) the Voting Stock of the Company outstanding immediately prior to such transaction is converted into or exchanged for Voting Stock (other than Disqualified Stock) of the surviving or transferee Person constituting a majority of the outstanding shares of such Voting Stock of such surviving or transferee Person (immediately after giving effect to such issuance) and (B) immediately after such transaction, no “person” or “group” (as such terms are used in Section 13(d) and 14(d) of the Exchange Act) becomes, directly or indirectly, the Beneficial Owner of 50% or more of the voting power of the Voting Stock of the surviving or transferee Person. |
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(1) | provision for taxes based on income or profits of such Person and its Restricted Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income;plus | ||
(2) | Fixed Charges of such Person and its Restricted Subsidiaries for such period, to the extent that any such Fixed Charges were deducted in computing such Consolidated Net Income;plus | ||
(3) | depreciation, amortization (including amortization of intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period), non-cash asset impairment charges and other non-cash expenses (excluding any such non-cash expense to the extent that it represents an accrual of or reserve for cash expenses in any future period or amortization of a prepaid cash expense that was paid in a prior period) of such Person and its Restricted Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses were deducted in computing such Consolidated Net Income;minus | ||
(4) | non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue consistent with past practice; |
(1) | the Net Income or loss of any Person that is not a Restricted Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Restricted Subsidiary thereof; | ||
(2) | the Net Income of any Restricted Subsidiary shall be excluded to the extent that the declaration or payment of dividends or similar distributions by that Restricted Subsidiary of that Net Income is not at the date of determination permitted without any prior governmental approval (that has not been obtained) or, directly or indirectly, by operation of the terms of its charter or any |
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agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its equityholders; | |||
(3) | the Net Income of any Person acquired during the specified period for any period prior to the date of such acquisition shall be excluded; | ||
(4) | the cumulative effect of a change in accounting principles shall be excluded; and | ||
(5) | notwithstanding clause (1) above, the Net Income or loss of any Unrestricted Subsidiary shall be excluded, whether or not distributed to the specified Person or one of its Subsidiaries. |
(1) | was a member of such Board of Directors on the Issue Date; or |
(2) | was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election. |
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(1) | the consolidated interest expense of such Person and its Restricted Subsidiaries for such period, whether paid or accrued, including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit (other than trade letters of credit in the ordinary course of business) or bankers’ acceptance financings, and net of the effect of all payments made or received pursuant to Hedging Obligations;plus | ||
(2) | the consolidated interest of such Person and its Restricted Subsidiaries that was capitalized during such period;plus | ||
(3) | any interest expense on Indebtedness of another Person that is Guaranteed by such Person or one of its Restricted Subsidiaries or secured by a Lien on assets of such Person or one of its Restricted Subsidiaries, whether or not such Guarantee or Lien is called upon;plus | ||
(4) | the product of (a) all dividends, whether paid or accrued and whether or not in cash, on any series of Disqualified Stock or Preferred Stock of such Person or any of its Restricted Subsidiaries, other than dividends on Equity Interests payable solely in Equity Interests (other than Disqualified Stock) of the Company or to the Company or a Restricted Subsidiary of the Company, times (b) a fraction, the numerator of which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of such Person, expressed as a decimal, |
(1) | acquisitions and dispositions of business entities or property and assets constituting a division or line of business of any Person that have been made by the specified Person or any of its Restricted Subsidiaries (or any entity that subsequently becomes a Restricted Subsidiary of the Company), including through mergers or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be given pro forma effect as if they had occurred on the |
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first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated on a pro forma basis in accordance with Regulation S-X under the Securities Act, but without giving effect to clause (3) of the proviso set forth in the definition of Consolidated Net Income; | |||
(2) | the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, shall be excluded; | ||
(3) | the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Restricted Subsidiaries following the Calculation Date; and | ||
(4) | consolidated interest expense attributable to interest on any Indebtedness (whether existing or being Incurred) computed on apro formabasis and bearing a floating interest rate shall be computed as if the rate in effect on the Calculation Date (taking into account any interest rate option, swap, cap or similar agreement applicable to such Indebtedness if such agreement has a remaining term in excess of 12 months or, if shorter, at least equal to the remaining term of such Indebtedness) had been the applicable rate for the entire period. |
(1) | each of our Subsidiaries that Incurs or Guarantees Obligations under the Credit Agreement; and |
(2) | any other Subsidiary that executes a Note Guarantee in accordance with the provisions of the Indenture; |
(1) | interest rate swap agreements, interest rate cap agreements, interest rate collar agreements and other agreements or arrangements with respect to interest rates; |
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(2) | commodity swap agreements, commodity option agreements, forward contracts and other agreements or arrangements with respect to commodity prices; and |
(3) | foreign exchange contracts, currency swap agreements and other agreements or arrangements with respect to foreign currency exchange rates. |
(1) | in respect of borrowed money; | ||
(2) | evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); | ||
(3) | in respect of banker’s acceptances; | ||
(4) | in respect of Capital Lease Obligations; | ||
(5) | in respect of the balance deferred and unpaid of the purchase price of any property or services, except any such balance that constitutes an accrued expense or trade payable;providedthat Indebtedness will not include any Earn-out Obligation, except to the extent that the contingent consideration relating thereto is not paid within 30 days after the amount due is finally determined; | ||
(6) | representing Hedging Obligations; | ||
(7) | representing Disqualified Stock valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued dividends; or | ||
(8) | in the case of a Subsidiary of such Person, representing Preferred Stock valued at the greater of its voluntary or involuntary maximum fixed repurchase price plus accrued dividends. |
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(1) | the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and |
(2) | the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. |
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(1) | any gain or loss, together with any related provision for taxes on such gain or loss, realized in connection with: (a) any sale of assets outside the ordinary course of business of such Person; or (b) the disposition of any securities by such Person or any of its Restricted Subsidiaries or the extinguishment of any Indebtedness of such Person or any of its Restricted Subsidiaries; | ||
(2) | any extraordinary gain or loss, together with any related provision for taxes on such extraordinary gain or loss; | ||
(3) | any non-cash goodwill or intangible asset impairment charges resulting from the application of FAS 142; | ||
(4) | any non-cash charges related to restructuring, debt retirement and/or store closings; | ||
(5) | taxes expensed or paid in accordance with the provisions of the American Jobs Creation Act of 2004 on any funds repatriated by any Restricted Subsidiary of the Company to the Company;providedthat the aggregate amount of such funds the taxes relating to which are excluded from the calculation of Net Income of the Company pursuant to this clause shall not exceed $60.0 million; and | ||
(6) | all non-cash expenses related to stock-based compensation plans, including stock option non-cash expenses. |
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(1) | any Investment in the Company or in a Restricted Subsidiary of the Company; | ||
(2) | any Investment in Cash Equivalents; | ||
(3) | any Investment by the Company or any Restricted Subsidiary of the Company in a Person, if as a result of such Investment: |
(a) | such Person becomes a Restricted Subsidiary of the Company; or | ||
(b) | such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or a Restricted Subsidiary of the Company; |
(4) | any Investment made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under the caption “—Repurchase at the Option of Holders—Asset Sales”; | ||
(5) | Investments to the extent acquired in exchange for the issuance of Equity Interests (other than Disqualified Stock) of the Company; | ||
(6) | Hedging Obligations that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes; |
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(7) | stock, obligations or securities received in connection with the bankruptcy or reorganization of, or settlement of delinquent accounts and disputes with, customers and suppliers, in each case in the ordinary course of business or received in satisfaction of judgment; | ||
(8) | advances to customers or suppliers in the ordinary course of business that are, in conformity with GAAP, recorded as accounts receivable, prepaid expenses or deposits on the balance sheet of the Company or its Restricted Subsidiaries and endorsements for collection or deposit arising in the ordinary course of business; | ||
(9) | commission, payroll, travel and similar advances to officers and employees of the Company or any of its Restricted Subsidiaries made consistent with past practices; | ||
(10) | Investments by the Company or a Restricted Subsidiary of the Company in a Receivables Subsidiary or any Investment by a Receivables Subsidiary in any other Person, in each case, in connection with a Qualified Receivables Transaction; | ||
(11) | Investments consisting of the licensing or contribution of intellectual property in the ordinary course of business; | ||
(12) | Loans or advances to employees of the Company or any of its Restricted Subsidiaries that are approved in good faith by a majority of the disinterested members of the Board of Directors of the Company in an aggregate amount outstanding not to exceed $2.0 million at any time; and | ||
(13) | other Investments in any Person other than an Unrestricted Subsidiary (provided that any such corporation, partnership, joint venture or other entity is not an Affiliate of the Company or is an Affiliate of the Company solely because the Company, directly or indirectly, owns Equity Interests in, or controls, such corporation, partnership, joint venture or other entity) having an aggregate Fair Market Value (measured on the date each such Investment was made and without giving effect to subsequent changes in value), when taken together with all other Investments made pursuant to this clause (13) since the date of the Indenture, not to exceed $50.0 million. |
(1) | Liens securing obligations in an amount when created or Incurred, together with the amount of all other obligations and Indebtedness secured by a Lien under this clause (1) at that time outstanding, not to exceed the greater of (a) the aggregate amount of Indebtedness permitted to be Incurred pursuant to clause (1) of the second paragraph under the caption “—Certain Covenants—Incurrence of Indebtedness”; and (b) the maximum principal amount of Indebtedness that, as of the date such Indebtedness could be incurred and after giving effect to the incurrence of such Indebtedness, would not cause the Secured Leverage Ratio of the Company and the Restricted Subsidiaries to exceed 3.5 to 1.0; | ||
(2) | Liens on the assets of the Company or any Restricted Subsidiary thereof securing Indebtedness Incurred under clause (15) of the second paragraph of the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness”; | ||
(3) | Liens in favor of the Company or any Restricted Subsidiary that is a Guarantor; | ||
(4) | Liens on property of a Person existing at the time such Person is merged with or into or consolidated with the Company or any Restricted Subsidiary of the Company;provided that such Liens were in existence prior to the contemplation of such merger or consolidation and do |
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not extend to any assets other than those of the Person merged into or consolidated with the Company or the Restricted Subsidiary; | |||
(5) | Liens on property existing at the time of acquisition thereof by the Company or any Restricted Subsidiary of the Company,providedthat such Liens were in existence prior to the contemplation of such acquisition and do not extend to any property other than the property so acquired by the Company or the Restricted Subsidiary; | ||
(6) | Liens securing the Notes and the Note Guarantees; | ||
(7) | Liens existing on the date of the Indenture; | ||
(8) | Liens securing Permitted Refinancing Indebtedness;providedthat such Liens do not extend to any property or assets other than the property or assets that secure the Indebtedness being refinanced; | ||
(9) | Liens on property or assets used to defease or to satisfy and discharge Indebtedness;providedthat (a) the Incurrence of such Indebtedness was not prohibited by the Indenture and (b) such defeasance or satisfaction and discharge is not prohibited by the Indenture; | ||
(10) | Liens to secure Indebtedness (including Capital Lease Obligations) permitted by clause (4) of the second paragraph of the covenant described under the caption “—Certain Covenants—Incurrence of Indebtedness”;providedthat any such Lien (i) covers only the assets acquired, constructed or improved with such Indebtedness and (ii) is created within 180 days of such acquisition, construction or improvement; | ||
(11) | Liens to secure Indebtedness Incurred for the purpose of financing all or any part of the purchase price or cost of construction or improvement of any warehouse facility used in the business of the Company or any Restricted Subsidiary of the Company, in an aggregate principal amount not to exceed at any time outstanding $35.0 million; | ||
(12) | Liens on cash or Cash Equivalents securing Hedging Obligations of the Company or any of its Restricted Subsidiaries (a) that are Incurred for the purpose of fixing, hedging or swapping interest rate, commodity price or foreign currency exchange rate risk (or to reverse or amend any such agreements previously made for such purposes), and not for speculative purposes, or (b) securing letters of credit that support such Hedging Obligations; | ||
(13) | Liens incurred or deposits made in the ordinary course of business in connection with worker’s compensation, unemployment insurance or other social security obligations; | ||
(14) | Lien, deposits or pledges to secure the performance of bids, tenders, contracts (other than contracts for the payment of Indebtedness), leases, or other similar obligations arising in the ordinary course of business; | ||
(15) | survey exceptions, encumbrances, easements or reservations of, or rights of other for, rights of way, zoning or other restrictions as to the use of properties, and defects in title which, in the case of any of the foregoing, were not incurred or created to secure the payment of Indebtedness, and which in the aggregate do not materially adversely affect the value of such properties or materially impair the use for the purposes of which such properties are held by the Company or any of its Restricted Subsidiaries; |
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(16) | judgment and attachment Liens not giving rise to an Event of Default and notices oflis pendensand associated rights related to litigation being contested in good faith by appropriate proceedings and for which adequate reserves have been made; | ||
(17) | Liens, deposits or pledges to secure public or statutory obligations, surety, stay, appeal, indemnity, performance or other similar bonds or obligations; and Liens, deposits or pledges in lieu of such bonds or obligations, or to secure such bonds or obligations, or to secure letters of credit in lieu of or supporting the payment of such bonds or obligations; | ||
(18) | Liens in favor of collecting or payor banks having a right of setoff, revocation, refund or chargeback with respect to money or instruments of the Company or any Subsidiary thereof on deposit with or in possession of such bank; | ||
(19) | any interest or title of a lessor, licensor or sublicensor in the property subject to any lease, license or sublicense; | ||
(20) | Liens arising from precautionary UCC financing statements regarding operating leases or consignments; | ||
(21) | Liens of franchisors in the ordinary course of business not securing Indebtedness; | ||
(22) | Liens for taxes, assessments and governmental charges not yet delinquent or being contested in good faith and for which adequate reserves have been established to the extent required by GAAP; | ||
(23) | Liens on cash and Cash Equivalents to secure letters of credit for the account of any Person that were in existence prior to, and not in contemplation of, the acquisition of such Person by the Company or any Restricted Subsidiary of the Company pending the replacement thereof with letters of credit issued under the Credit Agreement;provided that the aggregate Fair Market Value of all cash and Cash Equivalents subject to such Liens pursuant to this clause (23) shall not at any time exceed $5.0 million; | ||
(24) | carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like Liens imposed by law, arising in the ordinary course of business and securing obligations that are not overdue by more than 30 days or are being contested in good faith by appropriate proceedings and for which adequate reserves have been made; and | ||
(25) | Liens incurred in the ordinary course of business of the Company or any Restricted Subsidiary of the Company with respect to obligations that do not exceed at any time outstanding the greater of (x) $25.0 million and (y) 5.0% of the Company’s Consolidated Net Tangible Assets on such date of Incurrence. |
(A) | any Indebtedness of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock) issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace, defease or refund other Indebtedness of the Company or any of its Restricted Subsidiaries (other than Disqualified Stock and intercompany Indebtedness);providedthat: |
(1) | the principal amount (or accreted value, if applicable) of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the |
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Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded (plus all accrued and unpaid interest thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith); | |||
(2) | such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; | ||
(3) | if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded is subordinated in right of payment to the Notes or the Note Guarantees, such Permitted Refinancing Indebtedness has a final maturity date later than the final maturity date of the Notes and is subordinated in right of payment to the Notes or the Note Guarantees, as applicable, on terms at least as favorable, taken as a whole, to the Holders of Notes as those contained in the documentation governing the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded; | ||
(4) | if the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded ispari passuin right of payment with the Notes or any Note Guarantees, such Permitted Refinancing Indebtedness ispari passuwith, or subordinated in right of payment to, the Notes or such Note Guarantees; and | ||
(5) | such Indebtedness is Incurred by either (a) the Restricted Subsidiary that is the obligor on the Indebtedness being extended, refinanced, renewed, replaced, defeased or refunded or (b) the Company; and |
(B) | any Disqualified Stock of the Company or any of its Restricted Subsidiaries issued in exchange for, or the net proceeds of which are used to extend, refinance, renew, replace or refund Indebtedness or other Disqualified Stock of the Company or any of its Restricted Subsidiaries (other than Indebtedness or Disqualified Stock held by the Company or any of its Restricted Subsidiaries);providedthat: |
(1) | the liquidation or face value of such Permitted Refinancing Indebtedness does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness, or the liquidation or face value of the Disqualified Stock, as applicable, so extended, refinanced, renewed, replaced or refunded (plus all accrued and unpaid interest or dividends thereon and the amount of any reasonably determined premium necessary to accomplish such refinancing and such reasonable expenses incurred in connection therewith); | ||
(2) | such Permitted Refinancing Indebtedness has a final redemption date later than the final maturity or redemption date of, and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of, the Indebtedness or Disqualified Stock being extended, refinanced, renewed, replaced or refunded; | ||
(3) | such Permitted Refinancing Indebtedness has a final redemption date later than the final maturity date of, and is subordinated in right of payment to, the Notes on terms at least as favorable, taken as a whole, to the Holders of Notes as those contained in the documentation governing the Indebtedness or Disqualified Stock being extended, refinanced, renewed, replaced or refunded; |
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(4) | such Permitted Refinancing Indebtedness is not redeemable at the option of the holder thereof or mandatorily redeemable prior to the final maturity or redemption date of the Indebtedness or Disqualified Stock being extended, refinanced, renewed, replaced or refunded; and | ||
(5) | such Disqualified Stock is issued by either (a) the Restricted Subsidiary that is the issuer of the Indebtedness or Disqualified Stock being extended, refinanced, renewed, replaced or refunded or (b) the Company. |
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(1) | any corporation, association, limited liability company or other business entity of which more than 50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence of any contingency) to vote in the election of directors, managers or trustees thereof is at the time owned or controlled, directly or indirectly, by such Person or one or more of the other Subsidiaries of that Person (or a combination thereof); and |
(2) | any partnership (a) the sole general partner or the managing general partner of which is such Person or a Subsidiary of such Person or (b) the only general partners of which are such Person or one or more Subsidiaries of such Person (or any combination thereof). |
(1) | the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (b) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by |
(2) | the then outstanding principal amount of such Indebtedness. |
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• | an individual who is a citizen or resident of the U.S.; | ||
• | a corporation, or other entity taxable as a corporation for U.S. federal income tax purposes, created or organized in or under the laws of the U.S. or of any state thereof or the District of Columbia; | ||
• | an estate the income of which is subject to U.S. federal income taxation regardless of its source; or | ||
• | a trust, if a court within the U.S. is able to exercise primary jurisdiction over its administration and one or more U.S. persons have authority to control all of its substantial decisions, or if the trust has a valid election in effect under applicable Treasury regulations to be treated as a U.S. person. |
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• | does not actually or by attribution own 10% or more of the combined voting power of all classes of our stock entitled to vote; | ||
• | is not a controlled foreign corporation for U.S. federal income tax purposes that is related to us actually or by attribution through stock ownership; | ||
• | is not a bank that acquired the notes in consideration for an extension of credit made pursuant to a loan agreement entered into in the ordinary course of business; and |
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• | either (a) provides an appropriate IRS Form W-8 (or a suitable substitute form) signed under penalties of perjury that includes the non-U.S. holder’s name and address, and certifies as to non-U.S. status in compliance with applicable law and regulations; or (b) is a securities clearing organization, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business and provides a statement to us or our agent under penalties of perjury in which it certifies that such an IRS Form W-8 (or a suitable substitute form) has been received by it from the non-U.S. holder or qualifying intermediary and furnishes us or our agent with a copy. The Treasury regulations provide special certification rules for notes held by a foreign partnership and other intermediaries. |
• | the gain is effectively connected with the conduct of a U.S. trade or business by the non-U.S. holder (and, if required by an applicable tax treaty, the gain is attributable to a permanent establishment maintained in the U.S. by the non-U.S. holder); or |
• | the non-U.S. holder is an individual who is present in the U.S. for 183 days or more during the taxable year of that disposition, and certain other conditions are met or the non-U.S. holder is subject to Code provisions applicable to certain U.S. expatriates. |
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• | an “affiliate” of Brown Shoe within the meaning of Rule 405 under the Securities Act; or |
• | a broker-dealer. |
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• | our Annual Report on Form 10-K for the fiscal year ended January 29, 2011, which we filed with the SEC on April 1, 2011; |
• | our Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2011, which we filed with the SEC on June 9, 2011; and |
• | our Current Reports on Form 8-K filed with the SEC on February 17, 2011 (as amended on Form 8-K/A filed with the SEC on April 22, 2011), April 27, 2011, May 11, 2011, May 13, 2011, and May 26, 2011. |
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AMERICAN SPORTING GOODS CORPORATION AND SUBSIDIARIES
YEAR ENDED DECEMBER 31, 2010
F-2 | ||||
Consolidated Financial Statements | ||||
F-3 - F-4 | ||||
F-5 | ||||
F-6 | ||||
F-7 - F-8 | ||||
F-9 - F-24 | ||||
F-25 |
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American Sporting Goods Corporation and Subsidiaries
July 14, 2011
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(in thousands) | ||||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ | 5,889 | ||
Accounts receivable, net of allowances for doubtful accounts of $951,000 for 2010 | 31,714 | |||
Inventories, net | 50,371 | |||
Other receivables | 2,992 | |||
Income tax receivable | 1,380 | |||
Prepaid expenses and other current assets | 1,087 | |||
Deferred income taxes | 2,535 | |||
Total current assets | 95,968 | |||
Other assets | 44 | |||
Intangible assets, net | 5,350 | |||
Property, plant and equipment, net | 10,205 | |||
Deferred income taxes | 3,334 | |||
Total assets | $ | 114,901 | ||
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(in thousands) | ||||
Liabilities and Equity | ||||
Current liabilities | ||||
Credit facility | $ | 11,539 | ||
Accounts payable | 20,034 | |||
Accrued expenses | 11,075 | |||
Obligations under capital leases, current portion | 38 | |||
Income taxes payable | 251 | |||
Total current liabilities | 42,937 | |||
Equity | ||||
Common stock, $0.0001 par value. Authorized 200,000 shares; 100,000 shares issued and outstanding | — | |||
Preferred stock, $0.0001 par value. Authorized 30,000 shares; 21,000 shares issued and outstanding. Liquidation value of $10,000 per share | — | |||
Additional paid-in capital | 5,000 | |||
Accumulated other comprehensive income | 2,255 | |||
Retained earnings | 64,566 | |||
Total stockholders’ equity attributable to American Sporting Goods Corporation and Subsidiaries | 71,821 | |||
Noncontrolling interest in consolidated subsidiaries | 143 | |||
Total equity | 71,964 | |||
Total liabilities and equity | $ | 114,901 | ||
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(in thousands) | ||||
Revenues, net | $ | 231,742 | ||
Cost of sales | 144,172 | |||
Gross profit | 87,570 | |||
Selling, general and administrative expenses | 61,965 | |||
Other expenses, net | 571 | |||
Interest expense | 743 | |||
Interest and miscellaneous income | (474 | ) | ||
Income before income taxes | 24,765 | |||
Income taxes | 9,815 | |||
Net income | 14,950 | |||
Noncontrolling interest in loss of consolidated subsidiaries | 255 | |||
Net income attributable to American Sporting Goods Corporation and Subsidiaries | $ | 15,205 | ||
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Accumulated | ||||||||||||||||||||||||||||||||||||||||
Additional | Other | Noncontrolling | Total | |||||||||||||||||||||||||||||||||||||
Common Stock | Preferred Stock | Paid-in | Comprehensive | Retained | Interest in | Total | Comprehensive | |||||||||||||||||||||||||||||||||
(in thousands) | Shares | Amount | Shares | Amount | Capital | Income | Earnings | Cons. Subs. | Equity | Income | ||||||||||||||||||||||||||||||
Balances, December 31, 2009 | 100 | $ | — | 21 | $ | — | $ | 5,000 | $ | 1,615 | $ | 49,361 | $ | 398 | $ | 56,374 | ||||||||||||||||||||||||
Net income | — | — | — | — | — | — | 15,205 | (255 | ) | 14,950 | $ | 14,950 | ||||||||||||||||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | 640 | — | — | 640 | 640 | ||||||||||||||||||||||||||||||
Comprehensive income | — | — | — | — | — | — | — | — | — | 15,590 | ||||||||||||||||||||||||||||||
Comprehensive loss attributable to the noncontrolling interest | — | — | — | — | — | — | — | — | — | 255 | ||||||||||||||||||||||||||||||
Comprehensive income attributable to American Sporting Goods Corporation and Subsidiaries | — | — | — | — | — | — | — | — | — | $ | 15,845 | |||||||||||||||||||||||||||||
Balances, December 31, 2010 | 100 | $ | — | 21 | $ | — | $ | 5,000 | $ | 2,255 | $ | 64,566 | $ | 143 | $ | 71,964 | ||||||||||||||||||||||||
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(in thousands) | ||||
Operating activities | ||||
Net income | $ | 14,950 | ||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 4,008 | |||
Provision for doubtful accounts | 226 | |||
Inventory reserves | (147 | ) | ||
Deferred income taxes | (738 | ) | ||
Changes in operating assets and liabilities: | ||||
Accounts receivable | 1,377 | |||
Inventories | (10,574 | ) | ||
Other receivables | (2,259 | ) | ||
Income tax receivable | 1,216 | |||
Prepaid expenses and other current assets | 3,012 | |||
Other assets | 540 | |||
Accounts payable | 4,645 | |||
Accrued expenses | 2,732 | |||
Other liabilities | 66 | |||
Net cash provided by operating activities | 19,054 | |||
Investing activities | ||||
Purchases of property, plant and equipment | (4,574 | ) | ||
Net cash used in investing activities | (4,574 | ) | ||
Financing activities | ||||
Credit facility activity, net | (14,479 | ) | ||
Payments of term loan payable — other | (25 | ) | ||
Payments of obligations under capital leases | (43 | ) | ||
Net cash used in financing activities | (14,547 | ) | ||
Effect of exchange rate changes on cash and cash equivalents | 640 | |||
Net increase in cash | 573 | |||
Cash and cash equivalents, beginning of year | 5,316 | |||
Cash and cash equivalents, end of year | $ | 5,889 | ||
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(in thousands) | ||||
Supplemental disclosures of cash flow information: | ||||
Cash and cash equivalents paid during year for: | ||||
Income taxes paid, net | $ | 8,693 | ||
Interest | $ | 743 | ||
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Furniture and fixtures | 5 years | |
Machinery and equipment | 3 to 10 years | |
Leasehold improvements | Shorter of the lease term or useful life | |
Production molds | 1 to 2 years | |
Vehicles | 3 to 5 years | |
Computer system and hardware | 3 to 5 years | |
(in thousands) | ||||
License | $ | 3,000 | ||
Trademarks | 3,439 | |||
Patents | 16 | |||
Total | 6,455 | |||
Less accumulated amortization | (1,105 | ) | ||
$ | 5,350 | |||
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(in thousands) | ||||
Raw material | $ | 2,535 | ||
Work in process | 3,093 | |||
Finished goods | 44,743 | |||
$ | 50,371 | |||
(in thousands) | ||||
Furniture and fixtures | $ | 196 | ||
Machinery and equipment | 11,703 | |||
Leasehold improvements | 1,738 | |||
Production molds | 3,835 | |||
Vehicles | 420 | |||
Computer system and hardware | 3,500 | |||
Total | 21,392 | |||
Less accumulated depreciation and amortization | (12,038 | ) | ||
9,354 | ||||
Construction-in-progress | 851 | |||
$ | 10,205 | |||
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(in thousands) | ||||
2011 | $ | 38 | ||
2012 | 4 | |||
Total minimum lease payments | 42 | |||
Less: Amounts representing interest | 4 | |||
Present value of net minimum lease payments | 38 | |||
Less: Current portion of capital leases | (38 | ) | ||
Obligations under capital leases, net of current portion | $ | — | ||
(in thousands) | ||||
2011 | $ | 2,799 | ||
2012 | 1,062 | |||
2013 | 248 | |||
2014 | 231 | |||
2015 | 230 | |||
2016 and thereafter | 172 | |||
Total minimum lease payments | $ | 4,742 | ||
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(in thousands) | ||||
Office and warehouse space | $ | 3,051 | ||
Equipment | 339 | |||
3,390 | ||||
Less sublease income(1) | (52 | ) | ||
Total | $ | 3,338 | ||
(1) | Sublease income relates to leased space that was no longer being used. |
(in thousands) | ||||
Current | ||||
Federal | $ | 7,842 | ||
State | 2,244 | |||
Foreign | 467 | |||
10,553 | ||||
Deferred | ||||
Federal | (564 | ) | ||
State | (154 | ) | ||
Foreign | (20 | ) | ||
(738 | ) | |||
Total income tax provision | $ | 9,815 | ||
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(in thousands) | ||||
Deferred tax assets: | ||||
Operating loss carry forwards | $ | 2,700 | ||
Tax credit carry forwards | 2,266 | |||
Inventory | 1,159 | |||
Allowance for bad debts | 379 | |||
Trade credits | 1,452 | |||
Other | 1,015 | |||
Total deferred tax assets | 8,971 | |||
Deferred tax liabilities: | ||||
Property and equipment | (798 | ) | ||
Prepaids and other | (108 | ) | ||
Total deferred tax liabilities | (906 | ) | ||
Subtotal | 8,065 | |||
Valuation allowance | (2,196 | ) | ||
Net deferred tax assets | $ | 5,869 | ||
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(in thousands) | Parent | Guarantors | Non-Guarantors | Eliminations | Total | |||||||||||||||
Assets | ||||||||||||||||||||
Current assets: | ||||||||||||||||||||
Cash and cash equivalents | $ | 2 | $ | — | $ | 5,887 | $ | — | $ | 5,889 | ||||||||||
Accounts receivable, net of allowances | 22,067 | 6,927 | 2,720 | — | 31,714 | |||||||||||||||
Intercompany receivables | 5,930 | — | 3,035 | (8,965 | ) | — | ||||||||||||||
Inventories, net | 39,524 | 3,031 | 7,789 | 27 | 50,371 | |||||||||||||||
Other receivables | 693 | 59 | 2,240 | — | 2,992 | |||||||||||||||
Income tax receivable | 1,380 | — | — | — | 1,380 | |||||||||||||||
Prepaid expenses and other current assets | 880 | 207 | — | — | 1,087 | |||||||||||||||
Deferred income taxes | 2,513 | — | — | 22 | 2,535 | |||||||||||||||
Total current assets | $ | 72,989 | $ | 10,224 | $ | 21,671 | $ | (8,916 | ) | $ | 95,968 | |||||||||
Other assets | 44 | — | — | — | 44 | |||||||||||||||
Intangible assets, net | 4,838 | 512 | — | — | 5,350 | |||||||||||||||
Property, plant and equipment, net | 3,561 | 79 | 6,565 | — | 10,205 | |||||||||||||||
Investment in subsidiaries | 56,955 | — | — | (56,955 | ) | — | ||||||||||||||
Deferred income taxes | 3,278 | — | 56 | — | 3,334 | |||||||||||||||
Total assets | $ | 141,665 | $ | 10,815 | $ | 28,292 | $ | (65,871 | ) | $ | 114,901 | |||||||||
Liabilities and equity | ||||||||||||||||||||
Current liabilities: | ||||||||||||||||||||
Credit facility | $ | 11,539 | $ | — | $ | — | $ | — | $ | 11,539 | ||||||||||
Accounts payable | 9,041 | 1,591 | 9,402 | — | 20,034 | |||||||||||||||
Intercompany payables | 3,025 | 58,326 | — | (61,351 | ) | — | ||||||||||||||
Accrued expenses | 6,430 | 864 | 3,781 | — | 11,075 | |||||||||||||||
Obligations under capital leases, current portion | 38 | — | — | — | 38 | |||||||||||||||
Income taxes payable | 119 | — | 132 | — | 251 | |||||||||||||||
Total current liabilities | $ | 30,192 | $ | 60,781 | $ | 13,315 | $ | (61,351 | ) | $ | 42,937 | |||||||||
Equity | ||||||||||||||||||||
American Sporting Goods Corporation and subsidiaries shareholders’ equity | 111,473 | (49,966 | ) | 14,834 | (4,520 | ) | 71,821 | |||||||||||||
Noncontrolling interest in consolidated subsidiaries | — | — | 143 | — | 143 | |||||||||||||||
Total equity | 111,473 | (49,966 | ) | 14,977 | (4,520 | ) | 71,964 | |||||||||||||
Total liabilities and equity | $ | 141,665 | $ | 10,815 | $ | 28,292 | $ | (65,871 | ) | $ | 114,901 | |||||||||
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(in thousands) | Parent | Guarantors | Non-Guarantors | Eliminations | Total | |||||||||||||||
Revenues, net | $ | 195,624 | $ | 31,852 | $ | 58,059 | $ | (53,793 | ) | $ | 231,742 | |||||||||
Cost of sales | 127,774 | 20,078 | 50,552 | (54,232 | ) | 144,172 | ||||||||||||||
Gross profit | 67,850 | 11,774 | 7,507 | 439 | 87,570 | |||||||||||||||
Selling, general and administrative expenses | 47,500 | 7,960 | 6,558 | (53 | ) | 61,965 | ||||||||||||||
Other expenses, net | 338 | 85 | 148 | — | 571 | |||||||||||||||
Interest expense | 491 | 252 | — | — | 743 | |||||||||||||||
Interest and miscellaneous income | (399 | ) | (75 | ) | — | — | (474 | ) | ||||||||||||
Income before income taxes | 19,920 | 3,552 | 801 | 492 | 24,765 | |||||||||||||||
Income taxes | 8,076 | 1,492 | 242 | 5 | 9,815 | |||||||||||||||
Net income | 11,844 | 2,060 | 559 | 487 | 14,950 | |||||||||||||||
Noncontrolling interest in loss of consolidated subsidiaries | — | — | 255 | — | 255 | |||||||||||||||
Equity in operations of subsidiaries | 2,060 | — | — | (2,060 | ) | — | ||||||||||||||
Net income attributable to American Sporting Goods Corporation and Subsidiaries | $ | 13,904 | $ | 2,060 | $ | 814 | $ | (1,573 | ) | $ | 15,205 | |||||||||
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(in thousands) | Parent | Guarantors | Non-Guarantors | Eliminations | Total | |||||||||||||||
Net cash provided by operating activities | $ | 13,800 | $ | 1,924 | $ | 3,294 | $ | 36 | $19,054 | |||||||||||
Investing activities | ||||||||||||||||||||
Purchases of property, plant and equipment | (3,141 | ) | (63 | ) | (1,370 | ) | — | (4,574 | ) | |||||||||||
Net cash used in investing activities | (3,141 | ) | (63 | ) | (1,370 | ) | — | (4,574 | ) | |||||||||||
Financing activities | ||||||||||||||||||||
Credit facility activity, net | (14,479 | ) | — | — | — | (14,479 | ) | |||||||||||||
Payments of term loan payable — other | (25 | ) | — | — | — | (25 | ) | |||||||||||||
Payments of obligations under capital leases | (43 | ) | — | — | — | (43 | ) | |||||||||||||
Intercompany financing | 3,888 | (1,865 | ) | (2,068 | ) | 45 | — | |||||||||||||
Net cash used in financing activities | (10,659 | ) | (1,865 | ) | (2,068 | ) | 45 | (14,547 | ) | |||||||||||
Effect of exchange rate changes on cash and cash equivalents | — | — | 721 | (81 | ) | 640 | ||||||||||||||
Net increase in cash | — | (4 | ) | 577 | — | 573 | ||||||||||||||
Cash and cash equivalents, beginning of year | 2 | 4 | 5,310 | — | 5,316 | |||||||||||||||
Cash and cash equivalents, end of year | $ | 2 | $ | — | $ | 5,887 | $ | — | $ | 5,889 | ||||||||||
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ASG Asia Investments Company Limited
Certified Public Accountants
F-25
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INFORMATION NOT REQUIRED IN PROSPECTUS
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(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; | ||
(ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in the volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; | ||
(iii) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. | ||
(4) | If the registrant is a foreign private issuer, to file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Act need not be furnished, provided, that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. | ||
(5) | That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement |
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or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
(6) | That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; | ||
(ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; | ||
(iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and | ||
(iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) | The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | |
(c) | Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrants pursuant to the foregoing provisions, or otherwise, the registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrants of expenses incurred or paid by a director, officer or controlling person of the registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. | |
(d) | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. | |
(e) | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
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Brown Shoe Company, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Chairman of the Board of Directors | July 14, 2011 | ||
Director | ||||
/s/ Carla C. Hendra | Director | July 14, 2011 | ||
/s/ Ward M. Klein | Director | July 14, 2011 | ||
/s/ Steven W. Korn | Director | July 14, 2011 | ||
/s/ Patricia G. McGinnis | Director | July 14, 2011 |
II-8
Table of Contents
Signatures | Title | Date | ||
/s/ W. Patrick McGinnis | Director | July 14, 2011 | ||
/s/ Michael F. Neidorff | Director | July 14, 2011 | ||
/s/ Hal J. Upbin | Director | July 14, 2011 | ||
Director |
II-9
Table of Contents
Sidney Rich Associates, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-10
Table of Contents
Brown Group Retail, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-11
Table of Contents
Brown Shoe International Corp. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-12
Table of Contents
Buster Brown & Co. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-13
Table of Contents
Bennett Footwear Group LLC By:Brown Shoe Company, Inc., its sole member | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
Brown Shoe Company, Inc. | Member | July 14, 2011 | ||
/s/ Mark E. Hood | ||||
Senior Vice President and Chief | ||||
Financial Officer |
II-14
Table of Contents
American Sporting Goods Corporation | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-15
Table of Contents
The Basketball Marketing Company, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-16
Table of Contents
Edelman Shoe, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-17
Table of Contents
Shoes.com, Inc. | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director | July 14, 2011 |
II-18
Table of Contents
Brown Shoe Company of Canada Ltd | ||||
By: | /s/ Mark E. Hood | |||
Name: | Mark E. Hood | |||
Title: | Senior Vice President and Chief Financial Officer |
Signatures | Title | Date | ||
/s/ Diane M. Sullivan | President and Chief Executive Officer (Principal Executive Officer) | July 14, 2011 | ||
/s/ Mark E. Hood | Director, Brown Shoe International Corp., and Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | July 14, 2011 | ||
/s/ Ronald A. Fromm | Director, Brown Shoe International Corp. | July 14, 2011 | ||
/s/ Michael I. Oberlander | Director, Brown Shoe International Corp. | July 14, 2011 |
II-19
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
3.1 | Restated Certificate of Incorporation of Brown Shoe Company, Inc. incorporated herein by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended May 5, 2007, and filed June 5, 2007. | |
3.2 | Bylaws of Brown Shoe Company, Inc. as amended through May 26, 2011, incorporated herein by reference to Exhibit 3.1 to the Company’s Form 8-K dated and filed May 26, 2011. | |
3.3 | Certificate of Incorporation of Brown Shoe International Corp., incorporated herein by reference to Exhibit 3.3 to the Company’s Form S-4 filed May 16, 2005. | |
3.4 | Bylaws of Brown Shoe International Corp., incorporated herein by reference to Exhibit 3.4 to the Company’s Form S-4 filed May 16, 2005. | |
3.5 | Articles of Incorporation of Sidney Rich Associates, Inc., as amended, incorporated herein by reference to Exhibit 3.5 to the Company’s Form S-4 filed May 16, 2005. | |
3.6 | Bylaws of Sidney Rich Associates, Inc., incorporated herein by reference to Exhibit 3.6 to the Company’s Form S-4 filed May 16, 2005. | |
3.7 | Articles of Incorporation of Brown Group Retail, Inc., as amended, incorporated herein by reference to Exhibit 3.7 to the Company’s Form S-4 filed May 16, 2005. | |
3.8 | Bylaws of Brown Group Retail, Inc., incorporated herein by reference to Exhibit 3.8 to the Company’s Form S-4 filed May 16, 2005. | |
3.9 | Articles of Incorporation of Buster Brown & Co., as amended, incorporated herein by reference to Exhibit 3.9 to the Company’s Form S-4 filed May 16, 2005. | |
3.10 | Bylaws of Buster Brown & Co., incorporated herein by reference to Exhibit 3.10 to the Company’s Form S-4 filed May 16, 2005. | |
3.11 | Certificate of Amalgamation of Brown Shoe Company of Canada Ltd, incorporated herein by reference to Exhibit 3.11 to the Company’s Form S-4 filed May 16, 2005. | |
3.12 | By-laws of Brown Shoe Company of Canada Ltd, incorporated herein by reference to Exhibit 3.12 to the Company’s Form S-4 filed May 16, 2005. | |
3.13 | Certificate of Formation of Bennett Footwear Group LLC, incorporated herein by reference to Exhibit 3.13 to the Company’s Form S-4 filed May 16, 2005. | |
3.14 | Amended and Restated Limited Liability Company Agreement of Bennett Footwear Group LLC, incorporated herein by reference to Exhibit 3.14 to the Company’s Form S-4 filed May 16, 2005. | |
3.15 | Certificate of Incorporation of American Sporting Goods Corporation. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
3.16 | Bylaws of American Sporting Goods Corporation. | |
3.17 | Certificate of Incorporation of The Basketball Marketing Company, Inc. | |
3.18 | Bylaws of The Basketball Marketing Company, Inc. | |
3.19 | Certificate of Incorporation of Edelman Shoe, Inc. | |
3.20 | Bylaws of Edelman Shoe, Inc. | |
3.21 | Certificate of Incorporation of Shoes.com, Inc. | |
3.22 | Bylaws of Shoes.com, Inc. | |
4.1a | Indenture for the 8.75% Senior Notes due 2012 dated April 22, 2005, among the Company, the subsidiary guarantors set forth therein, and SunTrust Bank, as trustee, including the form of Global Note attached thereto, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated and filed April 26, 2005. | |
4.1b | Supplemental Indenture for 8.75% Senior Notes, dated October 24, 2007, incorporated herein by reference to Exhibit 4.1b to the Company’s Form 10-K for the year ended February 2, 2008, and filed March 28, 2008. | |
4.1c | Supplemental Indenture for 8.75% Senior Notes due 2012, dated as of June 18, 2010, between Edelman Shoe, Inc., the Company and U.S. Bank National Association, as successor to SunTrust Bank, as trustee, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 10-Q for the quarter ended July 31, 2010, and filed September 7, 2010. | |
4.1d | Supplemental Indenture for 8.75% Senior Notes due 2012, dated as of February 17, 2011, between American Sporting Goods Corporation, The Basketball Marketing Company, Inc., the Company and U.S. Bank National Association, as successor to SunTrust Bank, as trustee, incorporated herein by reference to Exhibit 4.1d to the Company’s Form 10-K for the year ended January 29, 2011, and filed April 1, 2011. | |
4.2 | Indenture for the 7.125% Senior Notes due 2019 dated as of May 11, 2011, among the Company, the subsidiary guarantors set forth therein, and Wells Fargo Bank, National Association, as trustee, including the form of Global Note attached thereto, incorporated herein by reference to Exhibit 4.1 to the Company’s Form 8-K dated May 11, 2011 and filed May 13, 2011. | |
4.3 | Form of 7.125% Senior Notes due 2019 (included in Exhibit 4.2) | |
4.4 | Registration Rights Agreement for the 7.125% Senior Notes due 2019 dated as of May 11, 2011, among Brown Shoe Company, Inc., the Guarantors, Merrill Lynch, Pierce, Fenner & Smith Incorporated, and J.P. Morgan Securities LLC, as initial purchasers, incorporated by reference to Exhibit 10.1 to Brown Shoe Company, Inc.’s Form 8-K dated May 11, 2011 and filed May 13, 2011. | |
5.1 | Opinion of Bryan Cave LLP. | |
5.2 | Opinion of Cozen O’Connor. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
5.3 | Opinion of McMillan L.L.P. | |
10.1a | Third Amended and Restated Credit Agreement, dated as of January 7, 2011 (the “Credit Agreement”), among the Company, as lead borrower for itself and on behalf of certain of its subsidiaries, and Bank of America, N.A., as lead issuing bank, administrative agent and collateral agent, Wells Fargo Bank, National Association, as an issuing bank, Wells Fargo Capital Finance, LLC, as syndication agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-documentation agents, and the other financial institutions party thereto, as lenders, as incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated and filed January 7, 2011. | |
10.1b | First Amendment to Third Amended and Restated Credit Agreement and Confidential Side Letter, dated February 17, 2011, by and among Brown Shoe Company, Inc., as lead borrower for itself and on behalf of certain of its subsidiaries, and Bank of America, N.A., as lead issuing bank, administrative agent and collateral agent, Wells Fargo Bank, National Association, as an issuing bank, Wells Fargo Capital Finance, LLC, as syndication agent, Bank of America, N.A. and JPMorgan Chase Bank, N.A., as co-documentation agents, and the other financial institutions party thereto, as lenders, as incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K dated and filed February 17, 2011. | |
10.2* | Summary of non-employee director compensation, incorporated herein by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended May 1, 2010, and filed June 8, 2010. | |
10.3* | Summary of compensatory arrangements for the named executive officers of the Company, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated March 4, 2009, and filed March 10, 2009, and Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended July 31, 2010, and filed September 7, 2010. | |
10.4a* | Incentive and Stock Compensation Plan of 1999, incorporated herein by reference to Exhibit 2 to the Company’s definitive proxy statement dated and filed April 26, 1999. | |
10.4b* | Amendment to Incentive and Stock Compensation Plan of 1999, dated May 27, 1999, incorporated herein by reference to Exhibit 10(e)(i) to the Company’s Form 10-K for the year ended January 29, 2000, and filed April 19, 2000. | |
10.4c* | First Amendment to the Incentive and Stock Compensation Plan of 1999, dated January 7, 2000, incorporated herein by reference to Exhibit 10(e)(ii) to the Company’s Form 10-K for the year ended January 29, 2000 and filed April 19, 2000. | |
10.5a(1)* | Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, as Amended and Restated as of May 22, 2008, incorporated herein by reference to Exhibit A to the Company’s definitive proxy statement dated and filed April 11, 2008. | |
10.5a(2)* | Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2011, incorporated herein by reference to Exhibit A to the Company’s definitive proxy materials filed with the Securities and Exchange Commission on Schedule 14A on April 15, 2011. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
10.5b(1)* | Form of Incentive Stock Option Award Agreement (for grants commencing May 2008) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5b(1) to the Company’s Form 10-K for the year ended January 31, 2009, and filed March 31, 2009. | |
10.5b(2)* | Form of Incentive Stock Option Award Agreement (for grants prior to May 2008) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended July 31, 2004, and filed September 8, 2004. | |
10.5c(1)* | Form of Non-Qualified Stock Option Award Agreement (for grants commencing May 2008) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5c(1) to the Company’s Form 10-K for the year ended January 31, 2009, and filed March 31, 2009. | |
10.5c(2)* | Form of Non-Qualified Stock Option Award Agreement for awards issued prior to May 2008 under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended July 31, 2004, and filed September 8, 2004. | |
10.5d(1)* | Form of Restricted Stock Agreement (for employee grants commencing 2008) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5d(1) to the Company’s Form 10-K for the year ended January 31, 2009, and filed March 31, 2009. | |
10.5d(2)* | Form of Restricted Stock Agreement (for employee grants in 2006 and 2007) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.6 to the Company’s Form 8-K dated and filed March 8, 2006. | |
10.5d(3)* | Form of Restricted Stock Agreement (for employee grants in 2002 through 2005) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended July 31, 2004, and filed September 8, 2004. | |
10.5e* | Form of Restricted Stock Award Agreement for non-employee director awards (for grants commencing May 2008) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5e to the Company’s Form 10-K for the year ended January 31, 2009, and filed March 31, 2009. | |
10.5f(1)* | Form of Performance Unit Award Agreement (for 2008-2010 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended October 30, 2010, and filed December 7, 2010. | |
10.5f(2)* | Amendment to Performance Unit Award Agreement (for 2008-2010 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K dated March 4, 2009, and filed March 10, 2009. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
10.5f(3)* | Form of Performance Award Agreement (for 2009-2011 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended October 30, 2010, and filed December 7, 2010. | |
10.5f(4)* | Form of Performance Award Agreement (for 2010-2012 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended October 30, 2010, and filed December 7, 2010. | |
10.5g(1)* | Form of Performance Share Award Agreement (for 2007-2009 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.5f to the Company’s Form 10-K for the year ended January 28, 2006, and filed April 10, 2006. | |
10.5g(2)* | Amendment to Performance Share Award Agreement (for 2007-2009 performance period) under the Brown Shoe Company, Inc. Incentive and Stock Compensation Plan of 2002, incorporated herein by reference to Exhibit 10.6 to the Company’s Form 8-K dated March 4, 2009, and filed March 10, 2009. | |
10.6a* | Form of Non-Employee Director Restricted Stock Unit Agreement between the Company and each of its Non-Employee Directors (for grants commencing in 2008), incorporated herein by reference to Exhibit 10.2 to the Company’s Form 10-Q for the quarter ended August 2, 2008, and filed September 10, 2008. | |
10.6b* | Form of Non-Employee Director Restricted Stock Unit Agreement between the Company and each of its Non-Employee Directors (for grants prior to 2008), incorporated herein by reference to Exhibit 10(u) to the Company’s Form 10-K for the year ended January 29, 2005, and filed April 1, 2005. | |
10.7* | Brown Shoe Company, Inc. Deferred Compensation Plan for Non-Employee Directors, as amended and restated as of January 1, 2009, incorporated herein by reference to Exhibit 10.2a to the Company’s Form 10-Q for the quarter ended November 1, 2008, and filed December 9, 2008. | |
10.8* | Brown Shoe Company, Inc. Supplemental Executive Retirement Plan (SERP), conformed and restated as of December 2, 2008, incorporated herein by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended November 1, 2008, and filed December 9, 2008. | |
10.9* | Brown Shoe Company, Inc. Deferred Compensation Plan, incorporated herein by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-8 filed December 11, 2007. | |
10.10* | Brown Shoe Company, Inc. Non-Employee Director Share Plan (2009), incorporated herein by reference to Exhibit 10.1 to the Company’s Form 10-Q for the quarter ended November 1, 2008, and filed December 9, 2008. | |
10.11a* | Severance Agreement, effective April 1, 2006, between the Company and Ronald A. Fromm, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated and filed April 6, 2006. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
10.11b* | Amendment letter dated December 18, 2009, to the Severance Agreement (April 1, 2006), between the Company and Ronald A. Fromm, as incorporated herein by reference to Exhibit 10.3 to the Company’s Form 10-Q for the quarter ended July 31, 2010, and filed September 7, 2010. | |
10.12* | Severance Agreement, effective April 1, 2006, between the Company and Richard M. Ausick, incorporated herein by reference to Exhibit 10.4 to the Company’s Form 10-Q for the quarter ended July 31, 2010, and filed September 7, 2010. | |
10.13* | Severance Agreement, effective April 1, 2006, between the Company and Diane M. Sullivan, incorporated herein by reference to Exhibit 10.5 to the Company’s Form 8-K dated and filed April 6, 2006. | |
10.14* | Severance Agreement, effective October 30, 2006, between the Company and Mark E. Hood, incorporated herein by reference to Exhibit 10.6 to the Company’s Form 8-K dated and filed October 30, 2006. | |
10.15* | Severance Agreement, effective April 1, 2009, between the Company and Mark D. Lardie, as incorporated herein by reference to Exhibit 10.5 to the Company’s Form 10-Q for the quarter ended July 31, 2010 and filed September 7, 2010. | |
10.16* | Form of Amendment letter dated December 18, 2009, to the Severance Agreements between the Company and each of: Richard M. Ausick, Mark E. Hood, Mark D. Lardie and Diane M. Sullivan, as incorporated herein by reference to Exhibit 10.6 to the Company’s Form 10-Q for the quarter ended July 31, 2010, and filed September 7, 2010. | |
10.17* | Employment Agreement, dated January 7, 2011, between Ronald A. Fromm and the Company, as incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated and filed January 10, 2011. | |
10.18 | Stock Purchase Agreement, dated February 17, 2011, by and among Brown Shoe Company, Inc., Brown Shoe Netherlands B.V., American Sporting Goods Corporation, the sellers named therein and Jerome A. Turner, in his capacity as representative incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K dated and filed February 17, 2011. | |
12.1 | Calculation of Ratio of Earnings to Fixed Charges. | |
21.1 | List of Subsidiaries of Brown Shoe Company, Inc. | |
23.1 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm of Brown Shoe Company, Inc. | |
23.2 | Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm of American Sporting Goods Corporation. | |
23.3 | Consent of BDO USA, LLP, Independent Registered Public Accounting Firm of American Sporting Goods Corporation. | |
23.4 | Consent of Shanghai Zhonghua, Independent Registered Public Accounting Firm of ASG Asia Investments Company Limited. |
Table of Contents
Exhibit | ||
Number | Description of Exhibit | |
23.5 | Consent of Bryan Cave LLP (included in Exhibit 5.1). | |
23.6 | Consent of Cozen O’Connor (included in Exhibit 5.2). | |
23.7 | Consent of McMillan L.L.P. (included in Exhibit 5.3). | |
24.1 | Powers of Attorney executed by certain of the officers and directors of the registrants (included in signature pages). | |
25.1 | Form T-1, Statement of Eligibility under the Trust Indenture Act of 1939, as amended, of Wells Fargo Bank, National Association, as Trustee under the Indenture. | |
99.1 | Form of Letter of Transmittal. | |
99.2 | Form of Notice of Guaranteed Delivery. | |
99.3 | Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and Other Nominees. | |
99.4 | Form of Letter to Clients. |
* | Denotes management contract or compensatory plan arrangements. |