UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
Exhibit "1.1.6.5"
FORM OF ASBESTOS PROPERTY
DAMAGE CLAIMS RESOLUTION PROCEDURES
[THIS PAGE LEFT BLANK INTENTIONALLY]
ASBESTOS PROPERTY DAMAGE CLAIMS RESOLUTION PROCEDURES
1. DEFINITIONS AND INTERPRETATION
1.1. The following terms and phrases shall have the following meanings:
"ACBM" shall mean asbestos-containing building
materials that the Claimant alleges
constitute One-Cote or Super "66."
"Accredited Inspector" shall mean a person accredited for the
purposes of inspecting for ACBM pursuant to
section 206 of title II of the Toxic
Substances Control Act, 15 U.S.C. 'SS'
2646.
"Accredited Inspector Report" shall mean a signed, written report of an
Accredited Inspector, which states (i) the
name, address, state of accreditation,
accreditation number, and the date of the
inspection; (ii) separately, for each
Homogeneous Area of ACBM for which a Claim
is made, (a) its location, (b) the
application of the ACBM, (c) the total
quantity of ACBM (stating in the case of
pipe fittings, the number and diameter, in
the case of pipe covering, the length and
diameter, and in the case of other
applications, the area), (d) whether the
ACBM is in need of repair, and (e) whether
the ACBM is in a position where it is likely
to be disturbed; (iii) the total number of
decontamination areas that it would be
necessary to construct; (iv) for each
decontamination area, (a) the total floor
area (in square feet) and (b) the total
circumference (in linear feet); and (v) if
an Approved Laboratory Report is submitted
with a Claim Information Form, certification
by the Accredited Inspector that the
Accredited Inspector has taken two bulk
samples from each Homogeneous Area listed in
(ii) in accordance with the procedures
described in the Protocols and an inventory
of the locations of the Homogeneous Areas
where samples are collected, the exact
location from which each sample is
collected, and the date of such collection.
"Adjusted Nominal Value" shall mean the nominal value of a Claim
assessed by reference to the Compensation
Model and adjusted by reference to the
Evaluation Criteria in accordance with
sections 4.3 and 4.4.
"Applicable Jurisdiction" shall mean the jurisdiction of the state in
which the buildings that are the subject of
the Claim are situated.
"Approved Laboratory" shall mean a laboratory conducting
constituent analysis listed in Exhibit "1"
or any laboratory that is a successful
participant in the National Institute of
Standards and Technology National Voluntary
Laboratory Accreditation Program for both
Asbestos Bulk Sample Analysis by Method in
40 C.F.R. 763, Appendix A, Subpart F, and
Airborne Fiber Analysis by Transmission
Electron Microscopy by the method in 40
C.F.R. 763, Appendix A, Subpart E.
A.1.1.6.5-1
"Approved Laboratory Report" shall mean a signed, written report by an
Approved Laboratory, pursuant to which the
Approved Laboratory (i) certifies (a) that
it has received the bulk samples referenced
in the related Accredited Inspector Report
and (b) that it has analyzed such bulk
samples in accordance with some or all of
the procedures described in the Protocols,
and (ii) makes one or more of the
certification(s) set forth in section 4.4.2
hereof. The Approved Laboratory Report shall
contain such other details of the results
and the procedures used to adequately
explain the analyses of the bulk samples
referenced therein.
"Arbitration" shall mean the binding dispute resolution
procedure set forth in section 7.
"Asbestos Abatement Program" shall mean a program for the removal and
disposal of ACBM carried out pursuant to
applicable federal and state regulations and
otherwise than in connection with the
renovation or demolition of a building.
"Asbestos PD Trust" shall mean the trust established in
accordance with the Eagle-Picher Industries,
Inc. Asbestos Property Damage Settlement
Trust Agreement, substantially in the form
of Exhibit "1.1.16" to the Plan.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of Ohio,
Western Division.
"Claim" shall mean any "Asbestos Property Damage
Claim," as such term is defined in a
confirmed plan of reorganization in the
Chapter 11 Cases.
"Claim Information Form" shall mean the Claim Information Form in the
form annexed hereto as Exhibit "2."
"Claimant" shall mean an entity asserting a Claim.
"Claims Information Deadline" shall mean the date that is one hundred
eighty (180) days after the Effective Date.
"Chapter 11 Cases" shall mean the cases of Eagle-Picher and its
affiliates under chapter 11 of title 11 of
the United States Code, pending in the
Bankruptcy Court under the consolidated case
number 1-91-00100.
"Compensation Model" shall mean the table of compensation values
set forth in Exhibit "3."
"Eagle-Picher" shall mean Eagle-Picher Industries, Inc.
"Effective Date" shall have the same meaning as provided in
the Plan.
"Evaluation Criteria" shall mean those criteria for evaluating the
Adjusted Nominal Value of a Claim set forth
in section 4.4.2.
"Homogeneous Area" shall mean an area of ACBM that is uniform
in color and texture.
"Nominal Value" shall mean the nominal value of a Claim
assessed in accordance with section 4.3.
"Notice of Arbitration" shall mean a notice of arbitration served by
a Claimant on the Asbestos PD Trust pursuant
to section 7.1.
"Notice of Decision" shall mean a notice of decision served by
the Asbestos PD Trust on a Claimant pursuant
to section 5 in the form annexed hereto as
Exhibit "4."
A.1.1.6.5-2
"Notice of Reconsideration" shall mean a notice of reconsideration
served by a Claimant on the Asbestos PD
Trust pursuant to section 6.1 in the form
annexed hereto as Exhibit "5."
"One-Cote" shall mean the product sold under the trade
name "One-Cote Insulating and Finishing
Cement."
"Plan" shall mean the Second Amended Consolidated
Plan of Reorganization of the debtors in the
Chapter 11 Cases, or such other plan that
may be confirmed with respect to
Eagle-Picher in the Chapter 11 Cases.
"Protocols" shall mean the product identification
protocols for One-Cote and Super "66" set
forth in Exhibits "6" and "7," respectively.
"Qualification Criteria" shall mean the criteria set forth in section
4.2, which must be satisfied before a claim
may be allowed.
"Super '66'" shall mean the product sold under the trade
name "Super '66' Insulating Cement."
"Trustee" shall mean, collectively, the trustee(s) of
the Asbestos PD Trust.
1.2. The headings and title of this document are for convenience only and are
not to be construed as part of the operative provisions of this document
or as defining or limiting in any way the scope or intent of the
provisions of this document.
1.3. References in this document to any section shall include all sections in
such section.
1.4. All references in this document to the singular shall include the plural,
where applicable.
1.5. Exhibits referred to in this document are hereby incorporated into and
made a part of this document.
1.6. The terms and provisions of this document shall be interpreted in
accordance with and governed by applicable federal law and the laws of the
State of Ohio without giving effect to the doctrine of conflict of laws.
2. ORGANIZATION
2.1. These procedures shall be the exclusive method for the evaluation and
settlement of Claims.
2.2. The Asbestos PD Trust may at any time following the Claims Information
Deadline, and at the sole discretion of the Trustee, by written notice to
each Claimant that has filed a Claim Information Form, extend any of the
dates established in these procedures within which a Claimant may or shall
take an action. The Asbestos PD Trust may only shorten any of the dates
within which a Claimant may or shall take an action or extend the time
within which the Asbestos PD Trust may or shall take an action by consent
of the Claimant(s) affected or by order of the Bankruptcy Court.
3. CLAIM INFORMATION FORM
3.1. On or before the date that is ninety (90) days after the Effective Date,
the Asbestos PD Trust shall mail to each holder of a Claim that has filed
a proof of claim in the Chapter 11 Cases and that has not previously been
disallowed or withdrawn, a copy of these Asbestos Property Damage Claims
Resolution Procedures and a Claim Information Form. The Asbestos PD Trust
shall provide one copy of these Asbestos Property
A.1.1.6.5-3
Damage Claims Resolution Procedures and a Claim Information Form to the
representative of each class that has filed a class proof of claim in the
Chapter 11 Cases so long as such class proof of claim has not been
disallowed as of the Effective Date, which representative shall be
responsible for distributing these Asbestos Property Damage Claims
Resolution Procedures and the Claim Information Form to each of the
members of such class; provided, however, that the Asbestos PD Trust shall
either (i) furnish any such class representative with copies of these
Asbestos Property Damage Claims Resolution Procedures and the Claim
Information Form, if within sixty (60) days after the Effective Date, such
class representative notifies the Asbestos PD Trust of the number of
copies needed for distribution to class members, or (ii) distribute these
Asbestos Property Damage Claims Resolution Procedures and the Claim
Information Form to each member of a class if, on or before sixty (60)
days after the Effective Date, the class representative furnishes the
Asbestos PD Trust with the names and addresses of the class members in a
format acceptable to the Asbestos PD Trust that will permit the automated
distribution of the Asbestos Property Damage Claims Resolution Procedures
and the Claim Information Form.
3.2. Each Claimant shall complete and serve the Claim Information Form so that
it is RECEIVED at the address specified on the Claim Information Form on
or before the Claims Information Deadline. EACH MEMBER OF A CLASS THAT HAS
FILED A CLASS PROOF OF CLAIM MUST FILE A SEPARATE CLAIM INFORMATION FORM.
IF A CLASS MEMBER DOES NOT TIMELY FILE A SEPARATE CLAIM INFORMATION FORM,
SUCH MEMBER WILL HAVE NO RIGHT TO ANY DISTRIBUTION FROM THE ASBESTOS PD
TRUST.
3.3. The Claimant shall complete a separate Claim Information Form for each
building with respect to which the Claim is made. Each Claim Information
Form shall state separately for each building the following information:
3.3.1. the name, location, and use of the building;
3.3.2. the date on which the Claimant first became aware of the presence
of the ACBM that are the subject of the Claim;
3.3.3. the date on which each Eagle-Picher product was installed;
3.3.4. separately for each Homogeneous Area, the Eagle-Picher brand-name,
location, and application of each product with respect to which the
Claim is made;
3.3.5. separately for each Homogeneous Area of ACBM, whether the ACBM for
which the Claim is made remains in place, whether it has been
abated pursuant to an Asbestos Abatement Program, or any other
disposition of the ACBM;
3.3.6. separately for each Homogeneous Area of ACBM, whether the ACBM has
been removed pursuant to a renovation or demolition, or otherwise
than in connection with an Asbestos Abatement Program and, if so,
the date of removal and actual abatement costs;
3.3.7. separately for each Homogeneous Area, whether the ACBM is in need
of repair and whether the ACBM is in a position in which it is
likely to be disturbed;
A.1.1.6.5-4
3.3.8. the total number rooms or areas for which it would be necessary to
construct an enclosure and decontamination area if the ACBM were to
be removed; and
3.3.9. separately for each Homogeneous Area, the quantity of the ACBM with
respect to which the Claim is made, stating in the case of fittings
the number and diameter of each fitting, in the case of pipe the
diameter and length, and in other cases the area.
3.4. The Claimant shall attach to the Claim Information Form the following
documentary evidence:
3.4.1. a copy of all documentary evidence (if any) evidencing the date of
installation of ACBM;
3.4.2. a copy of all documentary evidence (if any) evidencing the date on
which the Claimant first became aware of the presence of ACBM;
3.4.3. an Approved Laboratory Report;
3.4.4. with respect to a building in which ACBM remains in place, an
Accredited Inspector Report; and
3.4.5. with respect to a building in which ACBM was removed pursuant to an
Asbestos Abatement Program, evidence (if any) that such ACBM was
removed pursuant to such program and copies of bid specifications
and contracts for the abatement work, together with copies of the
receipted bills or other proof of payment.
4. ASSESSMENT OF CLAIMS
4.1. Each Claim shall be assessed solely by reference to the Qualification
Criteria, Evaluation Criteria, and Compensation Model.
4.2. QUALIFICATION CRITERIA
4.2.1. In order to be allowed, a Claim must satisfy each of the following
Qualification Criteria:
4.2.1.1. The Claimant properly filed a proof of claim corresponding
to the ACBM for which the Claim is made in the Chapter 11
Cases on or before September 30, 1992, except to the
extent that (i) the Bankruptcy Court has ordered, on or
before the Effective Date, that the Claimant be permitted
to file such proof of claim untimely, and the Claimant
has, in fact, filed its proof of claim within the time
specified by the Bankruptcy Court or (ii) Eagle-Picher has
expressly consented to the untimely filing of such proof
of claim, and such proof of claim is filed in accordance
with any conditions attached by Eagle-Picher to such
consent.
4.2.1.2. The Claim has not previously been disallowed by an order
of the Bankruptcy Court or withdrawn.
4.2.1.3. The Claim is not factually time-barred under the statute
of limitations or statute of repose of the Applicable
Jurisdiction.
4.2.1.4. The Claim is not otherwise barred by the law of the
Applicable Jurisdiction.
A.1.1.6.5-5
4.2.1.5. The Claimant timely served a Claim Information Form
containing the information required by section 3.3 hereof;
provided, however, that a Claimant that has timely served
a Claim Information Form but that has failed to supply all
of the information required by section 3.3 hereof may
supplement its Claim Information Form with such
information within thirty (30) days after receipt of
notice by the Asbestos PD Trust that information is
missing from the Claim Information Form.
4.2.1.6. The ACBM with respect to which the Claim is being made was
not removed from the building as part of a renovation or
demolition otherwise than in connection with an Asbestos
Abatement Program.
4.2.1.7. The Claimant has not previously received compensation with
respect to the ACBM for which Claim is made in excess of
the Claim's Adjusted Nominal Value from another party or
trust.
4.2.2. Disallowance of Claims based upon their failure to meet any of the
Qualification Criteria shall be made by the Bankruptcy Court, after
notice to the Claimants affected and a hearing thereon.
4.3. COMPENSATION MODEL; NOMINAL VALUE
4.3.1. The Nominal Value of each Claim will be calculated by the Asbestos
PD Trust with reference to the quantity, application, condition and
location of the ACBM with respect to each Homogeneous Area in
respect of which the Claim is made, and the number of enclosure and
decontamination areas necessary if that ACBM were to be removed,
applying the removal costs and the appropriate proportion of the
work area costs set forth in the Compensation Model.
4.3.2. Where the ACBM with respect to which the Claim is made has been
abated as part of an Asbestos Abatement Program, the Nominal Value
of the Claim shall be the lesser of (i) the Nominal Value
calculated by reference to the Compensation Model in accordance
with section 4.3.1 and (ii) the actual abatement costs incurred by
the Claimant.
4.4. EVALUATION CRITERIA; ADJUSTED NOMINAL VALUE
4.4.1. The Nominal Value of the Claim for each Homogenous Area shall be
adjusted in accordance with the provisions set forth herein in
order to take into account the weight and sufficiency of the
evidence provided by the Claimant showing that One-Cote or Super
"66" was installed and has not previously been removed or replaced
otherwise than pursuant to an Asbestos Abatement Program.
4.4.2. Proof of the installation of One-Cote or Super "66" for each
Homogenous Area may be established by the Claimant by the following
analytical and/or documentary evidence:
4.4.2.1. A Claim will be awarded 40 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon the PLM tests
specified in the Protocols, the bulk samples referenced
herein are consistent with [One-Cote] [Super '66']."
A.1.1.6.5-6
4.4.2.2. A Claim will be awarded 30 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon the qualitative
scanning electron microscopy and/or transmission electron
microscopy tests specified in the Protocols, the bulk
samples referenced herein are consistent with [One-Cote]
[Super '66']."
4.4.2.3. A Claim will be awarded 30 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon quantitative x-ray
diffraction and chemical analysis tests specified in the
Protocols, the bulk samples referenced herein are
consistent with [One-Cote] [Super '66']."
4.5. The proof points awarded with respect to a Claim shall be totaled. The
Adjusted Nominal Value of a Claim with respect to each Homogenous Area
shall be calculated based upon the following formula:
Adjusted Proof Points
Nominal = Nominal x ------------
Value Value 100
The Adjusted Nominal Value of a Claim shall be the sum of the Adjusted
Nominal Values for each Homogenous Area for which a Claim is made.
4.6. For each Homogenous Area of ACBM that the Accredited Inspector has
determined is not in need of repair and which is not in a position in
which it is likely to be disturbed, the Adjusted Nominal Value calculated
pursuant to the preceding subsection shall be further adjusted downward by
75%.
5. NOTICE OF DECISION
5.1. The Asbestos PD Trust shall, within the later of (i) if either
Eagle-Picher or the Asbestos PD Trust moves to disallow a Claim and the
Bankruptcy Court enters an order denying such motion as to such Claim,
thirty (30) days after entry of such order, or (ii) one hundred eighty
(180) days after the Claims Information Deadline serve on each Claimant a
Notice of Decision with respect to each Claim stating the extent to which
the Claim has been accepted.
5.2. The Notice of Decision shall state the Nominal Value and the Adjusted
Nominal Value of the Claim and explain the application of the Evaluation
Criteria and the Compensation Model in the assessment and valuation of the
Claim.
5.3. The Notice of Decision will specify the date by which a Notice of
Reconsideration must be filed in accordance with the provisions of section
6.1.
6. RECONSIDERATION
6.1. Any Claimant that is dissatisfied with the decision in the Notice of
Decision may serve on the Asbestos PD Trust a Notice of Reconsideration
within thirty (30) days after service of the Notice of Decision. Failure
to timely serve on the Asbestos PD Trust a Notice of Reconsideration shall
be deemed a consent to the Notice of Decision and the Adjusted Nominal
Value stated therein, and the Claimant shall be deemed to have waived any
right to seek further review of its Claim.
A.1.1.6.5-7
6.2. The Notice of Reconsideration must identify specifically which of the
Evaluation Criteria and Compensation Model the Claimant contends were
improperly applied by the Asbestos PD Trust, stating the reason(s) for
seeking reconsideration and including any supporting documentation. A
Claimant may seek reconsideration of the Notice of Decision solely on the
basis that the Evaluation Criteria or Compensation Model formulae have
been improperly applied by the Asbestos PD Trust.
6.3. The Asbestos PD Trust shall confer with the Claimant or the Claimant's
designated representative in an effort to reach agreement on the Adjusted
Nominal Value of the Claim. The Asbestos PD Trust may agree upon an
Adjusted Nominal Value of a Claim in the discretion of the Trustee, but
the Asbestos PD Trust shall have no obligation to base its assessment of
the Adjusted Nominal Value of a Claim on anything other than application
of the Evaluation Criteria and the Compensation Model.
7. ARBITRATION
7.1. At any time within twenty (20) days following the service of the response
of the Asbestos PD Trust to the Notice of Reconsideration, the Claimant
may serve a Notice of Arbitration on the Asbestos PD Trust. If a Notice of
Arbitration is not timely served by a Claimant, then the Claimant shall be
deemed to have waived any right to seek Arbitration or any further review
of its Claim, and the Adjusted Nominal Value of the Claim set forth in the
Notice of Decision, or otherwise agreed to in writing by the Asbestos PD
Trust within the time period for seeking Arbitration, shall be binding on
the Claimant.
7.2. The Asbestos PD Trust shall maintain a list of a minimum of ten
independent arbitrators who are available to hear disputes hereunder. The
Asbestos PD Trust shall, within ten (10) days after receipt of a Notice of
Arbitration, send to the Claimant the names and addresses of the ten
independent arbitrators. The Claimant shall have fifteen (15) days from
the date the list is served to strike five arbitrators and to return the
list to the Asbestos PD Trust. The Asbestos PD Trust shall select one of
the five arbitrators not stricken by the Claimant to arrange a date on
which the Arbitration can be conducted, such date to be mutually
convenient to the Asbestos PD Trust, the Claimant, and the arbitrator.
Unless otherwise agreed to by the Asbestos PD Trust, in its sole
discretion, all Arbitration proceedings will be conducted in Cincinnati,
Ohio. Upon confirmation of the date on which Arbitration will commence,
the Asbestos PD Trust shall notify the Claimant in writing of its date and
location.
7.3. The arbitrator shall conduct a de novo review of the Claim. In assessing
the extent to which the Claim should be allowed, the arbitrator shall
apply only the Evaluation Criteria and the Compensation Model in
accordance with the procedures set forth herein. The Asbestos PD Trust
shall pay the fees and expenses of the arbitrator; provided, however, that
in the event Claimant fails to obtain an award equal to or greater than
120 percent (120%) of the Adjusted Nominal Value of such Claim set forth
in the Notice of Decision, such fees shall be borne by the Claimant. The
Claimant may, but need not, be represented by counsel in the arbitration
proceeding. The Claimant shall be solely responsible for all fees and
expenses incurred by the Claimant and its representatives in connection
with the Arbitration or otherwise pursuant to these Asbestos Property
Damage Claims Resolution Procedures.
8. NOTICES
8.1. All notices and other communications made or served under these Asbestos
Property Damage Claims Resolution Procedures shall be in writing and shall
be deemed to have been duly served on the date of delivery, if delivered
by hand or by express delivery service, or on the third business day after
the deposit into an authorized United States mail depository, if mailed by
First Class Mail, postage prepaid. Notices to the Asbestos PD Trust shall
be addressed as follows:
A.1.1.6.5-8
Eagle-Picher Industries, Inc. Asbestos Property Damage Claims Facility
P.O. Box 1847
Cincinnati, Ohio 45201
Notices to a Claimant shall be addressed as specified in the Claim Information
Form.
A.1.1.6.5-9
EXHIBIT "1"
APPROVED LABORATORIES
RJ Lee Group, Inc.
350 Hochberg Road
Monroeville, PA 15146
Contact: Dr. Richard J. Lee
(412) 325-1776
Capabilities: PLM, SEM, CCSEM, XRD
McCrone Environmental Services, Inc.
850 Pasquinelli Drive
Westmont, IL 60559
(708) 887-7100
Capabilities: PLM, SEM, CCSEM, XRD
Clayton Environmental Consultants, Inc.
400 Chastain Center Boulevard, N.W.
Suite 490
Kennesaw, GA 30144
Contact: Owen S. Crankshaw
(404) 499-7500
Capabilities: PLM, SEM, XRD
Millette, Vanderwood & Associates
5500 Oakbrook Parkway, Suite 200
Norcross, GA 30093
Contact: James Millette
(404) 662-8509
Capabilities: PLM, SEM, CCSEM
Materials Analytical Services, Inc.
3597 Parkaway Lane, Suite 250
Norcross, GA 30092
Contact: William E. Longo
(404) 448-3200
Capabilities: PLM, SEM, XRD
EMSL of California, Inc.
17620 South Amphlett Boulevard
Suite 130
San Mateo, CA 94402
Contact: Peter Frasca
(609) 858-4800
Capabilities: PLM, SEM, XRD
EMS Laboratories
117 West Bellevue Drive
Pasadena, CA 91105-2503
Contact: Bernadine Kolk
(818) 568-4065
Capabilities: PLM, SEM, XRD
Particle Diagnostics, Inc.
106-A White Horse Pike
Haddon Heights, NJ 8035
Contact: James J. Weitzman
(609) 547-0491
Capabilities: PLM, XRD
Miero Analytical Laboratories, Inc.
3618 N.W. 97th Boulevard
Gainesville, FL 32606
Contact: Nancy Dehgan
(904) 332-1701
Capabilities: PLM, SEM
Forensic Analytical Specialties, Inc.
3777 Depot Road, Suite 406
Hayward, CA 94545-2756
(510) 887-8828
Capabilities: PLM, SEM, XRD
A.1.1.6.5-1-1
EXHIBIT "2"
IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
)
EAGLE-PICHER INDUSTRIES, INC. )
) CONSOLIDATED CASE NO.
et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
- --------------------------------------------------------------------------------
CLAIM INFORMATION FORM FOR
ASBESTOS-RELATED PROPERTY DAMAGE CLAIMS
- --------------------------------------------------------------------------------
NOTE: A SEPARATE CLAIM INFORMATION FORM MUST
BE FILED FOR EACH BUILDING INCLUDED IN A CLAIMANT'S CLAIM
CLAIMANT INFORMATION
Claim Number: [Eagle-Picher #]--
-----------------------------------------------------------
(Consecutively number claims for each building, using the
preassigned claim number as a prefix)
Claimant Name:
-----------------------------------------------------------
Claimant Address:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Claimant Type (check one):
Owner Operator Attorney in Fact
[ ] [ ] [ ]
A1.1.6.5-2-1
BUILDING INFORMATION
Building Name: _______________________________________________________
(Include any ceremonial name for the building. If the
building is part of a complex, the building's
designation should appear here, and the complex name
should appear under Location.)
Division or Agency
Operating Building: _______________________________________________________
(If a division or agency of a governmental entity or
corporation is operating the building, the name of the
agency or division operating the building should appear
here.)
Site Identification: _______________________________________________________
(If claimant routinely uses a unique numerical
identification for its buildings, this should be
inserted to aid in uniquely defining the claim.)
Building Address
or Location: _______________________________________________________
_______________________________________________________
(If the building is part of a complex, such as a group
of hospital buildings, this should be indicated. If the
complex has a single street address, usually of the
administration building, then this should be included
with that fact so indicated.)
Construction Date:
Original _________ Addition 1 _________ Addition 2 _________
Addition 3 _________ Addition 4 _________
(The approximate year(s) of construction of the original building and any
additions should be indicated, whether or not they are the dates of installation
of asbestos-containing materials.)
Building Type/Purpose: _______________________________________________________
_______________________________________________________
_______________________________________________________
(short description of the routine building uses, e.g.
school, hospital, office building, library, convention
center, manufacturing plant, museum, etc.)
Dates of Any Consultants' Reports Received Relating to Asbestos-Containing
Materials in Building: ________________________________________________________
Date Claimant First Became Aware of Presence of Asbestos-Containing Materials in
Building: ____________________________________________________________________
A1.1.6.5-2-2
PRODUCT INFORMATION
(COMPLETE CHART FOR EACH HOMOGENEOUS AREA - AN AREA
OF ASBESTOS-CONTAINING MATERIALS THAT IS UNIFORM IN TEXTURE AND COLOR. ATTACH
ADDITIONAL PAGES, IF NECESSARY)
- ----------------------------------------------------------------------------------------------------------------------------------
ASBESTOS-CONTAINING CONDITION
HOMOGENEOUS MATERIALS (CHECK ANY THAT
AREA # _____ PRODUCT I.D. (CHECK ONE) APPLY)
- ----------------------------------------------------------------------------------------------------------------------------------
Location (i.e., boiler room, Brand Name: [ ] remain in place Asbestos-containing materials
cafeteria, office): in this homogeneous area are
[ ] abated pursuant to Asbestos
Abatement Program
Installation date: Attached Approved
Laboratory Report Date:_____________________________ [ ] in need of repair
based upon the
following (check all Abatement Costs:
that apply):
Application (check one and
complete pertinent information): $_________________________________ [ ] likely to be disturbed
[ ] Fittings [ ] PLM tests [ ] removed in other renovation or
demolition
Number: ____________________
[ ] qualitative
Diameter:___________________ scanning electron Date:_____________________________
miscroscopy and/or
transmission electron Removal Costs:
microscopy
[ ] Pipes $_________________________________
Number: ____________________
Length:_____________________ [ ] quantitative x-ray [ ] Other (please attach explanation)
diffraction and
chemical analysis
[ ] Other
Area:_______________________
- ----------------------------------------------------------------------------------------------------------------------------------
A1.1.6.5-2-3
OTHER CLAIMS AND ACTIONS
(LIST ALL OTHER ACTIONS OR PROCEEDINGS IN WHICH A CLAIM HAS BEEN ASSERTED FOR
ASBESTOS-RELATED PROPERTY DAMAGE ON ACCOUNT OF THIS BUILDING, STATE WHETHER THE
STATUS OF ACTION AS IT PERTAINS TO SUCH CLAIM, AND, IF A RECOVERY WAS RECEIVED,
THE AMOUNT OF SUCH RECOVERY. ATTACH ADDITIONAL PAGES, IF NECESSARY.)
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
A1.1.6.5-2-4
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
A1.1.6.5-2-5
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
================================================================================
A1.1.6.5-2-6
ATTACHMENTS
(ALL DOCUMENTATION SUBMITTED MUST BE IN READABLE FORM. ILLEGIBLE DOCUMENTATION
WILL BE DISREGARDED, OR THE ASBESTOS PD TRUST MAY SEEK TO HAVE THE CLAIMANT
SUPPLY A LEGIBLE COPY. ALL DOCUMENTATION MUST BE CONSECUTIVELY NUMBERED TO
CORRESPOND TO THE CLAIM NUMBER. FOR EXAMPLE, IF TEN DOCUMENTS ARE SUBMITTED
RELATING TO CLAIM NO. 11111-5 (I.E., IN SUPPORT OF THE FIFTH BUILDING COVERED
UNDER CLAIM NO. 11111), EACH DOCUMENT MUST BE NUMBERED 11111-5-1 THROUGH
11111-5-10.)
The following documents are attached to this Claim Information Form (check all
that apply)
[ ] Documents that show the date of installation of asbestos-containing
materials
[ ] Documents that show the date on which Claimant first became aware of the
presence of asbestos-containing materials in the building
[ ] Approved Laboratory Report
[ ] Accredited Inspector Report (required if asbestos-containing materials
remain in place in the building)
[ ] Documents that show that asbestos-containing materials were removed
pursuant to an Asbestos Abatement Program, including bid specifications,
contracts for the abatement work, and proof of payment
A1.1.6.5-2-7
CERTIFICATION
The undersigned certifies to the best of his [her] knowledge under penalty of
perjury that the information contained and submitted with this Claim Information
Form is true and correct.
- ------------ ------------------------------- ---------------------
Date (Print Name and Title, if any) (Signature)
SUBMISSION REQUIREMENT
This Claim Information Form must be submitted and received no later than
_____________, 1996 to the address below, or returned in the enclosed
pre-addressed envelope:
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE
CLAIMS FACILITY
P.O. Box 1847
Cincinnati, Ohio 45202
A1.1.6.5-2-8
EXHIBIT "3"
COMPENSATION MODEL
WORK AREA COST
Isolation barrier $2.50 per linear foot
Floor cover $0.30 per square foot
Decontamination enclosure $100.00 each work area
REMOVAL COST
1/2" - 1 1/2" pipe $3.75 per linear foot
2" - 3" pipe $4.15 per linear foot
4" - 5" pipe $5.00 per linear foot
6" - 10" pipe $8.50 per linear foot
LENGTH OF COVERING
1/2" - 1 1/2" fitting $3.75 per fitting
2" - 3" fitting $4.15 per fitting
4" - 5" fitting $5.00 per fitting
6" - 10" fitting $8.50 per fitting
Boilers, breaching
and ducting $9.00 per square foot
A1.1.6.5-3-1
EXHIBIT "4"
FORM OF NOTICE OF DECISION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-4-1
EXHIBIT "5"
FORM OF NOTICE OF RECONSIDERATION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-5-1
EXHIBIT "6"
PROTOCOLS FOR ONE-COTE
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-6-1
EXHIBIT "7"
PROTOCOLS FOR SUPER "66"
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-7-1
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------)
EXHIBIT "1.1.8"
FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
[THIS PAGE LEFT BLANK INTENTIONALLY]
CERTIFICATE OF REORGANIZATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer, and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that: (1)
the Corporation is the Debtor in that certain Chapter 11 case identified as
Consolidated Case No. 1-91-00100 in the United States Bankruptcy Court for the
Southern District of Ohio, Western Division (the "Case"), (2) in the Case, the
Corporation has filed a Consolidated Plan of Reorganization that provides for
the adoption of Amended and Restated Articles of Incorporation for the
Corporation in the form set forth as Exhibit A to this Certificate, (3) the
Consolidated Plan of Reorganization, including the Amended and Restated Articles
of Incorporation that are Exhibit A hereto, was confirmed by the order of the
United States District Court for the Southern District of Ohio, Western
Division, on November __, 1996, and (4) such order remains in full force and
effect at the date hereof.
The Amended and Restated Articles of Incorporation annexed hereto may be
certified by the office of the Secretary of State of Ohio separately from this
Certificate of Reorganization.
IN WITNESS WHEREOF, the undersigned President and Secretary of
Eagle-Picher Industries, Inc., have executed this Certificate of Reorganization
this ___ day of November, 1996.
-----------------------------------
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
-----------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
CERTIFICATE OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that in
connection with a Plan of Reorganization confirmed by the United States District
Court for the Southern District of Ohio, Western Division, in the chapter 11
case of the Corporation, the Articles of the Corporation were amended and
restated, pursuant to such Plan and the authority granted by Section 1701.75 of
the Ohio Revised Code ("O.R.C."), to read as follows:
FIRST: The name of the Corporation is Eagle-Picher Industries, Inc.
SECOND: The place in Ohio where the principal office of the Corporation is
to be located is Cincinnati, Hamilton County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98 inclusive, of the O.R.C.
FOURTH: (a) All shares of the Corporation that are authorized for issuance
immediately prior to the time as of which these Amended and Restated Articles of
Incorporation become effective (the "Effective Time") are hereby canceled. As of
the Effective Time, the number of shares that the Corporation is authorized to
have outstanding is 20,000,000 common shares, without par value (the "Common
Stock").
(b) Pursuant to the requirements of Section 1123(a)(6) of the Bankruptcy
Code, the Corporation shall not issue nonvoting equity securities, subject,
however, to further amendment of these Amended and Restated Articles of
Incorporation as and to the extent permitted by applicable law.
FIFTH: The Corporation, by action of its board of directors, may purchase
its own shares at any time and from time-to-time to the extent permitted by law.
SIXTH: The shares of the Corporation's Common Stock, other rights or
options to purchase shares of the Corporation's Common
2
Stock and any other interests that would be treated as "stock" of the
Corporation under Section 382 of the Internal Revenue Code (collectively,
the "Corporate Securities") are subject to the following restrictions:
1. During the period beginning on the Effective Time and ending
twenty-five (25) months thereafter, any attempted sale, purchase, transfer,
assignment, conveyance, pledge or other disposition of any share or shares of
Corporate Securities ("Transfer") to any person or entity or to any group of
persons or entities acting in concert ("Transferee") who directly or indirectly
owns, or is treated as owning (within the meaning of the attribution rules
applicable under Section 382 of the Internal Revenue Code ("Own")), 4.75% or
more of any class of Corporate Securities, or after giving effect to the
Transfer, would directly or indirectly Own more than 4.75% of the outstanding
shares of any class of Corporate Securities, shall be void AB INITIO and shall
not be effective to Transfer any of such shares to the extent the Transfer
increases the Transferee's direct or indirect ownership of the Corporate
Securities above 4.75% of the total outstanding shares of such class of
Corporate Securities. Similarly, any Transfer by a transferor who directly or
indirectly Owns 5% or more of the outstanding shares of any class of Corporate
Securities shall be void AB INITIO and shall not be effective to Transfer any of
such shares to the purported Transferee.
2. (a) If the Board of Directors of the Corporation determines that a
Transfer of Corporate Securities constitutes a Transfer prohibited by Section 1
hereof (a "Prohibited Transfer"), then upon written demand made by any officer
of the Corporation, the purported Transferee shall transfer or cause to be
transferred any certificate or other evidence of ownership of Corporate
Securities that are the subject of the Prohibited Transfer ("Prohibited
Securities"), together with any dividends or other distributions that were
received by the Transferee from the Corporation with respect to such Prohibited
Securities ("Prohibited Distributions"), to an agent designated by the Board of
Directors of the Corporation (the "Agent"). The Agent shall then sell to a buyer
or buyers the Prohibited Securities so transferred to it. If, before receiving
the demand of the Corporation to transfer the Prohibited Securities to the
Agent, the purported Transferee has resold the Prohibited Securities, the
purported Transferee shall be deemed to have sold the Prohibited Securities for
and on behalf of the Agent and, in lieu of transferring the Prohibited
Securities to the Agent, shall transfer to the Agent any Prohibited
Distributions and the proceeds of such sale. If the purported Transferee fails
to surrender the Prohibited Securities or the proceeds of a sale thereof,
together with any Prohibited Distributions, to the Agent within thirty (30)
business days from the date on which the Corporation makes its demand for
surrender hereunder, the Corporation shall institute legal proceedings to compel
the surrender. The costs of any such proceeding in which the court
3
shall compel such surrender or award damages shall be borne by the purported
Transferee.
(b) Upon the receipt of the proceeds of any sale of Prohibited Securities
by the Agent or, upon the receipt from the purported Transferee thereof of the
proceeds from any previous sale of such Prohibited Securities by such
Transferee, the amount so received shall be applied by the Agent as follows: (i)
first, to the payment of the reasonable expenses of the Agent incurred in
connection with the performance of its duties hereunder; (ii) second, to the
purported Transferee up to the amount paid by the purported Transferee for the
Prohibited Securities, which amount shall be determined by the Board of
Directors of the Corporation in its sole discretion; and (iii) third, to one or
more organizations that shall then be qualified under Section 501(c)(3) of the
Internal Revenue Code as selected by the Board of Directors of the Corporation.
3. Neither the Corporation nor any transfer agent or other person on its
behalf shall effect a Prohibited Transfer on the stock record books of the
Corporation and the purported Transferee thereof shall not be recognized as a
shareholder of the Corporation for any purpose whatsoever in respect of the
Prohibited Securities. Until the Prohibited Securities are acquired by another
person in a Transfer that is not a Prohibited Transfer, the purported Transferee
shall not be entitled with respect to such Prohibited Securities to any rights
of shareholders of the Corporation, including, without limitation, the right to
vote such Prohibited Securities and to receive dividend distributions, whether
liquidating or otherwise, in respect thereof, if any. Once the Prohibited
Securities have been acquired in a Transfer that is not a Prohibited Transfer,
the Corporate Securities shall cease to be Prohibited Securities.
4. All certificates evidencing any Corporate Securities issued by the
Corporation after the Effective Time, shall bear a conspicuous legend reading
substantially as follows:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO
RESTRICTION PURSUANT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF REORGANIZED EAGLE-PICHER, WHICH RESTRICTION IS REPRINTED IN ITS
ENTIRETY ON THE BACK OF THIS CERTIFICATE.
With respect to any Corporate Securities that are not evidenced by a
certificate, but are uncertificated securities, the foregoing legend shall be
set forth in the initial transaction statement required for restrictions on
transfer by Section 1308.11 of the O.R.C.
5. Notwithstanding any other provisions of these Amended and Restated
Articles of Incorporation or the Regulations of the
4
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, these Amended and Restated Articles or the Code of
Regulations), the affirmative vote of the holders of 80% or more of the
outstanding shares, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with this Article Sixth;
provided, however, that shareholder action without a meeting shall require the
unanimous written consent of all shareholders entitled to vote thereon.
SEVENTH: All certificates evidencing any shares of the Corporation's
Common Stock issued by the Corporation after the Effective Time, shall bear a
conspicuous legend reading substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE,
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.
EIGHTH: These Amended and Restated Articles of Incorporation supersede and
take the place of all prior Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, the undersigned President and Chief Operating Officer
and Vice President, General Counsel and Secretary of Eagle-Picher Industries,
Inc. have executed this Certificate this _____ day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By
-----------------------------
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
-------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
5
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ---------------------------------)
EXHIBIT "1.1.9"
FORM OF AMENDED AND RESTATED CODE OF REGULATIONS
[THIS PAGE LEFT BLANK INTENTIONALLY]
Eagle-Picher Industries, Inc.
CODE OF REGULATIONS
--------
ARTICLE I
Seal
SECTION 1. Form. The seal of the Corporation shall have upon it the name
and words "Eagle-Picher Industries, Inc. Incorporated 1867 - Seal" and shall be
circular in form.
ARTICLE II
Shareholders
SECTION 1. Place of Meetings. Meetings of shareholders shall be held at
the office of the Corporation in Cincinnati, Ohio, or at such other place in
Cincinnati as may be designated by the Board of Directors.
SECTION 2. (a) Annual Meeting. The annual meeting of shareholders shall be
held at 2 o'clock P.M. on the fourth Tuesday in March of each year, if not a
legal holiday, but, if a legal holiday, then, at the same hour, on the next
succeeding business day which is not a legal holiday, at which time there shall
be elected, by ballot, in accordance with the laws of the State of Ohio and
these regulations, members of the Board of Directors to serve and hold office as
provided in Article III hereof.
(b) Shareholder Action. Any action required to be taken at a meeting of
shareholders shall be taken at an annual or special meeting thereof, or without
a meeting upon the unanimous written consent of all shareholders entitled to
vote thereon.
(c) Shareholder Nominations. Subject to the rights of holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, nominations for the election of directors may be made by the
Board of Directors or by any shareholder entitled to vote in the election of
directors generally. However, any shareholder entitled to vote in the election
of directors generally may nominate one or more persons for
election as directors, at an annual meeting or at a special meeting called in
whole or in part to vote on the election of directors, only if written notice of
such shareholder's intent to make such nomination or nominations has been
delivered to or mailed and received by the Secretary of the Corporation not less
than 60 days nor more than 90 days in advance of such meeting; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the shareholder
must be so received not later than the close of business on the 10th day
following the date on which such notice of the date of the meeting was first
mailed or such public disclosure was made. Each such shareholder's notice shall
set forth: (a) the name and address, as they appear on the Corporation's books,
of the shareholder who intends to make the nomination and the name, age,
business address and residence address of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) the principal occupation or employment of the person or
persons to be nominated; (e) the class and number of shares of the Corporation
which are beneficially owned by the shareholder intending to make the nomination
and by the person or persons to be nominated; (f) such other information
regarding each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (g) the written consent of each
nominee to being named in the proxy statement and serving as a director of the
Corporation if so elected. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to such nominee. No person to
be nominated by a shareholder shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth in
this Section 2.(c). The chairman of the meeting shall, if the facts warrant,
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedure and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
(d) Notice of Shareholder Business. At an annual meeting of shareholders,
only such business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting, busi-
2
ness must be (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a shareholder. For business
to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in these regulations to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2.(d), Article II. The
chairman of the annual meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting and in accordance with the
provisions of this Section 2.(d), Article II, and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
(e) Notwithstanding anything in these regulations to the contrary, the
affirmative vote of the holders of 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal these subsections (b), (c), (d) and (e) of
Section 2, Article II; provided, however, shareholder action without a meeting
shall require the unanimous written consent of all shareholders entitled to vote
thereon pursuant to Section 2.(b) hereof.
SECTION 3. Special Meetings of Shareholders. Subject to the rights of the
holders of any class or series of stock having preference over the Common Stock
as to dividends or upon liquidation, special meetings of shareholders may be
called by the Chairman of the Board of Directors, the President, or the
directors by action at a meeting or a majority of the directors
3
acting without a meeting, persons who hold fifty percent of all shares
outstanding and entitled to vote thereat, the Secretary or an Assistant
Secretary. Any shareholder or shareholders entitled to call a special meeting
pursuant to this Section 3, Article II, must, in order properly to call such
meeting, deliver a written notice to the Secretary of the Corporation
requesting that a special meeting be called. Such meeting shall be held on
a date fixed by the Board of Directors of the Corporation, which date shall
be not less than 60 days nor more than 90 days after the date of receipt of
such notice by the Secretary of the Corporation. Any such notice shall set
forth as to each matter proposed to be brought before the special meeting
(a) a brief description of the business desired to be brought before the
meeting, (b) the name and address, as they appear on the Corporation's books,
of the shareholder or shareholders proposing such business, (c) the class and
number of shares of the Corporation which are beneficially owned by the
shareholder, and (d) any material interest of the shareholder in such business.
Notwithstanding anything in these regulations to the contrary, the Secretary
shall not call a special meeting upon the request of any shareholder if such
shareholder has failed to comply with this Section 3, Article II, with respect
to all matters proposed to be brought before such meeting and, subject to
Section 2.(c) of this Article II with respect to shareholder nominations for
election of directors, no business shall be conducted at a special meeting
except business proposed in accordance with the procedures set forth in this
Section 3, Article II. The Chairman of the special meeting shall, if the facts
warrant, determine that business was not properly brought before the meeting
and in accordance with the provisions of this Section 3, Article II, and if
he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Notwithstanding anything in these regulations to the contrary, the affirmative
vote of the holders of 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal this Section 3 of Article II; provided,
however, shareholder action without a meeting shall require the unanimous
written consent of all shareholders entitled to vote thereon pursuant
to Section 2.(b) hereof.
SECTION 4. Notice of Meetings. A notice, as required by law, of each
regular or special meeting of shareholders shall be given in writing by the
Chairman of the Board of Directors, the President, the Secretary, or an
Assistant Secretary, not less than ten (10) days before the meeting.
SECTION 5. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of
shareholders for the transaction of business, except as otherwise provided by
law. by the articles of incorporation, or by these regulations, if, however,
4
such majority shall not be present or represented at any meeting of
shareholders, the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting, from time to
time, without notice other than announcement at the meeting, until the requisite
amount of voting stock shall be present or represented. At such adjourned
meeting, at which the requisite amount of voting stock shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 6. Proxies. Any shareholder entitled to vote at a meeting of
shareholders may be represented and vote thereat by proxy, appointed by an
instrument in writing, subscribed by the shareholder or his duly authorized
agent, and submitted to the Secretary of the Corporation not less than
forty-eight hours before such meeting; provided, any such proxy, other than for
a corporation, shall himself be a shareholder.
SECTION 7. Organization. The Chairman of the Board of Directors, or the
President, shall preside at all meetings of shareholders. In the absence of
both, the Board of Directors shall designate a presiding officer, who shall have
all the powers herein conferred upon the presiding officer of the meeting. The
Secretary of the Corporation shall act as secretary of all meetings but, in the
absence of the Secretary, the presiding officer of shareholders may appoint any
person to act as secretary of the meeting.
SECTION 8. Order of Business. At all shareholders' meetings the order of
business shall be as follows:
1. Proof of notice of meeting.
2. Presentation and examination of proxies.
3. Reading of minutes of previous meeting and acting thereon.
4. Report of Directors or Committees.
5. Reports of Officers.
6. Unfinished business
7. Election of Directors.
8. New or miscellaneous business.
9. Adjournment.
This order may be changed by affirmative vote of the holders of a majority of
the outstanding shares, present in person or represented by proxy.
5
ARTICLE III
Board of Directors
SECTION 1. (a) Number, Election and Terms. Except as otherwise fixed by or
pursuant to the provisions of Article Fourth, Division A of the Articles of
Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional directors under specified circumstances, the
Board of Directors of the Corporation shall consist of eleven (11) members or
such other number as may be determined from time to time by action of the Board
of Directors. The directors, other than those who may be elected by the holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as determined by the Board of Directors of the Corporation, one
class to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1986, another class to be originally elected for a
term expiring at the annual meeting of shareholders to be held in 1987, and
another class to be originally elected for a term expiring at the annual meeting
of shareholders to be held in 1988, with each class to hold office until its
successor is elected and qualified. At each annual meeting of shareholders of
the Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election.
(b) Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the number of directors shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any vacancies on the Board
of Directors shall be filled as provided by law. Any director so elected shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
(c) Removal. Any director may be removed from office as provided by law;
provided, however, the removal of directors by shareholders shall require an
affirmative vote of the holders of 80% of the combined voting power of the then
outstanding shares of stock entitled to vote generally in the election of
directors, voting together as a single class; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
6
(d) Amendment, Repeal, Inconsistent Provisions. Notwithstanding anything
in these regulations to the contrary, the affirmative vote of the holders of 80%
of the voting power of all shares of the Corporation entitled to vote generally
in the election of directors, voting as a single class, shall be required to
alter, amend, adopt any provisions inconsistent with or repeal these Subsections
(a), (b), (c) and (d) of Section 1, Article III; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
SECTION 2. Time and Place of Meetings. A meeting of the Board of Directors
shall be held immediately following each meeting of shareholders at which
directors are elected, and notice of such meeting need not be given. Other
meetings of the Board may be held at such times and places, either within or
without the State of Ohio, as may be fixed by resolution of the Board or as may
be specified in the call and notice of meetings; and shall be held at least
quarterly.
SECTION 3. Call and Notice of Meetings. Meetings may be called at any time
by the Chairman of the Board, the President, the Secretary, or by a majority of
the Board. The Board shall decide what notice of meetings shall be given and the
length of time prior to the meeting that such notice shall be given. Any meeting
at which all directors are present shall be a valid meeting, whether notice
thereof was given or not, and any business may be transacted at such meeting.
Notice for call of any meeting may be waived by any one or all of the directors.
SECTION 4. Quorum. A majority of the Board of Directors shall constitute a
quorum for the transaction of business and, if at any meeting of the Board there
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time.
SECTION 5. Compensation of Directors and Members of the Executive
Committee. The directors are authorized to fix, from time to time, their own
compensation for attendance at meetings of the Board and the compensation of
members of the Executive Committee for attendance at meetings of such Committee,
which may include expenses of attendance when meetings are not held at the place
of residence of any director or member.
SECTION 6. General Powers. The powers of the Corporation shall be
exercised, its business and affairs conducted, and its property controlled by
the Board of Directors, except as otherwise provided in the General Corporation
Law of Ohio or in the articles of incorporation of the Corporation and
amendments thereto. The Board of Directors shall have power to fix, define and
limit the powers and duties of all officers.
7
SECTION 7. Indemnification of Directors and Officers. Each director and
each officer now, heretofore, or hereafter in office, shall be indemnified by
the Corporation against all costs imposed upon, and/or expenses reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding of whatever nature (whether the same be settled or proceed to
judgement) in which he may be or become involved by reason of his being or
having been a director or officer of the Corporation, any subsidiary of the
Corporation, or any company or corporation which he serves as a director or
officer at the request of the Corporation (whether or not he continues to be a
director or officer at the time of the imposition of such costs and/or
expenses), except in respect to matters as to which he shall be finally adjudged
in such action, suit or proceeding to be liable for gross negligence or wilful
misconduct in the performance of his duty as such director or officer. The
foregoing right of indemnification shall be in addition to and not exclusive of
any and all other rights to which he may be entitled as a matter of law.
ARTICLE IV
Executive Committee
SECTION 1. Executive Committee. The Board of Directors may, by resolution,
designate not less than three (3) of its number to constitute an Executive
Committee, but may repeal said resolution and dispense with said Committee at
any time.
SECTION 2. Powers of Executive Committee. The Executive Committee shall
have charge of the management of the business and affairs of the Corporation in
the interim between meetings of the Board of Directors, and generally shall have
all of the authority of the Board, in the transaction of such business of the
Corporation as, in the judgement of the Committee, may require action between
meetings of the Board.
SECTION 3. Limitation of Powers of Executive Committee. The Board of
Directors shall have authority to limit or quality the powers of the Executive
Committee at any time, and may rescind any action of the Committee to the extent
that no rights of third persons shall have intervened.
SECTION 4. Record of Executive Committee. The Executive Committee shall
keep a record of its proceedings and make a report of its acts and transactions
to the Board of Directors, all of which shall form part of the records of the
Corporation.
ARTICLE V
Officers
SECTION 1. Number. The officers of the Corporation shall be a President,
one or more Vice-Presidents, a Secretary, one or more Assistant Secretaries,
8
a Treasurer and one or more Assistant Treasurers. Any two or more of the offices
may be held by the same person, but no officer shall execute, acknowledge, or
verify any instrument in more than one capacity if such instrument is required
to be executed, acknowledged, or verified by two or more officers.
SECTION 2. Other Officers. The Board of Directors is authorized in its
discretion to establish the office of Chairman of the Board, and shall have the
further power to provide for such other offices and agencies as it shall deem
necessary from time to time and to dispense with any of said offices and
agencies at any time.
SECTION 3. Election, Term and Removal. At the meeting of the Board of
Directors immediately following each meeting of shareholders at which directors
are elected, the Board shall select one of its members to be President of the
Corporation. It shall also select all other officers of the Corporation, none of
whom shall be required to be a member of the Board, except the Chairman of the
Board if that office be established. All officers of the Corporation shall hold
office during the pleasure of the Board, or until their successors shall have
been elected and qualified, and the Board may remove or suspend any officer at
any time, without notice, by the affirmative vote of a majority of the entire
Board.
SECTION 4. Vacancies and Absence. If any office shall become vacant by
reason of the death, resignation, disqualification, or removal of the incumbent
thereof, or other cause, the Board of Directors may select a successor to hold
office for the unexpired term in respect to which such vacancy occurred or was
created. In case of the absence of any officer of the Corporation or for any
reason that the Board of Directors may determine as sufficient, the Board may
for the time being delegate the powers and duties of such officer to any other
officer, or to any director, except where otherwise provided by these
regulations or by statute.
SECTION 5. Salaries. The Board of Directors or the Executive Committee
shall fix the salaries of all officers; and shall supervise the salaries of all
other employees of the Corporation.
ARTICLE VI
Duties of Officers
SECTION 1. Chairman of the Board. The Chairman of the Board of Directors
(if the Board establishes such office) shall preside at all meetings of the
Board, appoint all special or other committees (unless otherwise ordered by the
Board) and shall confer with and advise all other officers of the Corporation.
He shall have such executive and managerial powers and authority and shall
perform such duties as may, from time to time, be delegated to him by the Board
of Directors or the Executive Committee.
9
SECTION 2. President. The President shall, unless otherwise prescribed by
the Board of Directors or the Executive Committee, be the chief executive
officer and active head of the Corporation and, in the recesses of the Board of
Directors and the Executive Committee, shall have general control and management
of all of its business affairs. He shall make annual reports to the Board of
Directors, showing the condition of the affairs of the Corporation, making such
recommendations as he thinks proper, and from time to time shall bring before
the Board of Directors, or the Executive Committee, such information as may be
required touching upon the business and property of the Corporation. He shall
perform such other duties as may, from time to time, be assigned to him by the
Board of Directors. If there be no Chairman of the Board, or in his absence, the
President shall preside at all meetings of the Board and appoint all special or
other committees (unless otherwise ordered by the Board).
SECTION 3. Vice-Presidents. The Vice-Presidents shall perform such duties
as may be delegated to them by the Board of Directors, or assigned to them from
time to time by the Board of Directors, the Executive Committee, the Chairman of
the Board, or the President. In the absence of the Chairman of the Board and the
President, the Board of Directors shall designate one of the Vice-Presidents, or
some other person, to perform the duties and have the powers of the Chairman of
the Board and the President, and, during such absence, such person shall be
authorized to exercise all of the functions of the Chairman of the Board and the
President.
SECTION 4. Secretary. The Secretary shall keep a record of all proceedings
of the Board of Directors and of all meetings of shareholders, and shall perform
such other duties as may be assigned to him by the shareholders, the Board of
Directors, the Executive Committee, the Chairman of the Board, or the President.
SECTION 5. Assistant Secretaries. The Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Secretary. The Board
of Directors shall designate one of the Assistant Secretaries to be acting
Secretary during the absence or disability of the Secretary.
SECTION 6. Treasurer. The Treasurer shall have charge of the funds of the
Corporation. He shall keep proper books of account showing all transactions
entered into by, for and on behalf of the Corporation, with vouchers in support
thereof. He shall also, from time to time as required, make reports and
statements to the Board of Directors and the Executive Committee as to the
financial condition of the Corporation, and submit detailed statements of
receipts and disbursements; and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors, the Executive
Committee, the Chairman of the Board, or the President.
10
SECTION 7. Assistant Treasurers. The Assistant Treasurers shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Treasurer. The Board
of Directors shall designate one of the Assistant Treasurers to be acting
Treasurer during the absence or disability of the Treasurer.
SECTION 8. Bonds of Officers. The Board of Directors or the Executive
Committee shall determine which officers of the Corporation shall give bond, and
the amount thereof, the expense to be paid by the Corporation.
ARTICLE VII
Certificates for Shares of Stock
SECTION 1. Certificates. Certificates evidencing the ownership of shares
of the Corporation shall be issued to those entitled to them by transfer or
otherwise. Each certificate for shares shall bear the signature of the Chairman
of the Board, or the President or one of the Vice-Presidents, and of the
Secretary or an Assistant Secretary, the seal of the Corporation (but failure to
affix the seal shall not invalidate the certificate if properly signed) and such
recitals as may be required by law.
SECTION 2. Mutilated and Lost Certificates. If any certificate for shares
of the Corporation becomes worn, defaced or mutilated, the Board of Directors,
upon surrender thereof, may order the same cancelled and a new certificate
issued in lieu thereof. If any certificate for shares be lost or destroyed, a
new certificate may be issued upon such terms and under such regulations as may
be adopted by the Board of Directors.
ARTICLE VIII
Committees
SECTION 1. Committees. The Board of Directors shall have power to create
from time to time such committees, standing or special, as it shall deem best,
and to revoke their appointment or restrict or modify their powers.
ARTICLE IX
Closing Stock Transfer Books
SECTION 1. Closing Stock Transfer Books. The Board of Directors may fix a
time, not exceeding forty-five (45) days preceding the date of any meeting of
shareholders or any dividend payment date or any date for the allotment of
rights, as a record date for the determination of the shareholders entitled to
notice of such meeting or to vote thereat or to receive such dividends or rights
as the case may be and/or the Board of Directors may close the books of the
Corporation against transfer of shares of stock during the whole or any part of
such period.
11
ARTICLE X
Amendments
SECTION 1. Amendments. These regulations, or any of them, may be altered,
amended, added to or repealed as may be provided by law.
ARTICLE XI
Assent of Shareholders
SECTION 1. Assent of Shareholders. Any person becoming a shareholder in
this Corporation shall be deemed to assent to these regulations, and any
alterations, amendments, or additions thereto, lawfully adopted, and shall
designate to the Secretary or appointed Transfer Agents of the Corporation, the
address to which he desires that notices herein required to be given may be
sent, and all notices mailed to such address, with postage prepaid, shall be
considered as duly given at the date of mailing; provided, however, that, in the
event any shareholder shall have failed to so designate an address to which
notices shall be sent, said notices shall be sent to any address where the
Secretary believes he may be reached, otherwise to "General Delivery,
Cincinnati, Ohio." The mailing or any notice to "General Delivery, Cincinnati,
Ohio," shall be conclusive evidence that the Secretary knows of no address where
he believes said shareholder may be reached.
12
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------)
EXHIBIT "1.1.13"
FORM OF EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
[THIS PAGE LEFT BLANK INTENTIONALLY]
EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
This Trust Agreement is among Eagle-Picher Industries, Inc., an Ohio
corporation and debtor in possession ("EAGLE-PICHER"), and its affiliates, Daisy
Parts, Inc., Transicoil, Inc., Michigan Automotive Research Corp., EDI, Inc.,
Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc., and Hillsdale Tool &
Manufacturing Co. ("SETTLORS"), and Darius W. Gaskins, Jr., Kevin O'Donnell,
Daniel M. Phillips, William J. Williams and Marshall Wright, as Trustees
("TRUSTEES"), pursuant to the Second Amended Consolidated Joint Plan of
Reorganization of Eagle-Picher and its affiliated debtors, dated July 15, 1996
(the "PLAN").
WHEREAS, at the time of the entry of the order for relief in the Chapter
11 Cases, Eagle-Picher was named as a defendant in personal injury, wrongful
death, and property damage actions seeking recovery for damages allegedly caused
by the presence of, or exposure to, asbestos or asbestos-containing products;
and
WHEREAS, Eagle-Picher and its affiliated debtors (collectively, the
"DEBTORS") have reorganized under the provisions of Chapter 11 of the Bankruptcy
Code in cases pending in the United States Bankruptcy Court for the Southern
District of Ohio known as In re Eagle-Picher Industries, Inc., et al.,
Consolidated Case No. 1-91-00100 ("CHAPTER 11 CASES"); and
WHEREAS, the Plan, filed by the Debtors, the Legal Representative for
Future Claimants appointed by the Bankruptcy Court pursuant to its order of
October 31, 1991 ("FUTURE REPRESENTATIVE") and the Bankruptcy Court-appointed
committee composed of the representatives of certain tort claimants of the
Debtors ("INJURY CLAIMANTS' COMMITTEE") has been confirmed by the Bankruptcy
Court; and
WHEREAS, the Plan provides, inter alia, for the creation of the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust ("PI TRUST"); and
WHEREAS, pursuant to the Plan, the PI Trust is to be funded in whole or in
part by the securities of the Debtors and by the obligation of the Debtors to
make future payments, including dividends; and
WHEREAS, pursuant to the Plan, the PI Trust is to own a majority of the
voting shares of the Eagle-Picher; and
WHEREAS, pursuant to the Plan, the PI Trust is to use its assets or income
to pay Claims and Demands, as defined in Sections 101(5) and 524(g)(5) of the
Bankruptcy Code respectively, against the Debtors; and
WHEREAS, the Plan provides, among other things, for the complete
settlement and satisfaction of all liabilities and obligations of the Debtors
with respect to Asbestos Personal Injury Claims and Lead Personal Injury Claims
(hereinafter Asbestos Personal Injury Claims and Lead Personal Injury Claims are
sometimes jointly referred to as "TOXIC PERSONAL INJURY CLAIMS"); and
WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a
"Qualified Settlement Fund" within the meaning of Section 1.468B-1 of the
Treasury Regulations promulgated under Section 468B of the Internal Revenue
Code; and
A1.1.13-1
[THIS PAGE LEFT BLANK INTENTIONALLY]
WHEREAS, the Bankruptcy Court has determined that the PI Trust and the
Plan satisfy all the prerequisites for a supplemental injunction pursuant to
Section 524(g) of the Bankruptcy Code, which Asbestos and Lead PI Permanent
Channeling Injunction has been entered in connection with the Confirmation
Order;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the meanings specified
below:
1.1 Affiliate: Any Entity that is an "affiliate" of any of the Debtors
within the meaning of Section 101(2) of the Bankruptcy Code except (i) American
Imaging Services, Inc., (ii) Tri Sigma Corporation, and (iii) the PI Trust.
1.2 Asbestos and Lead PI Permanent Channeling Injunction: An order or
orders of the Bankruptcy Court or the District Court permanently and forever
staying, restraining, and enjoining any Entity from taking any of the following
actions for the purpose of, directly or indirectly, collecting, recovering, or
receiving payment of, on, or with respect to any Asbestos Personal Injury Claims
or Lead Personal Injury Claims (other than actions brought to enforce any right
or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the PI
Trust, which actions shall be in conformity and compliance with the provisions
hereof):
(a) commencing, conducting, or continuing in any manner, directly or
indirectly, any suit, action, or other proceeding (including, without express or
implied limitation, a judicial, arbitral, administrative, or other proceeding)
in any forum against or affecting any PI Protected Party or any property or
interests in property of any PI Protected Party;
(b) enforcing, levying, attaching (including, without express or
implied limitation, any prejudgment attachment), collecting, or otherwise
recovering by any means or in any manner, whether directly or indirectly, any
judgment, award, decree, or other order against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(c) creating, perfecting, or otherwise enforcing in any manner,
directly or indirectly, any Encumbrance against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(d) setting off, seeking reimbursement of, contribution from, or
subrogation against, or otherwise recouping in any manner, directly or
indirectly, any amount against any liability owed to any PI Protected Party or
any property or interests in property of any PI Protected Party; and
(e) proceeding in any manner in any place with regard to any matter
that is subject to resolution pursuant to the PI Trust, except in conformity and
compliance therewith.
1.3 Asbestos or Lead Contribution Claim: Any right to payment, claim,
remedy, liability, or Demand now existing or hereafter arising, whether or not
such right, claim, remedy, liability or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability or Demand are known or
unknown, that is (i) held by (A) any Entity (other than a director or officer
A1.1.13-2
entitled to indemnification pursuant to Section 8.6 of the Plan) who has been,
is, or may be a defendant in an action seeking damages for death, bodily injury,
or other personal damages (whether physical, emotional, or otherwise) to the
extent caused or allegedly caused, directly or indirectly, by exposure to (x)
asbestos or asbestos-containing products or (y) products that contain lead
chemicals, or (B) any assignee or transferee of such Entity, and (ii) on account
of alleged liability of any of the Debtors for reimbursement or contribution of
any portion of any damages such Entity has paid or may pay to the plaintiff in
such action.
1.4 Asbestos Personal Injury Claim: Any right to payment, claim, remedy,
liability, or Demand now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, whether or not the facts of or legal
bases for such right, claim, remedy, liability, or Demand are known or unknown,
for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
asbestos or asbestos-containing products that were manufactured, sold, supplied,
produced, distributed, released, or in any way marketed by any of the Debtors
prior to the Petition Date, including, without express or implied limitation,
any right, claim, remedy, liability, or Demand for compensatory damages (such as
loss of consortium, wrongful death, survivorship, proximate, consequential,
general, and special damages) and including punitive damages and any Asbestos or
Lead Contribution Claim.
1.5 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and as
codified in Title 11 of the United States Code, as applicable to the Chapter 11
Cases.
1.6 Bankruptcy Court: The United States District Court for the Southern
District of Ohio, Western Division, having jurisdiction over the Chapter 11
Cases and, to the extent of any reference made pursuant to section 157 of title
28 of the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.7 Business Day: Any day on which commercial banks are required to be
open for business in Cincinnati, Ohio.
1.8 Claim: (a) A "claim," as defined in Section 101(5) of the Bankruptcy
Code, against any of the Debtors or Debtors in Possession, whether or not
asserted, whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied limitation, any
rights under Sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, any
claim of a derivative nature, any potential or unmatured contract claims, and
any other Contingent Claim, and (b) any Environmental Claim or Product Liability
Tort Claim, whether or not it constitutes a "claim," as defined in Section
101(5) of the Bankruptcy Code.
1.9 Confirmation Order: The order or orders of the Bankruptcy Court
confirming the Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code, which will contain, inter alia, the Asbestos and Lead PI
Permanent Channeling Injunction, the Asbestos Property Damage Permanent
Channeling Injunction, and the Claims Trading Injunction.
1.10 Contingent Claim: Any Claim, the liability for which attaches or is
dependent upon the occurrence or happening, or is triggered by, an event, which
event has not yet occurred, happened, or been triggered, as of the date on which
such Claim is sought to be estimated or an objection to such Claim is filed,
whether or not such event is within the actual or presumed contemplation of the
holder of such Claim and whether or not a relationship between the holder of
such Claim and any of the Debtors now or hereafter exists or previously existed.
A1.1.13-3
1.11 Demand: A demand for payment, present or future, that (i) was not a
Claim during the Chapter 11 Cases; (ii) arises out of the same or similar
conduct or events that gave rise to the Claims addressed by the Asbestos and
Lead PI Permanent Channeling Injunction; and (iii) pursuant to the Plan, is to
be paid by the PI Trust.
1.12 Divestiture Notes: Those certain Senior Unsecured Notes in the
aggregate principal amount of Fifty Million and 00/100 Dollars ($50,000,000.00),
bearing interest at a rate determined by McDonald & Company Securities, Inc. on
the Effective Date as the rate such Senior Unsecured Notes should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form of Exhibit "1.1.55" to the
Plan.
1.13 Effective Date: The first Business Day after the date on which all of
the conditions precedent to the effectiveness of the Plan specified in Section
7.10 of the Plan have been satisfied or waived or, if a stay of the Confirmation
Order is in effect on such date, the first Business Day after the expiration,
dissolution, or lifting of such stay.
1.14 Encumbrance: With respect to any asset, any mortgage, lien, pledge,
charge, security interest, assignment, or encumbrance of any kind or nature in
respect of such asset (including, without express or implied limitation, any
conditional sale or other title retention agreement, any security agreement, and
the filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
1.15 Entity: An individual, corporation, partnership, association, joint
stock company, joint venture, estate, trust, unincorporated organization, or
government or any political subdivision thereof, or other person or entity.
1.16 Environmental Claim: Any Claim as to which the treatment thereof is
set forth in (a) the Environmental Settlement Agreement or (b) an agreement by
and between any of the Debtors and any party asserting a Claim against any of
the Debtors relating to alleged contamination under the federal or state
environmental laws or regulations, pursuant to which agreement all or a portion
of such Claim (to the extent and subject to the limitations imposed by such
agreement) may be asserted by the holder thereof after the Effective Date, to
the extent that such agreement is approved and authorized by a Final Order of
the Bankruptcy Court or otherwise in accordance with the Claims Settlement
Guidelines.
1.17 Environmental Settlement Agreement: That certain Settlement
Agreement, lodged with the Bankruptcy Court on March 23, 1995, by and between
the Debtors and the parties listed on the signatory pages thereof, to the extent
that such Settlement Agreement is approved and authorized by the Bankruptcy
Court by a Final Order of the Bankruptcy Court.
1.18 Final Order: An order as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari or other proceedings for reargument or rehearing
shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or the Reorganized Debtors, as the case
may be, and their counsel or, in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall have been
affirmed by the highest court to which such order was appealed, or certiorari
has been denied or from which reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or
rehearing shall have expired.
A1.1.13-4
1.19 Lead Personal Injury Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, whether or not the facts of or legal
bases for such right, claim, remedy, liability, or Demand are known or unknown,
for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
products that contained lead chemicals that were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, including, without express or implied limitation, any right,
claim, remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages) and including punitive damages and any Asbestos or Lead
Contribution Claim.
1.20 New Eagle-Picher Common Stock: Voting common stock, with no par
value, of Reorganized Eagle-Picher from and after the Effective Date after
giving effect to the Amended and Restated Articles of Incorporation.
1.21 Petition Date: January 7, 1991
1.22 PI Protected Party: Any of the following parties:
(a) the Debtors;
(b) the Reorganized Debtors;
(c) an Affiliate;
(d) any Entity that, pursuant to the Plan or after the Effective
Date becomes a direct or indirect transferee of, or successor to any assets of
any of the Debtors, the Reorganized Debtors, or the PI Trust (but only to the
extent that liability is asserted to exist by reason of it becoming such a
transferee or successor);
(e) any Entity that, pursuant to the Plan or after the Effective
Date, makes a loan to any of the Reorganized Debtors or the PI Trust or to a
successor to, or transferee of, any assets of any of the Debtors, the
Reorganized Debtors, or the PI Trust (but only to the extent that liability is
asserted to exist by reason of such Entity becoming such a lender or to the
extent any pledge of assets made in connection with such a loan is sought to be
upset or impaired); or
(f) any Entity to the extent he, she, or it is alleged to be
directly or indirectly liable for the conduct of, Claims against, or Demands on
any of the Debtors, the Reorganized Debtors, or the PI Trust on account of
Asbestos Personal Injury Claims or Lead Personal Injury Claims by reason of one
or more of the following:
(i) such Entity's ownership of a financial interest in any of
the Debtors or the Reorganized Debtors, a past or present affiliate of any
of the Debtors or the Reorganized Debtors, or predecessor in interest of
any of the Debtors or the Reorganized Debtors;
(ii) such Entity's involvement in the management of any of the
Debtors or the Reorganized Debtors or any predecessor in interest of any
of the Debtors or the Reorganized Debtors;
A1.1.13-5
(iii) such Entity's service as an officer, director, or
employee of any of the Debtors, the Reorganized Debtors, or Related
Parties;
(iv) such Entity's provision of insurance to any of the
Debtors, the Reorganized Debtors, or Related Parties; or
(v) such Entity's involvement in a transaction changing the
corporate structure, or in a loan or other financial transaction affecting
the financial condition, of any of the Debtors, the Reorganized Debtors,
or any of the Related Parties.
1.23 Product Liability Tort Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured, whether or not the facts of or legal bases for
such right, claim, remedy, liability, or Demand are known or unknown, for, under
any theory of law, equity, admiralty, or otherwise, death, bodily injury, or
other personal damages (whether physical, emotional, or otherwise) to the extent
caused or allegedly caused, directly or indirectly, by exposure to any products
or byproducts that were manufactured, sold, supplied, produced, released,
distributed, or in any way marketed by any of the Debtors prior to the Petition
Date, including, without express or implied limitation, any right, claim,
remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages), including punitive damages, and including, without express or
implied limitation, any Asbestos Personal Injury Claim or Lead Personal Injury
Claim.
1.24 Related Parties: (a) Any past or present affiliate of any of the
Debtors or the Reorganized Debtors, (b) any predecessor in interest of any of
the Debtors or the Reorganized Debtors, or (c) any Entity that owned a financial
interest in any of the Debtors or the Reorganized Debtors, any past or present
affiliate of any of the Debtors or the Reorganized Debtors, or any predecessor
in interest of any of the Debtors or the Reorganized Debtors.
1.25 Reorganized Debtors: The Debtors, or any successors in interest
thereto, from and after the Effective Date.
1.26 Reorganized Eagle-Picher: Eagle-Picher, or any successor in interest
thereto, from and after the Effective Date.
1.27 Senior Unsecured Sinking Fund Debentures: Those certain Senior
Unsecured Sinking Fund Debentures in the aggregate principal amount of Two
Hundred Fifty Million and 00/100 Dollars ($250,000,000.00), bearing interest at
a rate determined by McDonald & Company Securities, Inc. on the Effective Date
as the rate such Senior Unsecured Sinking Fund Debentures should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form set forth in Exhibit
"1.1.114" to the Plan.
All capitalized terms used herein and not defined in this Article 1 or in
another provision of this Trust Agreement shall have the meanings assigned to
them in the Plan and/or the Bankruptcy Code, which definitions are incorporated
by reference herein.
A1.1.13-6
ARTICLE 2
AGREEMENT OF TRUST
2.1 Creation and Name. The Settlor hereby creates a trust known as the
"Eagle-Picher Industries, Inc. Personal Injury Settlement Trust", which is the
PI Trust provided for and referred to in the Plan. The Trustees of the PI Trust
may transact the business and affairs of the PI Trust in the name, "Eagle-Picher
Industries Personal Injury Settlement Trust".
2.2 Purpose. The purpose of the PI Trust is to assume any and all
liabilities of the Debtors, their successors in interest or their affiliates,
with respect to any and all Toxic Personal Injury Claims; to use the PI Trust's
assets and income to promptly pay holders of valid Toxic Personal Injury Claims
in such a way that holders of similar Toxic Personal Injury Claims are paid in
substantially the same manner; and to otherwise comply in all respects with the
requirements of a trust set forth in Section 524(g)(2)(B)(i) of the Bankruptcy
Code. This purpose shall be fulfilled through the provisions of this Trust
Agreement, the Eagle-Picher Industries, Inc. Asbestos Injury Claims Resolution
Procedures attached hereto as Annex B ("EPI ASBESTOS CLAIMS PROCEDURES"), and
any Lead Personal Injury Claims procedures adopted pursuant to the Trust
Agreement ("EPI LEAD CLAIMS PROCEDURES").
2.3 Transfer of Assets. The Settlors hereby transfer and assign to the PI
Trust the property set forth in Article 10 of the Plan ( herein the "ASSETS").
2.4 Acceptance of Assets and Assumption of Liabilities.
(a) In furtherance of the purposes of the PI Trust, the Trustees, on
behalf of the PI Trust, hereby expressly accept the transfer and assignment to
the PI Trust of the Assets.
(b) In furtherance of the purposes of the PI Trust, and subject to
Article 5.4, the Trustees, on behalf of the PI Trust, expressly assume all
liability for all Toxic Personal Injury Claims as provided for in Article 10 of
the Plan. Except as otherwise provided in the EPI Asbestos Claims Procedures,
the PI Trust shall have all defenses, cross-claims, offsets, and recoupments
regarding Toxic Personal Injury Claims that Eagle-Picher has or would have had
under applicable law.
(c) Neither the Debtors nor their successors in interest or their
affiliates shall be entitled to any indemnification from the PI Trust for any
expenses, costs, and fees (including attorneys' fees), judgments, settlements,
or other liabilities arising from or incurred in connection with, any action
related to a Toxic Personal Injury Claim, including, but not limited to,
indemnification or contribution for Toxic Personal Injury Claims prosecuted
against Reorganized Eagle-Picher. Nothing in this section or any other section
of this Trust Agreement shall be construed in any way to limit the scope,
enforceability, or effectiveness of the Asbestos and Lead PI Permanent
Channeling Injunction issued in connection with the Plan or the PI Trust's
assumption of all liability with respect to Toxic Personal Injury Claims.
A1.1.13-7
ARTICLE 3
POWERS AND TRUST ADMINISTRATION
3.1 Powers.
(a) Subject to the limitations set forth in this Trust Agreement,
the Trustees shall have the power to take any and all actions that, in the
judgment of the Trustees, are necessary or proper to fulfill the purposes of the
PI Trust, including, without limitation, each power expressly granted in this
Article 3.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Ohio.
(b) Except as otherwise specified herein, the Trustees need not
obtain the order or approval of any court in the exercise of any power or
discretion conferred hereunder.
(c) Without limiting the generality of Article 3.1(a) above, the
Trustees shall have the power to:
(i) receive and hold the Assets, vote the New Eagle-Picher
Common Stock, exercise all rights with respect to, and sell any securities
issued by Reorganized Eagle-Picher that are included in the Assets,
subject to any restrictions set forth in the articles of incorporation of
Reorganized Eagle-Picher;
(ii) invest the monies held from time to time by the PI Trust;
(iii) sell, transfer or exchange any or all of the Assets at
such prices and upon such terms as they may consider proper, consistent
with the other terms of this Trust Agreement;
(iv) pay liabilities and expenses of the PI Trust;
(v) change the state of domicile of the PI Trust;
(vi) establish such funds, reserves and accounts within the PI
Trust estate, as deemed by the Trustees to be useful in carrying out the
purposes of the PI Trust;
(vii) sue and be sued and participate, as a party or
otherwise, in any judicial, administrative, arbitrative or other
proceeding;
(viii) amend the Bylaws, a copy of which is annexed hereto as
Annex A (the "BYLAWS");
(ix) appoint such officers and hire such employees and engage
such legal, financial, accounting, investment and other advisors,
alternative dispute resolution panelists, and agents as the business of
the PI Trust requires, and to delegate to such persons such powers and
authorities as the fiduciary duties of the Trustees permit and as the
Trustees, in their discretion, deem advisable or necessary in order to
carry out the terms of this PI Trust;
(x) pay employees, legal, financial, accounting, investment
and other advisors and agents reasonable compensation, including without
limitation, compensation at rates approved by the Trustees for services
rendered prior to the execution hereof;
A1.1.13-8
(xi) reimburse the Trustees, subject to Article 5.5, and
reimburse such officers, employees, legal, financial, accounting,
investment and other advisors and agents all reasonable out-of-pocket
costs and expenses incurred by such persons in connection with the
performance of their duties hereunder, including without limitation, costs
and expenses incurred prior to the execution hereof;
(xii) execute and deliver such deeds, leases and other
instruments as the Trustees consider proper in administering the PI Trust;
(xiii) enter into such other arrangements with third parties
as are deemed by the Trustees to be useful in carrying out the purposes of
the PI Trust, provided such arrangements do not conflict with any other
provision of this Trust Agreement;
(xiv) in accordance with Article 5.6, indemnify (and purchase
insurance indemnifying) Trustees and TAC members, and officers, employees,
agents, advisers and representatives of the PI Trust or the TAC to the
fullest extent that a corporation or trust organized under the law of the
PI Trust's domicile is from time to time entitled to indemnify and/or
insure its directors, trustees, officers, employees, agents, advisers and
representatives;
(xv) indemnify (and purchase insurance indemnifying) the
Additional Indemnitees as defined in Article 5.6 hereof;
(xvi) delegate any or all of the authority herein conferred
with respect to the investment of all or any portion of the Assets to any
one or more reputable individuals or recognized institutional investment
advisers or investment managers without liability for any action taken or
omission made because of any such delegation, except as provided in
Article 5.4;
(xvii) consult with Reorganized Eagle-Picher at such times and
with respect to such issues relating to the conduct of the PI Trust as the
Trustees consider desirable;
(xviii) make, pursue (by litigation or otherwise), collect,
compromise or settle any claim, right, action or cause of action included
in the Assets; and
(xix) merge or contract with other claims resolution
facilities that are not specifically created by this Agreement or the EPI
Asbestos Claims Procedures, subject to Article 3.2(e) of this Agreement;
provided that such merger or contract shall not (a) alter the EPI Asbestos
Claims Procedures; (b) subject the Reorganized Debtors or any successor in
interest to any risk of having any Toxic Personal Injury Claim asserted
against it or them; or (c) otherwise jeopardize the validity or
enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction.
(d) The Trustees shall promptly educate and inform themselves as to
Lead Personal Injury Claims that may be asserted against the PI Trust. To do so,
the Trustees shall expend no more than $2.5 million of PI Trust funds, in total,
for medical, scientific, and other research into diseases and conditions
allegedly caused by exposure to lead pigment-containing products. This research
shall also be used to determine what products cause such diseases and
conditions. The nature of the research conducted shall be in the Trustees' sole
discretion. This subsection shall in no way limit the Trustees' authority to
expend money as they otherwise are permitted or required by other sections of
this Trust Agreement, including, without limitation, Article 3.3 herein.
(e) The Trustees shall not have the power to guaranty any debt of
other persons.
A1.1.13-9
3.2 General Administration.
(a) The Trustees shall act in accordance with the Bylaws. To the
extent not inconsistent with the terms of this Trust Agreement, the Bylaws
govern the affairs of the PI Trust.
(b) The Trustees shall timely file such income tax and other returns
and statements and comply with all withholding obligations, as required under
the applicable provisions of the Internal Revenue Code and of any state law and
the regulations promulgated thereunder.
(c) (i) The Trustees shall cause to be prepared and filed with the
Bankruptcy Court, as soon as available, and in any event within ninety
(90) days following the end of each fiscal year, an annual report
containing financial statements of the PI Trust (including, without
limitation, a balance sheet of the PI Trust as of the end of such fiscal
year and a statement of operations for such fiscal year) audited by a firm
of independent certified public accountants selected by the Trustees and
accompanied by an opinion of such firm as to the fairness of the financial
statements' presentation of the cash and investments available for the
payment of claims and as to the conformity of the financial statements
with generally accepted accounting principles. The Trustees shall provide
a copy of such report to the TAC and to Reorganized Eagle-Picher.
(ii) Simultaneously with delivery of each set of financial
statements referred to in Article 3.2(c)(i) above, the Trustees shall
cause to be prepared and filed with the Bankruptcy Court a report
containing a summary regarding the number and type of claims disposed of
during the period covered by the financial statements.
(iii) All materials required to be filed with the Bankruptcy
Court by this Article 3.2 shall be available for inspection by the public
in accordance with procedures established by the Bankruptcy Court.
(d) The Trustees shall cause to be prepared and submitted to the TAC
as soon as practicable prior to the commencement of each fiscal year a budget
and cash flow projections covering such fiscal year and the succeeding four
fiscal years.
(e) The Trustees shall consult with the TAC (as hereinafter defined)
on the appointment of successor Trustees, the implementation and administration
of the EPI Asbestos Claims Procedures, the expenditure of funds for research as
described in Article 3.1 (d), and the adoption and administration of the EPI
Lead Claims Procedures (herein the EPI Asbestos Claims Procedures and the EPI
Lead Claims Procedures are some times jointly referred to as the "PROCEDURES").
The Trustees shall be required to obtain the consent of a majority of the
members of the TAC in order:
(i) to amend materially the Procedures, unless such amendment
relates to the specific amounts or percentages to be paid to holders of
Toxic Personal Injury Claims who have not elected discounted payment, in
which case, TAC consent is not required; or
(ii) to merge or participate with any claims resolution
facility that was not specifically created under this Trust Agreement or
the Procedures; or
(iii) to amend any provision of Article 6 herein; or
(iv) to terminate the PI Trust pursuant to Article 7.2(a)(iii)
herein.
A1.1.13-10
The TAC shall not unreasonably withhold any consent required hereunder, and if
ever the TAC shall withhold any consent required hereunder, at the election of
the Trustees, the dispute between the Trustees and the TAC shall be resolved
through the implementation of binding alternative dispute resolution procedures
mutually agreed to by the Trustees and the TAC.
3.3 Claims Administration.
(a) General Principles.
The Trustees shall proceed quickly to implement the EPI Asbestos
Claims Procedures, and they shall proceed quickly to adopt the EPI Lead Claims
Procedures when, and if, Lead Personal Injury Claims become eligible for
processing by the PI Trust. The PI Trust shall pay holders of valid Toxic
Personal Injury Claims in accordance with the provisions hereof as promptly as
funds become available. In their administration of the Procedures, the Trustees
shall favor settlement over arbitration, arbitration over resort to the tort
system, and fair and efficient resolution of claims in all cases, while
endeavoring to preserve and enhance the PI Trust estate.
(b) Asbestos Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the review of
estimates of the numbers and values of Asbestos Personal Injury Claims, or
other comparable mechanisms, that provide reasonable assurance the PI
Trust will value, and be in a financial position to pay, similar present
asbestos personal injury Claims and future asbestos personal injury
Demands in substantially the same manner.
(ii) The Trustees shall administer the processing and payment
of Asbestos Personal Injury Claims in accordance with the EPI Asbestos
Claims Procedures, a copy of which is annexed hereto as Annex B, as the
same may be amended from time to time, in accordance with the provisions
hereof and thereof.
(c) Lead Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the review of
estimates of the numbers and values of Lead Personal Injury Claims, or
other comparable mechanisms, that provide reasonable assurance the PI
Trust will value, and be in a financial position to pay, similar present
lead personal injury Claims and future lead personal injury Demands in
substantially the same manner. Notwithstanding the foregoing, due to (x)
the present absence of any court judgment imposing personal injury
liability upon any lead pigment manufacturer like Eagle-Picher, and (y)
the difficult, expensive, and inherently uncertain task of estimating the
amount of valid Lead Personal Injury Claims, if any, that the PI Trust may
be required to pay some time in the future, the Trustees shall not be
required to estimate the PI Trust's possible liability for, or decide
whether to reserve funds or otherwise maintain sufficient resources for
the payment of, Lead Personal Injury Claims until the latest of the
following events:
(A) four years have passed after the Effective Date;
(B) the PI Trust has paid One Million Dollars
($1,000,000) in indemnity costs, as opposed to claim defense costs,
for Lead Personal Injury Claims in any one calendar year; or
A1.1.13-11
(C) holders of Lead Personal Injury Claims obtain final,
nonappealable liability judgments against lead pigment manufacturers
in more than one state.
(ii) The Trustees shall administer the processing and payment
of Lead Personal Injury Claims pursuant to the EPI Lead Claims Procedures
to be adopted by the Trustees. The EPI Lead Claims Procedures shall be
similar to the EPI Asbestos Claims Procedures. For example, like the EPI
Asbestos Claims Procedures, the EPI Lead Claims Procedures shall provide
that the holders of Lead Personal Injury Claims shall be prevented from
suing the PI Trust in the tort system until they have exhausted their
remedies against the PI Trust under the EPI Lead Claims Procedures.
However, due to (x) the present absence of any court judgment imposing
personal injury liability upon any lead pigment manufacturer like
Eagle-Picher, and (y) the difficult, expensive, and inherently uncertain
task of estimating the amount of valid Lead Personal Injury Claims, if
any, that the PI Trust may be required to pay some time in the future, the
EPI Lead Claims Procedures shall differ from the EPI Asbestos Claims
Procedures in at least the following respect:
(A) no Lead Personal Injury Claim or any claim for
contribution, indemnification, or reimbursement of liability for a
Lead Personal Injury Claim shall be eligible for processing by the
PI Trust unless the holder can demonstrate that either the holder or
a similarly situated lead personal injury claimant has obtained a
final, nonappealable judgment against a lead pigment manufacturer
under the state law applicable to the holder's claim;
The PI Trust's determination under (A) above as to whether a claim
is eligible for processing (i) shall be final and nonappealable and (ii)
shall not be deemed to be an exhaustion of the claim holder's remedies
against the PI Trust, so that any claims the PI Trust determines to be
ineligible for processing may be refiled against the PI Trust at such time
as eligibility can be established under (A) above.
(d) Bankruptcy Court Claims Bar Date Orders.
(i) As provided herein, the Trustees shall enforce the
Bankruptcy Court's claims' bar date orders that are applicable to Toxic
Personal Injury Claims.
(ii) The Trustees shall disallow any Toxic Personal Injury
Claim if they determine the claimant inexcusably failed to comply with an
applicable claims bar date order entered by the Bankruptcy Court, and any
such decision shall be final and non-appealable. Notwithstanding the
foregoing, the Trustees shall not disallow a Toxic Personal Injury Claim
for failure to comply with an applicable claims bar date order if the
holder of such Toxic Personal Injury Claim demonstrates that the asbestos
or lead related disease complained of first manifested itself after the
applicable claims bar date order. For example, an asbestos disease victim
(A) who first manifested any asbestos related disease after the applicable
claims' bar date or (B) who suffered from a less serious asbestos related
disease, such as pleural thickening, at the time of the applicable bar
date and who later developed a more serious asbestos related disease, such
as cancer, shall not have his claim disallowed for failure to comply with
the applicable claims bar date order.
(iii) The Trustees shall have complete discretion to determine
whether a claimant inexcusably failed to comply with an applicable claims
bar date order. In making this determination, the Trustees may be guided
by the "excusable neglect" standard developed under federal bankruptcy law
in connection with the adjudication of late filed proofs of claim in
bankruptcy cases.
A1.1.13-12
ARTICLE 4
ACCOUNTS, INVESTMENTS, AND PAYMENTS
4.1 Accounts. The Trustees may, from time to time, create such accounts
and reserves within the PI Trust estate as they may deem necessary, prudent or
useful in order to provide for the payment of expenses and valid Toxic Personal
Injury Claims and may, with respect to any such account or reserve, restrict the
use of monies therein.
4.2 Separate Reserve For Future Claims. The first Fifty Million
($50,000,000) paid on the Divestiture Notes and the Senior Unsecured Sinking
Fund Debentures held by the PI Trust shall be segregated and held in a separate
account as a reserve for the payment of valid Toxic Personal Injury Claims whose
holders first manifest a disease after the Effective Date. The segregation and
holding of such funds, however, shall not in any way alter the duties of the
Trustees to pay similar present and future Toxic Personal Injury Claims in
substantially the same manner.
4.3 Investments. Investment of monies held in the PI Trust shall be
administered in the manner in which individuals of ordinary prudence, discretion
and judgment would act in the management of their own affairs, subject to the
following limitations and provisions:
(a) The PI Trust may acquire and hold any stock or securities issued
by Reorganized Eagle-Picher and included in the Assets and any New Eagle-Picher
Common Stock issuable on the exercise or conversion thereof, without regard to
any of the limitations set forth in the other parts of this Article 4.
(b) Except with respect to entities owned and controlled by the PI
Trust for purposes of carrying out provisions of this Trust Agreement, the PI
Trust shall not acquire or hold any equity in any Person or business enterprise
unless such equity is in the form of securities that are traded on a national
securities exchange or major international securities exchange or over the
National Association of Securities Dealers Automated Quotation System.
(c) The PI Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
4.4 Source of Payments. All PI Trust expenses, payments and all
liabilities with respect to Toxic Personal Injury Claims shall be payable solely
out of the PI Trust estate. Neither Eagle-Picher, Reorganized Eagle-Picher, any
Debtors, their subsidiaries, any successor in interest or the present or former
directors, officers, employees or agents of Eagle-Picher, Reorganized
Eagle-Picher, any Debtors or their subsidiaries, nor the Trustees, the TAC, or
any of their officers, agents, advisers or employees shall be liable for the
payment of any PI Trust expense or Toxic Personal Injury Claim or any other
liability of the PI Trust.
ARTICLE 5
TRUSTEES
5.1 Number. There initially shall be five (5) Trustees, two of whom shall
serve for a period of three (3) years from the effective date of the PI Trust
("THREE YEAR SERVICE PERIOD"). At the end of the Three Year Service Period, the
two trustee positions subject to the Three Year Service Period will
automatically terminate and the PI Trust will thereafter operate with three
Trustees until termination of the PI Trust pursuant to Article 7.2. The initial
Trustees shall be those persons named on the signature page hereof.
A1.1.13-13
5.2 Term of Service.
(a) Pursuant to Article 5.1, two of the initial Trustees shall serve
until the earlier of (i) the expiration of the Three Year Service Period, (ii)
his or her death, (iii) his or her resignation pursuant to Article 5.2(c), (iv)
his or her removal pursuant to Article 5.2(d), or (v) the termination of the PI
Trust pursuant to Article 7.2, at which time the term shall terminate
automatically.
(b) Trustees whose terms do not terminate upon the expiration of the
Three Year Service Period shall serve until the earlier of (i) the termination
of the PI Trust pursuant to Article 7.2 below, (ii) his or her death, (iii) his
or her resignation pursuant to Article 5.2(c) below, or (iv) his or her removal
pursuant to Article 5.2(d) below, at which time his or her term shall terminate
automatically.
(c) Any Trustee may resign at any time by written notice to each of
the remaining Trustees and the TAC. Such notice shall specify a date when such
resignation shall take effect, which shall not be less than 90 days after the
date such notice is given, where practicable.
(d) Any Trustee may be removed in the event that such Trustee
becomes unable to discharge his or her duties hereunder due to accident or
physical or mental deterioration, or for other good cause. Good cause shall be
deemed to include, without limitation, any failure to comply with Article 5.9, a
consistent pattern of neglect and failure to perform or participate in
performing the duties of the Trustees hereunder, or repeated nonattendance at
scheduled meetings. Such removal shall require the unanimous decision of the
other Trustees. Such removal shall take effect at such time as the other
Trustees shall determine.
5.3 Appointment of Successor Trustee.
(a) In the event of a vacancy in the position of a Trustee, the
vacancy shall be filled by majority vote of the remaining Trustees who shall
refrain from making any appointment that may result in the appearance of
impropriety; provided, however, that during the Three Year Service Period the
remaining Trustees, in their discretion, may decide not to appoint a successor
Trustee to fill such a vacancy so long as the remaining Trustees number no less
than three (3).
(b) Immediately upon the appointment of any successor Trustee, all
rights, titles, duties, powers and authority of the predecessor Trustee
hereunder shall be vested in, and undertaken by, the successor Trustee without
any further act. No successor Trustee shall be liable personally for any act or
omission of his or her predecessor Trustee.
5.4 Liability of Trustees. No Trustee, officer, or employee of the PI
Trust shall be liable to the PI Trust, to any person holding a Toxic Personal
Injury Claim, or to any other Person except for such Trustee's, officer's or
employee's own breach of trust committed in bad faith or for willful
misappropriation. No Trustee, officer, or employee of the PI Trust shall be
liable for any act or omission of any other officer, agent, or employee of the
PI Trust, unless the Trustee acted with bad faith or willful misconduct in the
selection or retention of such officer, agent, or employee.
5.5 Compensation and Expenses of Trustees.
(a) Each of the Trustees shall receive compensation from the PI
Trust for his or her services as Trustee in the amount of $ 35,000 per annum,
plus a per diem allowance for meetings attended in the amount of $1,000, or some
other amount as determined by the Trustees, payable as determined by the
Trustees. The Trustees shall determine the scope and duration of activities that
constitute a meeting and may
A1.1.13-14
provide for partial payment of per diem amounts for activities of less than a
full day's duration. The per annum compensation payable to the Trustees
hereunder may only be increased annually by the Trustees proportionately with
any increase in the Consumer Price Index -- All Cities (or any successor index)
for the corresponding annual period. Any increase in excess of that amount may
be made only with the approval of the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
5.6 Indemnification of Trustees and Others.
(a) The PI Trust shall indemnify and defend the Trustees, the PI
Trust's officers, agents, advisers or employees, to the fullest extent that a
corporation or trust organized under the laws of the PI Trust's domicile is from
time to time entitled to indemnify and defend its directors, trustees, officers,
employees, agents or advisers against any and all liabilities, expenses, claims,
damages or losses incurred by them in the performance of their duties hereunder.
Notwithstanding the foregoing, the Trustees shall not be indemnified or defended
in any way for any liability, expense, claim, damage or loss for which they are
liable under Article 5.4. Additionally, each member of the Injury Claimants'
Committee and its professionals, the Future Representative and his
professionals, and each member of the TAC (collectively, "ADDITIONAL
INDEMNITEES") who was or is a party, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding of any kind, whether
civil, administrative or arbitrative, by reason of any act or omission of such
Additional Indemnitees with respect to (i) the Chapter 11 Cases, (ii) the
liquidation of any Toxic Personal Injury Claims, or (iii) the administration of
the PI Trust and the implementation of the Procedures, shall be indemnified and
defended by the PI Trust against expenses, costs and fees (including attorneys'
fees), judgments, awards, costs, amounts paid in settlement, and liabilities of
all kinds incurred by each Additional Indemnitee in connection with or resulting
from such action, suit, or proceeding, if he or she acted in good faith and in a
manner such Additional Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the holders of Toxic Personal Injury Claims.
(b) Reasonable expenses, costs and fees (including attorneys' fees)
incurred by or on behalf of a Trustee or Additional Indemnitee in connection
with any action, suit, or proceeding, whether civil, administrative or
arbitrative from which they are indemnified by the PI Trust pursuant to this
Article 5.6, may be paid by the PI Trust in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf of such Trustee or
Additional Indemnitee to repay such amount unless it shall be determined
ultimately that such Trustee or Additional Indemnitee is entitled to be
indemnified by the PI Trust.
(c) The Trustees shall have the power, generally or in specific
cases, to cause the PI Trust to indemnify the employees and agents of the PI
Trust to the same extent as provided in this Article 5.6 with respect to the
Trustees.
(d) Any indemnification under Article 5.6(c) of this Agreement shall
be made by the PI Trust upon a determination that indemnification of such Person
is proper in the circumstances. Such determination shall be made by a majority
vote of the Trustees who were not parties to such action, suit, or proceeding,
if at least two such Trustees were not parties; otherwise the determination will
be made by legal counsel to the PI Trust.
(e) The Trustees may purchase and maintain reasonable amounts and
types of insurance on behalf of an individual who is or was a Trustee, officer,
employee, agent or representative of the PI Trust or Additional Indemnitee
against liability asserted against or incurred by such individual in that
capacity or arising from his or her status as a Trustee, officer, employee,
agent or representative.
A1.1.13-15
5.7 Trustees' Lien. The Trustees shall have a prior lien upon the PI Trust
corpus to secure the payment of any amounts payable to them pursuant to Articles
5.5 and 5.6.
5.8 Trustees' Employment of Experts. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is affiliated with any of the
Trustees in any manner, except as otherwise expressly provided in this Trust
Agreement), and the opinion of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the written opinion of any such party.
5.9 Trustees' Independence. No Trustee shall, during the term of his
service, hold a financial interest in Reorganized Eagle-Picher or act as
attorney for Reorganized Eagle-Picher or as an attorney or advisor for any
person who holds a Toxic Personal Injury Claim.
5.10 Trustees' Service as Officers or Consultants to the Trust. The
Trustees may, but are not required to, select any Trustee to serve as an officer
or manager of the Trust or as a consultant to the Trust. In the event any
Trustee serves the Trust in such a capacity, the Trust shall compensate the
Trustee in an amount determined by the Trustees. Compensation for a Trustee's
service as an officer or manager of the Trust or as a consultant to the Trust
shall be in addition to compensation paid pursuant to Article 5.5.
5.11 Trustees' Service as Directors of Reorganized Eagle-Picher.
Notwithstanding the provisions of Article 5.9 above, the Trustees are not
prohibited from serving as directors of Reorganized Eagle-Picher. If any Trustee
serves as a director of Reorganized Eagle-Picher, he shall not receive for such
service compensation over and above the compensation received as Trustee under
Article 5.5, but he shall receive from the PI Trust a per diem allowance in the
amount that Reorganized Eagle-Picher pays its directors for their attendance at
meetings.
5.12 Bond. The Trustees shall not be required to post any bond or other
form of surety or security unless otherwise ordered by the Bankruptcy Court.
ARTICLE 6
TRUSTEES' ADVISORY COMMITTEE
6.1 Formation; Duties. A Trustees' Advisory Committee (the "TAC") shall be
formed. The Trustees shall consult with the TAC on the appointment of successor
Trustees and the implementation and administration of the Procedures. The
Trustees may consult with the TAC on any matter affecting the PI Trust, and
certain actions by the Trustees are subject to the prior consent of the TAC as
provided in Article 3.2(e) hereof. The TAC shall endeavor to act in the best
interests of the holders of all Toxic Personal Injury Claims.
6.2 Number; Chairperson.
(a) There shall be three members of the TAC. One of the initial TAC
members shall be the Future Representative; the two other initial TAC members
shall be Robert E. Sweeney and Robert B. Steinberg. The TAC shall act in all
cases by majority vote.
(b) There shall be a Chairperson of the TAC. The Chairperson shall
act as the TAC's liaison, he shall coordinate and schedule meetings of the TAC,
and he shall handle all administrative matters
A1.1.13-16
that come before the TAC. The Future Representative shall serve as Chairperson
of the TAC for as long as he is a member of the TAC.
6.3 Term of Office.
(a) Each member of the TAC shall serve for the duration of the PI
Trust, subject to the earlier of his or her death, resignation, or removal.
(b) Subject to Article 6.4(b) hereof, any member of the TAC may
resign at any time by written notice to each of the remaining members specifying
the date when such resignation shall take place.
(c) Any member of the TAC may be removed in the event such member
becomes unable to discharge his or her duties hereunder due to accident,
physical deterioration, mental incompetence, or a consistent pattern of neglect
and failure to perform or to participate in performing the duties of such member
hereunder, such as repeated nonattendance at scheduled meetings. Such removal
shall be made by the unanimous decision of the other members of the TAC, and it
shall be effective at such time as all other members of the TAC determine.
6.4 Appointment of Successor.
(a) A vacancy in the TAC caused by the resignation of a TAC member
shall be filled with an individual nominated by the resigning TAC member and
approved by the unanimous vote of all TAC members. The resigning TAC member's
resignation shall not be effective until such approval is obtained and the
successor TAC member has accepted the appointment.
(b) In the event of a vacancy in the membership of the TAC other
than one caused by resignation, the vacancy shall be filled by the unanimous
vote of the remaining member(s) of the TAC; provided, however, that the Future
Representative shall have the exclusive right to predesignate his successor,
subject only to the unanimous approval of the remaining member(s) of the TAC.
6.5 Compensation and Expenses of TAC Members.
(a) Each member of the TAC shall receive compensation from the PI
Trust for his or her services in the amount of $2,500.00 per diem for meetings
attended by such member, payable as determined by the Trustees, but not less
frequently than quarterly. Such per diem amount shall be increased or decreased
annually pro rata with the amount that the per diem for meetings paid to the
Trustees is increased or decreased pursuant to Article 5.5(a). For purposes of
determining the per diem amount hereunder, the same definition of "meeting"
shall apply to the TAC as is adopted by the Trustees for meetings of the
Trustees.
(b) In the discretion of the Trustees, the Future Representative may
receive compensation from the PI Trust in addition to the per diem meeting
allowance paid to each member of the TAC, if they deem it appropriate to
compensate him for the additional duties imposed upon him as Chairperson of the
TAC. Such additional compensation shall be paid at the hourly rate previously
approved for the Future Representative by the Bankruptcy Court in the Chapter 11
Cases.
(c) All reasonable out-of-pocket costs and expenses incurred by TAC
members in connection with the performance of their duties hereunder will be
promptly reimbursed to such members by the PI Trust.
A1.1.13-17
6.6 Procedure for Obtaining Consent of TAC. In the event a matter is
subject to the consent of the TAC pursuant to the terms hereof, the Trustees
shall provide the TAC with the appropriate information regarding the matter in
question. Upon receipt of such information, the TAC shall be given a period of
twenty (20) days to respond to the Trustees' request for consent. This twenty
(20) day period may be extended with the consent of the Trustees. In the event
that the TAC does not respond to the Trustees within such twenty (20) day
period, or any extension thereof, as to their approval or non-approval to such
matter, then approval by the TAC shall be deemed to have been granted. The
members of the TAC must consider in good faith any request by the Trustees prior
to any non-approval thereof, and no member of the TAC may withhold his consent
unreasonably.
ARTICLE 7
GENERAL PROVISIONS
7.1 Irrevocability. The PI Trust is irrevocable, but is subject to
amendment as provided in Article 7.3.
7.2 Termination.
(a) The PI Trust shall automatically terminate on the date (the
"TERMINATION DATE") 90 days after the first occurrence of any of the following
events:
(i) the Trustees in their sole discretion decide to terminate
the PI Trust because (A) they deem it unlikely that new Toxic Personal
Injury Claims will be filed against the PI Trust and (B) all Toxic
Personal Injury Claims duly filed with the PI Trust have been liquidated
and satisfied and twelve consecutive months have elapsed during which no
new Toxic Personal Injury Claim has been filed with the PI Trust;
(ii) if the Trustees have procured and have in place
irrevocable insurance policies and have established claims handling
agreements and other necessary arrangements with suitable third parties
adequate to discharge all expected remaining obligations and expenses of
the PI Trust in a manner consistent with this Trust Agreement and the
Procedures, the date on which the Bankruptcy Court enters an order
approving such insurance and other arrangements and such order becomes
final;
(iii) if in the judgment of two/thirds of the Trustees, with
the consent of the TAC (which consent shall not be unreasonably withheld),
the continued administration of the PI Trust is uneconomic or inimical to
the best interests of the persons holding Toxic Personal Injury Claims and
the termination of the PI Trust will not expose or subject Reorganized
Eagle-Picher or any other Reorganized Debtor or any successor in interest
to any increased or undue risk of having any Toxic Personal Injury Claims
asserted against it or them or in any way jeopardize the validity or
enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction; or
(iv) 21 years less 91 days pass after the death of the last
survivor of all the descendants of Joseph P. Kennedy, Sr. of Massachusetts
living on the date hereof.
(b) On the Termination Date, after payment of all the PI Trust's
liabilities have been provided for, all monies remaining in the PI Trust estate
shall be transferred to charitable organization(s) exempt from federal income
tax under Section 501(c)(3) of the Internal Revenue Code, which tax-exempt
organization(s) shall be selected by the Trustees using their reasonable
discretion; provided, however, that (i)
A1.1.13-18
if practicable, the tax-exempt organization(s) shall be related to the treatment
of, research, or the relief of suffering of individuals suffering from asbestos
or lead caused disorders, and (ii) the tax-exempt organization(s) shall not bear
any relationship to Reorganized Eagle-Picher within the meaning of Section
468(d)(3) of the Internal Revenue Code.
7.3 Amendments. The Trustees, after consultation with the TAC, and subject
to the TAC's consent when so provided herein, may modify or amend this Trust
Agreement or any document annexed to it, including, without limitation, the
Bylaws, or the Procedures, except that Articles 2.2 (Purpose), 2.4 (Acceptance
of Assets and Assumption of Liabilities), 3.1(e) (precluding guaranty of others'
debt), 3.2(e) (Trustees' consultation with TAC), 3.3(a)-(c) (claims
administration), 5.1 (Number of Trustees), 5.2 (Term of Service), 5.3
(Appointment of Successor Trustees), 5.5 (Compensation and Expenses of
Trustees), 5.6 (Indemnification of Trustees and Others), 5.9 (Trustees'
Disinterestedness), 6.1 (TAC Formation and Duties), 6.2 (TAC Number and
Chairperson), 6.4 (Appointment of Successor (TAC)), 7.1 (Irrevocability), 7.2
(Termination) and 7.3 (Amendments) herein shall not be modified or amended in
any respect. No consent from the Settlors shall be required to modify or amend
this Trust Agreement or any document annexed to it. Any modification or
amendment made pursuant to this section must be done in writing. Notwithstanding
anything contained herein to the contrary, neither this Trust Agreement nor the
Procedures shall be modified or amended in any way that would jeopardize the
efficacy or enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction.
7.4 Meetings. For purposes of Articles 5.5 and 6.5 of this Trust
Agreement, a TAC member or a Trustee shall be deemed to have attended a meeting
in the event such person spends a substantial portion of the day conferring, by
phone or in person, on PI Trust matters with TAC members or Trustees. The
Trustees shall have complete discretion to determine whether a meeting, as
described herein, occurred for purposes of Articles 5.5 and 6.5.
7.5 Severability. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
7.6 Notices. Notices to persons asserting claims shall be given at the
address of such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim form submitted
to the PI Trust with respect to his or her Toxic Personal Injury Claim. Any
notices or other communications required or permitted hereunder shall be in
writing and delivered at the addresses designated below, or sent by telecopy
pursuant to the instructions listed below, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows, or to
such other address or addresses as may hereafter be furnished by any of
Reorganized Eagle-Picher, the Trustees or the TAC to the others in compliance
with the terms hereof.
To the PI Trust
or the Trustees: _______________________________
_______________________________
_______________________________
A1.1.13-19
To the TAC: Robert E. Sweeney, Esq.
Robert E. Sweeney Co., L.P.A.
Suite 1500, Illuminating Building
55 Public Square
Cleveland, Ohio 44113
Telecopier: (216) 696-0732
Telephone Confirmation: (216) 696-0606
and
Robert B. Steinberg, Esq.
Rose, Klein & Marias
18th Floor
801 South Grand Avenue
Los Angeles, California 90017-4645
Telecopier: (213) 623-7755
Telephone Confirmation: (213) 626-0571
and
James J. McMonagle
24 Walnut Street
Chagrin Falls, Ohio 44022
Telecopier: (216) 844-5010
Telephone Confirmation: (216) 844-3817
To Reorganized
Eagle-Picher: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
Suite 1300, 580 Building
580 Walnut Street
Cincinnati, Ohio 45202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
A1.1.13-20
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
All such notices and communications shall be effective when
delivered at the designated addresses or when the telecopy communication is
received at the designated addresses and confirmed by the recipient by return
telecopy in conformity with the provisions hereof.
7.7 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
7.8 Successors and Assigns. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Settlors, the PI Trust, and the
Trustees and their respective successors and assigns, except that neither the
Settlors nor the PI Trust nor any Trustee may assign or otherwise transfer any
of its, or his or her rights or obligations under this Trust Agreement except,
in the case of the PI Trust and the Trustees, as contemplated by Article 3.1.
7.9 Limitation on Claim Interests for Securities Laws Purposes. Toxic
Personal Injury Claims, and any interests therein, (a) shall not be assigned,
conveyed, hypothecated, pledged or otherwise transferred, voluntarily or
involuntarily, directly or indirectly, except by will or under the laws of
descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be
entitled to receive any dividends or interest; provided, however, that the
foregoing shall not apply to the holder of an Asbestos or Lead Contribution
Claim that is subrogated to an Asbestos Personal Injury Claim or Lead Personal
Injury Claim as a result of its satisfaction of such Asbestos Personal Injury
Claim or Lead Personal Injury Claim.
7.10 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein and
in the documents referred to herein, and this Trust Agreement and such documents
supersede any prior oral or written agreements concerning the subject matter
hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
law or in equity.
A1.1.13-21
7.11 Headings. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor in
any manner affect the construction of the provisions of this Trust Agreement.
7.12 Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
7.13 Settlors' Representative. Eagle-Picher is hereby irrevocably
designated as the representative of the Settlors, and it is hereby authorized to
take any action required of the Settlors in connection with the Trust Agreement.
7.14 Dispute Resolution. Any disputes that arise under this Agreement or
under the annexes hereto shall be resolved by the Bankruptcy Court pursuant to
Article 9 of the Plan, except as otherwise provided herein or in the annexes
hereto. Notwithstanding anything else herein contained, to the extent any
provision of this Trust Agreement is inconsistent with any provision of the
Plan, the Plan shall control.
7.15 Enforcement and Administration. The parties hereby acknowledge the
Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce
the terms of this Trust Agreement and the annexes hereto, pursuant to Article 9
of the Plan.
7.16 Effectiveness. This Trust Agreement shall not become effective until
it has been executed and delivered by all the parties hereto and until the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Trust Agreement this
____ day of __________________, 1996.
SETTLORS:
EAGLE-PICHER INDUSTRIES, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
DAISY PARTS, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
TRANSICOIL, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
A1.1.13-22
MICHIGAN AUTOMOTIVE RESEARCH CORP.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
EDI, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
EAGLE-PICHER MINERALS, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
HILLSDALE TOOL &
MANUFACTURING CO.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
A1.1.13-23
TRUSTEES:
-------------------------------
Name: Darius W. Gaskins, Jr.
-------------------------------
Name: Kevin O'Donnell
-------------------------------
Name: William J. Williams
-------------------------------
Name: Daniel M. Phillips
(3 Year Term)
-------------------------------
Name: Marshall Wright
(3 Year Term)
A1.1.13-24
ANNEX A
EPI PERSONAL INJURY SETTLEMENT TRUST
BYLAWS
ARTICLE I
OFFICES
SECTION 1. Principal Office. The initial principal office of the EPI
Personal Injury Settlement Trust (the "PI Trust") shall be in
____________________ or at such other place as the Trustees shall from time to
time select.
SECTION 2. Other Offices. The PI Trust may have such other offices at such
other places as the Trustees may from time to time determine to be necessary for
the efficient and cost-effective administration of the PI Trust.
ARTICLE II
TRUSTEES
SECTION 1. Control of Property, Business and Affairs. The property,
business and affairs of the PI Trust shall be managed by or under the direction
of the Trustees, provided that certain decisions of the Trustees shall be
subject to the consent of the Trustees' Advisory Committee (the "TAC") as
provided in the Trust Agreement to which these Bylaws are attached as Annex A.
SECTION 2. Number, Resignation and Removal. The number of Trustees and the
provisions governing the resignation and removal of a Trustee and the
appointment of a successor Trustee shall be governed by the provisions of
Article 5 of the Trust Agreement.
SECTION 3. Quorum and Manner of Acting. During the Three Year Service
Period described in Article 5.1 of the Trust Agreement, the presence of 3
Trustees shall constitute a quorum for the transaction of business; after the
Three Year Service Period described in Article 5.1 of the Trust Agreement, two
(2) Trustees shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Trustee[s] present may adjourn the meeting from time to
time until a quorum shall be present. During the Three Year Service Period
described in Article 5.1 of the Trust Agreement, the vote, at a meeting at which
a quorum is present of at least three (3) Trustees shall be an act of the
Trustees; after the Three Year Service Period described in Article 5.1 of the
Trust Agreement, the vote, at a meeting at which a quorum is present of at least
two (2) Trustees shall be an act of the Trustees.
SECTION 4. Regular Meetings. Regular meetings of the Trustees may be held
at such time and place as shall from time to time be determined by the Trustees
provided that the Trustees shall meet at least once per calendar quarter. After
there has been such determination, and a notice thereof has been once given to
each Trustee, regular meetings may be held without further notice being given.
A1.1.13A-1
SECTION 5. Special Meeting Notice. Special meetings of the Trustees shall
be held whenever called by one or more of the Trustees. Notice of each such
meeting shall be delivered by overnight courier to each Trustee, addressed to
him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy not later
than two (2) days before the day of which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the Trustee or Trustees entitled to receive
such notice, whether before or after the meeting, shall be deemed equivalent
thereto for purposes of this Section 5. No notice to or waiver by any Trustee
with respect to any special meeting shall be required if such Trustee shall be
present at said meeting.
SECTION 6. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if all Trustees consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Trustees.
The Trustees also may take any action required or permitted to be taken at
any meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. Principal Officers. The principal officer of the PI Trust shall
be an Executive Director. The PI Trust may also have such other principal
officers, including one or more Assistant Directors, a Secretary-Treasurer and a
Controller, as the Trustees may in their discretion appoint after determining
that such appointment will promote the efficient and cost-effective
administration of the PI Trust.
SECTION 2. Election and Term of Office. The principal officer(s) of the PI
Trust shall be chosen by the Trustees. Each such officer shall hold office until
his successor shall have been duly chosen and qualified or until his earlier
death, resignation or removal.
SECTION 3. Subordinate Officers. In addition to the principal officers
enumerated in Section 1 of this Article III, the PI Trust may have such other
subordinate officers, agents and employees as the Trustees may deem necessary
for the efficient and cost-effective administration of the PI Trust, each of
whom shall hold office for such period, have such authority, and perform such
duties as the Trustees may from time to time determine. The Trustees may
delegate to any principal officer the power to appoint and to remove any such
subordinate officers, agents or employees.
SECTION 4. Removal. The Executive Director or any other officer may be
removed with or without cause, at any time, by resolution adopted by the
Trustees at any regular meeting of the Trustees or at any special meeting of the
Trustees called for that purpose at which a quorum is present.
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Trustees. The resignation of any officer shall take effect
upon receipt of notice thereof or at such later
A1.1.13A-2
time as shall be specified in such notice and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6. Powers and Duties. The officers of the PI Trust shall have such
powers and perform such duties as may be conferred upon or assigned to them by
the Trustees.
ARTICLE IV
TRUSTEES' ADVISORY COMMITTEE
SECTION 1. Regular Meetings. Regular meetings of the TAC may be held at
such time and place as shall from time to time be determined by the TAC,
provided that the TAC shall meet as often as is necessary to respond promptly to
matters referred to it for consultation or consent by the Trustees. After a
schedule for regular meetings has been determined, and a notice thereof has been
once given to each TAC member, regular meetings may be held without further
notice being given.
SECTION 2. Special Meeting; Notice. Special meetings of the TAC shall be
held whenever called by one or more of the TAC members. Notice of each such
meeting shall be delivered by overnight courier to each TAC member, addressed to
him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy, not later
than two (2) days before the day on which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the TAC members entitled to receive such
notice, whether before or after the meeting, shall be deemed equivalent thereto
for purposes of this Section 2. No notice to or waiver by any TAC member with
respect to any special meeting shall be required if such TAC member shall be
present at such meeting.
SECTION 3. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the TAC may be taken
without a meeting if all members of the TAC consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the TAC.
The TAC may take any action required or permitted to be taken at any
meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
SECTION 4. Reimbursement of Expenses. All reasonable out-of-pocket
expenses incurred by each member of the TAC in connection with the performance
of his duties hereunder will be reimbursed promptly to such member by the PI
Trust upon presentation of appropriate documentation.
ARTICLE V
AMENDMENTS
The Bylaws of the PI Trust, other than Article II, Article IV and this
Article V, may be amended by the Trustees at any meeting of the Trustees,
provided that notice of the proposed amendment is
A1.1.13A-3
contained in the notice of such meeting. The Bylaws contained in Article IV may
be amended by the Trustees only after receipt of the consent of the TAC to the
proposed amendment.
A1.1.13A-4
ANNEX B
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS INJURY CLAIMS RESOLUTION PROCEDURES
These Eagle-Picher Industries Asbestos Personal Injury Claims Resolution
Procedures (the "EPI ASBESTOS CLAIMS PROCEDURES") have been prepared in
connection with the First Amended Consolidated Joint Plan of Reorganization of
Eagle-Picher Industries, Inc. ("EAGLE-PICHER") and its affiliated Debtors (the
"PLAN") confirmed by order of the United States Bankruptcy Court for the
Southern District of Ohio, dated __________________, 1996 ("BANKRUPTCY COURT")
in In re Eagle-Picher Industries, Inc., et al., Consolidated Case No. 1-91-00100
("CHAPTER 11 CASES") and the Eagle-Picher Industries, Inc. Personal Injury
Settlement Trust Agreement (the "TRUST AGREEMENT") filed in connection with the
Plan.
These EPI Asbestos Claims Procedures provide for processing, liquidating,
paying, and satisfying all Asbestos Personal Injury Claims as provided in and
required by the Plan and the Trust Agreement. The trustees of the PI Trust (the
"TRUSTEES") shall implement and administer these EPI Asbestos Claims Procedures
in accordance with the Trust Agreement.
SECTION I
Definitions
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Trust Agreement.
SECTION II
Purpose and Interpretation
2.1 Purpose. These EPI Asbestos Claims Procedures are adopted pursuant to
the Trust Agreement. They are designed to provide prompt payment to holders of
similar, valid Asbestos Personal Injury Claims in substantially the same manner.
2.2 Interpretation. Nothing in these EPI Asbestos Claims Procedures shall
be deemed to create a substantive right for any claimant. Without limiting the
foregoing, these EPI Asbestos Claims Procedures specifically shall not create
any substantive right for any claimant to be afforded now, or in the future, a
discounted cash payment election, as described in Section 5.2 herein, in any
amount. These EPI Asbestos Claims Procedures are procedural, and they may be
amended, deleted, or added to pursuant to the terms of the Trust Agreement and
the terms of these EPI Asbestos Claims Procedures.
SECTION III
Trustees' Advisory Committee
The Trustees shall consult with the Trustees' Advisory Committee ("TAC"),
appointed pursuant to the Trust Agreement, on the implementation and
administration of these EPI Asbestos Claims Procedures,
A1.1.13.B-1
including, but not limited to, implementation of procedures under various
claimant payment programs, including any future programs offering discounted
payments; development of Asbestos Personal Injury Claims categories and values
of claims, as set forth in Section 5.3; auditing and monitoring claims;
alternative dispute resolution forms and procedures; releases; and
interpretation of these EPI Asbestos Claims Procedures. When consultation is
required under the Trust Agreement or these EPI Asbestos Claims Procedures, the
Trustees need only seek advice and counsel from the TAC and are free to accept
or reject any recommendation of the TAC. The Trustees shall be subject to the
consent of the TAC on the issues enumerated in Article 3.2(e) of the Trust
Agreement, consistent with the provisions of that Section.
SECTION IV
Payment Percentage; Periodic Estimates
There is inherent uncertainty regarding Eagle-Picher's total liability to
holders of Asbestos Personal Injury Claims as well as the total value of the
assets available to pay valid Asbestos Personal Injury Claims. Consequently,
there is inherent uncertainty regarding the amounts that claimants will receive.
To ensure substantially equivalent treatment of all present and future valid
Asbestos Personal Injury Claims, prior to making distributions to claimants,
other than those who have elected the discounted cash payment described in
Section 5.2, the Trustees must determine the percentage of full liquidated value
that valid Asbestos Personal Injury Claims would be likely to receive ("PAYMENT
PERCENTAGE"). No claimant shall receive payments under the individualized review
process that exceed the PI Trust's most recent determination of the Payment
Percentage. The Trustees must base this determination, on the one hand, on
estimates of the number, types, and values of present and future Asbestos
Personal Injury Claims and, on the other hand, on the value of the PI Trust's
assets, the liquidity of those assets, the PI Trust's expected future expenses
for administration and legal defense, and other material matters that are
reasonable and likely to affect the sufficiency of funds to pay a comparable
percentage of full value to all holders of Asbestos Personal Injury Claims.
Periodically, but no less frequently than once every two (2) years, the Trustees
shall reconsider their determination of the Payment Percentage to assure that it
is based on accurate, current information and may, after such reconsideration,
change the Payment Percentage, if necessary. When making these determinations,
the Trustees shall exercise common sense and flexibly evaluate all relevant
factors.
SECTION V
Claims Types; Processing and Payment
5.1 Prepetition Liquidated Claims.
(a) Processing and Payment. Unless not feasible after every
reasonable effort, no later than 60 days after the Effective Date the Trustees
shall pay Asbestos Personal Injury Claims that were liquidated by settlement
agreement entered into prior to January 7, 1991 or by judgment that became final
and nonappealable prior to January 7, 1991 ("PREPETITION LIQUIDATED CLAIMS").
These claims shall be paid in an order to be determined by the Trustees based on
a first-in first-out ("FIFO") principle. These claims may require no processing
other than verification of the holder's identity, payment, and release of the PI
Trust. The liquidated value of a Prepetition Liquidated Claim shall be the
amount awarded in the prepetition judgment or settlement agreement, and holders
of Prepetition Liquidated Claims shall be paid the appropriate Payment
Percentage based upon that liquidated value.
(b) Marshalling. Prepetition Liquidated Claims that are secured by
letters of credit, appeal bonds, or other security or sureties shall first
exhaust their rights against any applicable security or surety before making a
claim against the PI Trust. In the event that such security or surety is
insufficient to
A1.1.13.B-2
pay the Prepetition Liquidated Claim in full, the deficiency shall be processed
and paid as a Prepetition Liquidated Claim.
5.2 Discounted Cash Payment Election.
(a) Rationale. The Plan provides for a discounted cash payment
election that may be made at the time the eligible holders of Asbestos Personal
Injury Claims vote to accept or reject the Plan. Those holders of valid Asbestos
Personal Injury Claims who so elect shall make a full and final settlement with
the PI Trust (except as provided in Section 5.2(c) herein) in exchange for a
single cash payment in the amounts shown below for each disease category:
Mesothelioma $6,500
Lung Cancer $2,000
Other Cancer $1,000
Non-malignancy $ 400
This discounted cash payment election is designed, in part, for claimants who
easily can be determined by the PI Trust to have valid Asbestos Personal Injury
Claims and who desire to have a fixed and certain payment made expeditiously
rather than wait for payment after individualized review. This discounted cash
payment election further is designed, in part, for claimants who easily can be
determined by the PI Trust to have valid Asbestos Personal Injury Claims for
non-malignant injuries and who wish to have a fixed payment now and the right to
receive a further payment if they should subsequently be diagnosed as having an
asbestos-related malignancy.
(b) Processing and Payment. Unless not feasible after every
reasonable effort, no later than 60 days after the Effective Date the Trustees
shall process and pay the holders of Asbestos Personal Injury Claims who elect
to receive a discounted cash payment in an order to be determined by the
Trustees based on a FIFO principle. The Trustees shall determine appropriate
procedures for ensuring that only holders of valid Asbestos Personal Injury
Claims are paid under the discounted cash payment election. These procedures for
ensuring payment only to holders of valid Asbestos Personal Injury Claims under
the discount ed cash payment election shall be based upon the guidelines set
forth in Section 7.1 herein.
(c) Subsequent Malignancy. The holder of a valid Asbestos Personal
Injury Claim based upon a non-malignant asbestos injury or condition who elects
to receive a discounted cash payment as provided herein may file a new Asbestos
Personal Injury Claim for an asbestos-related malignancy that is subsequently
diagnosed, and any additional payments to which such claimant may be entitled
shall not be reduced by the amount of the discounted cash payment.
(d) No Review. The Trustees' decision that the holder of an Asbestos
Personal Injury Claim should not receive a discounted cash payment is not
reviewable. However, the holder of an Asbestos Personal Injury Claim whose claim
is denied discounted cash payment may then elect individualized review as set
forth in Section 5.3.
(e) Future Discounted Payment Elections. In the future, the
Trustees, in their complete discretion, may, or may not, offer claimants
discounted cash payments for valid Asbestos Personal Injury Claims. In the event
they decide to offer claimants discounted cash payments in the future, they
shall have complete discretion to determine the amounts and procedures for such
future discounted cash payments and under no circumstances shall they be
obligated in the future to pay the same amounts set forth in Section 5.2(a)
herein for discounted cash payments.
A1.1.13.B-3
5.3 Individually Reviewed Claims; Claims Categories.
(a) Rationale. A claimant (i) who initially elects individualized
review, or (ii) whose Asbestos Personal Injury Claim was rejected by the
Trustees for discounted cash payment and who then elects individualized review,
shall have his or her Asbestos Personal Injury Claim reviewed, based upon an
evaluation of exposure, loss, damages, injury, and other factors determinative
of claim value according to applicable tort law. The detailed examination and
individualized valuation of Asbestos Personal Injury Claims is designed for
claimants with serious or fatal asbestos-related injuries whose Asbestos
Personal Injury Claims require the added expense of individualized examination.
(b) Categories and Values. The PI Trust will categorize Asbestos
Personal Injury Claims by injury, and it may subcategorize Asbestos Personal
Injury Claims by occupation, medical criteria, or any other factor related to
the value of Asbestos Personal Injury Claims within each injury category. The PI
Trust shall use these categories and subcategories to resolve Asbestos Personal
Injury Claims as expeditiously and economically as possible. For each category
or subcategory, the PI Trust shall determine a limited range of liquidated
values representing average historical payments by Eagle-Picher to resolve
similar Asbestos Personal Injury Claims. Offers of payments to claimants shall
be determined by assigning to their valid Asbestos Personal Injury Claim an
appropriate value within the applicable range and multiplying that value by the
Payment Percentage. Because discounted cash payment elections are a more cost
effective means for determining the liquidated value of less serious, non-fatal
Asbestos Personal Injury Claims, the PI Trust shall reduce the range of values
for categories and subcategories of such Asbestos Personal Injury Claims to
reflect the cost for providing such review to those holders of less serious,
non-fatal Asbestos Personal Injury Claims who did not elect discounted cash
payment under either the Plan or any subsequent discounted cash payment program
made available to them by the PI Trust.
When a claimant's economic damages are exceptionally larger than the
normal range, that claimant's Asbestos Personal Injury Claim may be classified
as an extraordinary Asbestos Personal Injury Claim and such Asbestos Personal
Injury Claim may be liquidated in an amount that exceeds the limited range of
liquidated values for any given injury category or subcategory, but such a
classification shall not increase the Payment Percentage. The Trustees shall
determine the nature of the Asbestos Personal Injury Claims that they will
classify as extraordinary Asbestos Personal Injury Claims.
(c) Processing and Liquidation. Individually reviewed claims shall
be processed and liquidated pursuant to the following schedule:
(i) substantially all the claims whose holders had filed
lawsuits against Eagle-Picher prior to January 7, 1991, shall be processed and
liquidated no later than 18 months after the Effective Date;
(ii) substantially all the claims whose holders had not filed
lawsuits against Eagle-Picher prior to January 7, 1991 but whose holders had
filed timely proofs of claim in the Chapter 11 Cases, shall be processed and
liquidated no later than 36 months after the Effective Date;
(iii) substantially all the claims whose holders had not filed
lawsuits against Eagle-Picher prior to January 7, 1991 and whose holders had not
filed timely proofs of claim in the Chapter 11 Cases, but whose holders at any
time prior to the date of the Confirmation Order (A) had filed lawsuits in the
tort system against asbestos manufacturers other than Eagle-Picher, or (B) had
filed a proof of claim with any other asbestos victims' trust or claims
processing facility, or (C) had filed a registration of any asbestos claim on
any inactive docket or similar asbestos claims registry, shall be processed and
liquidated no later than 48 months after the Effective Date; and
A1.1.13.B-4
(iv) claims not described in subsections (i) through (iii)
above, shall be processed and liquidated as soon as possible but not before the
claims described in subsections (i) through (iii) above.
(d) Payment. While payments to holders of valid Asbestos Personal
Injury Claims generally should be made in the same order in which claims are
liquidated, provided they act consistently with Section 524(g)(2)(B)(ii)(V) of
the Bankruptcy Code, the Trustees shall have complete discretion to determine
the timing and the appropriate method for making payments. Such methods may
include, in the discretion of the Trustees, a method for the payment on an
installment basis, in which case any installment payment shall be subject to the
Payment Percentage in effect at the time such installment payment is made.
(e) Disputes Over Individualized Review. Claimants who reject the
Trustees' offer after individualized review and who wish to dispute their
eligibility for payment, their categorization, or the amount of the Trustees'
offer under individualized review, must initiate one of the alternative dispute
resolution procedures established by the Trustees pursuant to Section 7.6. After
such alternative dispute resolution procedures have been exhausted, claimants
who still reject the PI Trust's offer must initiate arbitration pursuant to
procedures like those set forth in Section 7.8. Only after claimants have
rejected any non-binding arbitration award pursuant to procedures like those set
forth in Section 7.8, may they file suit against the PI Trust.
(f) Full Releases. Holders of Asbestos Personal Injury Claims who
receive an individualized payment shall execute and deliver to the Trustees a
general release in a form satisfactory to the Trustees and may not thereafter
file a new Asbestos Personal Injury Claim.
5.4 Exigent Health Claims; Extreme Hardship Claims. At any time the
Trustees may individually evaluate and pay Exigent Health Claims and Extreme
Hardship Claims, as defined in this Section 5.4. These claims may be considered
separately no matter what the order of processing otherwise would have been
under this Section V.
A claim qualifies as an Exigent Health Claim if the claimant provides: (i)
documentation that a physician has diagnosed the claimant as having an
asbestos-related illness and (ii) a declaration or affidavit made under penalty
of perjury by a physician who has examined the claimant within one hundred
twenty (120) days of the date of the declaration or affidavit in which the
physician states there is substantial medical doubt that the claimant will
survive beyond six (6) months from the date of the declaration or affidavit.
A claim qualifies for payment as an Extreme Hardship Claim if the
Trustees, in their complete discretion, determine the claimant needs financial
assistance on an immediate basis based on the claimant's expenses and all
sources of available income.
5.5 Asbestos Contribution Claims. Asbestos Personal Injury Claims asserted
against the PI Trust that fall within the Trust Agreement's definition of
Asbestos or Lead Contribution Claims, and which have not been disallowed,
discharged, or otherwise resolved, shall be processed, allowed or disallowed,
liquidated, paid, and satisfied in accordance with procedures to be developed
and implemented by the Trustees, which procedures (a) shall determine the
validity and allowance of such claims consistent with Section 502(e) of the
Bankruptcy Code; (b) shall require binding arbitration for the resolution of all
disputes and thereby foreclose resort to the tort system for dispute resolution;
and (c) shall otherwise provide the same processing and payment to the holders
of such claims that are allowed as the PI Trust would have afforded the holders
of any underlying valid Asbestos Personal Injury Claims under this Section V.
A1.1.13.B-5
SECTION VI
Claims Materials
As soon as reasonably practicable, but not later than six months following
the Effective Date, the PI Trust shall mail claims materials ("CLAIMS
MATERIALS") to each person with an Asbestos Personal Injury Claim who has filed
a proof of claim in the Bankruptcy Court or has pending a lawsuit against
Eagle-Picher or otherwise has been identified to the Trustees as holding an
Asbestos Personal Injury Claim that is neither a Prepetition Liquidated Claim
defined in Section 5.1 nor an Asbestos Personal Injury Claim for which a
discounted cash payment election has been made as set forth in Section 5.2. For
any person holding an Asbestos Personal Injury Claim who is first identified to
Eagle-Picher or the Trustees any time subsequent to the Effective Date, the PI
Trust shall mail the Claims Materials no later than six months following such
identification. The PI Trust may send Claims Materials to a claimant care of an
attorney representing the claimant.
The Claims Materials will include descriptions of these EPI Asbestos
Claims Procedures, instructions, and a claim form. If feasible, the forms used
by the PI Trust to obtain claims information shall be the same or substantially
similar to those used by other asbestos claims resolution facilities. Instead of
collecting some or all claims information from a claimant or the claimant's
attorney, the PI Trust may obtain such information from electronic data bases
maintained by any other asbestos claims resolution organization, provided that
the PI Trust informs the claimant that it plans to obtain information as
available from such other organizations unless the claimant objects in writing
or provides such information directly to the PI Trust.
In order to be eligible for payment under these EPI Asbestos Claims
Procedures, a claimant must return all claims' information requested by the PI
Trust within the six month period following his or her receipt of the Claims
Materials. An Asbestos Personal Injury Claim shall be disallowed automatically
if a claimant required to provide claims information fails to provide all such
information within this period, unless the claimant demonstrates to the
satisfaction of the Trustees that such a failure should be excused.
SECTION VII
General Guidelines for Liquidating and
Paying Individually Reviewed Claims
7.1 Showing Required. In order to establish a valid Asbestos Personal
Injury Claim, a claimant must (a) make a conclusive demonstration of exposure to
an Eagle-Picher asbestos-containing product and (b) submit a medical report from
a qualified physician that (i) results from a physical examination by that
physician and (ii) contains a diagnosis of an asbestos-related injury. The PI
Trust may require the submission of evidence of exposure to an Eagle-Picher
asbestos-containing product, x-rays, laboratory tests, medical examinations or
reviews, other medical evidence, or any other evidence to support such Asbestos
Personal Injury Claims and require that medical evidence submitted comply with
recognized medical standards regarding equipment, testing methods, and
procedures to assure that such evidence is reliable.
7.2 Discretion To Alter Order Of Processing Or Suspend Payments. Provided
it is consistent with Section 524(g)(2)(B)(ii)(V) of the Bankruptcy Code, in
order to reduce transaction costs the Trustees may process, liquidate, and pay
valid Asbestos Personal Injury Claims in groups of claims or otherwise no matter
what the order of processing otherwise would have been under Section V. In the
event that the Trustees determine it advisable, they may suspend their normal
order of processing or payment in favor of claimants who elect discounted cash
payment under any future discounted cash payment election programs
A1.1.13.B-6
offered by the PI Trust. Also, in the event that the PI Trust faces temporary
periods of limited liquidity, the Trustees may temporarily limit or suspend
payments altogether.
7.3 Costs Considered. Notwithstanding any provision of these EPI Asbestos
Claims Procedures to the contrary, the Trustees shall always give appropriate
consideration to the cost of investigating and uncovering invalid Asbestos
Personal Injury Claims so that the payment of valid Asbestos Personal Injury
Claims is not further impaired by such processes. In issues related to the
validity of Asbestos Personal Injury Claims, e.g., exposure and medical evidence
of injury, the Trustees shall have the latitude to make judgments regarding the
amount of transaction costs to be expended by the PI Trust so that valid
Asbestos Personal Injury Claims are not further impaired by the costs of
additional investigation. Nothing herein shall prevent the Trustees, in
appropriate circumstances, from contesting the validity of any Asbestos Personal
Injury Claim whatever the costs.
7.4 Discretion to Vary Payments. Consistent with the provisions hereof,
the Trustees shall proceed as quickly as possible to liquidate claims, and they
shall make payments to holders of valid Asbestos Personal Injury Claims promptly
as funds become available and as Asbestos Personal Injury Claims are liquidated,
while maintaining sufficient resources to pay future valid Asbestos Personal
Injury Claims in substantially the same manner. Because decisions about payments
must be based on estimates and cannot be done precisely, they may have to be
revised in light of experience over time, and a claimant who receives payment
early in the life of the PI Trust may receive a smaller or larger percentage of
the value of his Asbestos Personal Injury Claim than a claimant who receives
payment in the middle of or late in the life of the PI Trust. Therefore, there
can be no guarantee of any specific level of payment to claimants. However, the
Trustees shall use their best efforts to treat similar, valid Asbestos Personal
Injury Claims in substantially the same manner, consistent with their duties as
Trustees in these circumstances, the purposes of the PI Trust, and given the
practical limitations imposed by the inability to predict the future with
precision.
7.5 Punitive Damages. In determining the value of any Asbestos Personal
Injury Claim, punitive damages shall not be considered or allowed,
notwithstanding their availability in the tort system. Pre-judgment interest,
post-judgment interest, interest on deferred payments, or any other type of
interest, delay damages, or similar damages associated with Asbestos Personal
Injury Claims, shall not be paid or allowed.
7.6 Alternative Dispute Resolution. The Trustees shall establish an
appropriate alternative dispute resolution process so that the claimants and the
PI Trust shall have a full range of alternative dispute resolution devices
available for their use in the individualized review process, including reviews
by specialized panels, mediation and arbitration. If compensation of an
alternative dispute resolution provider becomes necessary, each side shall
equally share the obligation to pay such compensation and shall otherwise bear
its own costs.
7.7 Settlement Favored. Settlements shall be favored over all other forms
of Asbestos Personal Injury Claim resolution, and the lowest feasible
transaction costs for the PI Trust shall be incurred in order to conserve
resources and ensure funds to pay all valid Asbestos Personal Injury Claims.
7.8 Arbitration; Jury Trials. Holders of Asbestos Personal Injury Claims
may elect to submit their Asbestos Personal Injury Claims to binding or
non-binding arbitration only after other alternative dispute resolution
procedures established by the Trustees have been exhausted.
If arbitration becomes necessary, arbitrators shall (i) return awards
within the range of injury category value limits set by the PI Trust for the
injury category in which the Asbestos Personal Injury Claim properly falls, (ii)
determine that the Asbestos Personal Injury Claim falls in a higher or lower
category and determine an appropriate award within the range of value limits for
that category, or (iii) in cases involving an extraordinary Asbestos Personal
Injury Claim, return awards in excess of category limits. Arbitrators shall
A1.1.13.B-7
not consider the Payment Percentage in determining the value of any Asbestos
Personal Injury Claim. If a claimant submits to binding arbitration or accepts
an award after non-binding arbitration, the award will establish the liquidated
value of the Asbestos Personal Injury Claim, which will be multiplied by the
then current Payment Percentage in order to determine the amount that the
claimant will receive. The claimant will then receive payments and execute and
deliver a general release in the same manner as a claimant who had accepted a
valuation of his Asbestos Personal Injury Claim by the PI Trust.
Only claimants who opt for non-binding arbitration and then reject their
arbitration awards retain the right to a jury trial to determine the liquidated
value of their Asbestos Personal Injury Claims against the PI Trust. All other
claimants shall and shall be deemed to have irrevocably waived any right to a
jury trial and any and all notices with respect to the filing or liquidation of
Asbestos Personal Injury Claims shall contain a provision that clearly and
conspicuously explains such jury trial waiver. A holder of an Asbestos Personal
Injury Claim desiring to file suit against the PI Trust may do so only after the
rejection of a non-binding arbitration award. In all cases, the statute of
limitations will be tolled as of the earlier of the date the Asbestos Personal
Injury Claim was filed with the PI Trust or the date the claimant filed his/her
complaint against Eagle-Picher, and the right to a jury trial shall be preserved
with the defendant being solely the PI Trust. To the extent the statute of
limitations has been tolled, it shall commence running 30 days after entry of a
non-binding arbitration award.
The Chapter 11 Cases and the EPI Asbestos Claims Procedures shall have no
effect on trial venue or choice of laws. All claims and defenses (including,
with respect to the PI Trust, all claims and defenses which could have been
asserted by Eagle-Picher) that exist under applicable law shall be available to
both sides at trial; provided, however, that the death of claimant while his/her
Asbestos Personal Injury Claim is pending against the PI Trust shall not reduce
the value of the deceased claimant's Asbestos Personal Injury Claim,
notwithstanding applicable state law to the contrary. The PI Trust may waive any
defense or concede any issue of fact or law. The award of an arbitrator or the
recommendation of a mediator and the positions and admissions of the parties
during compliance with alternative dispute resolution procedures shall not be
admissible for any purpose at trial by any party or third party and they are
expressly determined not to be admissions by either party.
If necessary, the Trustees may obtain an order from the U.S. District
Court for the Southern District of Ohio, Western Division ("DISTRICT COURT")
incorporating an offer of judgment to liquidate the amount of the claim,
scheduling discovery and trials in such a fashion as not to create an undue
burden on the PI Trust, or containing any other provisions, in order to ensure
that the PI Trust fulfills its obligations in accordance with the principles set
forth in the Trust Agreement.
A claimant who, in accordance with the EPI Asbestos Claims Procedures,
elects to resort to the legal system and obtains a judgment for money damages
shall have an Asbestos Personal Injury Claim with a liquidated value equal to
the judgment amount, less the amount of any prejudgment interest or punitive
damages contained therein, and no post-judgment interest shall accrue on such
judgment amount. A judgment creditor with a final, nonappealable judgment in
excess of the highest amount in the range of values for his/her injury category
or subcategory as determined by the Trustees will be paid, when funds are
reasonably available, the appropriate Payment Percentage of the highest amount
in the range for that injury category or subcategory; provided, however, that a
holder of an extraordinary Asbestos Personal Injury Claim who obtains a final,
nonappealable judgment in excess of the PI Trust's last offer or the
arbitrator's award will be paid, when funds are reasonably available, the
appropriate Payment Percentage of the PI Trust's last offer or the arbitrator's
award, whichever is greater. The appropriate Payment Percentage for the excess
of the judgment above the foregoing amounts will be paid no later than five (5)
years after the date the judgment is entered in the trial court, unless the
Trustees determine that such payment will adversely affect payment to other
claimants, in which event such payment shall be made in five (5) equal annual
installments beginning five (5) years after the date the judgment becomes final
and nonappealable.
A1.1.13.B-8
7.9 Releases. The Trustees shall have the discretion to determine the form
and nature of the releases given to the PI Trust in order to maximize recovery
for claimants against other tort-feasors without increasing the risk or amount
of claims for indemnification or contribution from the PI Trust. As a condition
to making any payment to a claimant, the PI Trust shall obtain a general,
partial, or limited release as appropriate in accordance with the applicable
state or other law, consistent with the payment selection by the claimant. If
allowed by state law, the endorsing of a check or draft for payment by or on
behalf of a claimant shall constitute such a release. In addition, and as a
prerequisite, the claimant shall execute any documents necessary (i) for the PI
Trust to perfect its claims, if any, against Eagle-Picher's insurers to receive
indemnity for payments, (ii) to release any Asbestos Personal Injury Claim the
claimant may have against the insurer, and (iii) for the PI Trust to receive and
keep any and all payments made by such insurer for payment of such claim.
7.10 Auditing, Monitoring and Verifying. The Trustees shall conduct random
or other audits to verify information submitted in connection with these EPI
Asbestos Claims Procedures. In the event that an audit reveals that invalid
information has been provided to the PI Trust, the Trustees may penalize any
claimant or claimant's attorney by disallowing the Asbestos Personal Injury
Claims or seeking sanctions from the District Court including, but not limited
to, requiring the offending source to pay the costs associated with the audit
and any future audit or audits, reordering the priority of payment of the
affected claimants' Asbestos Personal Injury Claims, raising the level of
scrutiny of additional information submitted from the same source or sources, or
prosecuting the claimant or claimant's attorney for presenting a fraudulent
Asbestos Personal Injury Claim in violation of 18 U.S.C. 'SS' 152. The PI
Trust may develop methods for auditing the reliability of medical evidence,
including independent reading of x-rays. If its audits show an unacceptable
level of reliability for medical evidence submitted by specific doctors or
medical facilities, the PI Trust may refuse to accept medical evidence from such
doctors or facilities.
7.11 Claims' Bar Date. Notwithstanding anything to the contrary contained
herein, including, without limitation, Section 5.3(c) herein, in order to be
eligible for payment under these EPI Asbestos Claims Procedures, a claimant must
have complied with any applicable claims' bar date order issued by the
Bankruptcy Court or must have been excused from such compliance by the Trustees
pursuant to their discretion under Article 3.3(d) of the Trust Agreement.
7.12 Statute of Limitations. For purposes of determining the validity of
an Asbestos Personal Injury Claim, any applicable statute of limitations shall
be deemed to have been extended for a period of sixty (60) days beyond its
normal limit. This extension shall have no application, however, to any
applicable claims bar date set by an order of the Bankruptcy Court.
SECTION VIII
Miscellaneous
8.1 Amendments. The Trustees may amend, modify, delete, or add to any of
these EPI Asbestos Claims Procedures (including, without limitation, amendments
to conform these procedures to advances in scientific or medical knowledge or
other changes in circumstances) by a majority vote of the Trustees, provided
they first obtain any advice and consent of the TAC required by Article 3.2(e)
of the Trust Agreement. Notwithstanding anything contained herein to the
contrary, these EPI Asbestos Claims Procedures shall not be modified or amended
in any way that would jeopardize the validity or enforceability of the Asbestos
and Lead PI Permanent Channeling Injunction.
8.2 Severability. Should any provision contained in the EPI Asbestos
Claims Procedures be determined to be unenforceable, such determination shall in
no way limit or affect the enforceability and operative effect of any and all
other provisions of the EPI Asbestos Claims Procedures.
A1.1.13.B-9
8.3 Governing Law. The EPI Asbestos Claims Procedures shall be governed
by, and construed in accordance with, the laws of the State of Ohio.
A1.1.13.B-10
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.16"
FORM OF ASBESTOS PD TRUST AGREEMENT
[THIS PAGE LEFT BLANK INTENTIONALLY]
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST AGREEMENT
---------------------------------------------------
This Trust Agreement is among Eagle-Picher Industries, Inc., an Ohio
corporation and debtor in possession ("EAGLE-PICHER"), and its affiliates, Daisy
Parts, Inc., Transicoil Inc., Michigan Automotive Research Corp., EDI, Inc.,
Eagle-Picher Minerals, Inc., and Hillsdale Tool & Manufacturing Co. (the
"SETTLORS" or "DEBTORS"), and ______________, as Trustees ("TRUSTEES"), pursuant
to the Third Amended Consolidated Joint Plan of Reorganization of Eagle-Picher
and its affiliated debtors, dated August 28, 1996 (the "PLAN").
WHEREAS, at the time of the entry of the order for relief in the Chapter
11 Cases (as such term is hereinafter defined), Eagle-Picher was named as a
defendant in property damage actions seeking recovery for damages allegedly
caused by the presence of asbestos or asbestos-containing products in buildings
2
and other facilities; and
WHEREAS, the Settlors have reorganized under the provisions of chapter 11
of the Bankruptcy Code (as hereinafter defined) in cases pending in the
Bankruptcy Court (as hereinafter defined) known as In re Eagle-Picher
Industries, Inc., et al., Consolidated Case No. 1-91-00100 (the "CHAPTER 11
CASES"); and
WHEREAS, the Plan, filed by the Debtors, the Legal Representative for
Future Claimants appointed by the Bankruptcy Court pursuant to its order of
October 31, 1991 ("FUTURE REPRESENTATIVE") and the Bankruptcy Court-appointed
committee composed of the representatives of certain tort claimants of the
Debtors (the "INJURY CLAIMANTS' COMMITTEE") has been confirmed; and
WHEREAS, the Plan provides, inter alia, for the creation of the
Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust (the
"ASBESTOS PD TRUST"); and
WHEREAS, pursuant to the Plan, the Asbestos PD Trust is to be funded in
whole in either debentures of Eagle-Picher or cash, depending upon whether Class
16 votes to accept the Plan; and
WHEREAS, the Plan provides, among other things, for the complete
settlement and satisfaction of all liabilities and obligations of the Debtors
with respect to Asbestos Property Damage Claims (as such term is hereinafter
defined); and
WHEREAS, the Asbestos PD Trust is intended to qualify as a "Qualified
Settlement Fund" within the meaning of Section 1.468B-1 of the Treasury
Regulations promulgated under Section 468B of the Internal Revenue Code;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
-----------
3
As used herein, the following terms shall have the meanings specified
below:
1.1 Asbestos Property Damage Claim: Any Claim against any of the Debtors
under any theory of law, equity, admiralty, or otherwise, for damages arising
from the presence in buildings or other structures of asbestos or
asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors, including, without express or implied
limitation, all such Claims for compensatory damages (such as proximate,
consequential, general, and special damages) and punitive damages, but excluding
Asbestos Property Damage Contribution Claims.
1.2 Asbestos Property Damage Contribution Claim: Any Claim against any of
the Debtors that is (i) held by (A) any Entity (other than a director or officer
entitled to indemnification pursuant to section 8.6 of the Plan) who has been,
is, or may be a defendant in an action seeking damages arising from the presence
in buildings or other structures of asbestos or asbestos-containing products
that was or were manufactured, sold, supplied, produced, distributed, or in any
way marketed by any of the Debtors prior to the Petition Date, or for which any
of the Debtors is otherwise liable due to the acts or omissions of any of the
Debtors or (B) any assignee or transferee of such Entity, and (ii) on account of
alleged liability by any of the Debtors for reimbursement or contribution of any
portion of any damages such Entity has paid or may pay to the plaintiff in such
action.
1.3 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and as
codified in title 11 of the United States Code, as applicable to the Chapter 11
Cases.
1.4 Bankruptcy Court: The United States District Court for the Southern
District of Ohio, Western Division, having jurisdiction over the Chapter 11
Cases and, to the extent of any reference made pursuant to section 157 of title
28 of the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.5 Business Day: Any day on which commercial banks are required to be
open for business in Cincinnati, Ohio.
1.6 Claim: (a) A "claim," as defined in section 101(5) of the Bankruptcy
Code, against any of the Debtors or Debtors in Possession, whether or not
asserted, whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied limitation, any
4
rights under sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, any
claim of a derivative nature, any potential or unmatured contract claims, and
any other Contingent Claim, and (b) any Environmental Claim or Product Liability
Tort Claim, whether or not it constitutes a "claim," as defined in section
101(5) of the Bankruptcy Code.
1.7 Confirmation Order: The order or orders of the Bankruptcy Court
confirming the Plan in accordance with the provisions of chapter 11 of the
Bankruptcy Code, which will contain, inter alia, the Asbestos and Lead PI
Permanent Channeling Injunction and the Claims Trading Injunction.
1.8 Debtors in Possession: The Debtors, each in its respective capacity as
a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.
1.9 Effective Date: The first Business Day after the date on which all of
the conditions precedent to the effectiveness of the Plan specified in section
7.10 of the Plan have been satisfied or waived or, if a stay of the Confirmation
Order is in effect on such date, the first Business Day after the expiration,
dissolution, or lifting of such stay.
1.10 Entity: An individual, corporation, partnership, association, joint
stock company, joint venture, estate, trust, unincorporated organization, or
government or any political subdivision thereof, or other person or entity.
1.11 Petition Date: January 7, 1991.
1.12 Reorganized Debtors: The Debtors, or any successors in interest
thereto, from and after the Effective Date.
1.13 Reorganized Eagle-Picher: Eagle-Picher, or any successor in interest
thereto, from and after the Effective Date.
All capitalized terms used herein and not defined in this Article 1 or in
another provision of this Trust Agreement shall have the meanings assigned to
them in the Plan and/or the Bankruptcy Code, which definitions are incorporated
5
by reference herein.
ARTICLE 2
AGREEMENT OF TRUST
------------------
2.1 CREATION AND NAME. The Settlors hereby create a trust known as the
"Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust," which
is the Asbestos PD Trust provided for and referred to in the Plan. The Trustees
of the Asbestos PD Trust may transact the business and affairs of the Asbestos
PD Trust in the name, "Eagle-Picher Industries, Inc. Asbestos Property Damage
Settlement Trust."
2.2 PURPOSE. The purpose of the Asbestos PD Trust is to assume any and all
liabilities of the Debtors, their successors in interest, or their affiliates,
with respect to any and all Asbestos Property Damage Claims and to use the
Asbestos PD Trust's assets and income to pay holders of valid Asbestos Property
Damage Claims in such a way that holders of similar Asbestos Property Damage
Claims are paid in substantially the same manner. This purpose shall be
fulfilled through the provisions of this Trust Agreement and either the Asbestos
Property Damage Claims Resolution Procedures annexed as Exhibit 1.1.6.5 to the
Plan (if Class 16 votes to reject the Plan) or such other claims resolution
procedures as may be adopted by the Trustees (if and only if Class 16 votes to
accept the Plan) (the "ASBESTOS PD CLAIMS PROCEDURES").
2.3 TRANSFER OF ASSETS. The Settlors hereby transfer and assign to the
Asbestos PD Trust the property set forth in Article 11 of the Plan (the
"ASSETS").
2.4 ACCEPTANCE OF ASSETS AND ASSUMPTION OF LIABILITIES.
(a) In furtherance of the purposes of the Asbestos PD Trust, the Trustees,
on behalf of the Asbestos PD Trust, hereby expressly accept the transfer and
assignment to the Asbestos PD Trust of the Assets.
(b) In furtherance of the purposes of the Asbestos PD Trust, and
6
subject to section 5.4 hereof, the Trustees, on behalf of the Asbestos PD Trust,
expressly assume all liability for all Asbestos Property Damage Claims as
provided for in Article 11 of the Plan. Except as otherwise provided in the
Asbestos PD Claims Procedures, the Asbestos PD Trust shall have all defenses,
cross-claims, offsets, and recoupments regarding Asbestos Property Damage Claims
that Eagle-Picher has or would have had under applicable law.
(c) Neither the Debtors nor their successors in interest or their
affiliates shall be entitled to any indemnification from the Asbestos PD Trust
for any expenses, costs, and fees (including attorneys' fees), judgments,
settlements, or other liabilities arising from or incurred in connection with,
any action related to an Asbestos Property Damage Claim, including, but not
limited to, indemnification or contribution for Asbestos Property Damage Claims
prosecuted against Reorganized Eagle-Picher. Nothing in this section or any
other section of this Trust Agreement shall be construed in any way to limit the
scope, enforceability, or effectiveness of the discharge and injunction arising
in favor of the Reorganized Debtors upon the Effective Date or the Asbestos PD
Trust's assumption of all liability with respect to Asbestos Property Damage
Claims.
ARTICLE 3
POWERS AND TRUST ADMINISTRATION
-------------------------------
3.1 POWERS.
(a) Subject to the limitations set forth in this Trust Agreement, the
Trustees shall have the power to take any and all actions that, in the judgment
of the Trustees, are necessary or proper to fulfill the purposes of the Asbestos
PD Trust, including, without limitation, each power expressly granted in this
section 3.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Ohio.
(b) Except as otherwise specified herein, the Trustees need not obtain the
order or approval of any court in the exercise of any power or discretion
conferred hereunder.
7
(c) Without limiting the generality of Article 3.1(a) above, the Trustees
shall have the power to:
(i) receive and hold the Assets, exercise all rights with respect
to, and sell any debentures issued by Reorganized Eagle-Picher that are
included in the Assets, subject to any restrictions set forth in the
articles of incorporation of Reorganized Eagle-Picher;
(ii) invest the monies held from time to time by the Asbestos PD
Trust;
(iii) sell, transfer or exchange any or all of the Assets at such
prices and upon such terms as they may consider proper, consistent with
the other terms of this Trust Agreement;
(iv) pay liabilities and expenses of the Asbestos PD Trust;
(v) change the state of domicile of the Asbestos PD Trust;
(vi) establish such funds, reserves and accounts within the Asbestos
PD Trust estate, as deemed by the Trustees to be useful in carrying out
the purposes of the Asbestos PD Trust;
(vii) sue and be sued and participate, as a party or otherwise, in
any judicial, administrative, arbitrative or other proceeding;
(viii) amend the Bylaws, a copy of which is annexed hereto as Annex
A (the "BYLAWS");
(ix) appoint such officers and hire such employees and engage such
legal, financial, accounting, investment and other advisers, alternative
dispute resolution panelists, and agents as the business of the Asbestos
PD Trust requires, and to delegate to such persons such powers and
authorities as the fiduciary duties of the Trustees permit and as the
Trustees, in their discretion, deem advisable or necessary in order to
carry out the terms of this Asbestos PD Trust;
8
(x) pay employees, legal, financial, accounting, investment and
other advisers and agents reasonable compensation, including, without
limitation, compensation at rates approved by the Trustees for services
rendered prior to the execution hereof;
(xi) reimburse the Trustees, subject to section 5.5 hereof, and
reimburse such officers, employees, legal, financial, accounting,
investment and other advisers and agents all reasonable out-of-pocket
costs and expenses incurred by such persons in connection with the
performance of their duties hereunder, including, without limitation,
costs and expenses incurred prior to the execution hereof;
(xii) execute and deliver such deeds, leases and other instruments
as the Trustees consider proper in administering the Asbestos PD Trust;
(xiii) enter into such other arrangements with third parties as are
deemed by the Trustees to be useful in carrying out the purposes of the
Asbestos PD Trust, provided such arrangements do not conflict with any
other provision of this Trust Agreement;
(xiv) in accordance with section 5.6 hereof, indemnify (and purchase
insurance indemnifying) the Trustees and officers, employees, agents,
advisers and representatives of the Asbestos PD Trust to the fullest
extent that a corporation or trust organized under the law of the Asbestos
PD Trust's domicile is from time to time entitled to indemnify and/or
insure its directors, trustees, officers, employees, agents, advisers and
representatives;
(xv) delegate any or all of the authority herein conferred with
respect to the investment of all or any portion of the Assets to any one
or more reputable individuals or recognized institutional investment
advisers or investment managers without liability for any action taken or
omission made because of any such delegation, except as provided in
section 5.4 hereof;
(xvi) consult with Reorganized Eagle-Picher at such times and with
respect to such issues relating to the conduct of the Asbestos PD Trust as
the Trustees consider desirable;
9
(xvii) make, pursue (by litigation or otherwise), collect,
compromise or settle any claim, right, action or cause of action included
in the Assets; and
(xviii) merge or contract with other claims resolution facilities
that are not specifically created by this Trust Agreement or the Asbestos
PD Claims Procedures; provided that such merger or contract shall not (a)
subject the Reorganized Debtors or any successor in interest to any risk
of having any Asbestos Property Damage Claim asserted against it or them;
or (b) otherwise jeopardize the validity or enforceability of the
discharge and injunction arising in favor of the Reorganized Debtors on
the Effective Date.
(d) The Trustees shall not have the power to guaranty any debt of other
persons.
3.2 GENERAL ADMINISTRATION.
(a) The Trustees shall act in accordance with the Bylaws. To the extent
not inconsistent with the terms of this Trust Agreement, the Bylaws govern the
affairs of the Asbestos PD Trust.
(b) The Trustees shall timely file such income tax and other returns and
statements and comply with all withholding obligations, as required under the
applicable provisions of the Internal Revenue Code and of any state law and the
regulations promulgated thereunder.
(c)(i) The Trustees shall cause to be prepared and filed with the
Bankruptcy Court, as soon as available, and in any event within ninety
(90) days following the end of each fiscal year, an annual report
containing financial statements of the Asbestos PD Trust (including,
without limitation, a balance sheet of the Asbestos PD Trust as of the end
of such fiscal year and a statement of operations for such fiscal year)
audited by a firm of independent certified public accountants selected by
the Trustees and accompanied by an opinion of such firm as to the fairness
of the financial statements' presentation of the cash and investments
available for the payment of claims and as to the conformity of the
financial statements with generally accepted accounting principles. The
Trustees shall provide a copy of such report to Reorganized Eagle-Picher.
(ii) Simultaneously with delivery of each set of financial
statements referred to in Article 3.2(c)(i) above, the Trustees shall
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cause to be prepared and filed with the Bankruptcy Court a report
containing a summary regarding the number and type of claims disposed of
during the period covered by the financial statements.
(iii) All materials required to be filed with the Bankruptcy Court
by this Article 3.2 shall be available for inspection by the public in
accordance with procedures established by the Bankruptcy Court.
3.3 CLAIMS ADMINISTRATION.
(a) General Principles. The Trustees shall proceed quickly to implement
(and, if Class 16 votes to accept the Plan, develop) the Asbestos PD Claims
Procedures. The Asbestos PD Trust shall pay holders of valid Asbestos Property
Damage Claims in accordance with procedures developed by the Trustees that are
consistent with the Asbestos PD Claims Procedures and the terms of this Trust
Agreement.
(b) Payment of Asbestos Property Damage Claims. The Trustees shall employ
mechanisms such as the review of estimates of the numbers and values of Asbestos
Property Damage Claims, or other comparable mechanisms, that provide reasonable
assurance the Asbestos PD Trust will value, and be in a financial position to
pay, similar Asbestos Property Damage Claims in substantially the same manner.
(c) Bankruptcy Court Claims Bar Date Orders. The Trustees shall enforce
the Bankruptcy Court's claims' bar date orders that are applicable to Asbestos
Property Damage Claims.
ARTICLE 4
ACCOUNTS, INVESTMENTS, AND PAYMENTS
-----------------------------------
4.1 ACCOUNTS. The Trustees may, from time to time, create such accounts
and reserves within the Asbestos PD Trust estate as they may deem necessary,
prudent or useful in order to provide for the payment of expenses and valid
Asbestos Property Damage Claims and may, with respect to any such account or
reserve,
11
restrict the use of monies therein.
4.2 INVESTMENTS. Investment of monies held in the Asbestos PD Trust shall
be administered in the manner in which individuals of ordinary prudence,
discretion and judgment would act in the management of their own affairs,
subject to the following limitations and provisions:
(a) The Asbestos PD Trust may acquire and hold any debentures issued by
Reorganized Eagle-Picher and included in the Assets without regard to any of the
limitations set forth in the other parts of this Article 4.
(b) Except with respect to entities owned and controlled by the Asbestos
PD Trust for purposes of carrying out provisions of this Trust Agreement, the
Asbestos PD Trust shall not acquire or hold any equity in any Entity or business
enterprise unless such equity is in the form of securities that are traded on a
national securities exchange or major international securities exchange or over
the National Association of Securities Dealers Automated Quotation System.
(c) The Asbestos PD Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
4.3 SOURCE OF PAYMENTS. All Asbestos PD Trust expenses, payments and all
liabilities with respect to Asbestos Property Damage Claims shall be payable
solely out of the Asbestos PD Trust estate. Neither Eagle-Picher, Reorganized
Eagle-Picher, any Debtors, their subsidiaries, any successor in interest or the
present or former directors, officers, employees or agents of Eagle-Picher,
Reorganized Eagle-Picher, any Debtors or their subsidiaries, nor the Trustees,
or any of their officers, agents, advisers or employees shall be liable for the
payment of any Asbestos PD Trust expense or Asbestos Property Damage Claim or
any other liability of the Asbestos PD Trust.
ARTICLE 5
TRUSTEES
--------
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5.1 NUMBER. There initially shall be between one (1) and four (4)
Trustees, the number being determined (a) by Reorganized Eagle-Picher if Class
16 votes to reject the Plan or (b) pursuant to the Plan if Class 16 votes to
accept the Plan.
5.2 TERM OF SERVICE.
(a) Each of the initial Trustees shall serve until the earlier of (i) his
or her death, (ii) his, her, or its resignation pursuant to section 5.2(b)
hereof, (iii) his or her removal pursuant to section 5.2(c) hereof, or (iv) the
termination of the Asbestos PD Trust pursuant to section 6.2 hereof, at which
time the term shall terminate automatically.
(b) Any Trustee may resign at any time by written notice to each of the
remaining Trustees. Such notice shall specify a date when such resignation shall
take effect, which shall not be less than ninety (90) days after the date such
notice is given, where practicable.
(c) Any Trustee may be removed in the event that such Trustee becomes
unable to discharge his or her duties hereunder due to accident or physical or
mental deterioration, or for other good cause. Good cause shall be deemed to
include, without limitation, a consistent pattern of neglect and failure to
perform or participate in performing the duties of the Trustees hereunder, or
repeated nonattendance at scheduled meetings. Such removal shall require the
unanimous decision of the other Trustees. Such removal shall take effect at such
time as the other Trustees shall determine.
5.3 APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) In the event of a vacancy in the position of a Trustee, the vacancy
shall be filled by majority vote of the remaining Trustees who shall refrain
from making any appointment that may result in the appearance of impropriety.
(b) Immediately upon the appointment of any successor Trustee, all rights,
titles, duties, powers and authority of the predecessor Trustee hereunder shall
be vested in, and undertaken by, the successor Trustee without any further act.
No successor Trustee shall be liable personally for any act or
13
omission of his or her predecessor Trustee.
5.4 LIABILITY OF TRUSTEES. No Trustee, officer, or employee of the
Asbestos PD Trust shall be liable to the Asbestos PD Trust, to any person
holding an Asbestos Property Damage Claim, or to any other Entity except for
such Trustee's, officer's or employee's own breach of trust committed in bad
faith or for willful misappropriation. No Trustee, officer, or employee of the
Asbestos PD Trust shall be liable for any act or omission of any other officer,
agent, or employee of the Asbestos PD Trust, unless the Trustee acted with bad
faith or willful misconduct in the selection or retention of such officer,
agent, or employee.
5.5 COMPENSATION AND EXPENSES OF TRUSTEES.
(a) Each of the Trustees, other than Reorganized Eagle-Picher if
Reorganized Eagle-Picher serves as a Trustee, shall receive compensation from
the Asbestos PD Trust for his or her services as Trustee in the amount of
$35,000 per annum, plus a per diem allowance for meetings attended in the amount
of $1,000, or some other amount as determined by the Trustees, payable as
determined by the Trustees. The Trustees shall determine the scope and duration
of activities that constitute a meeting and may provide for partial payment of
per diem amounts for activities of less than a full day's duration. The per
annum compensation payable to the Trustees hereunder shall be increased annually
by the Trustees proportionately with any increase in the Consumer Price Index --
All Cities (or any successor index) for the corresponding annual period. Any
increase in excess of that amount may be made only with the approval of the
Bankruptcy Court.
(b) The Asbestos PD Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
5.6 INDEMNIFICATION OF TRUSTEES AND OTHERS.
(a) The Asbestos PD Trust shall indemnify and defend the Trustees and the
Asbestos PD Trust's officers, agents, advisers, or employees, to the fullest
extent that a corporation or trust organized under the laws of the Asbestos PD
Trust's domicile is from time to time entitled to indemnify and defend its
directors, trustees, officers, employees, agents or
14
advisers against any and all liabilities, expenses, claims, damages or losses
incurred by them in the performance of their duties hereunder. Notwithstanding
the foregoing, the Trustees shall not be indemnified or defended in any way for
any liability, expense, claim, damage or loss for which they are liable under
section 5.4 hereof.
(b) Reasonable expenses, costs and fees (including attorneys' fees)
incurred by or on behalf of a Trustee in connection with any action, suit, or
proceeding, whether civil, administrative or arbitrative, from which they are
indemnified by the Asbestos PD Trust pursuant to this section 5.6, may be paid
by the Asbestos PD Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such Trustee to repay such amount
unless it shall be determined ultimately that such Trustee is entitled to be
indemnified by the Asbestos PD Trust.
(c) The Trustees shall have the power, generally or in specific cases, to
cause the Asbestos PD Trust to indemnify the employees and agents of the
Asbestos PD Trust to the same extent as provided in this section 5.6 with
respect to the Trustees.
(d) Any indemnification under section 5.6(c) of this Trust Agreement shall
be made by the Asbestos PD Trust upon a determination that indemnification of
such Entity is proper in the circumstances. Such determination shall be made by
a majority vote of the Trustees who were not parties to such action, suit, or
proceeding, if at least two such Trustees were not parties; otherwise the
determination will be made by legal counsel to the Asbestos PD Trust.
(e) The Trustees may purchase and maintain reasonable amounts and types of
insurance on behalf of an individual who is or was a Trustee, officer, employee,
agent or representative of the Asbestos PD Trust against liability asserted
against or incurred by such individual in that capacity or arising from his or
her status as a Trustee, officer, employee, agent or representative.
5.7 TRUSTEES' LIEN. The Trustees shall have a prior lien upon the Asbestos
PD Trust corpus to secure the payment of any amounts payable to them pursuant to
sections 5.5 and 5.6.
5.8 TRUSTEES' EMPLOYMENT OF EXPERTS. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is affiliated with any of the
Trustees in any manner, except as otherwise expressly provided in this Trust
Agreement), and the opinion of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
15
respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the written opinion of any such party.
5.9 TRUSTEES' SERVICE AS OFFICERS OR CONSULTANTS TO THE ASBESTOS PD TRUST.
The Trustees may, but are not required to, select any Trustee to serve as an
officer or manager of the Asbestos PD Trust or as a consultant to the Asbestos
PD Trust. In the event any Trustee serves the Asbestos PD Trust in such a
capacity, the Asbestos PD Trust shall compensate the Trustee in an amount
determined by the Trustees. Compensation for a Trustee's service as an officer
or manager of the Asbestos PD Trust or as a consultant to the Asbestos PD Trust
shall be in addition to compensation paid pursuant to section 5.5 hereof.
5.10 TRUSTEES' SERVICE AS DIRECTORS OF REORGANIZED EAGLE-PICHER. The
Trustees are not prohibited from serving as directors of Reorganized
Eagle-Picher. If any Trustee serves as a director of Reorganized Eagle-Picher,
he or she shall not receive for such service compensation over and above the
compensation received as Trustee under section 5.5 hereof, but he may receive
from Reorganized Eagle-Picher a per diem allowance in the amount that
Reorganized Eagle-Picher pays its directors for their attendance at meetings.
5.11 BOND. The Trustees shall not be required to post any bond or other
form of surety or security unless otherwise ordered by the Bankruptcy Court.
ARTICLE 6
GENERAL PROVISIONS
------------------
6.1 IRREVOCABILITY. The Asbestos PD Trust is irrevocable, but is subject
to amendment as provided in section 6.3 hereof.
6.2 TERMINATION.
(a) The Asbestos PD Trust shall automatically terminate on the date (the
"TERMINATION DATE") ninety (90) days after the first occurrence of any of
16
the following events:
(i) the Trustees in their sole discretion decide to terminate the
Asbestos PD Trust because all Asbestos Property Damage Claims duly filed
with the Asbestos PD Trust have been liquidated and satisfied;
(ii) if the Trustees have procured and have in place irrevocable
insurance policies and have established claims handling agreements and
other necessary arrangements with suitable third parties adequate to
discharge all expected remaining obligations and expenses of the Asbestos
PD Trust in a manner consistent with this Trust Agreement and the Asbestos
PD Claims Procedures, the date on which the Bankruptcy Court enters an
order approving such insurance and other arrangements and such order
becomes final;
(iii) if in the judgment of two-thirds of the Trustees, the
continued administration of the Asbestos PD Trust is uneconomic or
inimical to the best interests of the persons holding Asbestos Property
Damage Claims, and the termination of the Asbestos PD Trust will not
expose or subject Reorganized Eagle-Picher or any other Reorganized Debtor
or any successor in interest to any increased or undue risk of having any
Asbestos Property Damage Claims asserted against it or them or in any way
jeopardize the validity or enforceability of the discharge and injunction
arising in favor of the Reorganized Debtors upon the Effective Date; or
(iv) 21 years less 91 days pass after the death of the last survivor
of all the descendants of Joseph P. Kennedy, Sr. of Massachusetts living
on the date hereof.
(b) On the Termination Date, after payment of all the Asbestos PD Trust's
liabilities have been provided for, all monies remaining in the Asbestos PD
Trust estate shall be transferred to charitable organization(s) exempt from
federal income tax under Section 501(c)(3) of the Internal Revenue Code, which
tax-exempt organization(s) shall be selected by the Trustees using their
reasonable discretion; provided, however, that the tax-exempt organization(s)
shall not bear any relationship to Reorganized Eagle-Picher within the meaning
of Section 468(d)(3) of the Internal Revenue Code.
17
6.3 AMENDMENTS. The Trustees may modify or amend this Trust Agreement or
any document annexed to it, including, without limitation, the Bylaws, except
that Articles 2.2 (Purpose), 2.4 (Acceptance of Assets and Assumption of
Liabilities), 3.1(d) (precluding guaranty of others' debt), 3.3(a)-(c) (claims
administration), 5.2 (Term of Service), 5.3 (Appointment of Successor Trustees),
5.5 (Compensation and Expenses of Trustees), 5.6 (Indemnification of Trustees
and Others), 6.1 (Irrevocability), 6.2 (Termination) and 6.3 (Amendments)
herein, and, if Class 16 votes to reject the Plan, the Asbestos PD Claims
Resolution Procedures shall not be modified or amended in any respect. No
consent from the Settlors shall be required to make the modifications or
amendments permitted by the foregoing sentence. Any modification or amendment
made pursuant to this section must be done in writing.
6.4 MEETINGS. For purposes of section 5.5 of this Trust Agreement, a
Trustee shall be deemed to have attended a meeting in the event such person
spends a substantial portion of the day conferring, by phone or in person, on
Asbestos PD Trust matters with Trustees. The Trustees shall have complete
discretion to determine whether a meeting, as described herein, occurred for
purposes of section 5.5 hereof.
6.5 SEVERABILITY. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
6.6 NOTICES. Notices to persons asserting claims shall be given at the
address of such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim form submitted
to the Asbestos PD Trust with respect to his, her, or its Asbestos Property
Damage Claim. Any notices or other communications required or permitted
hereunder shall be in writing and delivered at the addresses designated below,
or sent by telecopy pursuant to the instructions listed below, or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows, or to such other address or addresses as may hereafter be
furnished by any of Reorganized Eagle-Picher, or the Trustees to the others in
compliance with the terms hereof.
18
To the Asbestos PD Trust
or the Trustees:
---------------------------------------
---------------------------------------
---------------------------------------
To Reorganized
Eagle-Picher: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
Suite 1300, 580 Building
580 Walnut Street
Cincinnati, Ohio 45202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
19
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
All such notices and communications shall be effective when delivered at
the designated addresses or when the telecopy communication is received at the
designated addresses and confirmed by the recipient by return telecopy in
conformity with the provisions hereof.
6.7 COUNTERPARTS. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
6.8 SUCCESSORS AND ASSIGNS. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Settlors, the Asbestos PD Trust,
and the Trustees and their respective successors and assigns, except that
neither the Settlors nor the Asbestos PD Trust nor any Trustee may assign or
otherwise transfer any of its, or his or her rights or obligations under this
Trust Agreement except, in the case of the Asbestos PD Trust and the Trustees,
as contemplated by section 3.1.
6.9 LIMITATION ON CLAIM INTERESTS FOR SECURITIES LAWS PURPOSES. Asbestos
Property Damage Claims, and any interests therein, (a) shall not be assigned,
conveyed, hypothecated, pledged or otherwise transferred, voluntarily or
involuntarily, directly or indirectly, except by will or under the laws of
descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be
entitled to receive any dividends or interest.
6.10 ENTIRE AGREEMENT; NO WAIVER. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein and
in the documents referred to herein, and this Trust Agreement and such documents
supersede any prior oral or written agreements concerning the subject matter
hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
20
law or in equity.
6.11 HEADINGS. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor in
any manner affect the construction of the provisions of this Trust Agreement.
6.12 GOVERNING LAW. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
6.13 SETTLORS' REPRESENTATIVE. Reorganized Eagle-Picher is hereby
irrevocably designated as the representative of the Settlors, and it is hereby
authorized to take any action required of the Settlors in connection with the
Trust Agreement.
6.14 DISPUTE RESOLUTION. Any disputes that arise under this Trust
Agreement or under the annexes hereto shall be resolved by the Bankruptcy Court
pursuant to Article 9 of the Plan, except as otherwise provided herein or in the
annexes hereto. Notwithstanding anything else herein contained, to the extent
any provision of this Trust Agreement is inconsistent with any provision of the
Plan, the Plan shall control.
6.15 ENFORCEMENT AND ADMINISTRATION. The parties hereby acknowledge the
Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce
the terms of this Trust Agreement and the annexes hereto, pursuant to Article 9
of the Plan.
6.16 EFFECTIVENESS. This Trust Agreement shall not become effective until
it has been executed and delivered by all the parties hereto and until the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Trust Agreement this
____ day of __________________, 1996.
SETTLORS:
EAGLE-PICHER INDUSTRIES, INC.
21
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
DAISY PARTS, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRANSICOIL INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORP.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EDI, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EAGLE-PICHER MINERALS, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
22
HILLSDALE TOOL & MANUFACTURING CO.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRUSTEES:
ANNEX A
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST BYLAWS
------------------------------------------------
ARTICLE I
OFFICES
-------
SECTION 1. PRINCIPAL OFFICE. The initial principal office of the
Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust (the
"Asbestos PD Trust") shall be in ____________________ or at such other place as
the Trustees shall from time to time select.
SECTION 2. OTHER OFFICES. The Asbestos PD Trust may have such other
offices at such other places as the Trustees may from time to time determine to
be necessary for the efficient and cost-effective administration of the Asbestos
PD Trust.
ARTICLE II
TRUSTEES
--------
23
SECTION 1. CONTROL OF PROPERTY, BUSINESS AND AFFAIRS. The property,
business and affairs of the Asbestos PD Trust shall be managed by or under the
direction of the Trustees.
SECTION 2. NUMBER, RESIGNATION AND REMOVAL. The number of Trustees and the
provisions governing the resignation and removal of a Trustee and the
appointment of a successor Trustee shall be governed by the provisions of
Article 5 of the Trust Agreement.
SECTION 3. QUORUM AND MANNER OF ACTING. The presence of a majority of the
Trustees shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Trustee[s] present may adjourn the meeting from time to
time until a quorum shall be present. The vote, at a meeting at which a quorum
is present, of the majority of the Trustees present shall be an act of the
Trustees.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Trustees may be held
at such time and place as shall from time to time be determined by the Trustees.
SECTION 5. SPECIAL MEETING NOTICE. Special meetings of the Trustees shall
be held whenever called by one or more of the Trustees. Notice of each such
meeting shall be delivered by overnight courier to each Trustee, addressed to
him, her, or it at his, her, or its residence or usual place of business, at
least three (3) days before the date on which the meeting is to be held, or
shall be sent to him, her, or it at such place by personal delivery or by
telephone or telecopy not later than two (2) days before the day of which such
meeting is to be held. Such notice shall state the place, date and hour of the
meeting and the purposes for which it is called. In lieu of the notice to be
given as set forth above, a waiver thereof in writing, signed by the Trustee or
Trustees entitled to receive such notice, whether before or after the meeting,
shall be deemed equivalent thereto for purposes of this Section 5. No notice to
or waiver by any Trustee with respect to any special meeting shall be required
if such Trustee shall be present at said meeting.
24
SECTION 6. ACTION WITHOUT A MEETING; MEETING BY CONFERENCE CALL. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if all Trustees consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Trustees.
The Trustees also may take any action required or permitted to be taken at any
meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
ARTICLE III
OFFICERS
--------
SECTION 1. PRINCIPAL OFFICERS. The principal officer of the Asbestos PD
Trust shall be an Executive Director. The Asbestos PD Trust may also have such
other principal officers, including one or more Assistant Directors, a
Secretary-Treasurer and a Controller, as the Trustees may in their discretion
appoint after determining that such appointment will promote the efficient and
cost-effective administration of the Asbestos PD Trust.
SECTION 2. ELECTION AND TERM OF OFFICE. The principal officer(s) of the
Asbestos PD Trust shall be chosen by the Trustees. Each such officer shall hold
office until his successor shall have been duly chosen and qualified or until
his earlier death, resignation or removal.
SECTION 3. SUBORDINATE OFFICERS. In addition to the principal officers
enumerated in Section 1 of this Article III, the Asbestos PD Trust may have such
other subordinate officers, agents and employees as the Trustees may deem
necessary for the efficient and cost-effective administration of the Asbestos PD
Trust, each of whom shall hold office for such period, have such authority, and
perform such duties as the Trustees may from time to time determine. The
Trustees may delegate to any principal officer the power to appoint and to
remove any such subordinate officers, agents, or employees.
SECTION 4. REMOVAL. The Executive Director or any other officer may be
removed with or without cause, at any time, by resolution adopted by the
Trustees at any regular meeting of the Trustees or at any special meeting of the
Trustees called for that purpose at which a quorum is present.
25
SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Trustees. The resignation of any officer shall take effect
upon receipt of notice thereof or at such later time as shall be specified in
such notice and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 6. POWERS AND DUTIES. The officers of the Asbestos PD Trust shall
have such powers and perform such duties as may be conferred upon or assigned to
them by the Trustees.
ARTICLE IV
AMENDMENTS
----------
The Bylaws of the Asbestos PD Trust, other than Article II and this
Article IV, may be amended by the Trustees at any meeting of the Trustees,
provided that notice of the proposed amendment is contained in the notice of
such meeting.
26
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.38"
FORM OF CONNECTICUT MUTUAL NOTE
[THIS PAGE LEFT BLANK INTENTIONALLY]
[CONNECTICUT MUTUAL NOTE SECURED CLAIM]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
HILLSDALE TOOL & MANUFACTURING CO., a Michigan corporation ("Hillsdale"),
and EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company")
(Hillsdale and the Company are sometimes referred to herein individually as an
"Obligor" and collectively as the "Obligors"), for value received, hereby
promise jointly and severally to pay to MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, or registered assigns (the "Payee"), on or before June 1, 2001 (the
"Maturity Date"), as hereinafter provided, the principal sum of
[____________________________________ (____________)] and to pay interest on the
unpaid principal amount thereof from the date hereof to maturity at the rate of
10% per annum computed as if each year consisted of 360 days and each month
consisted of 30 days. Such principal and interest shall be payable without
presentation of this Note, by bank wire transfer of Federal or other immediately
available funds (identifying each payment as Hillsdale Tool & Manufacturing Co.
and Eagle-Picher Industries, Inc. 10% Secured Installment Note due 2001,
principal or interest) to the Payee pursuant to instructions provided by the
Payee to the Company from time to time, in ___________ consecutive payments of
principal and interest, in the respective amounts of and payable on the dates
indicated in the schedule annexed hereto as Schedule A (collectively, the
"Installment Payments"). The first of the Installment
Payments will be made on [the first Business Day of the second month following
the date of the issuance of the Note]. Whenever any Installment Payment is not
made when due and such default shall continue for more than ten (10) days, the
Obligors shall pay interest on such amount at a rate equal to the lesser of (a)
12% per annum or (b) the maximum rate allowed by law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
this Note:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
law to close.
"Collateral" shall have the meaning set forth in Section 3 hereof.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"NOTES" shall have the meaning set forth in Section 18 hereof.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
SECTION 2. PRINCIPAL PAYMENTS. (a) SCHEDULED PAYMENT. On the Maturity
Date, the Obligors shall pay to the Payee, in cash or other immediately
available funds, the entire unpaid principal amount of this Note plus all
accrued and unpaid interest thereon.
(b) MANDATORY PREPAYMENT. In the event of condemnation or of destruction
by fire or other casualty of substantially all of the Collateral, the Note shall
be prepaid in full (but not in part) at a price equal to 100% of the then
outstanding principal amount of the Note, together with all interest then
accrued and unpaid thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. The Obligors may, at any time and from time to
time, without premium or penalty, prepay (in multiples of $1,000)
2
all or a portion of the unpaid principal amount of this Note or all or a portion
of accrued and unpaid interest, together with unpaid accrued interest on the
amount so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. The Obligors shall give written notice of
prepayment of this Note or any portion hereof not less than 10 but not more than
30 days prior to the date chosen for prepayment, which notice shall specify the
amount thereof to be prepaid and the date fixed for prepayment.
SECTION 3. Security. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Obligors relating to any of the
foregoing; and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
The Obligors herewith confirm the grant of a security interest in the
Collateral to the Payee.
SECTION 4. AFFIRMATIVE COVENANTS. For as long as any principal or interest
remains unpaid under this Note:
(a) Financial Statements. The Company shall deliver to the Payee:
(i) a balance sheet and income statement of the Company within 45 days
after the close of each fiscal quarter other than the last fiscal quarter for
the fiscal year and (ii) a balance sheet and income statement of the Company
within 90 days after the close of each fiscal year. All such financial
statements will be prepared in accordance with generally accepted accounting
principles consistently applied. All statements will be in the same form as
those provided to creditors and shareholders of the Company generally. The
Company will also furnish to the Payee promptly copies of any Forms 10-Q, 10-K
and 8-K that are filed with the Securities and Exchange Commission as well as
copies of any other special mailings to shareholders.
3
(b) Reporting Requirements. The Company or Hillsdale, as the case may be,
shall furnish to the Payee:
(i) as soon as possible and in any event within 10 days after
becoming aware of the occurrence of any event of default as defined in
Section 10 hereof or any event that with notice or passage of time or both
would, if unremedied, constitute an event of default, a written statement
of the chief executive officer or chief financial officer of the Company
or Hillsdale, as the case may be, setting forth details of such event of
default or event, stating whether or not the same is continuing and, if
so, the action that the Company or Hillsdale, as the case may be, proposes
to take with respect thereto;
(ii) immediately after receiving knowledge thereof, notice in
writing of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that directly affect or affects
Hillsdale based on financial exposure to Hillsdale of $10 million or that
directly affect or affects the Company based on financial exposure to the
Company of $25 million or more or that directly affect or affects the
Collateral or that seek or seeks injunctive relief that will materially
adversely affect the operations of either of the Obligors or the
Collateral;
(iii) as soon as possible and in any event within 5 days after the
Obligors become aware of the occurrence of a material adverse change in
the business, properties or the operations and condition (financial or
otherwise) of either of the Obligors, a statement by the chief executive
officer or chief financial officer of the Company or Hillsdale, as the
case may be, setting forth details of such material adverse change and the
action that the Company or Hillsdale, as the case may be, proposes to take
with respect thereto, except as otherwise disclosed in public
announcements of the Obligors issued in the ordinary course of business;
and
(iv) such other information respecting the business, properties,
condition and operations (financial or otherwise) of the Obligors as the
Payee may from time to time reasonably request be
4
furnished to the Payee.
(c) FURTHER ASSURANCES.
(i) The Obligors agree that from time to time, at their expense,
they will promptly execute and deliver all further instruments and
documents, and take all further action that may be reasonably necessary or
desirable, or that the Payee may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted
hereby and the priority thereof or to enable the Payee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Obligors will
execute and file such financing or continuation statements or amendments
thereto and such other instruments or notices as may be necessary or
desirable or as the Payee may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby.
(ii) The Obligors hereby authorize the Payee to file one or more
financing or continuation statements and amendments thereto relative to
all or any part of the Collateral without the signature of the Obligors
where permitted by law. A carbon, photographic or other reproduction of
this Note or any part thereof shall be sufficient as a financing statement
where permitted by law.
(iii) The Obligors will furnish to the Payee from time to time
statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Payee may
reasonably request, all in reasonable detail.
(d) INSURANCE.
The Obligors shall, at their own expense, maintain liability and property
insurance with respect to their respective businesses and property, including
the Collateral, with responsible and reputable insurance companies or
associations satisfactory to the Payee in such amounts and covering such risks
as are acceptable to or specified by the Payee, taking into account, among other
factors, such amounts and risks as are usually carried by persons engaged in
similar
5
businesses and owning similar properties in the same general areas in which the
Obligors operate. Each policy for liability insurance and property damage
insurance shall provide for payment to or on behalf of the Obligors and the
Payee as their interests may appear. Each policy of property damage insurance
shall in addition (i) name the Payee as an insured party thereunder (without any
representation or warranty by or obligation upon the Payee), (ii) contain an
agreement by the insurer that any loss thereunder shall be payable to, or on
behalf of the Obligors or the Payee as their interests may appear, (iii) provide
that there shall be no recourse against the Payee for payment of premiums or
other amounts with respect thereto, and (iv) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the Payee by
the insurer. The Obligors shall deliver to the Payee certificates evidencing the
insurance maintained pursuant hereto.
(e) CERTAIN COVENANTS AS TO THE COLLATERAL. The Obligors shall:
(i) Keep the Collateral at the places identified therefor on
Schedule B hereto or, upon 15 days' prior written notice to the Payee, at
such other places as shall be identified in such notice (such notice to
identify the record owner of the new location) and which are in
jurisdictions where all actions required by subparagraph (c) above shall
have been taken with respect to such Collateral.
(ii) Cause the Collateral to be maintained and preserved in the same
condition, repair, and working order as when new, ordinary wear and tear
excepted, and, in the case of any loss or damage to the Collateral, as
quickly as practicable after the occurrence thereof make or cause to be
made all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end, provided, however,
that in the event of condemnation or of the destruction by fire or other
casualty of substantially all the Collateral, have the option to repay the
Note in full (but not in part) as provided in Section 2(b) hereof.
(iii) Pay promptly when due all property and other taxes,
assessments, and governmental charges or levies imposed upon it, and all
claims (including claims for labor, materials and supplies) against the
Collateral.
(iv) After the occurrence and during the continuance of an Event of
Default (as defined in Section 10 hereof) receive in trust for the benefit
of the Payee hereunder all amounts and proceeds
6
received or collected by the Obligors in respect of the Collateral,
segregate such amounts and proceeds from other funds of Debtor, and
forthwith pay such amounts and proceeds over to the Payee in the same form
as so received (with any necessary endorsement) to be held as cash
collateral and applied as provided in Section 10(c) hereof.
SECTION 5. Substitution of Collateral; Liens. During the term of the Note:
(a) The Obligors may substitute other collateral for the Collateral
identified in Schedule B hereto, provided, however, that the value of the
Collateral, including any substituted Collateral, shall at the time of such
substitution be equal to or greater than the value of the Collateral identified
in Schedule B hereto, such value to be determined by an independent appraisal
provided at the Obligors' expense and satisfactory to the Payee.
(b) The Obligors shall not create or suffer to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Collateral.
SECTION 6. Appointed Attorney-in-Fact. The Obligors hereby irrevocably
appoint Payee as their attorney-in-fact, with full authority in the place and
stead of the Obligors and in the name of the Obligors, the Payee, or otherwise,
to from time to time take any action which may be reasonably necessary to
protect the Payee's interest under this Note, including, without limitation:
(a) to sign in the name and on behalf of the Obligors any financing
statements or other papers required under Section 4(c) hereof;
(b) to obtain and adjust insurance required to be paid to the Payee
pursuant to Section 4(d) hereof;
(c) to ask, demand, collect, sue for, recover, compound, receive, and give
acquittance and receipts for moneys due and to become due in respect of any of
the Collateral;
(d) to receive, endorse, and collect any drafts or other
7
instruments in connection with subsection (b) or (c) above; and
(e) to file any claims or take any action or institute any proceedings
which the Payee may deem necessary or desirable to enforce the rights of the
Payee with respect to any of the Collateral.
The Obligors hereby ratify and approve all acts of the Payee as such
attorney-in-fact. The Payee shall not, in its capacity as such attorney-in-fact,
be liable for any acts or omissions, nor for any error of judgment or mistake of
fact or law, but only for gross negligence or willful misconduct.
This power, being coupled with an interest, is irrevocable until the Note shall
have been fully satisfied. Any amounts received or collected by the Payee in its
capacity as such attorney-in-fact shall be held as cash collateral and applied
as provided in Section 10(c) hereof.
SECTION 7. THE PAYEE MAY PERFORM. If the Obligors fail to perform any
agreement contained herein, the Payee may itself perform, or cause performance
of, such agreement, and the expenses of the Payee incurred in connection
therewith shall be payable by the Obligors under Section 17(b) hereof.
SECTION 8. THE PAYEE'S DUTIES. The powers conferred on the Payee hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Payee shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral.
SECTION 9. INSPECTION RIGHTS. The Payee, upon 24 hours' notice and during
normal business hours, shall have access to inspect, audit, and make extracts
from all of the Obligors' records, files, and books of account relating to the
Collateral, and the Obligors shall deliver any document or instrument necessary
for the Payee to obtain records from any service bureau maintaining records for
the Obligors. The Payee may also, at all reasonable times, examine and inspect
the Collateral. The Obligors shall, at the Payee's request, take all steps
necessary to facilitate such inspection.
SECTION 10. EVENTS OF DEFAULT. (a) Each of the following shall be an Event
of Default:
8
(i) If default shall be made in the payment of any installment of
principal and interest due from the Obligors under the Note when and as
the same shall become due and payable, whether at maturity or by
acceleration or prepayment or otherwise, and such default shall continue
for more than ten (10) days;
(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after written notice thereof shall have been
given by the Payee to the Company and Hillsdale, as the case may be;
(iii) If an event of default shall occur and continue with respect
to any borrowing in excess of $5,000,000 by the Company or Hillsdale,
exclusive of any alleged event of default that is being contested in good
faith by the Company or Hillsdale;
(iv) If at any time prior to payment in full of the Note there are
unsatisfied judgments against the Company and Hillsdale which aggregate in
excess of $5,000,000, exclusive of judgments as to which the Company or
Hillsdale has filed or is preparing to file and is actively prosecuting
timely appeals;
(v) If any representation or warranty of the Company or Hillsdale
made in this Note or in any writing delivered pursuant hereto shall prove
to be incorrect in any material respect as of the time when the same shall
have been made;
(vi) If either the Company or Hillsdale shall make an assignment for
the benefit of its creditors or file a petition in bankruptcy or for
reorganization or for an arrangement or any composition, readjustment,
liquidation, dissolution or similar relief pursuant to the Bankruptcy Code
or under any similar present or future federal or state law or shall be
adjudicated a bankrupt;
(vii) If a petition or answer shall be filed proposing the
adjudication of the Company or Hillsdale as a bankrupt or the
reorganization or arrangement of either of them or any composition,
readjustment, liquidation, dissolution or similar relief
9
with respect to either of them pursuant to the Bankruptcy Code or any
similar present or future federal or state law, and the Company or
Hillsdale, as the case may be, shall consent to the filing thereof, or
such petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof; or
(viii) If a receiver, trustee or liquidator (or other similar
official) of the Company or Hillsdale or of all or substantially all of
the assets of the Company or Hillsdale or any portion thereof shall be
appointed and shall not be discharged within sixty (60) days thereafter,
or if the Company or Hillsdale, as the case may be, shall consent to or
acquiesce in such appointment.
(b) Upon the occurrence and during the continuance of any Event of Default
described in Section 10(a) hereof other than in clause (vi), (vii) or (viii)
thereof, the holders of a majority of the outstanding principal amount of the
Notes may, by written notice to the Obligors, declare all or any portion of the
unpaid principal amount of the Notes and all interest accrued thereon to be
immediately due and payable. Upon the occurrence and during the continuance of
any Event of Default described in clauses (vi), (vii) or (viii) of Section 10(a)
hereof, the unpaid principal amount of the Notes and all interest accrued
thereon shall automatically become due and payable, without any action or notice
by the Payee. Demand, presentment, protest and notice of non-payment are hereby
waived by the Obligors. All payments made following an Event of Default shall be
applied first to payment of all accrued and unpaid interest and then to
principal.
(c) In addition, upon the occurrence and during the continuance of an
Event of Default described in Section 10(a), the Payee may exercise in respect
of the Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a Secured Party on
default under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also may (i) require the Obligors to, and the Obligors hereby
agree that they will at their expense and upon request of the Payee forthwith,
assemble the Collateral as directed by the Payee and make it available to the
Payee at a place or places to be designated by the Payee, which is or are
reasonably convenient to the Payee and the Obligors and (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of
10
the Payee's offices or elsewhere, for cash, on credit or for future delivery and
upon such other terms as the Payee may deem commercially reasonable. The
Obligors agree that, to the extent notice of sale shall be required by law, at
least five days' notice to the Obligors of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Payee shall not be obligated to make any sale of
the Collateral regardless of notice of sale having been given. The Payee may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
All cash proceeds received by the Payee in respect of any sale of,
collection from or other realization upon all or any part of the Collateral may,
in the discretion of the Payee, be held by the Payee (without interest) as
collateral for and/or then or at any time thereafter applied in whole or in part
by the Payee against payment of the Note. Any surplus of such cash or cash
proceeds held by the Payee and remaining after payment in full of the Note shall
be paid over to the Obligors or to whosoever may be lawfully entitled to receive
such surplus.
SECTION 11. Continuing Security Interest; etc. This Note shall create a
continuing security interest in the Collateral. The execution and delivery of
this Note shall in no manner impair or affect any other security (by endorsement
or otherwise) for the payment or performance of the Note and no security taken
hereafter as security for payment or performance of the Note shall impair in any
manner or affect this Note or the security interest granted hereby, all such
present and future additional security to be considered as one general,
continuing security interest. Any of the Collateral may be released from this
Note without altering, varying, or diminishing in any way this Note or the
security interest granted hereby as to the Collateral not expressly released,
and this Note and such security interest shall continue in full force and effect
as to all of the Collateral not expressly released.
SECTION 12. Entire Agreement; No Oral Change. This Note embodies the
entire agreement and understanding between the Payee and the Obligors relating
to the subject matter hereof, and supersedes all prior agreements and
understandings relating thereto. None of the provisions hereof may be waived,
altered or amended, except by a written instrument signed by the holders of a
majority of the outstanding principal amount of the Notes and by the Obligors.
In the case of any waiver, the Obligors and the holders of a
11
majority of the outstanding principal amount of the Notes shall be restored to
their former respective positions and rights hereunder and any Event of Default
waived shall be deemed to be cured and not continuing, but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon except to the extent expressly provided in such waiver.
SECTION 13. Remedies Cumulative. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 14. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Obligors, and if to the Obligors, at the address of the Company,
Attention: Treasurer, at P.O. Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Obligors to the Payee. Any
notice given in conformity with the foregoing shall be deemed given when
personally delivered or upon the date of delivery specified in the registered
mail receipt.
SECTION 15. Governing Law. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Indiana.
SECTION 16. Consent To Jurisdiction. The parties hereto irrevocably agree
that any legal action or proceeding with respect to this Note shall be brought
in the courts of the State of Indiana in the County of Steuben or in the courts
of the United States of America sitting in Indiana. By the execution and
delivery of this Note, the parties hereto irrevocably submit to the jurisdiction
of such courts. The Obligors hereby waive to the fullest extent permitted by law
any objection they may now or hereafter have to the laying of venue in any such
action or proceeding in any such court as well as any right they may now or
12
hereafter have to remove any such action or proceeding, once commenced, to
another court on the grounds of forum non conveniens or otherwise or to remove
an action brought in a state court to a court of the United States of America.
The Obligors hereby irrevocably agree that service of process in any such action
or proceeding may be made either by mailing or delivering a copy of the summons
and complaint in any such action or proceeding to the Obligors at the address
provided herein by certified mail, return receipt requested. Service of process
in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Obligors and shall be legal and binding upon the
Obligors for all purposes notwithstanding any failure on the part of the
Obligors to receive copies of such process mailed directly to the Obligors in
accordance with the provisions of this Section.
SECTION 17. INDEMNITY AND EXPENSES. (a) The Obligors agree to indemnify
the Payee from and against any and all claims, losses, and liabilities growing
out of or resulting from and after the date hereof from this Note (including,
without limitation, enforcement of this Note), except claims, losses or
liabilities resulting from the Payee's gross negligence or willful misconduct.
(b) The Obligors will upon demand pay to the Payee the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Payee may incur from and after
the date hereof in connection with (i) the administration of this Note, (ii) the
custody, preservation, use, or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Payee, or (iv) the failure by the Obligors to
perform or observe any of the provisions hereof.
SECTION 18. Successors and Assigns; Transferability. This Note shall be
binding upon and inure to the benefit of the Payee and the Obligors and their
respective transferees, successors and assigns; PROVIDED, HOWEVER, that the
Obligors may not transfer or assign any of their rights or obligations hereunder
without the prior written consent of the Payee. Within five (5) Business Days
after receipt of notice of any assignment by the Payee to any person or entity
(an "Assignee") of all or any part of this Note, the Obligors shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of this Note
assigned to it, and if the Payee has retained any amount owing to it hereunder,
a new Note to the order of the Payee in an amount equal to the amount retained
by it hereunder, which new Note shall be dated the same date as the surrendered
Note and be in substantially the form of this Note, and such Assignee will be
deemed the Payee
13
under the Note issued to it. References herein to "Notes" shall include all
outstanding Notes issued in substitution for or upon any assignment of this
Note.
SECTION 19. No Set-Off. The obligations of the Obligors under this Note
are absolute and not subject to any right of set-off, counterclaim, recoupment
or defenses against the Payee of any kind whatsoever.
SECTION 20. Miscellaneous. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Obligors have duly executed this Note this ____
day of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
-------------------------------
HILLSDALE TOOL & MANUFACTURING CO.
By:
-------------------------------
SCHEDULE A
Installment Payment Schedule
14
SCHEDULE B
Collateral
15
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.56"
FORM OF DIVESTITURE NOTES
[THIS PAGE LEFT BLANK INTENTIONALLY]
EAGLE-PICHER INDUSTRIES, INC.
AND
[ ] TRUSTEE
--------------------
INDENTURE
DATED AS OF
--------------------
$50,000,000
[____]% SENIOR UNSECURED DIVESTITURE NOTES DUE __________, _____
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
----------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06
314(a) 4.02; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 10.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
N.A. means not applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Article Section Heading Page
- ------- ------- ------- ----
1 DEFINITIONS AND INCORPORATION BY REFERENCE .................. 1
1.01. Definitions ................................................. 1
1.02. Other Definitions ........................................... 4
1.03. Rules of Construction ....................................... 4
2 THE SECURITIES .............................................. 4
2.01. Form and Dating ............................................. 4
2.02. Execution and Authentication ................................ 4
2.03. Registrar, Transfer Agent and Paying Agent .................. 5
2.04. Paying Agent to Hold Money in Trust ......................... 5
2.05. Securityholder Lists ........................................ 5
2.06. Transfer and Exchange ....................................... 6
2.07. Replacement Securities ...................................... 6
2.08. Outstanding Securities ...................................... 6
2.09. Treasury Securities ......................................... 7
2.10. Temporary Securities ........................................ 7
2.11. Cancellation ................................................ 7
2.12. Defaulted Interest .......................................... 7
3 REDEMPTION .................................................. 7
3.01. Notices to Trustee .......................................... 7
3.02. Selection of Securities to be Redeemed ...................... 8
3.03. Notice of Redemption ........................................ 8
3.04. Effect of Notice of Redemption .............................. 8
3.05. Deposit of Redemption Price ................................. 8
3.06. Securities Redeemed in Part ................................. 9
3.07. Mandatory Redemption ........................................ 9
3.08. Investment of Asset Account ................................. 9
4 COVENANTS ................................................... 9
4.01. Payment of Securities ....................................... 9
4.02. SEC Reports ................................................. 9
4.03. Compliance Certificate ..................................... 10
4.04. Asset Sale Account .......................................... 10
5 SUCCESSORS .................................................. 10
5.01. When Company May Merge, etc. ................................ 10
6 DEFAULTS AND REMEDIES ....................................... 10
6.01. Events of Default ........................................... 10
6.02. Acceleration ................................................ 11
6.03. Other Remedies .............................................. 12
6.04. Waiver of Past Defaults ..................................... 12
6.05. Control by Majority ......................................... 12
6.06. Limitation on Suits ......................................... 12
6.07. Rights of Holders to Receive Payment ........................ 13
6.08. Collection Suit by Trustee .................................. 13
6.09. Trustee May File Proofs of Claim ............................ 13
i
6.10. Priorities .................................................. 13
6.11. Undertaking for Costs ....................................... 13
7 TRUSTEE ..................................................... 14
7.01. Duties of Trustee ........................................... 14
7.02. Rights of Trustee ........................................... 15
7.03. Individual Rights of Trustee ................................ 15
7.04. Trustee's Disclaimer ........................................ 15
7.05. Notice of Defaults .......................................... 15
7.06. Reports by Trustee to Holders ............................... 16
7.07. Compensation and Indemnity .................................. 16
7.08. Replacement of Trustee ...................................... 16
7.09. Successor Trustee by Merger, etc ............................ 17
7.10. Eligibility; Disqualification ............................... 18
7.11. Preferential Collection of Claims
Against Company ............................................. 18
8 DISCHARGE OF INDENTURE ...................................... 18
8.01. Termination of Company's Obligations ........................ 18
8.02. Application of Trust Money .................................. 19
8.03. Repayment to Company ........................................ 19
9 AMENDMENTS .................................................. 19
9.01. Without Consent of Holders .................................. 19
9.02. With Consent of Holders ..................................... 19
9.03. Compliance with Trust Indenture Act ......................... 20
9.04. Revocation and Effect of Consents ........................... 20
9.05. Notation on or Exchange of Securities ....................... 20
9.06. Trustee Protected ........................................... 20
10 MISCELLANEOUS ............................................... 21
10.01. Trust Indenture Act Controls ................................ 21
10.02. Notices ..................................................... 21
10.03. Communication by Holders and Other Holders .................. 21
10.04. Certificate and Opinion as to Conditions Precedent .......... 22
10.05. Statements Required in Certificate or Opinion. .............. 22
10.06. Rules by Company and Agents ................................. 22
10.07. Legal Holidays .............................................. 22
10.08. No Recourse Against Others .................................. 22
10.09. Duplicate Originals ......................................... 22
10.10. Variable Provisions ......................................... 23
10.11. Governing Law ............................................... 23
INDENTURE, dated as of [ ], between EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation ("Company"), and [ ], a
ii
_____________ corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's [____]% Senior
Unsecured Divestiture Notes Due [three years from the Effective Date]
("Securities").
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying Agent.
"Asset Sale" means any sale or other disposition, or series of related
sales or other dispositions, made after the Effective Date by the Company or any
Subsidiary to any Person of any divisions, subsidiaries, plants, or product
lines or other operating assets in excess of $1,000,000 of the Debtors.
"Asset Sale Account" means that trust account (account no.
_______________) maintained with, and under the sole dominion and control of,
the Trustee.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease" means, at the time any determination thereof is made, any
lease of property, real or personal, in respect of which the present value of
the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a Capital Lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, partnership interests.
"Company" means the party named as such above until a successor replaces
it, and thereafter means the successor.
"Debtors" means the Debtors as defined in the Plan.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Effective Date" means [the Effective Date under the Plan].
1
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect on the Issue Date.
"Holder" or "Securityholder" means a person in whose name a Security is
registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit or similar
instruments (or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property (including
Capital Lease Obligations), except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing Indebtedness
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise included,
all Indebtedness of others secured by a Lien on any asset of such Person,
whether or not the Indebtedness is assumed by such Person.
"Indenture" means this Indenture as amended from time to time.
"Issue Date" means the date of first issuance of the Securities hereunder.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any Subsidiary in respect of any Asset Sale, including, without limitation,
the aggregate cash proceeds from the sale of the real estate of the Company's
Orthane Division, net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any expenses related to the relocation of assets on
personnel incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that are the subject of such Asset Sale
and any other Indebtedness (other than the Securities) required to be repaid in
connection with such transaction and any reserve for adjustment in respect of
the sale price or representations, warranties and indemnities, if any, made in
connection with the sale, of such asset or assets. Net Proceeds shall exclude
any non-cash proceeds received from any Asset Sale until converted by the
Company or any Subsidiary to cash.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the President, the Treasurer or a Vice-President of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
2
Company or the Trustee.
"Person" means any individual, corporation, partnership, joint venture,
entity, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Plan" means the Third Amended Consolidated Plan of Reorganization in the
Chapter 11 cases of the Company and certain of its affiliates dated August 28,
1996.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"Subsidiary" means any corporation, association 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 the Company or one or more of the other
Subsidiaries of the Company or a combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date shown above.
"Trustee" means the party named as such above until a successor replaces
it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 10.07
"Officer" 10.10
"Paying Agent" 2.03
"Quoted Price 10.10
"Registrar" 2.03
"Transfer Agent" 2.03
"U.S. Government Obligations" 8.01
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
3
(4) All terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definition; and
(5) words in the singular include the plural, and in the
plural include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities shall be substantially in
the form of Exhibit A, which is part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of Exhibit A upon a written
order of the Company signed by two Officers. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount except as provided
in Section 2.07 below.
SECTION 2.03. REGISTRAR, TRANSFER AGENT AND PAYING AGENT. The Company
shall maintain an office or agency where Securities may be authenticated
("Registrar"), where Securities may be presented for registration of transfer or
for exchange ("Transfer Agent") and where Securities may be presented for
payment ("Paying Agent"). The Transfer Agent shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint more than
one Registrars, Transfer Agents and Paying Agents. The Company shall notify the
Trustee of the name and address of any Agent not a party to this Indenture. If
the Company fails to maintain a Registrar, Transfer Agent or Paying Agent, the
Trustee shall act as such.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it
4
to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent shall have no further liability for the money. The Company shall not serve
as Paying Agent.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Transfer Agent, the Company shall furnish to the Trustee semiannually and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the
Transfer Agent with a request to register the transfer or to exchange them for
an equal principal amount of Securities of other denominations, the Transfer
Agent shall register the transfer or make the exchange if its requirements for
such transactions are met. The Transfer Agent may require a Holder to pay a sum
sufficient to cover any taxes imposed on a transfer or exchange. To permit
registrations of transfer and exchanges, the Trustee shall authenticate
Securities at the Transfer Agent's request. The Company may charge a reasonable
fee for any registration of transfer or exchange but not for any exchange
pursuant to Section 2.10, 3.06 and 9.05 hereof.
SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, then, in the
absence of notice to the Company or the Trustee that the Security has been
acquired by a bona fide purchaser, the Company shall issue a replacement
Security if the Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 above, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 hereof, they cease to
be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
5
SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities
to the Registrar for cancellation. The Transfer Agent and Paying Agent shall
forward to the Registrar any Securities surrendered to them for registration of
transfer, exchange or payment. The Registrar shall cancel all Securities
surrendered for registration of transfer, exchange, payment or cancellation and
shall dispose of cancelled Securities as the Company directs. The Company may
not issue new Securities to replace Securities that it has paid or delivered to
the Registrar for cancellation.
SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
defaulted interest, to the persons who are Securityholders on a subsequent
special record date. The Trustee shall fix the record date and payment date. At
least 15 days before the record date, the Trustee shall mail to Securityholders
a notice that states the record date, payment date and amount of interest to be
paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company wants to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed. If the Company is required to redeem Securities pursuant to Section
3.07 below and paragraph 6 of the Securities, it shall notify the Trustee of the
principal amount of Securities to be redeemed. The Company's notice shall
specify the paragraph of the Securities pursuant to which it wants to redeem
Securities.
The Company shall give each notice provided for in this Section at least
75 days before the redemption date unless a shorter notice is satisfactory to
the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed in the inverse order of aggregate principal amount of each
6
Security outstanding. In the event that some but not all Securities of equal
principal amount are to redeemed, such redemption shall be pro rata of all such
Securities of equal principal amount outstanding. The Trustee shall make the
selection not more than 75 days before the redemption date from Securities
outstanding not previously called for redemption. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a redemption date, the Trustee shall mail a notice of redemption by
first-class mail to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Securities called for redemption become due and payable on the redemption
date at the redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption
date, the Company shall deposit with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Securities to be redeemed on
that date. The Paying Agent shall return to the Company any money not required
for that purpose.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall deliver the Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. MANDATORY REDEMPTION. If at any time the cumulative amount
on deposit in the Asset Sale Account and not to be used for the redemption of
the Securities pursuant to this Section 3.07 as specified in a notice previously
filed with the Trustee by the Company pursuant to Section 3.01 above, equals or
exceeds $10 million, the Company shall redeem the maximum principal amount of
Securities that, together with accrued and unpaid interest thereon, may be
redeemed out of such Net Proceeds at an redemption price equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid interest, if any,
to the date fixed for such redemption. Notice of such redemption will be
governed by Section 3.07 hereof.
7
SECTION 3.08. INVESTMENT OF ASSET ACCOUNT. Pending application thereof to
the redemption of the Securities, amounts in the Asset Sales Account shall be
invested in U.S. government obligations. At such time as there are no Securities
outstanding, the Trustee shall pay over to the Company any remaining balances in
the Asset Sale Account.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the principal
of and interest on the Securities on the dates and in the manner provided in the
Securities. Principal and interest shall be considered paid on the date due if
the Paying Agent holds on that date money sufficient to pay all principal and
interest then due. The Company shall pay a default rate of interest on overdue
principal at the rate borne by the Securities plus 3%; it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee within
15 days after it files them with the SEC copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"). The Company shall provide
to each Holder within 15 days after it files them with the SEC copies of the
annual reports and quarterly reports that the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating whether or not the signers know of any Default
that occurred during the fiscal year. If they do, the certificate shall describe
the Default and its status. The certificate need not comply with Section 10.05
hereof.
SECTION 4.04. ASSET SALE ACCOUNT. The Company shall deposit all Net
Proceeds in the Asset Sale Account within five (5) days after receipt of same.
In addition, the Company shall transfer to the Asset Sale Account any cash
proceeds held in Star Bank Account #19-0170A (if such account does not become
the Asset Sale Account) as of the Issue Date.
ARTICLE 5
SUCCESSORS
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate or merge into, or transfer or lease all or substantially all of its
assets to, any person unless:
(1) the person is a corporation;
(2) the person assumes by supplemental indenture all the obligations
of the Company under the Securities and this Indenture;
8
and
(3) immediately after the transaction no Default exists.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture and the Securities and shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company fails to make a deposit for the payment of interest
on any Security when the same becomes due and payable and the Default
continues for a period of five (5) business days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon
redemption, acceleration or otherwise, or the Company defaults in payment
of the Net Proceeds required by Section 4.04 hereof;
(3) the Company fails to comply with any of its other agreements in
the Securities or this Indenture and the Default continues for 30 days
after notice either from the Trustee or the Holders of at least 25% in
principal amount of the Securities, which notice must specify the Default,
demand that it be remedied, and state that the notice is a "Notice of
Default," and which notice, if sent by the Holders, shall also be served
on the Trustee;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days.
9
The term "Bankruptcy Law" means title 11, U.S. Code, or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 6.02. ACCELERATION. If an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the Securities by notice to the Company and the Trustee,
may declare the principal of and accrued interest on all the Securities to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences, except a Default in the payment of the
principal of or interest on any Security or a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal
amount of the Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or is unduly prejudicial to the rights
of other Securityholders.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may pursue a remedy
with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) the Holders of at least 25% in principal amount of the
Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense; and
10
(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(1) or (2) above occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 below;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a
11
Holder pursuant to Section 6.07 above, or a suit by Holders of more than 10% in
principal amount of the Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith and in accordance with a direction
received by it pursuant to Section 6.05 above.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) Subject to paragraph (c) of this Section, the Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02. RIGHTS OF TRUSTEE.
12
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11 below.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement in the Securities other than its
authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to Securityholders a
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment on any Security, the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Any report required by TIA
Section 313(a) to be mailed to Securityholders shall be mailed by the Trustee on
or before May 31 of each year. The Trustee also shall comply with TIA Section
313(b)(2). A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim, and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel, and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
13
The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) above occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a) or Section 310(b)
or with Section 7.10 below;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(4) or (5) occurs with
respect to the Trustee.
The Company also may remove the Trustee with cause if the Company so
notifies the Trustee six months in advance and if no Default occurs during the
six-month period.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA Section 310(a) or Section 310(b)
or with Section 7.10, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the
14
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07 above.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always
have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall always have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published report of condition.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed is
subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. The Company may
terminate all of its obligations under this Indenture if:
(1) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations sufficient to pay principal and interest on
the Securities to maturity or redemption, as the case may be. The Company
may make the deposit only during the one-year period.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 7.07, 7.08 and 8.03 hereof shall survive until the Securities are no
longer outstanding. Thereafter, the Company's obligations in Sections 7.07 and
8.03 hereof shall survive.
After a deposit the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the Company's option.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
15
SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to Section 8.01
above. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal and interest on the Securities.
SECTION 8.03. REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or securities held by
them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Securityholders entitled
to the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01 above;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the rights of
any Securityholder.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities with the written consent of the Holders
of at least a majority in principal amount of the Securities. However, without
the consent of each Securityholder affected, an amendment under this Section may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or change the time for payment of interest on
any Security;
(3) reduce the principal of or change the fixed maturity of any
Security;
16
(4) make any Security payable in money other than that stated in the
Security; or
(5) make any change in Section 3.02, 3.07, 4.04, 6.04, 6.07 or 9.02
(second sentence) hereof; or
(6) create a privilege or priority of any Security over another
Security.
After an amendment under this Section becomes effective, the Trustee shall
mail to Securityholders a notice briefly describing the amendment.
Securityholders need not consent to the exact text of a proposed amendment
or waiver; it is sufficient if they consent to the substance thereof.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to this
Indenture or the Securities shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or
waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives the notice of revocation before
the date the amendment or waiver becomes effective. An amendment or waiver
becomes effective in accordance with its terms and thereafter binds every
Securityholder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place
an appropriate notation about an amendment or waiver on any Security thereafter
authenticated. The Company in exchange for all Securities may issue and the
Trustee shall authenticate new Securities that reflect the amendment or waiver.
SECTION 9.06. TRUSTEE PROTECTED. The Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS. The provisions of TIA Section
Sections 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control.
17
SECTION 10.02. NOTICES. Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person, sent
by facsimile transmission and confirmed by mail or mailed by first-class mail to
the other's address stated in Section 10.10 below. The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Transfer
Agent. Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice required to
be mailed or to publish a notice required to be published, the Company may give
such substitute notice as the Trustee approves. Failure to publish a notice as
required or any defect in it shall not affect the sufficiency of any mailed
notice.
All other notices or communications shall be in writing.
SECTION 10.03. COMMUNICATION BY HOLDERS AND OTHER HOLDERS. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar, the Transfer Agent and anyone else shall have the
protection of TIA Section 312(c)
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
18
(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 10.06. RULES BY COMPANY AND AGENTS. The Company may make
reasonable rules for action by or a meeting of Securityholders. Any Agent may
make reasonable rules and set reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in
Cincinnati, Ohio. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08. NO RECOURSE AGAINST OTHERS. All liability described in the
Securities of any director, officer, employee or stockholder, as such, of the
Company is waived and released.
SECTION 10.09. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 10.10. VARIABLE PROVISIONS.
"Officer" means President, any Vice-President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Trustee initially appoints [ ] as authenticating agent.
The Company initially appoints the Trustee as Paying Agent, Transfer Agent
and Registrar.
The first certificate pursuant to Section hereof 4.03 shall be for the
fiscal year ending on , 19 .
The Company's address is:
Eagle-Picher Industries, Inc., Attention: Treasurer
If by Hand or Overnight Delivery:
580 Building
580 Walnut Street
Suite 1300
Cincinnati, Ohio 45202
If by Mail:
Post Office Box 779
Cincinnati, Ohio 45201
The Trustee's address is:
[ ]
[ ]
[ ]
19
SECTION 10.11. GOVERNING LAW. The law of the State of New York shall
govern this Indenture and the Securities.
SIGNATURES
Dated: EAGLE-PICHER INDUSTRIES, INC.
By
Attest:
Secretary (SEAL)
Dated:
By
Trust Officer
Attest:
Assistant Secretary (SEAL)
EXHIBIT A
(Face of Security)
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
20
No. $
EAGLE-PICHER INDUSTRIES, INC.
promises to pay to ,
or registered assigns, the principal sum of
Dollars on
[____]% Senior Unsecured Divestiture Notes Due _____
Interest Payment Dates:
Record Dates:
Dated:
Authenticated:
[ ] EAGLE-PICHER INDUSTRIES, INC.
as Trustee
By By
Authorized Officer
(Back of Security)
EAGLE-PICHER INDUSTRIES, INC.
[____]% Senior Unsecured Divestiture Notes Due _____
1. Interest. Eagle-Picher Industries, Inc. (the "Company"), an Ohio
corporation, promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Company will pay interest semiannually on
and of each year, commencing at least six months after the
Effective Date or if any such day is not a Business Day on the next succeeding
Business Day (each an "Interest Payment Date") to Holders of record of the
Securities at the close of business on the immediately preceding [ ] and
[ ], whether or not a Business Day. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from . Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Paying Agent will pay interest on the Securities
(except defaulted interest) to the persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are cancelled after the record
21
date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Paying Agent
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However, the
Paying Agent may pay principal and interest by check payable in such money. It
may mail an interest check to a holder's registered address; provided however,
the Paying Agent shall make payments to a registered holder of Securities in the
aggregate principal amount greater than $500,000.00 by wire transfer if such
registered holder has on or before the record date for such payment provided the
Paying Agent with wire transfer instructions.
3. Transfer Agent, Paying Agent and Registrar. Initially, [ ] (the
"Trustee"), will act as Transfer Agent, Paying Agent and Registrar. The Company
may change any Agent without notice. The Company may act as Transfer Agent.
4. Indenture. The Company issued the Securities under an Indenture dated
as of [the Effective Date] (the "Indenture") between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Section Sections 77aaa-77bbbb) as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to
$50,000,000 in aggregate principal amount.
5. Optional Redemption. The Company may redeem all Securities at any time
or some of them from time to time upon not less than 30 nor more than 60 days'
notice, at par plus accrued and unpaid interest thereon to the applicable
redemption date.
6. Mandatory Redemption. If at any time the cumulative amount of Net
Proceeds on deposit in the Asset Sale Account and not to be used for the
redemption of Securities pursuant to Section 3.07 of the Indenture equals or
exceeds $10 million, the Company shall redeem the maximum principal amount of
Securities that, together with accrued and unpaid interest thereon, may be
redeemed out of such Net Proceeds at 100% of the outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the date fixed for such
redemption. Unless such Net Proceeds are sufficient to redeem all the
outstanding Securities, the aggregate principal amount of Securities to be
redeemed shall be selected by the Trustee in the inverse order of aggregate
principal amount of each Security outstanding. In the event that some but not
all Securities of equal principal amount are to redeemed, such redemption shall
be pro rata of all such Securities of equal principal amount outstanding.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each holder of
Securities to be redeemed at his registered address. On and after the redemption
date interest ceases to accrue on Securities or portions of them called for
redemption.
8. Transfer, Exchange. The transfer of Securities may be registered, and
Securities may be exchanged, as provided in the Indenture. The Transfer Agent
may require a holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Transfer Agent need not exchange or
22
register the transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
9. Persons Deemed Owners. The registered holder of a Security may be
treated as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Securities may be amended with the consent of the holders of at least 51%
in principal amount of the Securities, and any existing default may be waived
with the consent of the holders of a majority in principal amount of the
Securities. Without the consent of any Securityholder, the Indenture or the
Securities may be amended to cure any ambiguity, defect or inconsistency, to
provide for assumption of Company obligations to Securityholders or to make any
change that does not adversely affect the rights of any Securityholder.
11. Defaults and Remedies. An Event of Default is: default for 5 business
days in payment of interest on the Securities; default in payment of principal
on them or in the payment of Net Proceeds required by Section 4.04 of the
Indenture; failure by the Company for 30 days after notice to it to comply with
any of its other agreements in the Indenture or the Securities; and certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish an annual compliance certificate to
the Trustee.
12. Trustee Dealings with Company. [ ], the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
13. No Recourse Against Others. A director, officer, employee or a
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
14. Authentication. This Security shall not be valid until authenticated
by the manual signature of the Registrar or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
23
(= Uniform Gifts to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE, WHICH HAS IN IT THE TEXT OF THIS
SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO: SECRETARY, EAGLE-PICHER
INDUSTRIES, INC., POST OFFICE BOX 779, CINCINNATI, OHIO 45201.
24
ASSIGNMENT FORM
To assign this Security, fill in the form below:
I/we assign and transfer this Security to:
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
25
Date: ____________________________
Your Signature:
-------------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
================================================================================
26
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.82"
FORM OF INTER-MARKET NOTE
[THIS PAGE LEFT BLANK INTENTIONALLY]
[INTER-MARKET NOTE SECURED CLAIM]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company"), for
value received, hereby promises to pay to COMAC PARTNERS, L.P. AND COMAC
INTERNATIONAL N.V. or registered assigns (collectively, the "Payee"), on or
before June 1, 2001 (the "Maturity Date"), as hereinafter provided, the
principal sum of [___________________________________ (_____________)] and to
pay interest on the unpaid principal amount thereof from the date hereof to
maturity at the rate of 10% per annum computed as if each year consisted of 360
days and each month consisted of 30 days. Such principal and interest shall be
payable without presentation of this Note, by bank wire transfer of Federal or
other immediately available funds (identifying each payment as Eagle-Picher
Industries, Inc. 10% Secured Installment Note due 2001, principal or interest)
to the Payee pursuant to instructions provided by the Payee to the Company from
time to time in _________ (__) consecutive payments of principal and interest,
in the respective amounts of and payable on the dates indicated in the schedule
annexed hereto as Schedule A (collectively, the "Installment Payments"). The
first of the Installment Payments will be made on [the first Business Day of the
second month following the date of the issuance of the Note]. Whenever any
Installment Payment is not made when due and such default shall continue for
more than ten (10) days, the Company shall pay interest on such amount at a rate
equal to th e lesser of (a) 12% per annum or (b) the maximum rate allowed by
law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
this Note:
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
law to close.
"COLLATERAL" shall have the meaning set forth in Section 3 hereof.
"Company" shall have the meaning set forth in the opening paragraph of
this Note.
"CONSOLIDATED NET WORTH" of any corporation shall mean, at any date, the
sum of the capital stock (excluding treasury stock and capital stock subscribed
and unissued) and surplus (including retained earnings, additional paid-in
capital and the balance of the current profit and loss account not transferred
to surplus) of such corporation and its Subsidiaries, consolidated in accordance
with generally accepted accounting principles.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"NOTES" shall have the meaning set forth in Section 12 hereof.
"Officers' Certificate" shall mean a certificate signed on behalf of the
Company by its President or one of its Vice Presidents and its Treasurer or one
of its Assistant Treasurers.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
"PERSON" shall mean an individual or corporation, a partnership or joint
venture, a business, a trust, an unincorporated organization or a government or
any agency or political subdivision thereof.
"PREPAYMENT OFFER" shall have the meaning specified in Section 2.
"Subsidiary" of any corporation shall mean any Person a majority (by number of
votes) of the Voting Stock of which is owned by such corporation or by one or
more Subsidiaries or by such corporation and one or more Subsidiaries.
"Voting Stock", when used with reference to any corporation, shall mean
shares (however designated) of such corporation having ordinary voting power for
2
the election of a majority of the members of the board of directors (or other
governing body) of such corporation other than shares having such power only by
reason of the happening of a contingency.
SECTION 2. Principal Payments. (a) Scheduled Payment. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon.
(b) Mandatory Prepayment. In the event of condemnation or of destruction
by fire or other casualty of substantially all of the Collateral, the Note shall
be prepaid in full (but not in part) at a price equal to 100% of the then
outstanding principal amount of the Note, together with all interest then
accrued and unpaid thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. The Company may, at any time and from time to
time, without premium or penalty, prepay (in multiples of $1,000) all or a
portion of the unpaid principal amount of this Note or all or a portion of
accrued and unpaid interest, together with unpaid accrued interest on the amount
so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. The Company shall give written notice of prepayment
of this Note or any portion hereof not less than 10 but not more than 30 days
prior to the date chosen for prepayment, which notice shall specify the amount
thereof to be prepaid and the date fixed for prepayment.
(d) OFFER TO PREPAY IN THE EVENT OF CERTAIN TRANSACTIONS. In the event
that: (a) the Company shall take any action looking to any merger, consolidation
or other reorganization of the Company or any sale of all or substantially all
of its assets; or (b) any Person or any group of Persons acting together, other
than the Eagle-Picher Industries, Inc. Personal Injury Settlement Trust, shall
acquire twenty percent or more of the outstanding Voting Stock of the Company;
and the effect of such transaction described in the foregoing clause (a) or (b)
either in and of itself or together with any other transactions effected in
connection therewith or in response thereto, is or would be to reduce the
Consolidated Net Worth of the Company to an amount which is less than 66 2/3% of
the amount of the Consolidated Net Worth of the Company as of the end of the
3
fiscal year of the Company next preceding such transaction, as shown on the
financial statements for such fiscal year, the Company shall offer to prepay the
Note without premium (any such offer being hereinafter referred to as a
"Prepayment Offer"). Such Prepayment Offer shall be made in writing to the
holder of the Note not less than 30 nor more than 60 days prior to the date of
such proposed transaction. In the event that the holder of the Note has not
accepted such Prepayment Offer in writing within 20 days after such Prepayment
Offer is made, the holder of the Note shall be deemed to have declined such
Prepayment Offer. Each prepayment under this section shall be made concurrently
with the consummation of such proposed transaction.
SECTION 3. Security. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Company relating to any of the foregoing;
and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
The Company herewith confirms the grant of a security interest in the
Collateral to the Payee.
SECTION 4. Affirmative Covenants. For as long as any principal or interest
remains unpaid under this Note:
(a) FINANCIAL STATEMENTS. The Company shall deliver to the Payee promptly
after the same are available, copies of (i) all such notices, proxy statements,
financial statements, reports and documents as the Company shall send or make
available generally to its stockholders and (ii) all periodic and special
reports, documents and registration statements (other than on Form S-8) which
the Company may furnish to or file with the Securities and Exchange Commission
(or any governmental authority succeeding to any or all of its functions) or any
securities exchange;
(b) REPORTING REQUIREMENTS. The Company shall deliver to the Payee as
promptly as practicable (but in any event not later than 5 days) after any
officer of the Company obtains knowledge of the occurrence of any condition or
4
event which (i) in the operation or management of the Company would have a
material adverse effect on the business, condition (financial or otherwise),
operations, management or prospects of the Company and its Subsidiaries taken as
a whole (other than any condition or event described in this paragraph,
disclosure regarding which has been made in information previously provided to
the Payee pursuant to paragraph (a) above) or (ii) constitutes or, after notice
or lapse of time or both, would constitute an Event of Default, an Officers'
Certificate specifying the nature of such condition or event, the period of
existence thereof, what action the Company has taken and is taking and proposes
to take with respect thereto and the date, if any, on which it is estimated the
same will be remedied; and (c) such other information relating to the Company
and its Subsidiaries as shall be furnished to any other institutional lender or
as from time to time may reasonably be requested.
(c) Special Covenants of Company. The Company hereby covenants to the
Payee that:
(i) The Company will not change its principal place of business or
the location of the Collateral. The Company will not change its principal
place of business or the location of the Collateral from those shown on
Schedule B hereto, without at least thirty (30) days' prior written notice
to the Payee.
(ii) The Company will defend its ownership of the Collateral free
from any lien, security interest or encumbrance except for the security
interest hereunder against all claims and demands of all persons at any
time claiming the same or any interest therein.
(iii) The Company will not sell or otherwise dispose of the
Collateral or any interest therein nor will the Company create, incur or
permit to exist any mortgage, lien, charge, encumbrance or security
interest whatsoever with respect to the Collateral.
(iv) The Company will keep the Collateral in good order and repair
and adequately insured at all times against loss or damage of the kinds
customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated. Each
insurance policy pertaining to any of the Collateral shall: (a) name the
Payee as insured pursuant to a so-called "standard mortgagee clause"; (b)
provide that no action of the Company or any tenant or sub-tenant shall
void such policy as to the Payee; and (c) provide that the Payee shall be
notified of any
5
proposed cancellation of such policy at least 30 days in advance of such
proposed cancellation and will have sufficient time to correct any
deficiencies justifying such proposed cancellation. All such policies
shall be delivered to the Payee upon request. The Company will pay
promptly when due all taxes and assessments on the Collateral or for its
use or operation. The Payee may at its option discharge any taxes, liens,
security interests or other encumbrances to which any Collateral is at any
time subject, and may, upon the failure of the Company so to do, purchase
insurance on any Collateral and pay for the repair, maintenance or
preservation thereof, and the Company agrees to reimburse the Payee on
demand for any payments or expenses incurred by the Payee pursuant to the
foregoing authorization, and any unreimbursed amounts shall constitute
secured obligations for all purposes hereof.
(d) Further Assurances.
(i) The Company will promptly execute and deliver to the Payee such
financing statements, certificates and other documents or instruments as
may be necessary to enable the Payee to perfect or from time to time renew
the security interest granted hereby, including, without limitation, such
financing statements, certificates and other documents as may be necessary
to perfect a security interest in any additional Collateral hereafter
acquired by the Company or in any replacements or proceeds thereof. The
Company authorizes and appoints the Payee, in case of need, to execute
such financing statements, certificates and other documents in its stead,
with full power or substitution, as the Company's attorney in fact. The
Company further agrees that a carbon, photographic or other reproduction
of a security agreement or financing statement is sufficient as a
financing statement under this Agreement.
(ii) The Company will take all such reasonable action or actions as
may be necessary to prevent any of the Collateral from becoming fixtures.
Without limiting the generality of the foregoing, the Company will use its
best efforts to obtain waivers of lien, in form satisfactory to the Payee,
from each lessor of real property on which any of the Collateral is to be
located.
6
SECTION 5. EVENTS OF DEFAULT. (a) Each of the following shall be an Event
of Default:
(i) If default shall be made in the payment of any installment of
principal and interest due from the Company under the Note when and as the
same shall become due and payable, whether at maturity or by acceleration
or prepayment or otherwise, and such default shall continue for more than
five (5) days;
(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after the earlier to occur of (i) the Company's
obtaining actual knowledge of such default or (ii) the Company's receipt
of written notice of such default;
(iii) If the Company attempts to remove, sell, transfer, encumber,
sublet or part with possession of the Collateral or any part thereof, or
permits any other Person to take any such action, except as expressly
permitted herein;
(iv) If, unless specifically permitted by the terms hereof, the
Company ceases doing business as a going concern, makes an assignment for
the benefit of creditors, admits in writing its inability to pay its debts
as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for
itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar arrangement under any present or
future statute, law or regulation, or files an answer admitting the
material allegations of a petition filed against it in any such
proceeding, consents to, or acquiesces in the appointment of, a trustee,
receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or if it or its shareholders shall take any action
looking to its dissolution or liquidation; or
(v) If within sixty (60) days after the commencement of any
proceedings against the Company seeking reorganization, arrangement,
readjustment, liquidation,
7
dissolution or similar relief under any present or future statute, law or
regulation, such proceedings shall not have been dismissed, or if within
sixty (60) days after the appointment without the consent or acquiescence
of the Company of any trustee, receiver or liquidator of either of them or
of all or any substantial part of their respective assets and properties,
such appointment shall not be vacated.
(b) Upon the occurrence and during the continuance of any Event of Default
described in Section 5(a) hereof other than in clause (iv) or (v) thereof, the
holders of a majority of the outstanding principal amount of the Notes may, by
written notice to the Company, declare all or any portion of the unpaid
principal amount of the Notes and all interest accrued thereon to be immediately
due and payable. Upon the occurrence and during the continuance of any Event of
Default described in clauses (iv) or (v) of Section 5(a) hereof, the unpaid
principal amount of the Notes and all interest accrued thereon, shall
automatically become due and payable, without any action or notice by the Payee.
Demand, presentment, protest and notice of non-payment are hereby waived by the
Company. All payments made following an Event of Default shall be applied first
to payment of all accrued and unpaid interest and then to principal.
(c) In addition, upon the occurrence and during the continuance of an
Event of Default described in Section 5(a), the Payee may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a Secured Party on
default under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also shall have the right to take possession of the
Collateral and, in addition thereto, the right to enter upon any premises on
which the Collateral or any part thereof may be situated and remove the same
therefrom. The Payee may require the Company to make the Collateral (to the
extent the same is moveable) available to the Payee at a place to be designated
by the Payee which is reasonably convenient to both parties. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Payee will give the Company at
least ten (10) days' prior written notice at the address of the Company set
forth below (or at such other address or addresses as the Company shall specify
in writing to the Payee) of the time and place of any public sale thereof or of
the time after which any private sale or any other intended disposition thereof
is to be made. Any such notice shall be deemed to meet any requirement hereunder
or under any applicable law (including the Uniform Commercial Code) that
reasonable notification be given of the time and place of such sale or other
disposition. After deducting all costs and expenses of collection, storage,
custody, sale or other disposition and delivery (including legal costs and
attorneys' fees) and all other charges against the Collateral, the residue of
the proceeds of any such sale or disposition shall be applied to the payment of
the Note and, unless otherwise provided by law or by a court of competent
8
jurisdiction, any surplus shall be returned to the Company or to any person or
party lawfully entitled thereto (including, if applicable, any subordinated
creditors of the Company). In the event the proceeds of any sale, lease or other
disposition of the Collateral hereunder are insufficient to pay the Note in
full, the Company will be liable for the deficiency, together with interest
thereon at the maximum rate provided in the Note, and the cost and expenses of
collection of such deficiency, including (to the extent permitted by law),
without limitation, reasonable attorneys' fees, expenses and disbursements. The
Payee, may, at its option, take control of any and all proceeds to which it is
entitled under Section 9-306 of the Uniform Commercial Code, and the Company
agrees to cooperate fully in executing any commercially reasonable direction
made in the exercise of this right.
SECTION 6. ENTIRE AGREEMENT; NO ORAL CHANGE. This Note embodies the entire
agreement and understanding between the Payee and the Company relating to the
subject matter hereof, and supersedes all prior agreements and understandings
relating thereto. None of the provisions hereof may be waived, altered or
amended, except by a written instrument signed by the holders of a majority of
the outstanding principal amount of the Notes and by the Company. In the case of
any waiver, the Company and the holders of a majority of the outstanding
principal amount of the Notes shall be restored to their former respective
positions and rights hereunder and any Event of Default waived shall be deemed
to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon
except to the extent expressly provided in such waiver.
SECTION 7. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 8. Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
9
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, addressed to the Treasurer of the
Company at the Company's address at P.O. Box 779, Cincinnati, Ohio 45201 (if by
mail) or 580 Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally
delivered), or any other address notified in writing by the Company to the
Payee. Any notice given in conformity with the foregoing shall be deemed given
when personally delivered or upon the date of delivery specified in the
registered mail receipt.
SECTION 9. GOVERNING LAW. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Connecticut.
SECTION 10. CONSENT TO JURISDICTION. Any legal action or proceeding with
respect to this Note shall be brought in the courts of the State of Connecticut
or in the courts of the United States of America sitting in the State of
Connecticut. The Company hereby waives to the fullest extent permitted by law
any objection it may now or hereafter have to the laying of venue in any such
action or proceeding in any such court as well as any right it may now or
hereafter have to remove any such action or proceeding, once commenced, to
another court on the grounds of forum non conveniens or otherwise or to remove
an action brought in a state court to a court of the United States of America.
The Company hereby irrevocably agrees that service of process in any such action
or proceeding may be made either by mailing or delivering a copy of the summons
and complaint in any such action or proceeding to the Company at the address
provided herein by certified mail, return receipt requested. Service of process
in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Company and shall be legal and binding upon the
Company for all purposes notwithstanding any failure on the part of the Company
to receive copies of such process mailed directly to the Company in accordance
with the provisions of this Section.
SECTION 11. COSTS OF COLLECTION. If the Payee is required to commence suit
to recover any amount due under this Note following an Event of Default, the
Payee shall be entitled to collect from the Company reimbursement of such
reasonable attorneys' fees and expenses of counsel selected by the Payee.
SECTION 12. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. This Note shall be
binding upon and inure to the benefit of the Payee and the Company and their
respective transferees, successors and assigns; provided, however, that the
Company may not transfer or assign any of its rights or obligations hereunder
without the prior written consent of the Payee. Within five (5) Business Days
10
after receipt of notice of any assignment by the Payee to any person or entity
(an "Assignee") of all or any part of this Note, the Company shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of this Note
assigned to it, and if the Payee has retained any amount owing to it hereunder,
a new Note to the order of the Payee in an amount equal to the amount retained
by it hereunder, which new Note shall be dated the same date as the surrendered
Note and be in substantially the form of this Note, and such Assignee will be
deemed the Payee under the Note issued to it. References herein to "Notes" shall
include all outstanding Notes issued in substitution for or upon any assignment
of this Note.
SECTION 13. No Set-Off. The obligations of the Company under this Note are
absolute and not subject to any right of set-off, counterclaim, recoupment or
defenses against the Payee of any kind whatsoever.
SECTION 14. MISCELLANEOUS. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Company has duly executed this Note this ____ day
of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
------------------------------
SCHEDULE A
Installment Payment Schedule
11
SCHEDULE B
Collateral
12
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.94"
FORM OF NORTHWESTERN GROUP NOTE
[THIS PAGE LEFT BLANK INTENTIONALLY]
[NORTHWESTERN GROUP SECURED CLAIMS]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company"), for
value received, hereby promises to pay to COMAC PARTNERS L.P. and COMAC
INTERNATIONAL N.V., or registered assigns (collectively, the "Payee"), on or
before May 1, 2001 (the "Maturity Date"), as hereinafter provided, the principal
sum of [__________________________________ (_____________)] and to pay interest
on the unpaid principal amount thereof from the date hereof to maturity at the
rate of 10% per annum computed as if each year consisted of 360 days and each
month consisted of 30 days. Such principal and interest shall be payable without
presentation of this Note, by bank wire transfer of Federal or other immediately
available funds (identifying each payment as Eagle-Picher Industries, Inc. 10%
Secured Installment Note due 2001, principal or interest) to the Payee pursuant
to instructions provided by the Payee to the Company from time to time, in
___________________ (___) consecutive payments of principal and interest, in the
respective amounts of and payable on the dates indicated in the schedule annexed
hereto as Schedule A (collectively, the "Installment Payments"). The first of
the Installment Payments will be made on [the first Business Day of the second
month following issuance of the Note]. Whenever any Installment Payment is not
made when due and such default shall continue for more than ten (10) days, the
Company shall pay interest on such amount at a rate equal to the lesser of (a)
12% per annum or (b) the maximum rate allowed by law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
this Note:
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
law to close.
"COLLATERAL" shall have the meaning set forth in Section 3 hereof.
"Company" shall have the meaning set forth in the opening paragraph of
this Note.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
SECTION 2. PRINCIPAL PAYMENTS. (a) SCHEDULED PAYMENT. On the Maturity
Date, the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon.
(b) PREPAYMENT UPON CONDEMNATION OR DESTRUCTION. In the event of
condemnation or of destruction by fire or other casualty of the Collateral, the
Note may be prepaid in an amount equal to the value of the Collateral so
condemned or destroyed, together with all interest then accrued and unpaid
thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. This Note may be prepaid at any time in full (but
not in part) at a price equal to 100% of the then outstanding principal amount
of this Note, together with all interest then accrued and unpaid thereon, but
without any prepayment penalty or premium.
SECTION 3. SECURITY. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Company relating to any of the foregoing;
and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
2
The Company herewith confirms the grant of a security interest in the Collateral
to the Payee. As security for this Note, the Company will maintain an existing
first lien in favor of the Payee on the Collateral.
SECTION 4. Affirmative Covenants. For as long as any principal or interest
remains unpaid under this Note, the Company hereby covenants that, unless the
Payee shall otherwise consent in writing:
(a) The Company shall deliver to the Payee (i) a consolidated balance
sheet, income statement, and cash flow statement of the Company within 60 days
after the close of each fiscal quarter other than the last fiscal quarter of the
fiscal year and (ii) an audited consolidated balance sheet, income statement,
and cash flow statement of the Company certified by an independent certified
public accountant of recognized standing and suitable to the Payee within 90
days after the close of each fiscal year. All such financial statements will be
prepared in accordance with generally accepted accounting principles
consistently applied. All statements will be in the same form as those provided
to creditors and shareholders of the Company generally. The Company will also
furnish to the Payee promptly copies of any Forms 10-Q, 10-K and 8-K that are
filed with the Securities and Exchange Commission as well as copies of any other
special mailings to shareholders.
(b) The Company will not dispose of all or substantially all of its assets
or such other portion of its assets as to materially adversely affect the
Company's ability to conduct its business as presently conducted.
(c) The Company shall not enter into any merger or consolidation with any
other entity nor may any subsidiary of the Company enter into any merger or
consolidation with the Company unless (i) the Company is the survivor and (ii)
there exists no event which with or without the passing of time or giving of
notice, or both, would constitute an event of default hereunder.
(d) The Company shall furnish to the Payee:
(i) as soon as possible and in any event within 10 days after
becoming aware of the occurrence of any event of default as defined in
Section 13 hereof, or any event that with notice or passage of time or
both would, if unremedied, constitute an event of default, a
3
written statement of the chief executive officer, chief financial officer,
or treasurer of the Company, setting forth details of such event of
default or event, stating whether or not the same is continuing and, if
so, the action that the Company proposes to take with respect thereto;
(ii) immediately after receiving knowledge thereof, notice in
writing of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that directly affect or affects the
Company based on financial exposure to the Company of $25 million, or that
directly affect or affects the Collateral or that seek or seeks injunctive
relief that will materially adversely affect the operations of the Company
or the Collateral;
(iii) as soon as possible and in any event within 30 days
after the Company knows or has reason to know that any Reportable Event
has occurred with respect to any Plan (as such terms are used in the
Employee Retirement Income Security Act of 1974), a written statement by
the chief executive officer, chief financial officer, or treasurer of the
Company setting forth details of the Reportable Event and indicating what
action, if any, the Company proposes to take with respect thereto,
together with a copy of any required notice of such Reportable Event to
the Pension Benefit Guaranty Corporation;
(iv) as soon as possible and in any event within 5 days after
the Company becomes aware of the occurrence of a material adverse change
in the business, properties or the operations and condition (financial or
otherwise) of the Company, a statement by the chief executive officer,
chief financial officer, or treasurer of the Company, setting forth
details of such material adverse change and the action that the Company
proposes to take with respect thereto, except as otherwise disclosed in
public announcements of the Company issued in the ordinary course of
business; and
(v) such other information respecting the business,
properties, condition and operations (financial or otherwise) of the
Company as the Payee may from time to time reasonably request be furnished
to the Payee.
(e) The Company shall not enter into, or permit any subsidiary to enter
into, any agreement containing any provision that would be violated or breached
4
by this Note or by the performance by the Company of its obligations in
connection herewith.
SECTION 5. FURTHER ASSURANCES. (a) The Company agrees that from time to
time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may be reasonably
necessary or desirable, or that the Payee may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby and the priority thereof or to enable the Payee to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Company will execute and file such
financing or continuation statements or amendments thereto and such other
instruments or notices as may be necessary or desirable or as the Payee may
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby.
(b) The Company hereby authorizes the Payee to file one or more financing
or continuation statements and amendments thereto relative to all or any part of
the Collateral without the signature of the Company where permitted by law. A
carbon, photographic or other reproduction of this Note or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Company will furnish to the Payee from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Payee may reasonably request,
all in reasonable detail.
SECTION 6. Insurance. The Company shall, at its own expense, maintain
liability and property insurance with respect to its business and property,
including the Collateral, with responsible and reputable insurance companies or
associations satisfactory to the Payee in such amounts and covering such risks
as are acceptable to or specified by the Payee, taking into account, among other
factors, such amounts and risks as are usually carried by persons engaged in
similar businesses and owning similar properties in the same general areas in
which the Company operates. Each policy for liability insurance and property
damage insurance shall provide for payment to or on behalf of the Company and
the payee as their interests may appear. Each policy of property damage
5
insurance shall in addition (ii) name the Payee as an insured party thereunder
(without any representation or warranty by or obligation upon the Payee), (iii)
contain an agreement by the insurer that any loss thereunder shall be payable to
or on behalf of the Company or the Payee as their interests may appear, (iv)
provide that there shall be no recourse against the Payee for payment of
premiums or other amounts with respect thereto, and (v) provide that at least 30
days' prior written notice of cancellation or of lapse shall be given to the
Payee by the insurer. The Company shall deliver to the Payee certificates
evidencing the insurance maintained pursuant hereto.
SECTION 7. CERTAIN COVENANTS AS TO THE COLLATERAL. The Company shall:
(a) Keep the Collateral at the places identified therefor on Schedule B
hereto or, upon 15 days' prior written notice to the Payee, at such other places
as shall be identified in such notice (such notice to identify the record owner
of the new location) and which are in jurisdictions where all actions required
by Section hereof shall have been taken with respect to such Collateral.
(b) Cause the Collateral to be maintained and preserved in the same
condition, repair, and working order as when new, ordinary wear and tear
excepted, and, in the case of any loss or damage to the Collateral, as quickly
as practicable after the occurrence thereof make or cause to be made all
repairs, replacements, and other improvements in connection therewith which are
necessary or desirable to such end, provided, however, that in the event of
condemnation or of the destruction by fire or other casualty of the Collateral,
the Company shall have the option to prepay the Note to the extent of the value
of the Collateral so condemned or destroyed as provided in Section 2(b) hereof.
(c) Pay promptly when due all property and other taxes, assessments, and
governmental charges or levies imposed upon it, and all claims (including claims
for labor, materials and supplies) against the Collateral.
(d) After the occurrence and during the continuance of an Event of Default
(as hereinafter defined), receive in trust for the benefit of the Payee all
amounts and proceeds received or collected by the Company in respect of the
Collateral, segregate such amounts and proceeds from other funds of the Company,
and forthwith pay such amounts and proceeds over to the Payee in the same form
6
as so received (with any necessary endorsement) to be held as cash collateral
and applied as provided in Section 13(b)(iii) hereof.
SECTION 8. Substitution of Collateral; Liens. During the term of this
Note:
(a) The Company may substitute other equipment for the Collateral
identified in Schedule B hereto provided, however, that the aggregate value of
the Collateral remaining subject to the lien hereunder shall at all times be
equal to or greater than the value of the Collateral identified in Schedule B as
of the date of such substitution, such value to be determined by an independent
appraisal provided at the Company's expense and satisfactory to the Payee.
(b) The Company shall not create or suffer to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Collateral.
SECTION 9. PAYEE APPOINTED ATTORNEY-IN-FACT. The Company hereby
irrevocably appoints the Payee as its attorney-in-fact, with full authority in
the place and stead of the Company and in the name of the Company, the Payee, or
otherwise, from time to time to take any action which may be reasonably
necessary to protect the Payee's interest under this Note, including, without
limitation:
(a) to sign in the name and on behalf of the Company any financing
statements or other papers required under Section hereof;
(b) to obtain and adjust insurance required to be paid to the Payee
pursuant to Section hereof;
(c) to ask, demand, collect, sue for, recover, compound, receive, and give
acquittance and receipts for moneys due and to become due in respect of any of
the Collateral;
(d) to receive, endorse, and collect any drafts or other instruments in
connection with subsection (b) or (c) above; and
(e) to file any claims or take any action or institute any proceedings
that the Payee may deem necessary or desirable to enforce the respective rights
of the Payee with respect to any of the Collateral.
The Company hereby ratifies and approves all acts of the Payee as such
attorney-in-fact. The Payee shall not, in its capacity as such attorney-in-fact,
7
be liable for any acts or omissions, nor for any error of judgment or mistake of
fact or law, but only for gross negligence or willful misconduct. This power,
being coupled with an interest, is irrevocable until the Note shall have been
fully satisfied. Any amounts received or collected by the Payee in its capacity
as such attorney-in-fact shall be held as cash collateral and applied as
provided in Section 13(b)(iii).
SECTION 10. Payee May Perform. If the Company fails to perform any
agreement contained herein, the Payee may itself perform, or cause performance
of, such agreement, and the expenses of the Payee incurred in connection
therewith shall be payable by the Company under Section hereof.
SECTION 11. Payee's Duties. The powers conferred on the Payee hereunder
are solely to protect its interests in the Collateral and shall not impose any
duty to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by the Payee
hereunder, the Payee shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral.
SECTION 12. Inspection Rights. The Payee, upon 24 hours' notice and during
normal business hours, shall have access to inspect, audit, and make extracts
from all of the Company's records, files, and books of account relating to the
Collateral, and the Company shall deliver any document or instrument necessary
for the Payee to obtain records from any service bureau maintaining records for
the Company. The Payee may also, at all reasonable times, examine and inspect
the Collateral. The Company shall, at the Payee's request, take all steps
necessary to facilitate such inspection.
SECTION 13. Events of Default. (a) Any of the following occurrences or
acts shall constitute an Event of Default hereunder:
(i) If default shall be made in the payment of any installment of
principal and interest due from the Company under the Note when and as the
same shall become due and payable, whether at maturity or by acceleration
or prepayment or otherwise, and such default shall continue for more than
ten (10) days;
8
(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after written notice thereof shall have been
given by the Payee to the Company;
(iii) If an event of default shall occur and continue with respect
to any borrowing in excess of $5,000,000 by the Company, exclusive of any
alleged event of default that is being contested in good faith by the
Company;
(iv) If the Company shall make an assignment for the benefit of its
creditors or file a petition in bankruptcy or for reorganization or for an
arrangement or any composition, readjustment, liquidation, dissolution or
similar relief pursuant to the Bankruptcy Code or under any similar
present or future federal or state law, or shall be adjudicated a
bankrupt;
(v) If a petition or answer shall be filed proposing the
adjudication of the Company as a bankrupt or the reorganization or
arrangement of it, or any composition, readjustment, liquidation,
dissolution or similar relief with respect to it pursuant to the
Bankruptcy Code or any similar present or future federal or state law, and
the Company shall consent to the filing thereof, or such petition or
answer shall not be discharged or denied within sixty (60) days after the
filing thereof; or
(vi) If a receiver, trustee or liquidator (or other similar
official) of the Company, or of all or substantially all of the assets of
the Company or any portion thereof shall be appointed and shall not be
discharged within sixty (60) days thereafter, or if the Company shall
consent to or acquiesce in such appointment.
(b) If an Event of Default shall have occurred and be continuing:
(i) The Payee may give notice to the Company declaring the entire
unpaid principal amount of the Notes, together with all accrued interest
accrued and other sums then owing under this Note, to be forthwith
payable, and demanding that the same be paid, and thereupon all such
amounts shall be forthwith payable, together with all costs and expenses
of collection, notwithstanding any contrary provision contained in this
Note, and institute proceedings for the collection of all amounts then
payable on this Note, whether by declaration or otherwise, enforce any
judgment obtained, and exercise such lawful
9
remedies as may be necessary or desirable for the enforcement of each of
the Payee's rights hereunder.
(ii) The Payee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a Secured Party on default
under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also may (i) require the Company to, and the Company
hereby agrees that it will at its expense and upon request of the Payee
forthwith, assemble the Collateral as directed by the Payee and make it
available to the Payee at a place or places to be designated by the Payee,
which is or are reasonably convenient to the Payee and the Company and
(ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of
the Payee's offices or elsewhere, for cash, on credit or for future
delivery and upon such other terms as the Payee may deem commercially
reasonable. The Company agrees that, to the extent notice of sale shall be
required by law, at least five days' notice to the Company of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Payee shall not be
obligated to make any sale of the Collateral regardless of notice of sale
having been given. The Payee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor and such
sale may, without further notice, be made at the time and place to which
it was so adjourned.
(iii) All cash proceeds received by the Payee in respect of any sale
of, collection from or other realization upon all or any part of the
Collateral may, in the discretion of the Payee, be held by the Payee
(without interest) as collateral for and/or then or at any time thereafter
applied in whole or in part by the Payee against payment of this Note. Any
surplus of such cash or cash proceeds held by the Payee and remaining
after payment in full of this Note shall be paid over to the Company or to
whosoever may be lawfully entitled to receive such surplus.
SECTION 14. Entire Agreement; No Oral Change. This Note embodies the
entire agreement and understanding between the Payee and the Company relating to
the subject matter hereof, and supersedes all prior agreements and
understandings relating thereto. This Note may not be changed orally, but only
by an instrument in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
SECTION 15. NOTICES. Any notices or other communications required or
10
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at P.O. Box 779, Cincinnati, Ohio 45201 (if by mail) or 580
Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally delivered), or
any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 16. Continuing Security Interest; Etc. This Note confirms the
grant of a continuing security interest in the Collateral and shall (a) be
binding upon the Company, its heirs, administrators, successors, and assigns and
(b) inure to the benefit of the Payee and its respective successors,
transferees, and assigns. No security taken hereafter as security for the
payment or performance of this Note shall impair in any manner or affect this
Note or the security interest confirmed hereby, all present and future
additional security to be considered as one general, continuing security
interest. Any of the Collateral may be released from this Note without altering,
varying, or diminishing in any way this Note or the security interest confirmed
hereby as to the Collateral not expressly released, and this Note and such
security interest shall continue in full force and effect as to all of the
Collateral not expressly released.
SECTION 17. Governing Law. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Connecticut applicable
to contracts made and wholly performed in that state (without giving effect to
principles relating to conflict of laws).
SECTION 18. Consent To Jurisdiction. The parties hereto irrevocably agree
that any legal action or proceeding with respect to this Note shall be brought
in the courts of the State of Connecticut or in the courts of the United States
of America sitting in Connecticut. The Company hereby waives to the fullest
extent permitted by law any objection it may now or hereafter have to the laying
of venue in any such action or proceeding in any such court as well as any right
it may now or hereafter have to remove any such action or proceeding, once
commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise
11
or to remove an action brought in a state court to a court of the United States
of America. The Company hereby irrevocably agrees that service of process in any
such action or proceeding may be made either by mailing or delivering a copy of
the summons and complaint in any such action or proceeding to the Company at the
address provided herein by certified mail, return receipt requested. Service of
process in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Company and shall be legal and binding upon the
Company for all purposes notwithstanding any failure on the part of the Company
to receive copies of such process mailed directly to the Company in accordance
with the provisions of this Section.
SECTION 19. Indemnity and Expenses. (a) The Company agrees to indemnify
the Payee from and against any and all claims, losses, and liabilities growing
out of or resulting from this Note (including, without limitation, enforcement
of this Note), except claims, losses, or liabilities resulting from the Payee's
gross negligence or willful misconduct.
(b) The Company will upon demand pay to the Payee the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, that the Payee may after the date hereof
incur in connection with (i) the custody, preservation, use, or operation of, or
the sale of, collection from, or other realization upon, any of the Collateral,
(ii) the exercise or enforcement of any of the rights of the Payee, or (iii) the
failure by the Company to perform or observe any of the provisions hereof.
SECTION 20. SEVERABILITY. The provisions of this Note are independent of
and separable from each other, and no such provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any reason any
other such provision may be invalid or unenforceable in whole or in part.
SECTION 21. MISCELLANEOUS. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Company has duly executed this Note this ____ day
of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By: ______________________________
12
SCHEDULE A
Installment Payment Schedule
13
SCHEDULE B
Collateral
14
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.114"
FORM OF SENIOR UNSECURED SINKING FUND DEBENTURES
[THIS PAGE LEFT BLANK INTENTIONALLY]
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
[____]% SENIOR UNSECURED SINKING FUND DEBENTURES DUE _____
U.S. $250,000,000 Cincinnati, Ohio
[Effective Date]
FOR VALUE RECEIVED, the undersigned, EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation (the "Company"), hereby promises to pay to the order of [ ]
or to any other holder of this Debenture (such holder being the "Payee") the
principal amount of TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) on [date
that is 10 years from the Effective Date] (the "Maturity Date") and interest
thereon as hereinafter provided. Both principal and interest hereunder are
payable in lawful money of the United States of America to the Payee at such
place as the Payee may designate from time to time in writing in cash or other
immediately available funds.
This Debenture is one of an issue of [____]% Senior Unsecured
Sinking Fund Debentures Due [ten years from the Effective Date] of the Company
issued in an aggregate principal amount limited to $250,000,000 (the
"Debentures") and the holder hereof is entitled equally and ratably with the
holders of all other Debentures outstanding to the benefits provided for hereby.
SECTION 1. (a) The following terms have the following meanings when
used in this Debenture:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Cincinnati, Ohio are authorized or
required by law to close.
"COMPANY" shall have the meaning set forth in the opening paragraph
of this Debenture.
"EVENT OF DEFAULT" shall mean any of the events set forth in Section
4(a).
"MATURITY DATE" shall have the meaning set forth in the opening
paragraph of this Debenture.
"PAYEE" shall have the meaning set forth in the opening paragraph of
this Debenture.
(b) Unless otherwise provided herein, (i) the word "from" shall mean
from and including, and (ii) the words "to" or "until" shall mean to and until
but excluding.
SECTION 2. INTEREST. The Company will pay interest at a rate of
[____]% per annum semiannually on ___________ and _____________ of each year,
commencing six months after ___________ (the "Effective Date") or if any such
day is not a Business Day on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Debentures will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from
_____________. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 3. PAYMENTS. (a) SCHEDULED PAYMENTS. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Debenture plus all accrued and
2
unpaid interest thereon. Holders must surrender Debentures to the Company to
collect principal payments.
(b) SINKING FUND. The Company will redeem $20,000,000 of the
aggregate principal amount of the original issuance of the Debentures on each of
the third through ninth anniversaries of the Effective Date, in each case at
100% of the principal amount to be redeemed plus accrued interest to the
redemption date, by paying such amounts as a sinking fund payment, before each
such anniversary of the Effective Date. The Company may reduce the principal
amount of Debentures to be redeemed by subtracting 100% of the principal amount
of any Debenture that the Company redeemed or repurchased otherwise than
pursuant to this Section. The Company may so subtract the same Debenture only
once.
(c) OPTIONAL REDEMPTION. The Company at its option may on each date
it is required to redeem Debentures pursuant to paragraph (b) above redeem up to
an additional $20,000,000 of the outstanding aggregate principal amount of the
Debentures by paying the principal amount to be redeemed plus accrued and unpaid
interest thereon to the applicable redemption date. In addition, the Company at
its option may redeem after [date that is three years from the Effective Date]
all or, from time to time, part of the Debentures at the following redemption
prices (expressed as a percentage of the principal amount thereof) plus accrued
interest to the redemption date (the "Redemption Price"):
If redeemed during the If redeemed during the
twelve month period twelve month period
beginning [Month and date Redemption beginning [Month and date Redemption
of Effective Date], Price of Effective Date], Price
3
- -------------------------------------------------------------------------------
[3 years from 105.25% [7 years from 101.25%
Effective Date] Effective Date]
[4 years from 104.25% [8 years from 100.25%
Effective Date] Effective Date]
[5 years from 103.25% [9 years from
Effective Date] Effective Date] and
[6 years from 102.25% thereafter 100%
Effective Date]
(d) NOTICE OF REDEMPTION. A notice of redemption will be mailed at
least 20 days but not more than 60 days before the redemption date to each
holder of Debentures to be redeemed at its registered address. Debentures in
denominations larger than $1,000 may be redeemed in part, but only in whole
multiples of $1,000. If any Debenture is to be redeemed in part only, a new
Debenture in principal amount equal to the unredeemed portion thereof will be
issued in the name of the holder thereof upon cancellation of the original
Debenture. If less than all of the Debentures outstanding are to be redeemed,
the Debentures to be redeemed will be selected on a pro rata basis (with such
adjustments as may be deemed appropriate so that only Debentures in
denominations of $1,000, or integral multiples thereof, shall be redeemed). Once
notice of redemption is given, Debentures called for redemption become due and
payable on the redemption date at the redemption price.
SECTION 4. EVENTS OF DEFAULT. (a) Each of the following shall be an
Event of Default:
(i) any failure by the Company for ninety days to pay all or any
portion of principal under the Debentures when the same shall be due
and payable in accordance with the terms hereof, whether on the
Maturity Date, by acceleration or otherwise;
(ii) any failure by the Company for ninety days to pay (by delivery
of cash or other immediately available funds) all or any portion of
any interest under the Debentures when the same shall be due and
payable.
4
(ii) any default by the Company for ninety days after notice to it
in the due and punctual performance or observance of any of the
agreements of the Company contained in the Debentures;
(iii) (A) the filing by the Company of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any
form, of its debts under title 11 of the United States Code (or
corresponding provisions of future laws) or any other applicable
bankruptcy, insolvency or similar law, (B) the making by the Company
of any assignment for the benefit of its creditors, or the admission
by the Company in writing of its inability to pay its debts as they
become due, (C) the filing of (x) an involuntary petition against
the Company under title 11 of the United States Code, or any other
applicable bankruptcy, insolvency or similar law (or corresponding
provisions of future laws), (y) an application for the appointment
of a custodian, receiver, trustee or other similar official for the
Company for all or a substantial part of the assets of the Company
or (z) an involuntary petition against the Company seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Company or any of the
Company's debts under any other federal or state insolvency law,
provided that any such filing under (x), (y) or (z) above shall not
have been vacated, set aside or stayed within a 60-day period from
the date thereof unless the Company shall have filed an answer
consenting to or acquiescing therein, or (D) the entry against the
Company of a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect;
(b) Upon the occurrence and during the continuance of any Event of
Default described in paragraph (a) above, the holders of a majority of the
outstanding principal amount of the Debentures may, by written notice to the
5
Company, declare all or any portion of the unpaid principal amount of the
Debentures and all interest accrued thereon to be immediately due and payable.
Demand, presentment, protest and notice of non-payment are hereby waived by the
Company. All payments made following an Event of Default shall be applied first
to payment of all accrued and unpaid interest and then to principal.
SECTION 5. WAIVER OR ALTERATION. Without the consent of the Company
and each holder affected, an amendment to the Debentures may not: reduce the
amount of Debentures whose holders must consent to an amendment; reduce the rate
of or change the time for payment of interest on any Debenture; reduce the
principal of or change the fixed maturity of any Debenture; or make any
Debenture payable in money other than that stated in the Debenture. Subject to
the exceptions listed in the preceding sentence, the Debentures may be amended
by a written instrument signed by the Company and the holders of a majority of
the outstanding principal amount of the Debentures. In the case of any waiver,
the Company and the holders of a majority of the outstanding principal amount of
the Debentures shall be restored to their former respective positions and rights
hereunder, and any Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon except to the extent expressly
provided in such waiver. Without the consent of any holder, the Debentures may
be amended to cure any ambiguity, defect or inconsistency, to provide for
assumption of Company obligations to holders or to make any change that does not
adversely affect the rights of any holder.
SECTION 6. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any
6
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 7. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at Post Office Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 8. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or a stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Debentures or for any claim based on, in
respect of or by reason of such obligations or their creation. Each holder by
accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Debentures.
SECTION 9. GOVERNING LAW. The Debentures shall be governed by, and
construed and enforced in accordance with, the law of the State of Ohio.
SECTION 10. COSTS OF COLLECTION. If the Payee is required to
commence suit to recover any amount due under the Debentures following an Event
of Default, the Payee shall be entitled to collect from the Company
reimbursement of such reasonable attorneys' fees and expenses of counsel
selected by the Payee.
7
SECTION 11. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. The Debentures
shall be binding upon and inure to the benefit of the Payee and the Company and
their respective transferees, successors and assigns; PROVIDED, HOWEVER, that
the Company may not transfer or assign any of its rights or obligations
hereunder without the prior written consent of the Payee. Within five Business
Days after receipt of notice of any assignment by the Payee to any person or
entity (an "Assignee") of all or any part of a Debenture, the Company shall
execute and deliver to such Assignee, in exchange for the surrendered Debenture,
a new Debenture to the order of such Assignee in an amount equal to the amount
of the Debenture assigned to it, and if the Payee has retained any amount owing
to it hereunder, a new Debenture to the order of the Payee in an amount equal to
the amount retained by it hereunder, which new Debenture shall be dated the same
date as the surrendered Debenture and be in substantially the form of this
Debenture, and such Assignee will be deemed the Payee under the Debenture issued
to it. In the event that the Payee proposes to transfer the Debentures in a
transaction that would require qualification of an indenture under the Trust
Indenture Act of 1939, the Company shall cooperate with the Payee in the
preparation and qualification of such indenture and the replacement of the
Debentures with a comparable instrument evidencing the indebtedness represented
hereby and providing the holder thereof with substantially comparable terms.
References herein to "Debentures" shall include all outstanding Debentures
issued in substitution for or upon any assignment of this Debenture.
SECTION 12. REPLACEMENT OF DEBENTURE. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of a Debenture, and the Company's receipt of an indemnity agreement
of the Payee reasonably satisfactory to the Company, the Company will, at the
expense of the Payee, execute and deliver, in lieu thereof, a new Debenture of
like terms.
SECTION 13. NO SET-OFF. The obligations of the Company under the
Debentures are absolute and not subject to any right of set-off, counterclaim,
recoupment or defenses against the Payee of any kind whatsoever.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of the
Debentures are inserted for convenience only and do not constitute a part of
this Debenture.
8
IN WITNESS WHEREOF, the Company has caused this Debenture to be
executed by its duly authorized officer as of the day and year first written
above.
EAGLE-PICHER INDUSTRIES, INC.
By: ________________________
Name:
Title:
9
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.119"
FORM OF TAX REFUND NOTES
[THIS PAGE LEFT BLANK INTENTIONALLY]
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
[__]% TAX REFUND NOTE DUE _____
U.S. $[___________] Cincinnati, Ohio
[Effective Date]
FOR VALUE RECEIVED, the undersigned, EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation (the "Company"), hereby promises to pay to the order of the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust or to any other
holder (such holder being the "Payee") of this note (the "Note") the principal
amount of [_______________________] on June 1, 1998 (the "Maturity Date") and
interest thereon as hereinafter provided. Both principal and interest hereunder
are payable in lawful money of the United States of America to the Payee at such
place as the Payee may designate from time to time in writing in cash or other
immediately available funds.
SECTION 1. (a) The following terms have the following meanings when
used in this Note:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Cincinnati, Ohio are authorized or
required by law to close.
"COMPANY" shall have the meaning set forth in the opening paragraph
of this Note.
"EVENT OF DEFAULT" shall mean any of the events set forth in
Section 5(a).
"MATURITY DATE" shall have the meaning set forth in the opening
paragraph of this Note.
"PAYEE" shall have the meaning set forth in the opening paragraph of
this Note.
(b) Unless otherwise provided herein, (i) the word "from" shall mean
from and including, and (ii) the words "to" or "until" shall mean to and until
but excluding.
SECTION 2. INTEREST. The Company will pay interest at a rate of
[__]% per annum semiannually on __________ and ___________ of each year,
commencing six months after _______________ (the "Effective Date") or if any
such day is not a Business Day on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
_____________________. Interest will be computed on the basis of a 360- day year
of twelve 30-day months.
SECTION 3. PAYMENTS. (a) SCHEDULED PAYMENTS. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon. The Payee must surrender the Note to the Company to
collect principal payments.
(b) MANDATORY REDEMPTION. The Company will redeem all of the
aggregate principal amount of the Note outstanding plus accrued interest to the
redemption date as soon as practicable after its receipt of its federal income
2
tax refund (the "Tax Refund") for the fiscal year ending _______ (in the
aggregate principal amount of such tax refunds).
(c) OPTIONAL PREPAYMENT. The Company may, at any time and from time
to time, without premium or penalty, prepay (in multiples of $1,000) all or a
portion of the unpaid principal amount of the Note or all or a portion of
accrued and unpaid interest, together with unpaid accrued interest on the amount
so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. A notice of redemption under this subsection will
be mailed at least 20 days but not more than 60 days before the redemption date
to the Payee at its registered address. The Note may be redeemed in part, but
only in whole multiples of $1,000. Once notice of redemption is given, the Note
becomes due and payable on the redemption date at the redemption price.
SECTION 4. LIENS. The Company shall not create or suffer to exist
any lien, security interest, or other charge or encumbrance upon or with respect
to, or grant any right to a party other than the Eagle-Picher Industries, Inc.
Personal Injury Settlement Trust in, the Tax Refund.
SECTION 5. EVENTS OF DEFAULT. (a) Each of the following shall be an
Event of Default:
(i) any failure by the Company for ninety days to pay all or any
portion of principal under the Note when the same shall be due and
payable in accordance with the terms hereof, whether on the Maturity
Date, by acceleration or otherwise;
(ii) any failure by the Company for ninety days to pay (by delivery
of cash or other immediately available funds) all or any portion of
any interest under the Note when the same shall
3
be due and payable;
(ii) any default by the Company for ninety days after notice to it
in the due and punctual performance or observance of any of the
agreements of the Company contained in the Note;
(iii) (A) the filing by the Company of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any
form, of its debts under title 11 of the United States Code (or
corresponding provisions of future laws) or any other applicable
bankruptcy, insolvency or similar law, (B) the making by the Company
of any assignment for the benefit of its creditors, or the admission
by the Company in writing of its inability to pay its debts as they
become due, (C) the filing of (x) an involuntary petition against
the Company under title 11 of the United States Code, or any other
applicable bankruptcy, insolvency or similar law (or corresponding
provisions of future laws), (y) an application for the appointment
of a custodian, receiver, trustee or other similar official for the
Company for all or a substantial part of the assets of the Company
or (z) an involuntary petition against the Company seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Company or any of the
Company's debts under any other federal or state insolvency law,
provided that any such filing under (x), (y) or (z) above shall not
have been vacated, set aside or stayed within a 60-day period from
the date thereof unless the Company shall have filed an answer
consenting to or acquiescing therein, or (D) the entry against the
Company of a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect;
(b) Upon the occurrence and during the continuance of any Event of
Default described in paragraph (a) above, the Payee may, by written notice to
the Company, declare all or any portion of the unpaid principal amount of the
Note and all interest accrued thereon to be immediately due and payable. Demand,
presentment, protest and notice of non-payment are hereby waived by the Company.
All payments made following an Event of Default shall be applied first to
payment of all accrued and unpaid interest and then to principal.
SECTION 6. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof,
4
nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 7. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at Post Office Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 8. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or a stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Note or for any claim based on, in respect
of or by reason of such obligations or their creation. The Payee by accepting
the Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Note.
SECTION 9. GOVERNING LAW. The Note shall be governed by, and
construed and enforced in accordance with the law of the State of Ohio.
SECTION 10. COSTS OF COLLECTION. If the Payee is required to
commence suit to recover any amount due under the Note following an Event of
5
Default, the Payee shall be entitled to collect from the Company reimbursement
of such reasonable attorneys' fees and expenses of counsel selected by the
Payee.
SECTION 11. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. The Note shall
be binding upon and inure to the benefit of the Payee and the Company and their
respective transferees, successors and assigns; PROVIDED, HOWEVER, that the
Company may not transfer or assign any of its rights or obligations hereunder
without the prior written consent of the Payee. Within five Business Days after
receipt of notice of any assignment by the Payee to any person or entity (an
"Assignee") of all or any part of the Note, the Company shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of the Note assigned
to it, and if the Payee has retained any amount owing to it hereunder, a new
Note to the order of the Payee in an amount equal to the amount retained by it
hereunder, which new Note shall be dated the same date as the surrendered Note
and be in substantially the form of this Note, and such Assignee will be deemed
the Payee under the Note issued to it. References herein to "Notes" shall
include all outstanding Notes issued in substitution for or upon any assignment
of this Note.
SECTION 12. REPLACEMENT OF NOTE. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Note, and the Company's receipt of an indemnity agreement of the Payee
reasonably satisfactory to the Company, the Company will, at the expense of the
Payee, execute and deliver, in lieu thereof, a new Note of like terms.
SECTION 13. NO SET-OFF. The obligations of the Company under
6
the Note are absolute and not subject to any right of set-off, counterclaim,
recoupment or defenses against the Payee of any kind whatsoever.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of the
Note are inserted for convenience only and do not constitute a part of the Note.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
by its duly authorized officer as of the day and year first written above.
EAGLE-PICHER INDUSTRIES, INC.
By: ________________________
Name:
Title:
7
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "5.2"
FORM OF AMENDED CLAIMS SETTLEMENT GUIDELINES
[THIS PAGE LEFT BLANK INTENTIONALLY]
AMENDED GUIDELINES FOR THE
COMPROMISE AND SETTLEMENT
OF CLAIMS AND CONTROVERSIES
---------------------------
Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule
9019, Eagle-Picher Industries, Inc., Daisy Parts, Inc., Transicoil Inc.,
Michigan Automotive Research Corporation, EDI, Inc., Eagle-Picher Minerals,
Inc., and Hillsdale Tool and Manufacturing Co. (the "Debtors") may compromise or
settle as allowed claims (i) all claims asserted against the Debtors as to which
the Debtors have the power and authority to file and prosecute objections
pursuant to section 5.1 of the Third Amended Consolidated Plan of
Reorganization, dated August 28, 1996 and (ii) all claims that the Debtors have
asserted against other parties prior to [insert Effective Date of Plan]
("Claims") according to the following procedures:
1. Subject to section 2(b) hereof, the following settlements or compromises
do not require the review or approval of the United States Bankruptcy
Court for the Southern District of Ohio (the "Bankruptcy Court") or any
other party in interest:
(a) The settlement or compromise of a Claim against the Debtors or their
estates pursuant to which such Claim is allowed in an amount of
$1,000,000 or less;
(b) The settlement or compromise of a Claim against the Debtors or their
estates where the difference between the amount of the Claim listed
on the Debtors' schedules and the amount of the
Claim proposed to be allowed under the settlement is $1,000,000 or
less; and
(c) The settlement or compromise of a Claim asserted by one or more of
the Debtors against a party, where the difference between the amount
sought to be recovered by the Debtors and the amount to be paid to
the Debtors under the proposed settlement is $1,000,000 or less.
2. The following settlements or compromises shall be submitted to the
Bankruptcy Court for approval:
(a) Any settlement or compromise not described in section 1 hereof; and
(b) Any settlement or compromise of Claims that involve an "insider," as
defined in 11 U.S.C. Section 101(3).
2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.11"
FORM OF MANAGEMENT CONTRACTS
[THIS PAGE LEFT BLANK INTENTIONALLY]
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of ________________, 1995, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and _____________________________ (the
"Executive"), residing at _________________________.
W I T N E S S E T H:
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as __________ ________________ of the Company;
and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated __________ __, 1995 (the "Confirmation
Order") the Bankruptcy Court confirmed the Consolidated Plan of Reorganization,
dated _________ __, 1995 (the "Plan"), in the Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the Executive
will enter into this Agreement which is to become effective on the Effective
Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT; EFFECTIVENESS OF AGREEMENT. The obligation of the
Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the Effective
Date.
2. TERM. The term of Executive's employment hereunder (hereinafter
referred to as the "Term") shall commence on the Effective Date and shall
continue thereafter until the date which is thirty (30) months from and after
the date on which the Confirmation Order was entered by the Bankruptcy Court,
unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive agrees
to continue to serve as the _______ _______________ of the Company faithfully
and to the best of his ability under the direction of the [Chief Executive
Officer and the] Board of Directors of the Company (the "Board"), and agrees to
devote substantially all of his business time, energy and skill to such
employment. Executive agrees to perform the duties commensurate with the
position of ___________ of the Company, which shall include,without limitation,
the duties set forth on Annex A hereto. Executive agrees also to perform such
specific duties and services of a senior executive nature as the [Chief
Executive Officer of the Company or the] Board shall reasonably request
consistent with Executive's position as ___________. The principal place of
employment of Executive shall be Cincinnati, Ohio and, subject to such
reasonable travel as the performance of his duties may require, such principal
place of employment shall not be changed unless the Executive otherwise
consents.
4. COMPENSATION.
4.1 BASE SALARY. The Company agrees to pay or cause to be paid to
Executive during the Term, a base salary equal to the amount of his base salary
as at the date immediately preceding the Effective Date, subject to adjustment
as provided below (as so adjusted, the "Base Salary"). The Base Salary shall be
payable in accordance with the regular payroll policies of the Company from time
to time in effect, less such deductions as shall be required to be withheld by
applicable law and regulations. On each December 1 during the Term, the Board or
a committee thereof, shall review Executive's Base Salary as then in effect and
may, but shall not be obligated to, increase such salary by such amount as the
Board (or such committee), in its sole discretion, shall determine.
[4.2 DISCRETIONARY BONUS. In addition to Base Salary, the
2
Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.]
4.3 BENEFITS AND PERQUISITES. During the Term, the Company shall
provide Executive with and Executive shall be entitled to the following benefits
and perquisites:
(a) participation in and the receipt of benefits under (i) all of
the Company's employee benefit plans and arrangements in effect from time to
time applicable to salaried employees of the Company, (ii) all short-term and
long-term incentive plans of the Company as in effect from time to time, (iii) a
supplemental executive retirement plan (the "SERP") substantially in accordance
with and no less favorable to Executive than the terms, provisions and benefits
under the supplemental executive retirement plan currently provided by the
Company, and (iv) any life insurance, health and accident plan or arrangement
made available by the Company, now or in the future, to its executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar year.
(c) an automobile paid for by the Company for use in the performance
of his services under this Agreement, in a manner substantially consistent with
past practices.
3
(d) membership fees paid for by the Company with respect to any of
the Executive's business-related club memberships (it being understood that such
membership fees shall not include any fees for country clubs or other similar,
primarily social, clubs).
The Company also shall implement, as soon as reasonably practicable
after the Effective Date, a long-term incentive plan. Although the ability to
receive stock of the Company may not be available for such plan, the plan
nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those provided by similar companies, many
of which do provide stock options and/or other types of stock grants as
components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from time to time be
established by the Board, the Company shall pay or reimburse Executive for all
reasonable expenses actually incurred or paid by Executive during the Term in
the performance of his services under this Agreement, upon presentation of
expense statements or vouchers or such other supporting information as the
Company may require.
5. TERMINATION.
5.1 Cause. The Company may terminate Executive's employment
hereunder for Cause. For the purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder only by reason of any one
or more of the following:
(i) Executive's conviction, by a court of competent and final
jurisdiction, of any crime (whether or not involving the Company or
any of its subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of fraud upon the
Company or any or its
4
subsidiaries; or
(iii) Executive's repeated willful failure to perform in all
material respects his duties hereunder in accordance with the terms
of this Agreement which failure (other than by reason of death or
disability) continues uncorrected for a period of ten (10) days
after Executive shall have received written notice from the Board
stating with specificity the nature of such failure or refusal.
5.2 TERMINATION BY THE EXECUTIVE. Executive may terminate his
employment hereunder upon [thirty (30)] days' prior written notice to the
Company for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean (i) the material diminution of the nature or scope of the duties assigned
to Executive from that contemplated by Section 3 hereof, (ii) a reduction in
Executive's Base Salary, or a material reduction in Executive's fringe benefits
or any other material failure by the Company to comply with Section 4 hereof,
other than any such reduction or failure as shall apply to all executive
officers of the Company generally, (iii) ceased participation by Executive, for
any reason other than as a result of any action by Executive, in any employee
benefit plan of the Company with respect to which Executive is or was, prior to
such time, eligible to participate, (iv) the relocation of Executive's principal
place of employment more than twenty (20) miles from the location specified in
Section 3 hereof without Executive's consent, (v) the requirement that Executive
engage in a substantial amount of additional travel (as compared to Executive's
past practices) in the performance of his duties hereunder without Executive's
consent, or (vi) any other material breach by the Company of its obligations
under this Agreement. Good Reason shall not exist in the event of a sale or
disposition of a subsidiary or division of the Company and Executive either (a)
voluntarily agrees to be employed by such subsidiary or division, or (b) is
offered a comparable position with the Company. For purposes hereof, comparable
shall encompass such items as salary, benefits, duties and geographic location.
5.3 NOTICE OF TERMINATION. Any termination by the Company pursuant
to Section 5.1 above or by Executive pursuant to Section 5.2 above shall be
communicated by written notice (the "Notice of Termination"), which notice shall
indicate the specific termination provision in this Agreement relied upon for
such termination.
5.4 DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Executive's employment is terminated pursuant to Section 5.1 or 5.2 hereof, the
date
5
specified in the Notice of Termination, and (ii) if Executive's employment is
terminated by the Company other than for Cause or by Executive other than for
Good Reason, the date on which a Notice of Termination is given.
5.5 PAYMENTS UPON TERMINATION. (a) If the employment of Executive
with the Company is terminated (i)by the Company other than for Cause or (ii) by
the Executive for Good Reason, then Executive shall be entitled to receive from
the Company, and the Company shall pay to Executive, a lump sum severance
payment equal to the greater of (x) the aggregate Base Salary (at the rate in
effect at the Date of Termination) that Executive would have received for the
remainder of the Term if his employment had not been terminated, and (y) the
aggregate amount of the Base Salary (at the rate in effect at the Date of
Termination) which would be paid for a period of twenty-four (24) months, plus,
in either case, such other benefits or reimbursement of expenses payable to the
Executive pursuant to Sections 4.3 and 4.4 hereof (including, without
limitation, the SERP), and less such amounts as shall be required to be withheld
by the Company pursuant to applicable laws and regulations (the "Severance
Amount"). The Severance Amount shall not be present-valued and shall be payable
by the Company to Executive within thirty (30) days after Executive's
termination. Executive shall not be required to mitigate the Company's
obligation to pay the full Severance Amount by seeking employment or otherwise
and the Severance Amount shall not be decreased or otherwise offset as a result
of any compensation received by Executive from employment in any capacity. The
Severance Amount shall be deemed compensation payable to Executive for the
purpose of determining the total amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is terminated
(i) by the Company for Cause, or (ii) by the Executive other than for Good
Reason, then the Executive shall be entitled to receive, and the Company shall
pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
6
under this Agreement.
6. Death or Disability.
6.1 DEATH. If Executive dies during the Term, this Employment
Agreement, other than the provisions of Section 6.3 hereof, shall terminate.
6.2 Disability. If, during the Term, Executive becomes physically or
mentally disabled, whether totally or partially, so that he is unable
substantially to perform his services hereunder for (i) a period of six (6)
consecutive months or (ii) for shorter periods aggregating six (6) months during
any eighteen (18) month period, the Company may at any time after the last day
of the six (6) consecutive months of disability or the day on which the shorter
periods of disability equal an aggregate of six (6) months, by written notice to
Executive (the "Disability Notice"), terminate the Term of the Executive's
employment hereunder.
6.3 Payments upon Death or Disability. Upon a termination due to the
death or disability of Executive, Executive (or, in the event of a termination
as a result of the death of Executive, Executive's estate (or a designated
beneficiary thereof)) shall be entitled to receive from the Company, and the
Company shall pay to Executive (or Executive's estate, if applicable) the amount
of any accrued and unpaid Base Salary and other benefits and reimbursement of
expenses payable to the Executive hereunder pursuant to Sections 4.3 and 4.4
hereof as of the date of Executive's death or the date of the Disability Notice,
as applicable. In addition, for a period of thirty (30) months following the
date of such termination, the Company shall continue to pay and provide to
Executive and Executive's dependents at the Date of Termination all medical
benefits pursuant to any plans and programs in which Executive was entitled to
participate immediately prior to the Date of Termination as if Executive were
still employed by the Company pursuant hereto. If Executive's participation in
any plan or program pursuant to which such medical benefits are provided to
Executive is barred as a result of such termination, the Company shall arrange
to provide Executive and Executive's dependents with benefits substantially
similar on an after tax basis to those which Executive was entitled to receive
under such plan or program.
7. Non-Competition; Confidentiality.
7
7.1 NON-COMPETITION. Executive agrees that, during the Term and for
a period of [two years] following the date of termination of Executive's
employment hereunder (the "Restricted Period"), he will not, directly or
indirectly, own, manage, operate or control, or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director or otherwise with, or have any financial interest in, or aid
or assist anyone else in the conduct of, any entity or business which competes
with any material business conducted by the Company or by any group, division or
subsidiary of the Company, in any area where such business is being conducted,
or for which negotiations to conduct business are pending, at the date of such
termination (a "Competitive Operation"); PROVIDED, HOWEVER, that Executive may
acquire, solely as an investment and through market purchases, securities of any
corporation that are traded on any national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), if Executive is not a controlling person of, or a member of a group
which controls, such corporation; and Executive does not, directly or
indirectly, own more than [one percent (1%)] of any class of securities of such
corporation.
7.2 Confidential Information; Personal Relationships. Executive
agrees that, during the Term and thereafter, he shall keep secret and retain in
strictest confidence, and shall not use for his benefit or the benefit of
others, any and all confidential information relating to the Company, including,
without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 PROPERTY OF THE COMPANY. All memoranda, notes, lists, records
and other documents or papers (and all copies thereof), including such items
stored in computer memories, or microfiche or by any other means, made or
compiled by or on behalf of Executive, or made available to Executive, relating
to the Company or any successors thereto, are and shall be
8
the property of the Company or any such successor and shall be delivered to the
Company or any such successor promptly at any time on request.
7.4 EMPLOYEES OF THE COMPANY. During the Restricted Period, the
Executive shall not, directly or indirectly, hire, solicit or encourage to leave
the employment of the Company, any of its employees or hire any such employee
who has left the employment of the Company.
7.5 RIGHTS AND REMEDIES UPON BREACH. If Executive breaches, or
threatens to commit a breach of, any of the provisions of this Section 7 (the
"Restrictive Covenants"), the Company and any successor thereto shall have the
following rights and remedies, each of which shall be independent of the other
and severally enforceable, and all of which shall be in addition to, and not in
lieu of, any other rights and remedies available to the Company under law or in
equity.
(a) SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any arbitrator or any court
having equity jurisdiction, it being acknowledged and agreed by Executive that
any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require Executive to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
Executive as the result of any transactions constituting a breach of any of the
Restrictive Covenants, and Executive shall account for and pay over such
Benefits to the Company.
7.6 SEVERABILITY OF COVENANTS. Executive acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in geographical and
temporal scope and in all other respects. Notwithstanding the foregoing, if any
arbitrator or court determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable or should be reduced, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect without regard to the invalid Restrictive Covenants or portions thereof.
9
8. INSURANCE. The Company may, from time to time, apply for and take
out, in its own name and at its own expense, naming itself or others as the
designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and delivering
such applications and other instruments in writing as may reasonably be required
by any insurance company to which the Company may apply for insurance.
9. INDEMNIFICATION. To the fullest extent permitted or required by
the laws of the State of Ohio, the Company shall indemnify and hold harmless
Executive, in accordance with the terms of such laws, if Executive is made a
party, or threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration. Such arbitration shall be conducted
by an arbitrator mutually selected by the Company and Executive (or, if the
Company and Executive are unable to agree upon an arbitrator within ten (10)
days, then the Company and Executive shall each select an arbitrator, and the
arbitrators so selected shall mutually select a third arbitrator, who shall
resolve such dispute). Such arbitration shall be conducted in accordance with
the applicable rules of the American Arbitration Association. Any decision
rendered by an arbitrator pursuant hereto may be enforced by a court of
competent jurisdiction without review of such decision by such court. The
Company shall pay all of the fees and expenses of the arbitrators and the other
costs of arbitration. The Company also shall pay Executive's reasonable legal
fees and expenses incurred in connection with any successful enforcement by
Executive of his rights hereunder.
11. Miscellaneous.
10
11.1 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telecopied or sent by certified or registered mail, postage prepaid, or by
Federal Express or similar overnight courier. Any such notice shall be deemed
given when delivered:
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn:
Telecopy No.:
(ii) if to Executive, to:
----------------------------------
----------------------------------
----------------------------------
11.2 WAIVERS AND AMENDMENTS. This Agreement may not be amended,
modified, superseded or cancelled except by a written instrument signed by the
Company and Executive. No delay on the part of any party in exercising any right
or remedy hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any such right or remedy, nor any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9 hereof shall
survive the Term, irrespective of the reasons for termination of Executive's
employment hereunder.
11.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
11.5 Entire Agreement. This Agreement (including the schedules,
annexes and exhibits hereto) contain the entire agreement between
11
the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and obligations
hereunder, may not be assigned by any party hereto without the prior written
consent of the other party.
11.7 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By __________________________
Name:
Title:
_____________________________
[Executive]
12
ANNEX A
TO EMPLOYMENT AGREEMENT OF
THOMAS E. PETRY
POSITION: Chairman and Chief Executive Officer
DUTIES: Serves as presiding officer of the Board of Directors. In that
capacity guides the deliberations and activities of that group.
Responsible for directing the Company toward the objective of
providing maximum profit and return on invested capital. Establishes
short-term and long-range objectives, plans, and policies, subject
to the approval of the Board of Directors. Represents the Company
before all of its constituencies, including, without limitation,
major customers, the financial community, the Company's operations
and host communities, and the public.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
ANDRIES RUIJSSENAARS
POSITION: President and Chief Operating Officer
DUTIES: Directs, administers and coordinates the activities of the Company
in accordance with policies, goals and objectives established by the
Chief Executive Officer and the Board of Directors. Assists the
Chief Executive Officer in the development of Company policies and
goals for, among others, operations, personnel, financial
performance and growth. Has direct line responsibility for all
operating units.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
WAYNE R. WICKENS
POSITION: Senior Vice President and Group Executive
DUTIES: Plans, directs and controls all activities in certain profit centers
(currently ten Automotive Divisions) through the general managers of
those entities. Those general managers are in turn responsible for
production, research, engineering, marketing/sales, purchasing and
human resources in their operations.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
DAVID N. HALL
POSITION: Senior Vice President and Chief Financial Officer
DUTIES: Plans, directs and controls the Company's overall financial plans
and policies, and its accounting practices, and conducts the
Company's relationship with lending institutions and the financial
community. Directs treasury, budgeting, audit, tax, accounting,
information management, insurance and certain administrative
functions. Develops and coordinates necessary and appropriate
accounting and statistical data for all departments.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
CARROLL D. CURLESS
POSITION: Vice President and Controller
DUTIES: Directs and has responsibility for the Company's accounting
practices, the maintenance of its fiscal records, and the
preparation of its financial reports. Directs and has overall
supervisory responsibility for general and property accounting,
internal auditing, cost accounting, and budgetary controls.
Appraises operating results in terms of costs, budgets, policies of
operations, trends and increased profit opportunities.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
JAMES A. RALSTON
POSITION: Vice President, General Counsel and Secretary
DUTIES: As chief legal officer directs the legal affairs of the Company.
Provides legal counsel and guidance in the ordinary and special
activities of the Company to insure maximum protection of its legal
rights utilizing broad familiarity with most legal disciplines.
Participates in senior management policy deliberations. Directs the
defense of suits or claims and manages the prosecution of the
Company's claims against others. Supervises the legal aspects of
Company transactions and the preparation of reports and statements
of a legal nature. Supervises the environmental compliance function
within the Company. Serves as Secretary in accordance with the
charter, by-laws, and other legal requirements. Coordinates meetings
of the Board of Directors and keeps minutes of such meetings.
Attends to Company notices and correspondence, and conducts
relations with shareholders on matters concerning meetings of
shareholders or share holdings.
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.12"
FORM OF AMENDMENTS TO SUPPLEMENTAL SEVERANCE PROGRAM
[THIS PAGE LEFT BLANK INTENTIONALLY]
AMENDMENT AND RESTATEMENT OF THE
EAGLE-PICHER INDUSTRIES, INC. SEVERANCE PLAN
EFFECTIVE ___________
SECTION 1. THE AMENDMENT
1.1 THE AMENDMENT. Effective upon entry of an order confirming the Third
Amended Consolidated Plan of Reorganization, Eagle-Picher
Industries, Inc. ("Company") amends the severance plan (the "Plan"),
adopted effective May 13, 1991, to read as follows:
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
mean:
(a) "ADMINISTRATOR" means the Company's Director of Taxes or his
designee. The Administrator shall be a named fiduciary under the
Plan.
(b) "AFFILIATES" means Daisy Parts, Inc., Transicoil Inc., Michigan
Automotive Research Corporation, Eagle-Picher Fluid Systems, Inc.,
Eagle-Picher Minerals, Inc. and Hillsdale Tool & Manufacturing
Company.
(c) "ANNUAL COMPENSATION" means the total of all compensation, including
wages, salary, and any other benefit of monetary value, whether paid
in the form of cash or otherwise, which was paid as consideration
for the participant's service during the 12-month
period preceding the participant's severance, or the total which
would have been so paid at the participant's usual rate of
compensation for any participant who did not work for the Company or
an Affiliate for the full 12-month period preceding the
participant's severance.
(d) "BASE PAY" means the participant's base annual pay rate at the date
of his termination of employment.
(e) "BUSINESS DAY" means any day on which commercial banks are required
to be open for business in Cincinnati, Ohio.
(f) "COMPANY" means Eagle-Picher Industries, Inc., or any successor
thereto.
(g) "CONFIRMATION DATE" means the date of entry of an order confirming
the Reorganization Plan.
(h) "CONFIRMATION ORDER" means the order or orders of the court
confirming the Reorganization Plan.
(i) "EFFECTIVE DATE" means May 13, 1991 pursuant to Judge Burton
Perlman's order entered that date.
(j) "ELIGIBLE EMPLOYEES" means division presidents (including the
presidents of wholly-owned subsidiaries), all persons employed in
the Cincinnati, Ohio General Office as salaried employees except
Officers, and those employees designated by the Chief Executive
Officer of the Company as key division employees.
(k) "OFFICERS" means officers of Eagle-Picher Industries, Inc.
(l) "REORGANIZATION EFFECTIVE DATE" means the first Business Day after
the date on which all of the conditions precedent to the
effectiveness of the Reorganization Plan specified in Section 7.9 of
the Reorganization Plan have been satisfied or waived, or if a stay
of the Confirmation Order is in effect on such date, the first
Business Day after the expiration, dissolution, or lifting of such
stay.
(m) "REORGANIZATION PLAN" means the Third Amended Consolidated Plan of
Reorganization of the Company and its affiliated debtors, either in
its present form or as it may be amended, supplemented, or otherwise
modified from time to time, and the exhibits and schedules to the
foregoing, as the same may be in effect at the time such reference
becomes operative.
(n) "SERVICE" means Vesting Service as defined in the Eagle-Picher
Retirement Income Plan for Salaried Employees.
(o) "WEEK'S PAY" means a participant's Base Pay divided by 52.
2.2 GENDER REFERENCE. Any words in this Plan document (or amendments to
it) which are used in one gender shall be read and construed to mean
or include the other gender wherever they would so apply.
SECTION 3. PARTICIPATION
3.1 PARTICIPANTS. Eligible Employees employed on the Effective Date
shall become participants on that date.
3.2 NEW PARTICIPANTS. Anyone meeting the definition of Eligible Employee
hired or designated by the Chief Executive Officer after the
Effective Date shall become a participant after completion of three
months of Service. The Company's Chief Executive Officer can waive
any service period required of a new participant by a written letter
to the participant with a copy to the Administrator.
SECTION 4. BENEFITS
4.1 SEVERANCE BENEFIT. Participants terminated by the Company or an
Affiliate after the Effective Date other than for cause will receive
a Base Severance Benefit, a Supplemental Severance Benefit and Group
Medical and Life Insurance Benefits as described herein. The
eligibility for, and the level of, benefits will be determined by
the employee's status as a division president or key employee at the
date of the employee's termination of employment. If the operation
for which a
participant is working is sold and the participant continues to work
with the operation, or another entity affiliated with the buyer,
after the sale, the participant will not be eligible for the Base
Severance Benefit, the Supplemental Severance Benefit, or the Group
Medical and Insurance Benefits.
4.2 BASE SEVERANCE BENEFIT. The Base Severance Benefit will provide one
Week's Pay for each completed year of Service and, for any partial
year of Service, one-twelfth Week's Pay for each completed month of
Service. Payments shall be reduced dollar for dollar by compensation
earned for services rendered by a participant for a subsequent
employer during the period Base Severance Benefits are being paid.
The minimum Base Severance Benefit shall be two Week's Pay. Payments
under the Base Severance Benefit will be made under the general
payroll practice for the unit in which the participant was employed.
4.3 SUPPLEMENTAL SEVERANCE BENEFIT. The Supplemental Severance Benefit
will provide one year's Base Pay for division presidents; six
months' Base Pay for salaried General Office and division employees
designated as key employees by the Chief Executive Officer; and
three months' Base Pay for all other salaried General Office
employees. The Supplemental Severance Benefit for a salaried
employee employed in the Cincinnati, Ohio, General Office who
becomes entitled to a benefit under Section 4.1 after age 50 and
before the first anniversary of the Reorganization Effective Date
will be twice the Supplemental Severance Benefit otherwise provided
under this Section. The Supplemental Severance Benefit shall be paid
in a lump sum on termination of employment.
4.4 GROUP MEDICAL AND LIFE INSURANCE BENEFITS. The Group Medical and
Life Insurance Benefits will provide continued participation in the
medical indemnity benefits, self-funded medical benefits, health
maintenance organizations, and group term life insurance benefits
(including the additional group term life insurance available at
employee cost) as if the participant were an active employee of the
Company or an Affiliate. These benefits will continue for one week
for each year of Service unless similar coverage is obtained from a
subsequent employer. Any period for which medical benefits are
provided hereunder shall reduce the period for which COBRA benefits
are available. These benefits shall continue under the participant's
election in force when his severance occurs, subject to any new
election that would be available to him as an active employee. If
the HMO or medical
indemnity provider refuses to continue coverage for the participant,
the participant will receive coverage under the self-funded medical
benefit program available to employees at his location.
4.5 VACATION PAY. Any existing practices of the Company or Affiliates
with respect to payment for unused vacation time at termination of
employment shall not be affected by this Plan.
4.6 MAXIMUM SEVERANCE BENEFITS. Payments under the Plan shall not exceed
twice the participant's Annual Compensation.
4.7 DEATH OF PARTICIPANT. No benefits shall be payable upon the death of
a participant except for any payment which may have been due prior
to his date of death.
SECTION 5. ADMINISTRATION
5.1 POWERS AND DUTIES. The Administrator shall have the power and the
duty to take all action, and to make all decisions necessary or
proper to carry out the Plan, including, without limitation, the
following:
(a) To interpret the Plan, which interpretations shall be final
and conclusive;
(b) To compute the benefit to be paid to any person under the
Plan;
(c) To provide procedures for withholding of any income or
employment taxes from benefits payable hereunder.
5.2 CLAIMS PROCEDURE.
(a) CLAIM, DENIAL AND NOTICE: Any participant who disagrees with
the Administrator's determination of his right to benefits or
the amount of the benefits shall file a written claim for the
benefits he believes he is entitled to. If the Administrator
denies the claim, in whole or in part, he
shall furnish the participant with written notice of the
denial of his claim within sixty (60) days of receipt of the
claim. Such notice shall be written in a manner calculated to
be understood by the participant and shall contain the
specific reasons for such denial, specific references to
pertinent Plan provisions on which the denial is based, a
description of additional material or information which is
needed to complete the claim and why such is necessary, and an
explanation of the Plan's appeal procedure.
(b) APPEAL: Within sixty (60) days after the receipt of a notice
that his claim was denied, the claimant may appeal the denial
of his claim to the Administrator in writing stating the
reason for his appeal and submitting any issues or comments
for the Administrator's review.
(c) DECISION ON APPEAL: Within sixty (60) days of receipt of an
appeal, the Administrator shall mail to the applicant a
written notice of his decision setting forth, in a manner
calculated to be understood by the applicant, the specific
reasons for his decision and the specific references to the
pertinent Plan provisions on which his decision was based.
5.3 INDEMNITY FOR LIABILITY. The Company shall indemnify the
Administrator against any and all claims, losses, damages, expenses,
including counsel fees, incurred by the Administrator and any
liability, including any amounts paid in settlement with the
Company's approval, arising from the Administrator's action or
failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of the
Administrator.
SECTION 6. MISCELLANEOUS
6.1 PLAN YEAR. The plan year shall be the calendar year.
6.2 AMENDMENT OR TERMINATION. The Company reserves the right to amend,
extend or terminate this Plan at any time. However, the
benefits provided in Section 4.1 shall remain in effect for at least
one year subsequent to the Reorganization Effective Date. A
participant whose employment terminates after the termination or
amendment of this Plan shall be entitled only to the benefits
available under the Plan, if any, in existence at his termination of
employment.
In Witness Whereof, Eagle-Picher Industries, Inc. has caused this
amendment and restatement of the plan to be executed by its duly authorized
corporate officers this _________ day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By: _______________________
Attest: Thomas E. Petry
Chairman of the Board and
Chief Executive Officer
___________________________
EAGLE-PICHER INDUSTRIES, INC. OFFICERS' SEVERANCE PLAN
SECTION 1. THE PLAN
1.1 THE PLAN. Effective upon entry of an order confirming the Third
Amended Consolidated Plan of Reorganization, Eagle-Picher
Industries, Inc. ("Company") adopts the following severance plan
(the "Plan"). The Plan is intended to be an employee welfare benefit
plan under Section 201(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). To the extent it may be
determined to be a pension plan, it is an unfunded plan maintained
to provide benefits to certain individuals described in Section
201(2) of ERISA.
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
mean:
(a) "ADMINISTRATOR" means the Company's Director of Taxes or his
designee. The Administrator shall be a named fiduciary under the
Plan.
(b) "BASE PAY" means the participant's base annual pay rate at the date
of his termination of employment.
(c) "BUSINESS DAY" means any day on which commercial banks are required
to be open for business in Cincinnati, Ohio.
(d) "COMPANY" means Eagle-Picher Industries, Inc., or any successor
thereto.
(e) "CONFIRMATION DATE" means the date of entry of an order confirming
the Reorganization Plan.
(f) "CONFIRMATION ORDER" means the order or orders of the court
confirming the Reorganization Plan.
(g) "ELIGIBLE EMPLOYEES" means Officers of the Company employed in the
Cincinnati, Ohio General Office.
(h) "EXECUTIVE OFFICERS" means Thomas E. Petry, Andries Ruijssenaars,
David N. Hall, Wayne R. Wickens, Carroll D. Curless and James
A.Ralston.
(i) "OFFICERS" means officers of Eagle-Picher Industries, Inc.
(j) "REORGANIZATION EFFECTIVE DATE" means the first Business Day after
the date on which all of the conditions precedent to the
effectiveness of the Reorganization Plan specified in Section 7.9 of
the Reorganization Plan have been satisfied or waived, or if a stay
of the Confirmation Order is in effect on such date, the first
Business Day after the expiration, dissolution, or lifting of such
stay.
(k) "REORGANIZATION PLAN" means the Third Amended Consolidated Plan of
Reorganization of the Company and its affiliated debtors, either in
its present form or as it may be amended, supplemented,
or otherwise modified from time to time, and the exhibits and
schedules to the foregoing, as the same may be in effect at the time
such reference becomes operative.
(l) "SERVICE" means Vesting Service as defined in the Eagle-Picher
Retirement Income Plan for Salaried Employees.
(m) "WEEK'S PAY" means a participant's Base Pay divided by 52.
2.2 GENDER REFERENCE. Any words in this Plan document (or amendments to
it) which are used in one gender shall be read and construed to mean
or include the other gender wherever they would so apply.
SECTION 3. PARTICIPATION
3.1 PARTICIPANTS. Eligible Employees employed on the Confirmation Date
shall become participants on that date. Participation by the
Executive Officers shall cease upon the effective date of the
employment contracts described in Section 7.11 of the Reorganization
Plan.
3.2 NEW PARTICIPANTS. Anyone meeting the definition of Eligible Employee
after the Confirmation Date shall become a participant after
completion of three months of Service. The Company's Chief Executive
Officer can waive any service period required of a new participant
by a written letter to the participant with a copy to the
Administrator.
SECTION 4. BENEFITS
4.1 SEVERANCE BENEFIT. Participants terminated by the Company on or
after the Confirmation Date other than for cause will receive a Base
Severance Benefit, a Supplemental Severance Benefit and Group
Medical and Life Insurance Benefits as described herein.
4.2 BASE SEVERANCE BENEFIT. The Base Severance Benefit will provide one
Week's Pay for each completed year of Service and, for any partial
year of Service, one-twelfth Week's Pay for each completed month of
Service. Payments shall be reduced dollar for dollar by compensation
earned for services rendered by a participant for a subsequent
employer during the period Base Severance Benefits are being paid.
The minimum Base Severance Benefit shall be two Week's Pay. Payments
under the Base Severance Benefit will be made under
the general payroll practice for the unit in which the participant
was employed.
4.3 SUPPLEMENTAL SEVERANCE BENEFIT. The Supplemental Severance Benefit
will provide one year's Base Pay. The Supplemental Severance Benefit
will provide two years' Base Pay for an Officer employed in the
Cincinnati, Ohio, General Office who becomes entitled to a benefit
under Section 4.1
(i) before the first anniversary of the Reorganization Effective
Date, and
(ii) after the Officer reaches age 50.
The Supplemental Severance Benefit shall be paid in a lump sum on
termination of employment.
4.4 GROUP MEDICAL AND LIFE INSURANCE BENEFITS. The Group Medical and
Life Insurance Benefits will provide continued participation in the
medical indemnity benefits, self-funded medical benefits, health
maintenance organizations, and group term life insurance benefits
(including the additional group term life insurance available at
employee cost) as if the participant were an active employee of the
Company or an Affiliate. These benefits will continue for one week
for each year of Service unless similar coverage is obtained from a
subsequent employer. Any period for which medical benefits are
provided hereunder shall reduce the period for which COBRA benefits
are available. These benefits shall continue under the participant's
election in force when his severance occurs, subject to any new
election that would be available to him as an active employee. If
the HMO or medical indemnity provider refuses to continue coverage
for the participant, the participant will receive coverage under the
self-funded medical benefit program available to employees at his
location.
4.5 VACATION PAY. Any existing practices of the Company or Affiliates
with respect to payment for unused vacation time at termination of
employment shall not be affected by this Plan.
4.6 DEATH OF PARTICIPANT. No benefits shall be payable upon the death of
a participant except for any payment which may have been due prior
to his date of death.
SECTION 5. ADMINISTRATION
5.1 POWERS AND DUTIES. The Administrator shall have the power and the
duty to take all action, and to make all decisions necessary or
proper to carry out the Plan, including, without limitation, the
following:
(a) To interpret the Plan, which interpretations shall be final
and conclusive;
(b) To compute the benefit to be paid to any person under the
Plan;
(c) To provide procedures for withholding of any income or
employment taxes from benefits payable hereunder.
5.2 CLAIMS PROCEDURE.
(a) CLAIM, DENIAL AND NOTICE: Any participant who disagrees with
the Administrator's determination of his right to benefits or
the amount of the benefits shall file a written claim for the
benefits he believes he is entitled to. If the Administrator
denies the claim, in whole or in part, he shall furnish the
participant with written notice of the denial of his claim
within sixty (60) days of receipt of the claim. Such notice
shall be written in a manner calculated to be understood by
the participant and shall contain the specific reasons for
such denial, specific references to pertinent Plan provisions
on which the denial is based, a description of additional
material or information which is needed to complete the claim
and why such is necessary, and an explanation of the Plan's
appeal procedure.
(b) APPEAL: Within sixty (60) days after the receipt of a notice
that his claim was denied, the claimant may appeal the denial
of his claim to the Administrator in writing stating the
reason for his appeal and submitting any issues or comments
for the Administrator's review.
(c) DECISION ON APPEAL: Within sixty (60) days of receipt of an
appeal, the Administrator shall mail to the applicant a
written notice of his decision setting forth, in a manner
calculated to be understood by the applicant, the specific
reasons for his decision and the specific references to the
pertinent Plan provisions on which his decision was based.
5.3 INDEMNITY FOR LIABILITY. The Company shall indemnify the
Administrator against any and all claims, losses, damages, expenses,
including counsel fees, incurred by the Administrator and any
liability, including any amounts paid in settlement with the
Company's approval, arising from the Administrator's action or
failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of the
Administrator.
SECTION 6. MISCELLANEOUS
6.1 PLAN YEAR. The plan year shall be the calendar year.
6.2 AMENDMENT OR TERMINATION. The Company reserves the right to amend,
extend or terminate this Plan at any time. However, the benefits
provided in Section 4.1 shall remain in effect for at least one year
subsequent to the Reorganization Effective Date. A participant whose
employment terminates after the termination or amendment of this
Plan shall be entitled only to the benefits available under the
Plan, if any, in existence at his termination of employment.
6.3 UNFUNDED PLAN. The Plan shall be unfunded and all benefit payments
shall be made from the general assets of Eagle-Picher Industries,
Inc.
In Witness Whereof, Eagle-Picher Industries, Inc. has caused this
plan
to be executed by its duly authorized corporate officers this _________ day of
November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
--------------------------
Attest: Thomas E. Petry
Chairman of the Board and
Chief Executive Officer
- ------------------------
/s/ James A. Ralston
--------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.1"
EXECUTORY CONTRACTS OR UNEXPIRED LEASES
TO BE ASSUMED
[THIS PAGE LEFT BLANK INTENTIONALLY]
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: CINCINNATI INDUSTRIAL MACHINERY
- --------------------------------------------------------------------------------
Herman Engineering Inc Sales Representative 0.00
5011 28th Street, S.E. Agreement
Grand Rapids, MI 45912
- --------------------------------------------------------------------------------
Holloway & Assoc Sales Representative 0.00
P.O. Box 100 Agreement
501 Archdale Dr., Ste. 225
Charlotte, NC 28217
- --------------------------------------------------------------------------------
Lohrer, Larry Sales Representative 0.00
260 Northland Blvd., Ste. 224 Agreement
Cincinnati, OH 45246-3651
- --------------------------------------------------------------------------------
Mechanics Laundry Service Agreement 31.66
711 E. Vermont Ave. 10/19/90
Indianapolis, IN 46202
- --------------------------------------------------------------------------------
A8.1-1
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: CONSTRUCTION EQUIPMENT
- --------------------------------------------------------------------------------
Caterpillar, Inc. Warranty Agreement 0.00
600 W. Washington St.
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Equipos de Acuna SA de CV Intercompany Agreement undetermined
Carretera Presa La Amistad, KM 9 07/23/86
CD Acuna, Coahuila Mexico
- --------------------------------------------------------------------------------
Weaver, David Real Estate Lease 139.38
500 E. 50th Street 01/01/80
Lubbock, TX 79404-3726
- --------------------------------------------------------------------------------
A8.1-2
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: EAGLE-PICHER MINERALS, INC.
- --------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 08/01/79
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 06/01/88
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------
Anderson, Virginia C. Mining Lease 0.00
6861 N. Ocean Blvd. 01/01/80
Ocean Ridge, FL 33435
- --------------------------------------------------------------------------------
Bohanan, James A. Mining Lease 0.00
208 Parkview 01/01/80
PO Box 293
Luling, TX 78648
- --------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 150.00
Route 1, Box 357 04/16/74
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 0.00
Route 1, Box 357 03/01/84
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------
Catellus Development Corp Mining Lease 0.00
201 Mission Street, Ste. 250 12/01/71
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Catellus Development Corp Commercial Lease 0.00
201 Mission Street, Ste. 250 02/01/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Copeland, Ella Mae Mining Lease 0.00
1452 Plymouth Rock 01/01/80
Clovis, CA 93612-2444
- --------------------------------------------------------------------------------
Cowie, Elizabeth Herrmann Mining Lease 1,530.08
4 Hawk Lane, North Oaks 01/01/80
St. Paul MN 55127
- --------------------------------------------------------------------------------
Diatomite Products Co Mining Lease 0.00
5 Greenwood Ave., N.W. 07/18/79
Bend, OR 97701-2028
- --------------------------------------------------------------------------------
Eagle-Picher Industries Inc Agency Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Eagle-Picher Industries Inc Export Management Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
A8.1-3
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Fischer, Dalmar Mining Lease 0.00
618 Beacon St. 01/01/80
Newton Centre, MA 02159
- --------------------------------------------------------------------------------
Fischer, Jeannette Mining Lease 0.00
618 Beacon Street 01/01/80
Newton Center, MA 02159
- --------------------------------------------------------------------------------
Fisk, Walter M. Mining Lease 400.00
P.O. Box 458 07/27/87
Lovelock, NV 89419-0458
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 04/01/89
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 09/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 10/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
Grove, Robert E. Farm Lease 1,331.45
2331 Loop Road 04/01/87
Vale, OR 97918-5636
- --------------------------------------------------------------------------------
Knight, James A. Mining Lease 4,131.23
135 S. Elm St. 01/01/80
Hinsdale, IL 60521
also:
- -----
c/o S. Duhl, Schwarts & Freeman
401 N. Michigan #1900
Chicago, IL 60611-4206
- --------------------------------------------------------------------------------
Moore, Leonard W. Farm Lease 0.00
Route 1, Box 451 04/01/87
Vale, OR 97918-9801
- --------------------------------------------------------------------------------
Moran, Richard T. Residential Lease 0.00
2558 Graham Blvd. 12/22/89
Vale, OR 97918-5625
- --------------------------------------------------------------------------------
Rauch, John Rental Agreement 0.00
1340 Nixon Avenue 01/29/80
Reno, NV 89509-2640
- --------------------------------------------------------------------------------
Savage, Louise Mining Lease 0.00
Savage, Thomas & Thomas Jr. 01/01/80
Trust of T. Savage
1949/T.C. Savage, Trustee
1700 1st Bank Building
St. Paul, MN 55101
- --------------------------------------------------------------------------------
A8.1-4
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
SFP Minerals Corp. Mineral Lease 0.00
P.O. Box 27019 12/01/66
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------
SFP Minerals Corp. Sand & Gravel Lease 4,364.32
P.O. Box 27019 11/14/85
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------
Southern Pacific Trans Co Commercial Lease 17.28
One Market Plaza 12/01/70
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Southern Pacific Trans Co. Industrial Lease 0.00
One Market Plaza 03/14/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------
State of Oregon Mining Lease 0.00
Division of State Lands 09/02/82
1600 State Street
Salem, OR 97310-0302
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Lease 12/15/83 61.94
2900 Vassar Street
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Tweedt, Andre M., Jr. Mining Lease 16.67
P.O. Box 59 03/01/84
Durham, CA 95938-0059
- --------------------------------------------------------------------------------
Tweedt, John A. Mining Lease 16.67
11895 Parey Avenue 03/01/84
Red Bluff, CA 96080-8982
- --------------------------------------------------------------------------------
Tweedt, Peter Mining Lease 16.67
424 Stanford Drive 03/01/84
Arcadia, CA 91006
- --------------------------------------------------------------------------------
Twiname, John & Carolyn A. Mining Lease 0.00
60 East End Avenue 01/01/80
New York, NY 10028-7907
- --------------------------------------------------------------------------------
US Postmaster Post Office Box Rental 0.00
2000 Vassar 03/20/80
Reno, NV 89510
- --------------------------------------------------------------------------------
A8.1-5
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ELECTRONICS
- --------------------------------------------------------------------------------
Abel Lemon et al Distributor Sales Agreement 0.00
Division of La Porte Group 02/15/90
Australia, Ltd.
26 Fariola Street
Silverwater, New South Wales,
2141 Australia
- --------------------------------------------------------------------------------
Albright, Lawrence Consultant Agreement 58.06
Route 1, Box 365 10/15/84
Neosho, MO 64850-9801
- --------------------------------------------------------------------------------
Chemag Aktiengesellschaft Distributor Sales Agreement 0.00
Postfach 970167 08/21/90
Senckenbergenlage 10/12
D-6000 Frankfurt AM Main
97 Germany
- --------------------------------------------------------------------------------
City of Joplin Real Estate Lease 0.00
P.O. Box 1355 10/01/90
303 E. 3rd Street
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH License 0.00
Bahnhofsplatz 6 06/26/89
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 06/26/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 08/29/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl GMBH & C Cooperation Agreement 0.00
Stephanstrassr 49 06/09/89
D-8500 Nuernberg 30
Germany
- --------------------------------------------------------------------------------
Dons Machine Shop Lease 0.00
1021 Moffet Street 07/07/77
Joplin, MO 64801-1024
- --------------------------------------------------------------------------------
Evode Laboratories Secrecy Agreement 0.00
Stafford St. 16 3 EH 02/10/89
United Kingdom
- --------------------------------------------------------------------------------
A8.1-6
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Flexibulk Ltd. Distributor Sales Agreement 0.00
Davidson House Upper St. John's 05/14/90
Street
Lichfield, Staffordshire
WS14 9DU United Kingdon
- --------------------------------------------------------------------------------
HB Fuller Co, Research & Dev. Confidentiality Agreement 0.00
Laboratory 09/07/89
1200 Wolters Blvd.
Vadnais Heights, MN 55110-5146
- --------------------------------------------------------------------------------
Le Clanche SA License 0.00
48 Avenue De Grandson
Ch 1401 Yuerdon, Switzerland
- --------------------------------------------------------------------------------
Massey Machine Shop Lease 0.00
1915 Iron Gates Road 01/01/78
Joplin, MO 64801
- --------------------------------------------------------------------------------
Meheffy, Orville A. Medical Services Agreement 0.00
2817 McClelland Blvd., Ste. 108 02/01/86
Joplin, MO 64801
- --------------------------------------------------------------------------------
Morton International Secrecy Agreement 0.00
1275 Lake Avenue 01/01/83
Woodstock, IL 60098-7415
- --------------------------------------------------------------------------------
Swiss Federal Aircraft Factory License 0.00
CH 6032 Emmen, Switzerland
- --------------------------------------------------------------------------------
Union Carbide Chemicals & Plastics License Agreement 0.00
39 Old Ridgebury Road 10/01/82
Danbury, CT 06817-0001
- --------------------------------------------------------------------------------
A8.1-7
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: FABRICON PRODUCTS
- --------------------------------------------------------------------------------
Davies Packing Manufacturer Representative 0.00
P.O. Box 3825 07/19/81
2901 Brixham Drive
Richmond, VA 23235-7825
- --------------------------------------------------------------------------------
Jackson & Assoc. Manufacturer Representative 0.00
5826 Castle Lane 03/26/90
Norcross, GA 30093-3801
- --------------------------------------------------------------------------------
Marks, George Manufacturer Representative 0.00
310 Bok Road 05/01/83
Wyncote, PA 19095-2004
- --------------------------------------------------------------------------------
Pierce, Earl Manufacturer Representative 0.00
7 N. Gate Road 05/01/83
West Chester, PA 19380
- --------------------------------------------------------------------------------
A8.1-8
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: GENERAL OFFICE
- --------------------------------------------------------------------------------
BIS Offsite Records Real Property Lease - 32.28
318 W. Third St. Storage
Cincinnati, Ohio 45202-3408
- --------------------------------------------------------------------------------
Brooks, BB Mineral Rights Interest - 0.00
1501 Mission 07/30/80
Bartlesville, OK 74003
- --------------------------------------------------------------------------------
Bunting Bearings Corp. Subordination Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------
Bunting Bearings Corp. Indemnity Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
Cooper, Geoffrey Vernon Acquisition of Shares (GVC) 189,825.80
Green Hayes, Broad Street - 08/25/88 (British pounds
Brixworth sterling)
Northamptonshire, England, U.K.
- --------------------------------------------------------------------------------
Donlen Corporation Master Agreement 44 0.00
500 Lake Cook Road
Deerfield, IL 60015-4996
- --------------------------------------------------------------------------------
Eagle-Picher, Inc. Export Management Agreement undetermined
580 Walnut Street - 01/01/85
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Eagle-Picher, Inc. Agency Agreement - 01/01/85 undetermined
580 Walnut Street
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Firm Diehl Incorporation of Joint 0.00
Stephenstrasse 49 Company, amendments 1978,
8500 Nuernberg 30 1986, 1989 - 05/19/71
Federal Republic of Germany
- --------------------------------------------------------------------------------
A8.1-9
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Foundation Technology Ltd. License Agreement - 0.00
28 Nerang Centre 06/28/89
Price Street, Nerange,
Queensland, 4211 Australia
- --------------------------------------------------------------------------------
Goldman Sachs Group Industrial Revenue Bond 932.40
85 Broad Street (Remarketing Agent-Oregon
New York, NY 10005 IRB) - 12/01/84
- --------------------------------------------------------------------------------
Lane, Vincent G.J. Acquisition of Shares; 126,860.00
The Beeches, Burnmill Road Indemnity (GVC) - 08/25/88 (British pounds
Market Harborough sterling)
Leicestershire, England LE16 7JG
- --------------------------------------------------------------------------------
Ohio Office Machines Maintenance Agreement - 0.00
124 Burkhart Avenue 08/15/90
Cincinnati, OH 45215
- --------------------------------------------------------------------------------
Pitney Bowes Credit Corp. Equipment Lease - 06/01/88 12.77
P. O. Box 5151
Norwalk, CT 06851
- --------------------------------------------------------------------------------
Pitney Bowes Corp. Maintenance Agreement - 0.00
P.O. Box 14447 01/01/91
Cincinnati, OH 45214
- --------------------------------------------------------------------------------
Powers Energy, Inc. Mineral Rights Interest - 0.00
11930 Menaul Blvd., N.E. 07/30/80
Suite 223
Albuquerque, NM 87112-2461
- --------------------------------------------------------------------------------
Rozai Kogyo Kaisha License Agreement - 0.00
5, 1-Chome Minami 04/18/70
Horeidori Nishiku
Osaka, Japan
- --------------------------------------------------------------------------------
Security Water & Sanitation Dist. Test Well License & Land 1,431.50
231 Security Blvd. Use Agreement - 04/01/90
P.O. Box 5156
Joplin, MO 64802
- --------------------------------------------------------------------------------
Sun Refining & Marketing Co. Mineral Rights Interest - 0.00
P.O. Box 2039 07/30/80
Tulsa, OK 74102-2039
- --------------------------------------------------------------------------------
Veluwse Machine Industries BV License Agreements - 0.00
P. O. Box 161 05/30/73
816 AD EDE
The Netherlands
- --------------------------------------------------------------------------------
A8.1-10
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: HILLSDALE TOOL
- --------------------------------------------------------------------------------
Grede Vassar Inc. Real Estate Lease 0.00
P.O. Box 26499 06/01/89
Milwaukee, WI 53226-0499
- --------------------------------------------------------------------------------
A8.1-11
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: INJECTION MOLDING (PARIS)
- --------------------------------------------------------------------------------
Future Three Software Inc. Software Support Agreement 0.00
33031 Schoolcraft Rd. 03/22/90
Livonia, MI 48150-1604
- --------------------------------------------------------------------------------
Mid American Telephone Supply Telephone System Service 0.00
1628 Wabash 02/18/90
Terre Haute, IN 47807-3321
- --------------------------------------------------------------------------------
A8.1-12
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: MAT
- --------------------------------------------------------------------------------
Kalcor Coatings Co. Use of Land - 05/01/80 0.00
37721 Stevens Boulevard
Willoughby, OH 44094-6231
- --------------------------------------------------------------------------------
A8.1-13
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- --------------------------------------------------------------------------------
Creative Investment Assoc. Real Estate Lease 0.00
P.O. Box 7209 09/15/88
1254 N. Main Street
Ann Arbor, MI 48107-7209
- --------------------------------------------------------------------------------
Detroit Edison Co. Primary Supply Rate 13.38
2000 Second Avenue Schedule D6
Detroit, MI 48226 05/15/90
- --------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation & 0.00
2000 Second Avenue Standby Service
Detroit, MI 48226 07/23/90
- --------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation 0.00
2000 Second Avenue Interconnection Agreement
Detroit, MI 48226 08/01/90
- --------------------------------------------------------------------------------
Federal Energy Regulatory Comm Qualification as a 0.00
Security of the Commission Cogeneration Facility
825 North Capital St., N.E. 07/03/90
Washington, DC 20426
- --------------------------------------------------------------------------------
A8.1-14
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ORCOMATIC
- --------------------------------------------------------------------------------
Iron Mountain Group Inc. Service Agreement 1.20
P.O. Box 1772 01/01/91
Albany, NY 12201-1772
- --------------------------------------------------------------------------------
Unifirst Corp. Rental of Uniforms & rugs 2,101.35
205 Garfield Avenue 01/02/91
Stratford, CT 06497-7103
Claim Assigned to:
- ------------------
Amroc Investments Inc.
Sonia Gardner
335 Madison Ave., 26th Floor
New York, NY 10017
- --------------------------------------------------------------------------------
A8.1-15
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: PLASTICS
- --------------------------------------------------------------------------------
Adams/Remco Inc. Maintenance Agreement 0.00
1109 Sherman Drive 11/03/90
Ft. Wayne, IN 46808-3430
- --------------------------------------------------------------------------------
ADT Security Systems Service Agreement 0.00
P.O. Box 6720 01/01/91
8770 Manchester
St. Louis, MO 63144
- --------------------------------------------------------------------------------
Arrow Service Inc. Service Agreement 0.00
4121 Northrup 01/01/91
Ft. Wayne, IN 46805-1034
- --------------------------------------------------------------------------------
B Safe Extinguishers Service Agreement 0.00
310 Railroad Street 01/01/91
Huntington, IN 46750-2845
- --------------------------------------------------------------------------------
Bertsch Coffee Service Agreement 6,099.79
P.O. Box 815 01/01/91
Warsaw, IN 46580
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
Dekalb Fire & Safety Inc Service Agreement 709.93
P.O. Box 406 10/01/90
103 Depot Street
Auburn, IN 46706-0406
- --------------------------------------------------------------------------------
GTE Telephone Operations North Utility Agreement 4,616.96
Area 08/15/90
11611 N. Meridian, Ste 600 MMI
Carmel, IN 46032
- --------------------------------------------------------------------------------
IBM Information Network Service Agreement 0.00
P.O. Box 30104 01/23/89
Tampa, FL 33630-3104
- --------------------------------------------------------------------------------
Jims Auto Care Service Agreement 0.00
P.O. Box 78 01/01/91
Grabill, IN 46741-0078
- --------------------------------------------------------------------------------
A8.1-16
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Medec Inc. Service Agreement 225.00
1012 LaFort 01/01/91
Ft. Wayne, IN 46805-4333
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
Mid City Office Systems Maintenance Agreement 489.30
P.O. Box 403 07/20/90
138 E. Seventh Street
Auburn, IN 46706-0403
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
National Serv All Waste Disposal Agreement 0.00
P.O. Box 2234 01/01/91
Ft. Wayne, IN 46809
- --------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 67,819.72
P.O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 0.00
P. O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------
TDJ Snow Plowing Service Agreement 0.00
7791 N. Goshen Road 01/01/91
Huntington, IN 46750-8879
- --------------------------------------------------------------------------------
VanDyne Crotty Service Agreement 0.00
3115 Independence Drive 01/01/91
Ft. Wayne, IN 46808-4502
- --------------------------------------------------------------------------------
Welding Services Inc. Service Agreement 0.00
836 Market Street 01/01/91
Huntington, IN 46750-2870
- --------------------------------------------------------------------------------
A8.1-17
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ROSS ALUMINUM FOUNDRIES
- --------------------------------------------------------------------------------
Aktiengesellschaft Customer PO 80493 0.00
Kuhnle Kopp & Kausch 11/23/90
Postfach 265, 6710 Frankenthal
Pfalz, Germany
- --------------------------------------------------------------------------------
Cummins Engine Company Inc Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Decision Data Service Inc. Maintenance Agreement 175.91
One Progress Avenue 09/09/83
Worsham, PA 19044-3502
- --------------------------------------------------------------------------------
Gardner, Mary G., Trustee Royalty Agreement 23,481.08
2500 N. Kuther Rd., Apt. 301 02/17/89
Sidney, OH 45365
- --------------------------------------------------------------------------------
JC Sales Company Inc. Sales Representative 0.00
P.O. Box 2566, 200 East Howard St. Agreement
Des Plaines, IL 60018 09/01/82
- --------------------------------------------------------------------------------
John P Winn Assoc. Sales Representative 0.00
10164 Bear Valley Road Agreement
Jacksonville, FL 32257-5960 12/01/89
- --------------------------------------------------------------------------------
A8.1-18
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
Alco Capital Resource Inc. Copier Lease - 12/19/90 372.26
P.O. Box 9915
Macon, GA 31298-2099
- --------------------------------------------------------------------------------
Ameritech Operator Lease 4,697.63
7255 W. 98th Terrace, Ste. 200 12/04/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 12/08/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 03/01/90
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Eagle Picher Indus Material GMBH Sales Commission undetermined
P.O. Box 1549, D-74605 10/01/90
Ohringen, Germany
- --------------------------------------------------------------------------------
Theresa A. Meyers Government Contract-Cost 0.00
P. O. Box 29396 Plus Fixed Fee
Brookland Station 07/18/90
Washington, D.C. 20017
- --------------------------------------------------------------------------------
National Cancer Institute Cost Plus Fixed Fee 0.00
Research Contracts Branch 03/16/87
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------
National Cancer Institute DOD Cost Plus Fixed Fee 0.00
Research Contracts Branch 06/18/86
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------
Pitney Bowes Operator Lease 0.00
23 Barney Place 05/01/85
Stamford, CT 06926
- --------------------------------------------------------------------------------
A8.1-19
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: TRANSICOIL, INC.
- --------------------------------------------------------------------------------
A Tech Instruments Ltd Sales Representative 0.00
50 Weybright Court Agreement
Unit 24 02/16/90
Scarborough, Ontario
M1S5A8 Canada
- --------------------------------------------------------------------------------
Advance Control Equip Co Sales Representative 0.00
6404 Mallory Drive Agreement
Richmond, VA 23226-2912 12/01/82
- --------------------------------------------------------------------------------
Advent Components Corp Sales Representative 0.00
3080 N. Civic Center Plaza #30 Agreement
Scottsdale, AZ 85251-7930 08/01/88
- --------------------------------------------------------------------------------
AMJ Equipment Corp Sales Representative 0.00
P.O. Box 6320 Agreement
Lakeland, FL 33807-6320 11/03/89
- --------------------------------------------------------------------------------
Douglas Lee Associates Inc. Sales Representative 0.00
249 Ayer Rd., Ste. 304 Agreement
Harvard, MA 01451-1133 04/16/90
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Export Management Agreement undetermined
580 Walnut St. 10/01/87
Cincinnati, OH 45202-3159
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Agency Agreement undetermined
580 Walnut St. 12/01/87
Cincinnti, OH 45202-3159
- --------------------------------------------------------------------------------
FLW Inc Sales Representative 0.00
2930 C Grace Lane Agreement
Costa Mesa, CA 92626-4194 07/01/81
- --------------------------------------------------------------------------------
FLW Southeast Inc Sales Representative 0.00
1400 Marietta Pkwy., Ste. 108 Agreement
Marietta, GA 30067-8269 10/01/85
- --------------------------------------------------------------------------------
Intl. Precision Products Sales Representative 0.00
28 Blvd. Belgique Agreement
MC 98000 12/16/88
Monaco
- --------------------------------------------------------------------------------
J&B Technical Sales Sales Representative 0.00
211 Lexsington Avenue Agreement
Pssiac, NJ 07055-6206 04/16/90
- --------------------------------------------------------------------------------
Keystone Precision Machining Lease Purchase Agreement 0.00
220 N. Center Street 05/02/90
North Wales, PA 19454-3326
- --------------------------------------------------------------------------------
A8.1-20
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
National Guardian Security Security System 0.00
Services Lease/Service
1816 W. Point Pike 07/01/90
West Point, PA 19486
- --------------------------------------------------------------------------------
Raddatz Aero Dynamic Vertriebs Sales Representative 0.00
GMBH Agreement
Otto-Wagner Str. 16 03/15/89
D-8034 Germering, Germany
- --------------------------------------------------------------------------------
Raeco Rep Inc. Sales Representative 0.00
253 West Joe Orr Road Agreement
Chicago Heights, IL 60411-1744 09/03/85
- --------------------------------------------------------------------------------
RDP Corp. Sales Representative 0.00
5877 Huberville Ave. Agreement
Dayton, OH 45431-1218 09/22/90
- --------------------------------------------------------------------------------
Russell Associates Inc Sales Representative 0.00
P. O. Box 6000 Agreement
Pinellas Park, FL 34664-6000 11/01/90
- --------------------------------------------------------------------------------
Synergic Engr Corp Sales Representative 0.00
7100 OHMS Lane Agreement
Edina, MN 55435 08/30/78
- --------------------------------------------------------------------------------
A8.1-21
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: WOLVERINE GASKET
- --------------------------------------------------------------------------------
LDI Corporation Equipment Schedule No. 9, 758.16
30033 Clemens Road as replaced and renewed by
Westlake, OH 44145-1021 Equipment Schedule No. 23-
91, to Master Lease
Agreement No. 7044, dated
01/08/88
================================================================================
A8.1-22
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.4"
PREVIOUSLY SCHEDULED CONTRACTS
[THIS PAGE LEFT BLANK INTENTIONALLY]
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: CINCINNATI INDUSTRIAL MACHINERY
- --------------------------------------------------------------------------------
Lohre & Associates Printing/Advertising 0.00
Suite 101 - 2330 Victory Parkway Agreement
Cincinnati, OH 45206-2809 06/28/90
- --------------------------------------------------------------------------------
A8.4-1
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: CONSTRUCTION EQUIPMENT
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 08/30/65
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 11/20/68
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 05/19/81
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
A8.4-2
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: EAGLE-PICHER EUROPE
- --------------------------------------------------------------------------------
Eagle-Picher Europe, Inc. Loan Agreement - 8/23/88 0.00
P. O. Box 779
580 Walnut St.
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
NBD Bank N.A. - London Loan Agreement - 8/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
United Kingdom
- --------------------------------------------------------------------------------
A8.4-3
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- ------------------------------------------------------------------------------
Division: EAGLE-PICHER MINERALS, INC.
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fifth-Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank NA Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Street 11/02/88
Pittsburgh, PA 15265
- --------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-4
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: EDI
- --------------------------------------------------------------------------------
Chrysler Credit Installment Loan 0.00
40 Oak Hollow, Ste. 155 09/01/89
Southfield, MI 48034-7470
- --------------------------------------------------------------------------------
Star Bank N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-5
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: ELECTRONICS
- --------------------------------------------------------------------------------
IBM Boston Remarketer Lease - 05/01/90 470,000.00
404 Wyman Street (also listed under
Waltham, MA 02254 Plastics Division)
- --------------------------------------------------------------------------------
A8.4-6
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: GENERAL OFFICE
- --------------------------------------------------------------------------------
Amvestors Investment GRP Loan Agreement, Security 0.00
415 S.W. 8th Avenue Agreement
Topeka, KS 66603-3913 03/21/89
- --------------------------------------------------------------------------------
Bank of New York (Trustee) 9 1/2 Sinking Fund 51,662,500.00
21 W. Street, 12th Floor Debentures
New York, NY 10286 02/24/87
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement - 0.00
One Liberty Plaza 11/02/88
26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bank of Nova Scotia Industrial Revenue Bond - 0.00
One Liberty Plaza 12/01/84
26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bankers Trust Industrial Revenue Bond being
(Trustee & Tender Agt) (Oregon) - reinstated
4 Albany Street 12/01/84 under the Plan
New York, NY 10006-1592
- --------------------------------------------------------------------------------
Blue Dove Development Assn. Guarantee of Transicoil 0.00
1352 Bobarn Drive Lease
Narberth, PA 19072-1147 04/21/89
- --------------------------------------------------------------------------------
Central Trust Co., N.A. (Trustee) Industrial Development Bonds 0.00
201 East Fifth Street (Loudon Cty.) - 05/01/80
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Loan 0.00
201 East Fifth Street
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement - 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
City of Mansfield Industrial Revenue Bond - 2,052,000.00
30 N. Diamond Street 10/01/80
Mansfield, OH 44902-1716
- --------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Guarantee - see below
Private Placement Division 07/29/88
140 Garden Street
Hartford, CT 06154
- --------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Security 927,100.60
Private Placement Division Agreement - 07/29/88
140 Garden Street
Hartford, CT 06154
- --------------------------------------------------------------------------------
A8.4-7
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement - 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
First Fidelity Leasing Corp. Capitalized Lease - 10/31/90 70,932.99
255 Business Center Dr. #250
Horsham, PA 19044-3473
- --------------------------------------------------------------------------------
Grove Industrial Development Auth. Secured Note - Mortgage - 0.00
P. O. Box 1268 08/09/89
Grove, OK 74344-1268
- --------------------------------------------------------------------------------
Henry County Development Auth. Industrial Development 2,630,000.00
345 Phillips Drive Revenue Bonds - 08/01/81
McDonough, GA 30253-3425
- --------------------------------------------------------------------------------
IBM Capitalized Lease - 05/01/89 446,230.87
1300 E. Ninth Street (also listed
Cleveland, OH 44114-1502 under Mat
Division)
- --------------------------------------------------------------------------------
Industrial Dev. Board Industrial Development Bonds 0.00
of Loudon Cty. - 05/01/80
Loudon County Courthouse
Lenoir City, TN 37771
- --------------------------------------------------------------------------------
JD Manly Construction Trust Mortgage - 12/01/83 0.00
P.O. Box 491611
Leesburg, FL 34749
- --------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 02/01/90 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed
Westlake, OH 44145-1021 to Master Lease Agreement under
No. 7044, dated 01/08/88) Wolverine
Gasket
Division)
- --------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 03/01/90 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed
Westlake, OH 44145-1021 90 to Master Lease Agreement under
No. 7044, dated 01/08/88) Wolverine
Gasket
Division)
- --------------------------------------------------------------------------------
Lister, Roy D. Patent License Agreement - 0.00
457 Pine Tree 12/04/89 (also listed
Keller, TX 76248 under Orthane
Division)
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement - 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
A8.4-8
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
National City Bank Industrial Revenue Bond 0.00
P.O. Box 5756 (Huntington) - 10/1/84
Reference Account 66688
Cleveland, OH 44101-0756
- --------------------------------------------------------------------------------
NBD Bank NA - London Loan Agreement - 08/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
England
- --------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement - 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Note Agreement - 07/07/88 891,723.30
501 Boylston Street
Boston, MA 02117
Claim Assigned to:
- ------------------
certain affiliates of Morgens
Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Guarantee of E-P Note see above
501 Boylston Street Agreement - 09/14/89
Boston, MA 02117
Claim Assigned to:
- ------------------
certain affiliates of
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Northern Atlantic Life Ins. Co. Loan Agreement, Security 1,546,907.11
Robbins Lane Agreement - 03/21/89
Jericho, NY 11753
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
A8.4-9
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Northern Life Ins. Co. Loan Agreement, Security see above
1110 Third Avenue Agreement - 03/21/89
Seattle, WA 98111
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Northwestern Natl. Life Ins. Co. Loan Agreement, Security see above
20 Washington Avenue, South Agreement - 03/21/89
Minneapolis, MN 55401-1908
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Norwich Cmty. Development Corp. Community Development Loan - 0.00
One Thomas Plaza 03/01/71
Norwich, CT 06360-5314
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement - 0.00
Fifth & Wood Street 11/02/88
Pittsburgh, PA 15265
- --------------------------------------------------------------------------------
Port Development Corp. Industrial Development 3,078,000.00
1519 Capitol Avenue Revenue Bonds - 10/01/80
Houston TX 77002-3613
- --------------------------------------------------------------------------------
Societe Generale Financial Corp. Guarantee of Capitalized 0.00
50 Rockefeller Plaza Lease - 04/19/90
New York, NY 10020-1675
- --------------------------------------------------------------------------------
Societe Generale Financial Corp. Capitalized Lease - 04/19/90 0.00
50 Rockefeller Plaza
New York, NY 10020-1675
- --------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street -08/03/89
Mail Location 8160
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street - 08/03/89
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds see City of
P.O. Box 1118 (Mansfield) - 10/01/80 Mansfield
Cincinnati, OH 45202 above
- --------------------------------------------------------------------------------
A8.4-10
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds 0.00
425 Walnut Street (Storey Cty. IRB) - 04/26/83
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement - 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
State of Oregon Industrial Revenue Bond - see Bankers
Economic Development Dept. 12/01/84 Trust above
595 Cottage Street, NE
Salem, OR 97410
- --------------------------------------------------------------------------------
Storey County Industrial Revenue Bonds - 0.00
"B" Street County Courthouse 04/26/83
Virginia City, NV 89440
- --------------------------------------------------------------------------------
Texas Commerce Bank (Trustee) Industrial Development see Port
P. O. Box 2558 Revenue Bonds (Port Development
Attn: Corporate Trust Development) - 10/01/80 above
Houston, TX 77001
- --------------------------------------------------------------------------------
Trust Company Bank (Trustee) Industrial Development see Henry
P. O. Box 4625 Revenue Bonds (Henry County) County above
Atlanta, GA 30302-4625 - 08/01/81
- --------------------------------------------------------------------------------
U.S. Dept. of Commerce Community Development Loan 0.00
Economic Development Administration (Norwich) - 03/01/71
105 S. 7th Street, 1st Floor
Philadelphia, PA 19106-3324
- --------------------------------------------------------------------------------
Washington Square Capital Inc. Loan Agreement, Security see Northern
625 Marquette Ave., South Agreement - 03/21/89 Atlantic
1500 North Star West above
Minneapolis, MN 55402-1702
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
A8.4-11
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: HILLSDALE TOOL
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-12
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: MAT
- --------------------------------------------------------------------------------
IBM Credit Corp. Lease Agreement - 05/16/89 446,230.87
18000 W. Nine Mile Road (also listed
B/O YR6 - 14th Fl. under General
Southfield, MI 48086 Office
Division)
- --------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/14/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- --------------------------------------------------------------------------------
A8.4-13
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Unsecured Loan Agreement undetermined
580 Walnut Street 09/27/88
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Fleet Credit Corp. Capitalized Equipment Lease 152,280.03
P. O. Box 37144M Agreement
Pittsburgh, PA 15251 01/28/88
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 03/24/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/19/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/25/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 07/20/88 0.00
101 S. Main Street
Ann Arbor, MI 48107
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 04/21/89 0.00
101 S. Main Street
Ann Arbor, MI 48107
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 09/29/89 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/20/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/28/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
Ford Motor Credit Co. Equipment Loan Agreement 0.00
P. O. Box 371065 09/01/88
Pittsburgh, PA 15251-7065
- --------------------------------------------------------------------------------
Star Bank, N.A. Equipment Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement - 08/03/89 0.00
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-14
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: ORTHANE
- --------------------------------------------------------------------------------
Lister, Roy D. License Agreement 0.00
457 Pine Tree 12/04/89 (also listed under
Keller, TX 76248-4421 General Office
Division)
- --------------------------------------------------------------------------------
A8.4-15
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: PLASTICS
- --------------------------------------------------------------------------------
Future Three Software Inc. License Agreement - 10/26/88 0.00
33031 Schoolcraft Road
Livonia, MI 48150-1604
- --------------------------------------------------------------------------------
GE Capital Corp. Equipment Lease - 02/07/90 0.00
P.O. Box 94916
Cleveland, OH 44101-4916
- --------------------------------------------------------------------------------
IBM Credit Corp. Equipment & Software Lease 470,000.00
200 E. Main Street 11/22/88 (also listed
Fort Wayne, IN 46801 under
Electronics
Division)
- --------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/25/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- --------------------------------------------------------------------------------
A8.4-16
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
Southwestern Bell Finance Lease - 04/01/90 5,913.92
P.O. Box 18767
St. Louis, MO 63178-0767
- --------------------------------------------------------------------------------
A8.4-17
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: TRANSICOIL
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza - 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bell Savings Bank Pasa Subordination Agreement 0.00
9 South 69th Street 07/28/89
Upper Darby, PA 19082-2416
- --------------------------------------------------------------------------------
Blue Dove Development Assn. Subordination Agreement 0.00
c/o Ronald Bluestein 07/28/89
1352 Bobarn Drive
Narberth, PA 19072-1147
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fidelcor Services Inc. Lease of Citizen- Cuncom 16,946.00
1700 Market St., 9th Floor 08/29/86
Philadelphia, PA 19103-3913
- --------------------------------------------------------------------------------
Fidelcor Services Inc. Equipment Lease see above
1700 Market St., 9th Floor 02/25/87
Philadelphia, PA 19103-3913
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank, N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-18
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: WOLVERINE GASKET
- --------------------------------------------------------------------------------
LDI Corporation Equipment Lease 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed
Westlake, OH 44145-1021 to Master Lease Agreement under General
No. 7044, dated 01/08/88) Office
Division)
- --------------------------------------------------------------------------------
LDI Corporation Equipment Lease 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed
Westlake, OH 44145-1021 90 to Master Lease Agreement under General
No. 7044, dated 01/08/88) Office
Division)
- --------------------------------------------------------------------------------
NBD Bank, N.A. Equipment Lease - 0.00
611 Woodward Avenue 04/01/87
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
A8.4-19
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.1"
INSURANCE POLICIES TO BE ASSUMED
All insurance policies and related agreements as to which any
insurer may still have obligations to any of the Debtors so
long as such policies and agreements are not listed on Exhibit
"8.5.2."
[THIS PAGE LEFT BLANK INTENTIONALLY]
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.2"
INSURANCE AGREEMENTS TO BE REJECTED
Liberty Mutual Insurance Company
Liberty Mutual Fire Insurance Company
Liberty Mutual Insurance Corporation
c/o William F. Cupelo, Esq.
Home Office Legal Department
175 Berkeley Street
Boston, Massachusetts 02117: All retrospective premium agreements with
respect to workers' compensation,
automobile, and comprehensive general
liability insurance policies issued by
Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, and Liberty
Insurance Corporation for all years prior to
June 1, 1986.
[THIS PAGE LEFT BLANK INTENTIONALLY]
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- ------------------------------------
EXHIBIT "B"
Order of the Bankruptcy Court, dated August 28, 1996, approving this
Disclosure Statement
[THIS PAGE LEFT BLANK INTENTIONALLY]
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re: )
EAGLE-PICHER INDUSTRIES, ) CONSOLIDATED CASE NO.
INC., et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
ORDER (A) APPROVING THE DEBTORS' JOINT DISCLOSURE
STATEMENT, (B) SCHEDULING HEARING ON CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (C) APPROVING NOTICE OF (i) LAST DAY
FOR RECEIPT OF BALLOTS WITH RESPECT TO DEBTORS' THIRD
AMENDED CONSOLIDATED PLAN OF REORGANIZATION,
(ii) LAST DAY FOR FILING OBJECTIONS TO CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (iii) HEARING ON CONFIRMATION
OF DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION
Upon the record of the hearings held on August 12, 1996, and
August 28, 1996 (collectively, the "Disclosure Hearing"), to consider approval
of the Proposed Joint Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code (the "Disclosure Statement") with respect to the Third Amended
Consolidated Plan of Reorganization (as such plan may be modified, the "Plan")
of Eagle-Picher Industries, Inc. and its affiliated debtors in the
above-captioned chapter 11 cases (collectively, the "Debtors"); and each of the
objections to the Disclosure Statement having been withdrawn, overruled by the
Court, or rendered moot by reason of modifications made to the Disclosure
Statement and/or the Plan; and the Debtors having revised the Disclosure
Statement to make certain technical changes thereto; and it appearing that no
further notice of the approval of the Disclosure Statement, as modified, need be
given; and upon the record of the Disclosure Hearing and all of the proceedings
had before the Court; and the Court
B-1
having determined after due deliberation that the Disclosure Statement contains
adequate information, as such term is defined in section 1125 of title 11 of the
United States Code (the "Bankruptcy Code"); and sufficient cause appearing
therefor, it is
ORDERED that, in accordance with section 1125 of the
Bankruptcy Code and Bankruptcy Rule 3017(b), the Disclosure Statement be, and it
hereby is, approved in all respects; and it is further
ORDERED that the forms of ballot (the "Ballots") filed with
the Court on August 27, 1996, be, and they hereby are, approved in all respects;
and it is further
ORDERED that compliance with Local Bankruptcy Rule 3.15(a) and
(b) be, and it hereby is, waived; and it is further
ORDERED that, pursuant to Bankruptcy Rules 3017(c) and
3018(a), the holders of Bearer Unsecured Debt Securities (as such term is
defined in the Plan), the holders of Registered Unsecured Debt Securities (as
such term is defined in the Plan) as of the date that is five (5) business days
after the entry of this Order (the "Voting Record Date"), and other holders of
claims in each of Classes, 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21 of the Plan
as of the Voting Record Date may vote to accept or reject the Plan by indicating
their acceptance or rejection of the Plan on the Ballots provided therefor; and
it is further
ORDERED that, the Voting Deadline, as such term is used in the
Ballot Solicitation and Tabulation Procedures approved by an order of the Court,
dated July 23, 1996 (the "Voting Procedures"), shall be 5:00 p.m., Cincinnati,
Ohio, time on November 4, 1996; and it is further
ORDERED that a hearing (the "Confirmation Hearing") to
consider (i) confirmation of the Plan and (ii) approval of any and all
compromises and settlements embodied in or contemplated by the Plan shall be
held before the Court at the United States Bankruptcy Court, Room 817, 221 East
4th Street, Atrium Two, Cincinnati, Ohio, on November 13, 1996, at 9:30 a.m., or
as soon thereafter as counsel may be heard; and it is further
B-2
ORDERED that objections, if any, to confirmation of the Plan
shall be in writing, and shall (a) state the name and address of the objecting
party and the nature of the claim or interest of such party, (b) state with
particularity the basis and nature of each objection to confirmation of the
Plan, and (c) be filed, together with proof of service, with the Court (with a
copy delivered directly to the Honorable Burton Perlman) and served so that such
objections are received no later than November 4, 1996 at 4:00 p.m., Cincinnati,
Ohio, time, by the Court, Judge Perlman, and the following parties: (i) Weil,
Gotshal & Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York,
New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs,
Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati,
Ohio 45202-4183, Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher
Industries, Inc., (if by courier) 580 Walnut Street, 13th Floor, Cincinnati,
Ohio 45202, Attention: James A. Ralston, Esq., or (if by mail) P.O. Box 1847,
Cincinnati, Ohio 45201, Attention: James A. Ralston, Esq.; (iv) Squire, Sanders
& Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio 44114-3404,
Attention: Carolyn J. Buller, Esq.; (v) Keating, Muething & Klekamp, 1800
Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention:
Kevin E. Irwin, Esq.; (vi) McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800
Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115, Attention:
Robert S. Balantzow, Esq.; and (vii) the Office of the United States Trustee, 36
East 7th Street, Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill,
Esq.; and it is further
ORDERED that replies, if any, to any objections to
confirmation shall be filed, together with proof of service, with the Court
(with a copy delivered directly to the Honorable Burton Perlman) and served so
that such replies are received no later than November 8, 1996 at 4:00 p.m.,
Cincinnati, Ohio, time, by the Court, Judge Perlman, and the following parties:
(i) Weil, Gotshal & Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue,
New York, New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost &
Jacobs, Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street,
Cincinnati,
B-3
Ohio 45202-4183, Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher
Industries, Inc., (if by courier) 580 Walnut Street, 13th Floor, Cincinnati,
Ohio 45202, Attention: James A. Ralston, Esq., or (if by mail) P.O. Box 1847,
Cincinnati, Ohio 45201, Attention: James A. Ralston, Esq.; (iv) Squire, Sanders
& Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio 44114-3404,
Attention: Carolyn J. Buller, Esq.; (v) Keating, Muething & Klekamp, 1800
Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention:
Kevin E. Irwin, Esq.; (vi) McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800
Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115, Attention:
Robert S. Balantzow, Esq.; and (vii) the Office of the United States Trustee, 36
East 7th Street, Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill,
Esq.; and it is further
ORDERED that the Confirmation Hearing may be adjourned from
time to time without prior notice to holders of claims, holders of equity
interests, or parties in interest other than the announcement of the adjourned
hearing date at the Confirmation Hearing; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and directed to mail or cause to be mailed by first-class mail within fifteen
(15) business days after the date of entry of this Order a copy of the notice
(the "Notice") of, among other things, the Confirmation Hearing, substantially
in the form annexed hereto as Exhibit "A," and the Disclosure Statement,
including a copy of the Plan and this Order annexed as exhibits thereto, to all
entities as provided in the Ballot Tabulation and Solicitation Procedures (the
"Voting Procedures"), as approved by the order of the Court dated July 23, 1996,
and also to (i) the indenture trustees under any debt instruments of the Debtors
and (ii) the Office of the United States Trustee; and it is further
ORDERED that the Debtors be, and they hereby are, directed to
cause the Notice to be published two (2) times no less than twenty (20) days
prior to the date of the Confirmation Hearing in the national editions of The
Wall Street Journal and The New York Times; and it is further
B-4
ORDERED that the provision of notice in accordance with the
procedures set forth in this Order and the Voting Procedures shall be deemed
good and sufficient notice of the Confirmation Hearing, the time fixed for
filing objections to confirmation of the Plan, and the time within which holders
of claims may vote to accept or reject the Plan; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and empowered to take such steps and perform such acts as may be necessary to
implement and effectuate this Order.
Dated: Cincinnati, Ohio
August 28, 1996
/s/ Burton Perlman
-------------------------------
United States Bankruptcy Judge
B-5
[THIS PAGE LEFT BLANK INTENTIONALLY]
EXHIBIT "A"
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
)
- ---------------------------------
NOTICE OF (A) SOLICITATION OF VOTES TO ACCEPT OR
REJECT THE DEBTORS' THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION AND (B) HEARING TO
CONSIDER CONFIRMATION OF DEBTORS' THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION
TO ALL CREDITORS, INDENTURE TRUSTEES, EQUITY
SECURITY HOLDERS, AND PARTIES IN INTEREST:
NOTICE IS HEREBY GIVEN that on August 28, 1996, the United States
Bankruptcy Court for the Southern District of Ohio (the "Court") entered an
order (the "Order") approving the disclosure statement (the "Disclosure
Statement") with respect to the Third Amended Consolidated Plan of
Reorganization dated August 28, 1996, (the "Plan") for Eagle-Picher Industries,
Inc., Daisy Parts, Inc., Transicoil Inc., Michigan Automotive Research
Corporation, EDI, Inc., Eagle-Picher Minerals, Inc., and Hillsdale Tool and
Manufacturing Co., Inc. (collectively, the "Debtors"). Pursuant to the Order,
copies of the Plan and Disclosure Statement have been mailed to all known
creditors and equity security holders of the Debtors. Ballots for voting to
accept or reject the Plan have been mailed to all known creditors entitled to
vote to accept or reject the Plan. If you are a creditor of the Debtors and have
not received a copy of the Plan, Disclosure Statement or, if applicable, a
ballot, you may obtain a copy of same by telephoning the Debtors' solicitation
agent, Hill and Knowlton, Inc., at (212) 885-0555. IF YOU HOLD DEBT SECURITIES
ISSUED BY ANY OF THE DEBTORS IN BEARER FORM, YOU MUST CALL HILL AND KNOWLTON,
INC. IN ORDER TO RECEIVE A BALLOT.
NOTICE IS FURTHER GIVEN that all ballots cast to accept or reject
the Plan must be properly completed, executed and mailed or delivered to (i) for
all ballots relating to any debt securities issued by any of the Debtors, Hill
and Knowlton, Inc., 466 Lexington Avenue, New York, New York 10017 and (ii) for
all other claims, the Federated Claims Service Group, 9111 Duke Blvd., P.O. Box
8041, Mason, Ohio 45040, so that they are RECEIVED no later than 5:00 p.m.,
Cincinnati Ohio, time, on November 4, 1996. Owners of debt securities that are
registered in "street name" or that are on deposit with a depositary should
follow the instructions on the ballot for
BA-1
the completion and return of the ballot. If your ballot is not properly
completed or received within such time, it will not be counted as a vote to
accept or reject the Plan.
NOTICE IS FURTHER GIVEN that the Court has fixed November 13, 1996,
at 9:30 a.m. as the date and time for the hearing to consider confirmation of
the Plan and related matters (the "Confirmation Hearing"). The Confirmation
Hearing will be held in Room 817 of the United States Bankruptcy Court, 221 East
4th Street, Atrium Two, Cincinnati, Ohio. The Confirmation Hearing may be
adjourned from time to time without further notice other than announcement made
at the Confirmation Hearing or any adjourned hearing.
NOTICE IS FURTHER GIVEN that objections, if any, to the confirmation
of the Plan shall be in writing, and (a) shall state the name and address of the
objecting party and the nature of the claim or interest of such party, (b) shall
state with particularity the basis and nature of each objection to confirmation
of the Plan and (c) be filed, together with proof of service, with the Court
(with a copy to the Honorable Burton Perlman) and served so that they are
received not later than 4:00 p.m., Cincinnati, Ohio, time, on November 4, 1996,
1996, by the Court, Judge Perlman, and the following parties: (i) Weil, Gotshal
& Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York, New York
10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs, Co- Attorneys for
the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati, Ohio 45202-4183,
Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher Industries, Inc., (if by
courier) 580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202, Attention: James
A. Ralston, Esq., or (if by mail) P.O. Box 1847, Cincinnati, Ohio 45201,
Attention: James A. Ralston, Esq.; (iv) Squire, Sanders & Dempsey, 4900 Society
Center, 127 Public Square, Cleveland, Ohio 44114-3404, Attention: Carolyn J.
Buller, Esq.; (v) Keating, Muething & Klekamp, 1800 Provident Tower, One East
Fourth Street, Cincinnati, Ohio 45202, Attention: Kevin E. Irwin, Esq.; (vi)
McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800 Midland Building, 101
Prospect Avenue, West, Cleveland, Ohio 44115, Attention: Robert S. Balantzow,
Esq.; and (vii) the Office of the United States Trustee, 36 East 7th Street,
Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill, Esq.
Dated: Cincinnati, Ohio
August 28, 1996
BY ORDER OF THE UNITED STATES
BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF OHIO
WEIL GOTSHAL & MANGES LLP FROST & JACOBS
Co-Attorneys for the Debtors Co-Attorneys for the Debtors
767 Fifth Avenue 2500 PNC Center
New York, New York 10153 201 E. Fifth Street
(212) 310-8000 Cincinnati, Ohio 45202-4183
(513) 651-6800
BA-2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- -----------------------------------
EXHIBIT "C"
FINANCIAL APPENDIX
A. HISTORICAL FINANCIAL INFORMATION:
Report on Form 10-K for the Fiscal Year Ended November 30, 1995
Report on Form 10-Q for Quarter Ended May 31, 1996
B. PROJECTED FINANCIAL INFORMATION:
Pro Forma Consolidated Balance Sheet of Reorganized
Eagle-Picher as of December 1, 1996;
Projected Consolidated Balance Sheets of Reorganized
Eagle-Picher as of December 1, 1996, and November 30 of each
of the years from 1997 through 2001;
Projected Consolidated Statements of Income of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 20, 2001;
Projected Consolidated Statements of Cash Flow of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001; and
Projected Capital Structure of Reorganized Eagle-Picher as of
December 1, 1996.
[THIS PAGE LEFT BLANK INTENTIONALLY]
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1995
COMMISSION FILE NUMBER 1-1499
EAGLE-PICHER INDUSTRIES, INC.
AN OHIO CORPORATION
I.R.S. EMPLOYER IDENTIFICATION
NO. 31-0268670
580 BUILDING, 580 WALNUT STREET, P. O. BOX 779, CINCINNATI, OHIO 45201
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-721-7010
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS
Common Capital Stock,
Par Value $1.25 per Share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 23, 1996 was $1,313,029 based upon the average of
the bid and asked prices as of such date. On February 23, 1996, 11,040,932
shares of the registrant's Common Stock were outstanding. The registrant had and
has no other classes of stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Excerpts from registrant's Annual Report for the fiscal year ended
November 30, 1995 -- Incorporated in Part I and Part II.
================================================================================
NOTE
This copy of Eagle-Picher's Form 10-K for 1995 includes only Exhibits 13,
21, 23, 24(a), 24(b) and 99.
In accordance with SEC requirements, copies of the following exhibits will
be furnished upon payment of a fee of ten cents per page. Please remit the
proper amount with your request to:
James A. Ralston, Vice President,
General Counsel and Secretary
Eagle-Picher Industries, Inc.
P. O. Box 779
Cincinnati, Ohio 45201.
Exhibits not included in this Form 10-K for 1995 have the following number
of pages (see list of Exhibits in Part IV, Item 14(a)(3)):
3. (i) -- 10 4. (a) -- 99 10. (a) -- 6
(ii) -- 12 (b)(i) -- 120 (b) -- 6
(b)(ii) -- 5 (c) -- 9
(d) -- 4
TABLE OF CONTENTS
ITEM PAGE
- ---- ----
PART I
1. Business............................................................ 3
2. Properties.......................................................... 5
3. Legal Proceedings................................................... 6
4. Submission of Matters to a Vote of Security Holders................. 12
PART II
5. Market for the Registrant's Common Equity and Related Stockholder
Matters............................................................. 13
6. Selected Financial Data............................................. 13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 13
8. Financial Statements and Supplementary Data......................... 13
9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 13
PART III
10. Directors and Executive Officers of the Registrant.................. 14
11. Executive Compensation.............................................. 17
12. Security Ownership of Certain Beneficial Owners and Management...... 20
13. Certain Relationships and Related Transactions...................... 20
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.... 21
Signatures............................................................... 22
Exhibit Index............................................................ 23
2
PART I
ITEM 1. BUSINESS.
General Development of Business.
Eagle-Picher Industries, Inc. (the "Company") was incorporated in 1867
under the laws of the State of Ohio as an outgrowth of a business enterprise
founded in Cincinnati in 1843. It conducts its business through unincorporated
operating divisions and separately incorporated subsidiaries, both of which are
referred to herein as divisions.
On January 7, 1991, the Company and seven of its domestic subsidiaries
each filed a voluntary petition for relief under chapter 11 of the United States
Bankruptcy Code ("chapter 11"). The chapter 11 filings were the consequence of a
cash shortfall resulting from the Company's inability to satisfy certain
immediate asbestos litigation liabilities. See Item 3.(a) below.
Financial Information About Industry Segment.
The Company's major industry segments are:
1. Industrial;
2. Machinery; and
3. Automotive.
Industry Segment Data is incorporated herein by reference to Exhibit 13, the
Company's Annual Report for the fiscal year ended November 30, 1995, pages
29-30.
Narrative Description of Business.
The Industrial Group, which is composed of three divisions and operations
in three other divisions, produces a variety of products for industrial markets,
principally manufacturers of consumer products. The Minerals Division mines and
refines diatomaceous earth products used for high purity filtration primarily by
the food and beverage industry and also for general industrial applications. The
Fabricon Products Division produces printed packaging materials for the dairy
and confectionery industries. The Specialty Materials Division refines rare
metals, such as high purity germanium and gallium compounds, and is a major
source of boron isotopes for nuclear applications. This Division also produces a
wide range of super-clean containers, which meet strict EPA protocols, for
environmental sampling. Other products manufactured in the Industrial Group
include custom designed cast plastic parts, injection molded rubber parts and
industrial chemicals.
The methods of distribution and competitive positions of the divisions of
the Industrial Group vary widely. For example, the Minerals Division is second
to the Alleghany Corporation in the sale of certain filter aid products which
are sold both directly and through distributors to many large and small
customers. By contrast, the Fabricon Products Division conducts its sales
through sales personnel and competes against many other firms in a highly
price-sensitive market. Other products are sold under competitive conditions
which vary widely from plant to plant.
The Machinery Group consists of five divisions, which are involved in
manufacturing products for various industrial markets. The Construction
Equipment Division produces earthmoving equipment for Caterpillar Inc. and a
line of heavy-duty industrial forklift trucks. The Electronics Division is a
leading supplier of sophisticated special purpose batteries for aerospace and
defense applications. The Cincinnati Industrial Machinery Division produces
specialized high-volume metal cleaning and finishing systems. The Ross Aluminum
Foundries Division manufactures complex aluminum castings in sand and plaster.
Transicoil Inc. manufactures sophisticated electronic components for aerospace,
shipboard, ground-based, and industrial applications.
The principal products manufactured by the Machinery Group are distributed
through various methods and in a variety of competitive environments. The
Electronics Division bids competitively for numerous fixed price government
contracts for special purpose batteries. The Division is a recognized leader in
this business
3
and has a few competitors for some highly technological products, but many large
and small competitors for other products. The Construction Equipment Division is
the sole supplier of four lines of earthmoving equipment to its longstanding
largest customer, Caterpillar Inc. The forklift trucks are distributed through a
dealer network.
The Automotive Group consists of ten divisions, which are involved largely
in the production and sale of mechanical, structural and trim parts for
passenger cars, trucks, vans, and recreational and sport utility vehicles. The
Hillsdale Tool Division specializes in the manufacture of precision-machined
aluminum and steel parts. Typical machined products include torsional vibration
dampers and a variety of castings and forgings. The Division also produces the
entire front pump assembly for Ford Motor Co.'s electronic four-speed overdrive
transmission primarily used on one-half and three-quarter ton pick-up trucks,
vans and sport utility vehicles. The Plastics Division is a major supplier of
fiberglass reinforced molded plastic parts to automotive and other customers.
The Division also produces the fiberglass reinforced plastic roof panels for
General Motors Corporation's all-plastic body, all-purpose vehicle. The
Wolverine Gasket Division coats steel and aluminum with elastomeric compounds
and produces materials which are particularly suitable for high compression
applications. The International Operations Division includes Eagle-Picher
Industries Europe GmbH, with responsibility over three plants in Europe which
manufacture sealing and insulating products, elastomeric extrusions, and
injection molded parts for the European automotive market. The Division also
includes a sales and engineering office in Japan that serves the Asian market.
The Trim Division manufactures automotive interior trim including headliners,
rear package trays, spare tire covers and door panels. The Michigan Automotive
Research Corporation Division offers vehicle and vehicle system manufacturers a
comprehensive range of testing programs for engines, power trains and power
train components. The Rubber Molding Division manufactures small rubber
precision-molded parts. The Suspension Systems Division, which was formerly part
of the Rubber Molding Division, manufactures engineered rubber and rubber-to-
metal products. The department of the Orthane Division which produces
injection-molded plastic parts for automotive and industrial applications was
sold in January 1996. Certain assets of the Orthane Division, related to the
elastomeric extrusion process, were transferred to the new Fluid Systems
Division.
The Automotive Group distributes its products primarily to the "Big Three"
automotive manufacturers, or to other suppliers to those manufacturers, directly
through internal sales personnel. With respect to the hundreds of products
manufactured by the Automotive Group, competition varies widely as to the number
and type of competitors, the methods of competition and the Group's competitive
positions. Divisions producing precision-machined parts, such as Hillsdale Tool
Division, tend to have a few strong competitors (including among others the
automotive manufacturers themselves) and compete on the basis of quality and
price. Divisions such as Trim and Wolverine Gasket tend to have many competitors
of varying sizes and compete primarily on the basis of price. Generally,
competitive conditions for this Group are characterized by a decreasing number
of competitors, an increasing amount of foreign competition (particularly from
the Far East), an increased emphasis on quality and intense pricing pressures
from major customers.
No product accounted for more than 7%, and no customer accounted for more
than 10%, of total sales of the Company for fiscal 1993 through fiscal 1995
except Ford Motor Co., for which sales were $166.8 million in 1995, $165.3
million in 1994, and $148.0 million in 1993, and General Motors Corporation, in
1994 and 1993, when sales were $81.4 million and $73.1 million, respectively. In
addition, the Company is not dependent upon any individual raw material source
for a substantial part of its business and believes that its sources of raw
materials are adequate.
In the Machinery Group, order backlog was approximately $182.5 million as
of November 30, 1995, $190.1 million as of November 30, 1994 and $148.1 million
as of November 30, 1993. The decrease from the prior year is due primarily to
softer demand for capital equipment and heavy-duty forklift trucks and better
efficiencies in producing forklift trucks which worked off the prior year
backlog. A substantial portion of the order backlog outstanding at November 30,
1995 is expected to be filled within the current fiscal year. In no other
segment is order backlog of significance, except in the Specialty Materials
Division which had order backlogs of $34.4 million as of November 30, 1995, and
$25.1 million and $19.9 million as of November 30, 1994 and 1993, respectively.
4
In fiscal 1995, the Company spent approximately $19.9 million for research
and development and related activities, primarily for the development of new
products or the improvement of existing products. Comparable costs were $21.1
million and $17.1 million for 1994 and 1993, respectively.
The Company owns or is licensed under patents relating to methods and
products in several areas of its business. Although these have been of value and
are expected to be of value in the future, the loss of any individual patent or
group of patents would not materially affect the conduct of the Company's
business.
In the fiscal years 1995, 1994, and 1993, for current operations the
Company spent approximately $10.9 million, $9.6 million and $8.6 million,
respectively, to comply with federal, state and local regulatory provisions
relating to the protection of the environment. This level of expenditures has
had no material effect on the earnings or competitive position of the Company or
its operations during the period described. The Company expects these
expenditures to be approximately $12.3 million in fiscal 1996. See Item 3.(d)
for information with respect to various other environmental proceedings.
As of November 30, 1995, the Company employed approximately 7,500 persons
in its operations, of whom approximately 1,900 were salaried employees and
approximately 5,600 were hourly employees. Approximately 20% of the Company's
hourly employees are represented by eight labor organizations under twelve
separate contracts. The thirteenth contract is currently being negotiated. The
Company believes that its relations with its employees generally are good.
Export sales totaled approximately $92.5 million, $76.9 million and $73.2
million in fiscal 1995, 1994 and 1993, respectively. The revenues generated by
foreign operations do not exceed 10% of consolidated revenues, nor do their
identifiable assets exceed 10% of consolidated total assets.
The Company's debtor-in-possession financing expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Should a
plan not become effective by the end of 1996, the Company would expect to have
the current facility extended as long as necessary.
ITEM 2. PROPERTIES.
Eagle-Picher Industries, Inc. manufactures at 57 locations a wide variety
of products primarily for other manufacturers. Types of manufacturing include,
among others, chemical processing, mining, metal fabricating, aluminum casting,
precision machining, electronic and electrical assembling, and rubber and
plastic molding and extruding.
The plants are fully utilized for the purposes intended and generally have
capacity for expansion of existing buildings on owned real estate. Plants range
in size from 425,000 square feet of floor area to under 50,000 square feet and
generally are located away from large urban centers.
Information on the locations of all manufacturing plants is contained in
Exhibit 99 attached hereto, which is incorporated by reference into this report.
The Company considers the following plants to be its most important
physical properties:
LOCATION GENERAL CHARACTER
-------------- ---------------------
INDUSTRIAL GROUP
Minerals Division........................ Lovelock, NV Processing facility
MACHINERY GROUP
Electronics Division..................... Joplin, MO Manufacturing plants
(six locations)
Construction Equipment Division.......... Lubbock, TX Fabrication and
assembly facility
AUTOMOTIVE GROUP
Hillsdale Tool Division.................. Hillsdale, MI Manufacturing plants
(four locations)
Plastics Division........................ Grabill, IN Manufacturing plant.
All of such properties are held in fee and none of them is subject to any major
encumbrances.
5
ITEM 3. LEGAL PROCEEDINGS.
(a) Chapter 11 Proceedings.
On January 7, 1991 ("petition date"), the Company and seven of its
domestic subsidiaries each filed a voluntary petition for relief under chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Ohio, Western Division, in Cincinnati, Ohio
("Bankruptcy Court"). The subsidiaries that filed chapter 11 petitions are Daisy
Parts, Inc., Transicoil Inc., Michigan Automotive Research Corporation
("MARCO"), EDI, Inc., Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc.,
and Hillsdale Tool & Manufacturing Co. On November 30, 1991, substantially all
of the assets of EDI, Inc. were sold pursuant to authority granted by the
Bankruptcy Court. All of the chapter 11 cases have been consolidated for
procedural purposes only under the caption: "In re Eagle-Picher Industries,
Inc., et al.," Consolidated Case No. 1-91-00100, before the Honorable Burton
Perlman, United States Bankruptcy Judge. The Company and its petitioning
subsidiaries, other than EDI, Inc., are operating their businesses and managing
their properties as debtors in possession, in accordance with the provisions of
the Bankruptcy Code.
The filing of a chapter 11 petition operates as an automatic stay of all
litigation against the debtor that was or could have been commenced before the
filing of the chapter 11 petition and of any act to collect or recover a claim
against the debtor that arose before the commencement of the chapter 11 case.
While claimants or the Company may petition the Bankruptcy Court for a
modification of the stay to permit such litigation or claim recovery to proceed,
the Company believes that it is unlikely that the Bankruptcy Court will grant
such permission except in certain limited instances to permit the liquidation of
a pre-petition claim, but not any payment or collection efforts with respect
thereto. Consistent with the provisions of chapter 11, the Company intends to
address all of the pre-petition claims in a plan of reorganization.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business.
At the Company's request, the Bankruptcy Court established a bar date of
October 31, 1991 for all pre-petition claims against the Company other than
those arising from the sale of asbestos-containing products and other than those
arising from any future rejection of executory contracts or unexpired leases in
the chapter 11 cases. The bar date is the date by which claimants who disagree
with the amounts recorded by the Company as owing to such claimants must file a
proof of claim against the Company in the Bankruptcy Court. The Company notified
all known or potential claimants subject to the October 31, 1991 bar date of
their possible need to file a proof of claim with the Bankruptcy Court. Of the
5,600 claims filed pursuant to this bar date, 2,675 were general claims (e.g.
vendor, note holder and other miscellaneous claims), 1,325 were
litigation-related claims and environmental claims, and 1,600 were
asbestos-related claims.
Substantially all of the general claims have been reconciled by the
Company. Such claims, as reconciled, have been allowed as pre-petition claims
against the Company's estate. The impact of these reconciliations on the
Company's financial statements was not material. The Company continues to
attempt to negotiate settlements for the remaining unreconciled general claims.
If they cannot be resolved by a negotiated settlement, the Company intends to
have them resolved by the Bankruptcy Court. The Company does not expect that the
impact of the resolution of these claims will be material. The
litigation-related and environmental claims are discussed in subsections (c) and
(d) respectively, below.
The Bankruptcy Court also established a bar date of September 30, 1992 for
all present asbestos-related claims. Approximately 161,000 asbestos-related
claims were filed with the Bankruptcy Court pursuant to the bar date.
Approximately 1,000 of these claims alleged property damage. The 1,600
asbestos-related claims referred to above filed prior to the October 31, 1991
bar date will be treated in the reorganization cases in the same manner as the
asbestos-related claims filed in connection with the September 30, 1992 bar
date. The asbestos-related claims are discussed more fully in subsection (b),
below.
6
The Bankruptcy Court has approved five extensions of the periods during
which the Company has the exclusive right to file and confirm a chapter 11 plan
under section 1121(a) of the Bankruptcy Code ("Exclusive Periods"). The most
recent order of the Bankruptcy Court, entered on May 23, 1995, provides that the
Exclusive Periods are extended until further order of the Bankruptcy Court.
On June 5, 1992, a mediator was appointed by the Bankruptcy Court to
assist the Company, the ICC, the UCC, the RFC and the ESC in their efforts to
negotiate a consensual plan of reorganization. On November 9, 1993, the Company
reached an agreement ("Agreement") on the principal elements of a joint plan of
reorganization with the ICC and the RFC, the representatives of the holders of
present and future asbestos-related and other toxic tort claims in the Company's
chapter 11 case. The Agreement was reached with the assistance of the mediator
appointed by the Bankruptcy Court.
As a consequence of the Agreement, the Company recorded a provision in the
fourth quarter of 1993 of $1.135 billion to increase the asbestos liability
subject to compromise to $1.5 billion. The Company also recorded a provision of
$41.4 million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization. On February 28, 1995, the Company and
its petitioning subsidiaries filed a plan of reorganization and accompanying
disclosure statement with the Bankruptcy Court ("Original Plan"). The Original
Plan was proposed jointly with the ICC and the RFC.
The Original Plan was premised on the settlement of the Company's
liability for all present and future asbestos-related personal injury claims and
certain other tort claims contemplated by the Agreement. Pursuant to the
Original Plan, these claims were to be channeled to and resolved by an
independently administered claims trust ("Trust") and the Bankruptcy Court would
issue an injunction with respect to such claims. The injunction would forever
stay, restrain and enjoin actions against the Company for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on or
with respect to any personal injury claims resulting from exposure to
asbestos-containing products allegedly manufactured or sold by the Company. In
1994, the Bankruptcy Code was amended to add, among others, new subsections
524(g) and (h), which authorize the issuance of a permanent injunction to
supplement the existing injunctive relief afforded by section 524 of the
Bankruptcy Code in asbestos-related reorganizations under chapter 11. The new
subsections provide that, if certain specified conditions are satisfied, a court
may issue a supplemental permanent injunction barring the assertion of
asbestos-related claims or demands against the reorganized company and
channeling those claims to an independent trust. The issuance of such a
channeling injunction was a condition precedent to confirmation of the Original
Plan.
The Original Plan provided for the distribution of cash, notes,
debentures, and common stock of the reorganized Company ("Plan Consideration")
to the Trust and to holders of allowed unsecured claims on a pro-rata basis
proportionate to their share of the aggregate amount of allowed pre-petition
unsecured claims against the Company and the other debtor entities. The Original
Plan also provided that claims entitled to priority in payment under the
Bankruptcy Code and convenience claims (general unsecured claims of $500 or less
or claims that will be reduced to that amount) would be paid in full, in cash.
Under the Bankruptcy Code, shareholders are not entitled to any distribution
under a plan of reorganization unless all classes of pre-petition creditors
receive satisfaction in full of their allowed claims or accept a plan which
allows shareholders to participate in the reorganized company or to receive a
distribution. The Original Plan did not provide that all classes of pre-petition
creditors would receive satisfaction in full of their allowed claims.
Consequently, the Original Plan did not provide for any distribution to
shareholders and their equity interests were to be canceled.
The Original Plan did not have the support of the UCC or the ESC because
neither the UCC or the ESC agreed with the amount of the aggregate asbestos
liability which had been negotiated and which was used in the proposed Plan to
determine the allocation of the consideration to be distributed to the unsecured
creditor and shareholder classes. As a result of the dispute, the Company was
unable to move forward with the Original Plan. In order to resolve this dispute,
the Company filed a motion in July 1995, requesting that the Bankruptcy Court
estimate the Company's aggregate liability on account of present and future
asbestos-related personal injury claims. The Bankruptcy Court ruled in December
1995 that the Company's estimated liability with
7
respect to such claims is $2.5 billion ("Estimation Ruling"). The UCC and the
ESC and two individual members of the UCC have filed notices of appeal of the
Estimation Ruling. The Company does not know whether the appellate court will
hear the appeals or, if it does, when any decision will be rendered.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity in
excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order directing the United States
Trustee to disband the ESC on the basis that existing equity holders do not have
an economic interest in the chapter 11 cases. In January 1996, the Bankruptcy
Court ruled that the ongoing activities of the ESC shall be limited to pursuing
its appeal of the Estimation Ruling.
In August 1995, certain entities that had, since the petition date,
purchased claims held by certain trade creditors of Hillsdale Tool &
Manufacturing Co., filed with the Bankruptcy Court a complaint seeking to
preclude the use of substantive consolidation as an element of any plan of
reorganization of the Company and its subsidiaries. Under the principles of
substantive consolidation, the assets of all debtors are used to satisfy claims
against all debtors. In its answer, the Company requested that the Bankruptcy
Court substantively consolidate the estates of the Company and its subsidiaries.
The Company believes that substantive consolidation is warranted in the chapter
11 cases. The Bankruptcy Court has scheduled an evidentiary hearing to commence
on March 4, 1996.
The Company intends to file with the Bankruptcy Court as soon as
practicable an amended plan of reorganization ("Amended Plan") and an
accompanying proposed amended disclosure statement. It is anticipated that the
Amended Plan essentially will modify the Original Plan so as to reflect in the
allocation of the distributions of Plan Consideration the effect of the
Estimation Ruling. More specifically, based upon an aggregate amount of allowed
pre-petition unsecured claims to share in the Plan Consideration of
approximately $2.663 billion, it is anticipated that under the Amended Plan the
Trust would receive approximately 94 percent of the Plan Consideration and the
other unsecured creditors the balance.
Each class of creditors and equity security holders that is impaired under
a plan of reorganization is entitled to vote to accept or reject the plan. The
Bankruptcy Code defines acceptance of a plan by a class of creditors as
acceptance by holders of two-thirds in dollar amount and more than one-half in
number of claims of that class that have timely voted to accept or reject the
plan. The Bankruptcy Code defines acceptance of a plan by a class of equity
security holders as acceptance by holders of equity interests that hold at least
two-thirds in amount of the allowed equity interests in such class who have
timely voted to accept or reject the plan. The Bankruptcy Code further provides
that any class that does not receive a distribution under a plan is deemed to
have rejected the plan, and, accordingly, does not vote. Thus, because the
Amended Plan will not provide for any distribution to the Company's existing
shareholders, that class will not vote on the Amended Plan and will be deemed to
reject the Amended Plan. The Bankruptcy Court will confirm a plan only if all of
the requirements of section 1129 of the Bankruptcy Code are met. Among the
requirements for confirmation of a plan are that the plan is (i) accepted by all
impaired classes of claims and equity interests or, if rejected by an impaired
class, that the plan "does not discriminate unfairly" and is "fair and
equitable" as to such class, (ii) feasible, and (iii) in the "best interest" of
creditors and stockholders impaired under the plan.
Additional information concerning the Original Plan, the Amended Plan and
the chapter 11 cases can be found in Note B to the Consolidated Financial
Statements in the Company's Annual Report for the fiscal year ended November 30,
1995, which is attached as Exhibit 13 to this Form 10-K and which is
incorporated herein by reference. Additional information concerning the chapter
11 proceedings can be found in subsections (b) through (d), inclusive, of this
Item 3.
(b) Asbestos.
Prior to its chapter 11 filing, the Company had been named as a
co-defendant in a substantial number of lawsuits alleging personal injury from
exposure to asbestos-containing insulation products. As of the petition date,
there were approximately 67,800 asbestos-related claims outstanding against the
Company. The claims, which were pending in 48 states, British Columbia, Guam,
the Virgin Islands, and the District of Columbia,
8
alleged, in general, that the Company and other defendant manufacturers failed
to warn of the potential hazard to health from the inhalation of asbestos fiber
contained in their products. As a result of the chapter 11 filing by the
Company, all of such litigation was automatically stayed pursuant to section 362
of the Bankruptcy Code and additional suits were not allowed to be filed against
the Company.
Since the first asbestos case was filed in 1966, the Company has disposed
of approximately 73,500 claims through trial, dismissal or settlement. On
average, the Company spent approximately $7,800 per claim, including attorneys'
fees and other defense costs, to dispose of these claims.
All persons with a pre-petition asbestos-related claim were required to
file a proof of claim by the September 30, 1992 bar date. Approximately 160,000
proofs of claim were filed alleging personal injury. The Company believes that
approximately 11,000 of these claims are duplicates or were filed by persons
whose lawsuits were previously disposed of through trial, dismissal or
settlement. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Such future claims were
not subject to the September 30, 1992 bar date.
The Company recorded a provision in the fourth quarter of 1993 of $1.135
billion to increase the asbestos liability subject to compromise on its books to
$1.5 billion, as a consequence of the proposed settlement discussed in
subsection (a), above. In July 1995, the Company filed a motion requesting that
the Bankruptcy Court estimate the Company's aggregate liability on account of
present and future asbestos-related personal injury claims. The motion was filed
because the UCC and the ESC appointed in the Company's chapter 11 cases had not
agreed with the amount of such liability previously negotiated for settlement
purposes among the Company, the ICC and the RFC. Utilizing information available
from the Company and from other sources, the Company's expert and the experts
retained by the committees and the RFC appointed in the chapter 11 cases gave
opinions as to this liability at the hearing before the Bankruptcy Court on this
matter. In December 1995, the Bankruptcy Court ruled that the Company's
estimated liability for such claims is $2,502,511,000. Specifically, the
Bankruptcy Court found the value of the asbestos-related personal injury claims
asserted prior to the petition date to be $478,000,000 and the value of future
such claims, claims which will be filed after the petition date, to be
$2,024,511,000. Appeals have been filed by certain creditors, the UCC and the
ESC, seeking to have the Bankruptcy Court's ruling overturned. The Company does
not know whether the appellate court will hear the appeals or, if it does, when
any decision may be rendered.
The Company, and numerous others, also were sued in both state and federal
courts by various entities that own or operate commercial properties and public
buildings, such as school districts, counties, cities, states, libraries and
hospitals, based on allegations that asbestos or asbestos-containing products
are or may be in the buildings. The typical demand in such suits is that the
defendants compensate the plaintiffs for any costs incurred in identifying,
repairing, encapsulating or removing the asbestos-containing products, or that
defendants perform such remedial action. Many suits seek an injunction requiring
abatement and punitive damages on the basis that the defendants allegedly knew
of the hazards and, in concert with one another, concealed and misrepresented
the dangers. Many such suits also seek indemnification from the defendants for
all claims for personal injury brought against plaintiffs resulting from the
presence of asbestos-containing products in plaintiffs' buildings. These suits
too have been stayed as against the Company as a result of the commencement of
the chapter 11 cases.
One hundred forty-nine such lawsuits were instituted against the Company
prior to the filing of its chapter 11 petition, including two which were
certified as class actions. Two of such suits were consolidated into one. One
hundred and one were disposed of through dismissals by the court following
rulings on pre-trial motions, or voluntarily by the plaintiffs. The Company
settled seven of these cases for less than $22,000 in the aggregate, prior to
filing its chapter 11 petition. Forty of such suits remain pending, but have
been stayed as a consequence of the chapter 11 filing.
The class actions that were certified pre-petition are a national school
class action consisting of all public and private elementary and secondary
school systems in the United States that have not excluded themselves from the
suit; and a Michigan school class action consisting of all public and private
elementary and secondary school systems in Michigan that have excluded
themselves from the national school class action and included themselves in the
state class action. In four lawsuits, class certification petitions were pending
pre-petition. One of these suits has since been dismissed; one suit has been
suspended; and the remaining two suits, one
9
involving a class of colleges and universities and the other a class of
buildings leased to the government, have been certified as class actions. Many
of the claimants which voluntarily dismissed their individual claims as set
forth above did so to pursue them in one of the certified class actions.
Approximately 1,000 proofs of claim alleging asbestos property damage were
filed in the chapter 11 cases pursuant to the bar date. Certain of these claims
have been withdrawn by the claimants or disallowed by the Bankruptcy Court. The
remaining, approximately 930 proofs of claim assert claims in the aggregate
amount of approximately $11.5 billion. These claims include most of those
asserted in the lawsuits described above that were pending as of the petition
date.
It is anticipated that the Amended Plan will provide for the establishment
of a second trust to resolve asbestos-related property damage claims and
alternative mechanisms relating to such trust. More specifically, if the class
of asbestos-related property damage claimants votes to accept the Amended Plan,
the Company will fund the trust with $3 million in cash, the trustees for the
trust will be selected by the representatives of the claimants, and such
trustees will develop claims resolution procedures. If such class votes to
reject the Amended Plan, but the Amended Plan is nevertheless confirmed, the
trust will be funded with its pro rata share of the Plan Consideration, based
upon an estimate of the aggregate value of asbestos-related property damage
claims by the Bankruptcy Court, and such claims will be resolved and discharged
pursuant to claims resolution procedures contained in the Amended Plan. These
procedures will require such claimants to prove by application of a scientific
protocol that the asbestos-containing insulation products for which they are
seeking damages were manufactured by the Company.
In February 1996, after the close of the fiscal year, the hospital members
of the American Hospital Association, which filed asbestos-related property
damage claims against the Company in the alleged approximate amount of $300
million ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
(a) estimating the aggregate value of all asbestos-related property damage
claims against the Company, and (b) temporarily allowing such claims for
purposes of voting on a plan of reorganization. The motion states that the
relief requested is not intended to be a determination by the Bankruptcy Court
of the Company's liability, if any, on account of such claims or to assign a
permanently fixed value for such claims, but is sought in order to determine the
appropriate distribution to creditor classes under a plan of reorganization.
Because the motion was just filed, the Company has not yet made a determination
as to how it intends to respond. On February 15, 1996, however, the Company
filed with the Bankruptcy Court an objection on various grounds to the allowance
of many asbestos-related property damage claims, including the claims filed by
the Hospitals.
Additional information concerning the asbestos litigation can be found in
Note K to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(c) Other.
In June 1989, the City of New York filed suit against the Company and
others in New York state court seeking indemnity for costs New York had incurred
and would incur because residents of housing owned by the city were allegedly
injured by ingesting paint in that housing. Counts in this suit alleging
negligence and strict product liability have been dismissed. Certain other
counts are still pending. The City of New York did not file a proof of claim in
the Company's chapter 11 case with respect to the claims asserted in such
lawsuit by the 1991 bar date. In November 1993, however, it filed three proofs
of claim with respect to the litigation each seeking $50 million in damages. The
Company's objection to these claims, seeking to have them disallowed on the
basis that they were filed after the bar date, was sustained in November 1994,
and the claims were disallowed. As a result, and given the voluntary withdrawal
of three other lead-related property damage claims, the Company has disposed of
all lead-related property damage claims that were asserted in its chapter 11
case.
In addition to the foregoing, late in 1987, litigation was initiated
against the Company and numerous other defendants, which alleged claims for
personal injuries resulting from ingestion of lead-containing paint. Such suits
have been stayed as to the Company as a consequence of the filing of the chapter
11 cases.
One hundred twenty-eight (128) non-duplicative proofs of claim were timely
filed in the Bankruptcy Court asserting liability for personal injuries from
lead chemicals allegedly manufactured and sold by the
10
Company. Four of such claims have been voluntarily withdrawn at the Company's
request. One of such claims was dismissed by the Bankruptcy Court. The Company
filed objections with the Bankruptcy Court to seven of such claims. Pursuant to
the objections, the Company sought an order of the Bankruptcy Court disallowing
such claims because the claimants' lawsuits asserting similar claims against
other defendants which were not in bankruptcy had been dismissed. Prior to the
filing of its chapter 11 case, the Company also had been a defendant in these
lawsuits. In June 1995, the Bankruptcy Court disallowed all seven of such
claims. Currently, there are 113 remaining timely-filed, lead-related personal
injury claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance
of all of the remaining lead-related personal injury claims. However, in
December 1994, the Eighth District Court of Appeals, Cleveland, Ohio, ruled that
the plaintiff in a lawsuit filed in state court in Cuyahoga County, Ohio, may
pursue certain claims against defendants, such as the Company, that manufactured
lead pigment. The trial court had dismissed the plaintiffs' enterprise
liability, market share and alternative liability theories pursuant to a defense
motion to dismiss. The Ohio Appeals Court upheld the dismissal of the enterprise
liability count, but reversed the dismissal as to the market share and
alternative liability counts and remanded the case to the trial court. The case
is currently proceeding before the trial court on the market share and
alternative liability counts. It is not possible to predict how or when the
trial court will rule on these counts or whether its rulings will be appealed.
It is currently contemplated that all lead-related personal injury claims
that were filed that are not disposed of pursuant to an objection filed by the
Company, and all such claims which may be filed in the future, will be channeled
to and resolved by the Trust that will be established under the Amended Plan for
the benefit of holders of asbestos-related and certain other personal injury
claims discussed in subsection (a), above.
On June 18, 1993, the Company, together with its wholly-owned subsidiary,
Transicoil Inc., commenced an adversary proceeding in the Bankruptcy Court
against Blue Dove Development Associates ("Blue Dove"), the landlord for
Transicoil's domestic manufacturing facility in Valley Forge, Pennsylvania, and
against K-Jem, Inc., Blue Dove's general partner. The suit seeks to recover
excess rent that the Company and Transicoil believe has been paid to the
landlord. The landlord filed a counterclaim in the adversary proceeding seeking
a determination that Transicoil has breached the lease and, therefore, the
entire rent through June 30, 2005 should be accelerated and due. The landlord
made similar claims in a suit filed against Transicoil in October 1993, in the
United States District Court for the Eastern District of Pennsylvania
("Pennsylvania Action"). Prosecution of the Pennsylvania Action which seeks
approximately $10.3 million in damages has been enjoined by the Bankruptcy
Court. The parties filed cross motions for Summary Judgment in the adversary
proceeding in the Bankruptcy Court, which the Bankruptcy Court denied in
December 1995. The Company and Transicoil are seeking leave of the United States
District Court for the Southern District of Ohio to appeal the denial of their
Motion for Summary Judgment, which sought as a matter of law and without a trial
an order requiring repayment of the excess rent that was paid, on the grounds
that the Bankruptcy Court misread the lease in denying their Motion. The Company
cannot predict when the District Court will rule on this request for leave to
appeal the Bankruptcy Court's decision. The Company believes that the
counterclaim asserted by the landlord and the claims asserted in the
Pennsylvania Action are without merit and that the resolution of the dispute
with respect to the lease will not have a materially adverse impact on the
financial condition of the Company or Transicoil Inc.
Additional information concerning such litigation claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(d) Environmental.
The Company received 1,102 proofs of claim in its chapter 11 cases
alleging a right to payment because of environmental matters. Many of these
claims were filed in connection with environmental matters reported in Form 10-K
reports for prior fiscal years. These include claims with respect to numerous
waste disposal sites previously discussed. They also include claims with respect
to the Tri-State mining district of Kansas, Missouri and Oklahoma previously
disclosed: Ottawa County, Oklahoma; Cherokee County, Kansas; Jasper
11
County, Missouri; and the Baxter Springs, Treece, and Galena Subsites in Kansas.
The Company has resolved the majority of these environmental claims through
negotiations with the EPA and the United States Department of Interior. Pursuant
to a negotiated agreement, the agencies and certain states will be granted
allowed pre-petition general unsecured claims in the Company's chapter 11 case
aggregating approximately $43.0 million in full satisfaction of all of the
Company's alleged liability at most of its known Superfund sites, including any
liability for any natural resource damage.
In exchange for these allowed claims, the agencies will release the
Company from liability at such Superfund sites and the Company will be protected
from contribution claims of other parties with potential liability at the sites.
Accordingly, the Company's settlement should completely resolve all claims with
respect to these sites. Further, the agreement provides a process which will
permit any liability, which may arise with respect to a small number of sites as
to which the EPA believes that it does not have sufficient information to
negotiate a meaningful settlement at this time, to be resolved in the future
when additional information is available.
During fiscal 1995, following execution of the settlement agreement by all
parties, the settlement agreement was lodged with the Bankruptcy Court and
notice of it was published in the Federal Register as required by law. In April
and September 1995, respectively, the Company and the United States filed
motions seeking approval of the settlement by the Bankruptcy Court.
Certain parties that may be liable at certain of the sites resolved by the
settlement agreement opposed Bankruptcy Court approval of the settlement. Such
opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objector may have liability. The UCC also opposed approval of the settlement,
arguing that the potential repeal of the retroactive liability provisions of the
Superfund laws could substantially reduce the Company's pre-petition liability,
and, accordingly, the allowed pre-petition claims of $43.0 million should be
reduced. The Company believes, however, that the terms and provisions of the
settlement agreement are fair and equitable and that the objections raised have
no basis. In November 1995, a hearing was held before the Bankruptcy Court on
the motions seeking the approval of the settlement agreement. The Court has not
yet ruled on the motions.
Additional information concerning the environmental claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(e) Summary - Environmental And Other Claims.
The Company intends to defend all remaining litigation claims vigorously
in the manner permitted by the Bankruptcy Code and/or applicable law. All
pre-petition claims against the Company arising from litigation must be
liquidated or otherwise addressed in the context of the chapter 11 cases.
Further, all such claims against the Company will be addressed in a plan of
reorganization. During the pendency of the chapter 11 cases, any unresolved
litigation with respect to pre-petition claims can proceed against the Company
only with the express permission of the Bankruptcy Court.
The Company has resolved most of the litigation claims that were asserted
pursuant to the October 31, 1991 bar date, other than those claims arising from
the sale of asbestos-containing products. The Company has filed objections to
certain of the unresolved litigation-based claims seeking to reduce the amount
of such claims or eliminate them entirely. These objections have not yet been
resolved. The Company anticipates filing additional objections to other such
claims if they cannot be resolved through negotiation. These objections will be
litigated vigorously by the Company pursuant to the provisions of the Bankruptcy
Code and applicable law.
The Company expects that all such claims will be resolved without material
adverse effect on the Company, its operations or its financial condition. In
addition, the Company may have insurance coverage for certain of these claims
and may have factual and legal defenses available to it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
12
PART II
CROSS REFERENCE SHEET
TO ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1995
MARKED AS EXHIBIT 13
EXHIBIT 13
PAGES CAPTIONS
------ --------------------------------------
ITEM 5. MARKET FOR THE REGISTRANT'S
COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Market Information 18 -- Quarterly Data
(b) Holders of Common Stock -- 5,932 holders of record at February
23, 1996
(c) Dividends 35 -- Selected Financial Data
32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
20-21 -- Note B to the Consolidated
Financial Statements
ITEM 6. SELECTED FINANCIAL DATA 35 -- Selected Financial Data
ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 13 -- Consolidated Statement of Income
(Loss) for the Three Years Ended
November 30, 1995
16 -- Consolidated Statement of Cash
Flows for the Three Years Ended
November 30, 1995
14-15 -- Consolidated Balance Sheet as of
November 30, 1995 and 1994
17 -- Consolidated Statement of
Shareholders' Equity (Deficit) for
the Three Years Ended November 30,
1995
19-29 -- Notes to Consolidated Financial
Statements
32 -- Report of Management
31 -- Independent Auditors' Report
18 -- Quarterly Data
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Directors.
The name and age; the positions and offices held with the registrant;
principal occupation during the past five years and present employer; other
boards of directors on which he serves; the year in which he first became a
director of the Company and the committees on which he serves, follow for each
director:
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
PAUL W. CHRISTENSEN, JR., 71.............................................. 1969 1996
Retired, 1987; Chairman of the Board 1978-87, and President prior thereto,
of The Cincinnati Gear Company, Cincinnati, Ohio, a manufacturer of custom
gears and enclosed drives.
Member of Audit, Executive and Stock Option/Compensation Committees.
Chairman of Audit Committee.
MELVIN F. CHUBB, JR., 62.................................................. 1990 (1)
Senior Vice President 1988-96, of Eagle-Picher Industries, Inc.;
Lieutenant General, United States Air Force and Commander of the
Electronic Systems Division at Hanscom Air Force Base, Massachusetts,
1984-88. Director of Empire District Electric Co.
V. ANDERSON COOMBE, 69.................................................... 1974 1996
Chairman of the Board since March 1991, and President prior thereto
(through April 1991), of The Wm. Powell Company, Cincinnati, Ohio, a valve
manufacturer. Director of Star Banc Corp., The Starflo Corp., Union
Central Life Insurance Co. and The Wm. Powell Company.
Member of Audit, Executive and Stock Option/Compensation Committees.
ROGER L. HOWE, 61......................................................... 1986 (2)
Chairman of the Board of U.S. Precision Lens, Inc., Cincinnati, Ohio, a
manufacturer of optics for video projection, instrumentation, and
photographic applications.
Director of Cintas Corporation, Star Banc Corp. and Baldwin Piano & Organ
Co.
Member of Executive and Stock Option/Compensation Committees.
DANIEL W. LEBLOND, 69..................................................... 1965 (2)
Chairman of the Board of LeBlond Makino Machine Tool Company, Cincinnati,
Ohio, a manufacturer of machine tools.
Director of The Ingersoll Milling Machine Company, LeBlond Makino Machine
Tool Company and The Ohio National Life Insurance Co.
Member of Executive and Stock Option/Compensation Committees. Chairman of
Stock Option/Compensation Committee.
POWELL MCHENRY, 69........................................................ 1991 (2)
Of Counsel to Dinsmore & Shohl, a law firm, Cincinnati, Ohio, as of
October 1, 1991; Senior Vice President and General Counsel of The Procter
& Gamble Company, Cincinnati, Ohio, a manufacturer of consumer and
industrial products, 1983-91.
Member of Audit Committee.
14
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
THOMAS E. PETRY, 56....................................................... 1981 (2)
Chairman of the Board and Chief Executive Officer 1994, Chairman of the
Board, President, and Chief Executive Officer 1992, Chairman of the Board
and Chief Executive Officer 1989, President and Chief Executive Officer
1982, President and Chief Operating Officer 1981, Group Vice President
1978, President, Akron Standard Division 1977, Vice President and
Treasurer 1974, of Eagle-Picher Industries, Inc. Director of Cinergy
Corp., Star Banc Corp., Union Central Life Insurance Co. and Insilco Corp.
Member and Chairman of Executive Committee.
EUGENE P. RUEHLMANN, 71................................................... 1991 1996
Of Counsel to Vorys, Sater, Seymour & Pease, a law firm, Cincinnati, Ohio
as of January 1, 1996; Partner of that firm 1989-1996, Chairman, Hamilton
County (Ohio) Republican Central Committee, 1991.
Director of Western-Southern Life Insurance Company.
Member of Audit Committee.
ANDRIES RUIJSSENAARS, 53.................................................. 1994 (2)
President and Chief Operating Officer as of December 1, 1994, Senior Vice
President 1989-94, President, the Ohio Rubber Company Division 1987-89,
Executive Vice President, the Ohio Rubber Company Division 1986-87, General
Manager of the subsidiary, Eagle-Picher Industries GmbH in Ohringen, Germany
1980-86, of Eagle-Picher Industries, Inc.
- ----------
(1) Mr. Chubb retired from the Company's Board of Directors effective February
1, 1996.
(2) Messrs. LeBlond and Petry were elected directors to hold office for terms
expiring at the annual meeting of shareholders in 1994 or when their
successors are elected and qualified. Messrs. Howe and McHenry were elected
directors to hold office for terms expiring at the annual meeting of
shareholders in 1995 or when their successors are elected and qualified. As
the Company did not hold an annual meeting of shareholders in 1994 or 1995,
these directors continue to hold office until their successors are elected
and qualified. Mr. Ruijssenaars was elected director by the incumbent
directors on November 2, 1994 to serve in the same class as Messrs. LeBlond
and Petry, and accordingly will hold office until his successor is elected
and qualified.
(b) Executive Officers.
The name and age, the positions and offices held with the registrant and
employment history with the registrant, term of office as officer and period
during which each has served as such, follow for each executive officer:
YEAR ELECTED
OR ASSUMED
PRESENT
AGE DUTIES
--- ------------
Thomas E. Petry.......... Chairman of the Board of Directors and Chief
Executive Officer 56 1982
Andries Ruijssenaars..... President and Chief Operating Officer,
Director 53 1994
Melvin F. Chubb, Jr...... Senior Vice President and Director* 62 1988
David N. Hall............ Senior Vice President-Finance 56 1987
Wayne R. Wickens......... Senior Vice President 49 1994
Carroll D. Curless....... Vice President and Controller 57 1984
James A. Ralston......... Vice President, General Counsel and Secretary 49 1982
- ----------
* Retired effective February 1, 1996.
15
Thomas E. Petry was first employed by the Company in 1968. He was elected
Assistant Treasurer in 1971, Treasurer in 1973 and Vice President and Treasurer
in 1974. He served as President of the Akron Standard Division from 1977 to
1978. He was elected Group Vice President in 1978, a Director, President and
Chief Operating Officer in 1981, and President and Chief Executive Officer in
1982. He served as President from 1981-89 and from 1992-94. He has been serving
as Chief Executive Officer since 1982 and as Chairman of the Board since 1989.
Andries Ruijssenaars was first employed by the Company in 1980 as General
Manager of Eagle-Picher Industries GmbH in Ohringen, Germany. He served as
Executive Vice President of The Ohio Rubber Company Division from 1986 to 1987
and as President of The Ohio Rubber Company Division from 1987 to 1989. He was
elected Senior Vice President in 1989 and was appointed a Director in November,
1994. He was elected President and Chief Operating Officer effective December 1,
1994 and has been serving in those capacities since December 1, 1994.
Melvin F. Chubb, Jr., was first employed by the Company in 1988 and was
elected and served as Senior Vice President from 1988 until his retirement
effective February 1, 1996. In 1990 Mr. Chubb was elected a Director. Prior to
joining the Company, he completed a career in the United States Air Force,
having attained the rank of Lieutenant General and having served most recently
as commander of the Electronic Systems Division, Air Force Systems Command at
Hanscom Air Force Base.
David N. Hall was first employed by the Company and elected Treasurer in
1977. He was elected Vice President and Treasurer in 1979, and he was elected
and has been serving as Senior Vice President-Finance since 1987.
Wayne R. Wickens was first employed by the Company in 1976 as a management
trainee with the former Fabricon Automotive Division, was promoted to Plant
Manager in 1979, Vice President in 1981 and then President of Fabricon
Automotive in 1986. He was named President of the Wolverine Gasket Division in
1988, Vice President of the Eagle-Picher Automotive Group in 1989, and Division
President of Hillsdale Tool & Manufacturing Co. in 1990. He was elected Senior
Vice President of the Company effective December 1, 1994.
Carroll D. Curless was first employed by the Company in 1964. He was
elected Assistant Controller in 1978 and Controller in 1984. He was elected and
has been serving as Vice President and Controller since 1986.
James A. Ralston was first employed by the Company as an attorney in the
Legal Department in 1979. He was elected Assistant Secretary in 1982, General
Counsel in 1982, Vice President and General Counsel in 1984, and Secretary in
1994. He has been serving as Vice President, General Counsel and Secretary since
1994.
Executive officers serve during the pleasure of the Board, or until their
successors are elected and qualified. There are no family relationships existing
between or among the above executive officers and directors of the registrant.
16
ITEM 11. EXECUTIVE COMPENSATION.
The following Summary Compensation Table sets forth for the last three
fiscal years the compensation provided by the Company to the Chief Executive
Officer and each of the other four most highly compensated executive officers
(collectively, "named executive officers"):
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION
----------------------------------------------
OTHER
FISCAL ANNUAL ALL OTHER
NAME AND YEAR COMPENSATION COMPENSATION
PRINCIPAL POSITION ENDED SALARY($) BONUS($) ($)(2) ($)(3)
- ----------------------------------------- --------- --------- -------- ------------ ------------
Thomas E. Petry.......................... 11/30/95 575,000 244,000 255,296 285,611
Chairman and 11/30/94 575,000 216,000 150,149 169,763
Chief Executive Officer 11/30/93 575,000 100,000 149,492 178,154
Andries Ruijssenaars..................... 11/30/95 390,000 145,000 87,298 102,571
President and Chief Operating Officer 11/30/94 300,000 100,000 86,033 101,197
11/30/93 275,000 75,000 22,760 31,420
Melvin F. Chubb, Jr...................... 11/30/95 290,000 100,000 129,387 149,692
Senior Vice President(1) 11/30/94 280,000 75,000 326,853 370,313
11/30/93 275,000 45,000 0 4,497
David N. Hall............................ 11/30/95 345,000 110,000 120,284 136,415
Senior Vice President -- Finance 11/30/94 320,000 95,000 193,447 216,177
11/30/93 310,000 65,000 50,133 62,692
Wayne R. Wickens......................... 11/30/95 280,000 85,000 24,377 31,109
Senior Vice President 11/30/94 205,000 60,000 20,272 29,512
11/30/93 195,000 60,000 7,150 25,202
- ----------
(1) Mr. Chubb retired effective February 1, 1996.
(2) This column includes nothing for perquisites since in no case did they
exceed the reporting thresholds (the lesser of 10% of salary plus bonuses or
$50,000), but includes amounts for the payment of taxes on purchases of
annuities under the Supplemental Executive Retirement Plan.
(3) All Other Compensation:
COST OF
ANNUITY UNDER COMPANY
NON-QUALIFIED CONTRIBUTIONS
SUPPLEMENTAL TO EAGLE-PICHER
EXECUTIVE RETIREMENT
YEAR RETIREMENT SAVINGS
ENDED PLAN($) PLAN($) TOTAL($)
--------- ------------- ---------------- --------
Thomas E. Petry.................. 11/30/95 280,991 4,620 285,611
Andries Ruijssenaars............. 11/30/95 97,951 4,620 102,571
Melvin F. Chubb, Jr.............. 11/30/95 145,072 4,620 149,692
David N. Hall.................... 11/30/95 131,795 4,620 136,415
Wayne R. Wickens................. 11/30/95 26,489 4,620 31,109
17
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
NOTE: Registrant has never granted Stock Appreciation Rights (SARs), so
there are no SARs outstanding. There were no exercises of options by, or grants
of options to, the named executive officers during fiscal 1995.
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------------------- ------------------------- -------------------------
Thomas E. Petry......................... 0/100,000 **
Andries Ruijssenaars.................... 0/50,000 **
David N. Hall........................... 0/50,000 **
Melvin F. Chubb, Jr.*................... 0/50,000 **
Wayne R. Wickens........................ 0/10,000 **
- ----------
* Retired effective February 1, 1996.
** None of the unexercised options held by any of the named executive
officers was "In-the-Money" as of November 30, 1995. Further, the
options were exercisable only if the last selling price per share on the
New York Stock Exchange ("NYSE") or its successor prior to the date on
which the Company received written notice of the exercise was at least
20% above the option price per share. Trading in the Company's shares on
the NYSE was suspended on November 15, 1993, and the NYSE delisted the
Company's shares effective June 9, 1994. All of the unexercised options
are at a price of $2.50 per share.
PENSION BENEFITS
The following table shows the estimated total combined annual benefits to
named executive officers upon retirement at age 62 payable under Social
Security, the Eagle-Picher Salaried Plan, and the Supplemental Executive
Retirement Plan:
PENSION PLAN TABLE
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ---------------------------- --------- --------- --------- --------- ---------
$ 250,000................... $ 90,000 $ 120,000 $ 150,000 $ 150,000 $ 150,000
300,000................... 108,000 144,000 180,000 180,000 180,000
350,000................... 126,000 168,000 210,000 210,000 210,000
400,000................... 144,000 192,000 240,000 240,000 240,000
450,000................... 162,000 216,000 270,000 270,000 270,000
500,000................... 180,000 240,000 300,000 300,000 300,000
550,000................... 198,000 264,000 330,000 330,000 330,000
600,000................... 216,000 288,000 360,000 360,000 360,000
650,000................... 234,000 312,000 390,000 390,000 390,000
700,000................... 252,000 336,000 420,000 420,000 420,000
750,000................... 270,000 360,000 450,000 450,000 450,000
800,000................... 288,000 384,000 480,000 480,000 480,000
850,000................... 306,000 408,000 510,000 510,000 510,000
900,000................... 324,000 432,000 540,000 540,000 540,000
950,000................... 342,000 456,000 570,000 570,000 570,000
1,000,000................... 360,000 480,000 600,000 600,000 600,000
The Eagle-Picher Salaried Plan, a non-contributory defined benefit pension
plan in which the named executive officers are participants, provides benefits
after retirement based on the highest average monthly compensation during five
consecutive years of the last ten years preceding retirement. For purposes of
the Plan, compensation includes base salary, bonuses, commissions, and severance
payments; salary and bonus included are as reported in the Summary Compensation
Table, and commissions and severance payments, if
18
there had been any, would have been included in that Table. The benefits shown
by the Pension Plan Table above include amounts payable under Social Security
and the Company's Supplemental Executive Retirement Plan as well as those
payable under the Eagle-Picher Salaried Plan. Benefits are computed on the basis
of straight-life annuity amounts.
The estimated credited years of service with the Company for the named
executive officers at age 62 are:
Thomas E. Petry............................................ 33
David N. Hall.............................................. 24
Andries Ruijssenaars....................................... 24
Melvin F. Chubb, Jr........................................ 12
Wayne R. Wickens........................................... 32
SEVERANCE PLAN
On February 6, 1991, the Board of Directors adopted a Severance Plan for
certain employees, including the named executive officers, which was approved by
the Bankruptcy Court on May 13, 1991. Under the Severance Plan, a participant
whose employment is terminated by the Company other than for cause receives: a
Base Severance Benefit of one week's pay for each year of Company service,
payable under general payroll pay practices, but reduced dollar for dollar by
any compensation earned from a subsequent employer during the period such
benefits are being paid; a Supplemental Severance Benefit ranging from three
months' salary up to one year's salary, payable in a lump sum upon termination;
and continuation of certain insurance benefits for up to one week for each year
of service. Currently, the Severance Plan provides that the payment of
Supplemental Severance Benefits will terminate upon confirmation of a plan of
reorganization. It is anticipated, however, that the Amended Plan that the
Company intends to file will provide for the continuation of the Severance Plan
for a period of at least twelve months after the effective date of the Amended
Plan.
COMPENSATION OF DIRECTORS
During fiscal 1995, directors were paid a retainer of $18,000 per year, a
fee of $750 for each Board meeting attended and a fee of $750 for each Board
committee meeting attended. Effective December 1, 1995, this retainer was
increased to $24,000 per year, and the fee for attending a meeting of the Board
or a Board committee was increased to $1,000 for each meeting attended. Board
committee members, excluding committee chairmen, are paid a retainer of $3,000
per year for each committee on which they serve; the chairman of each Board
committee is paid a retainer of $5,000 per year. The Company does not pay
director retainers or attendance fees, or committee retainers or attendance
fees, to directors who are also employees of the Company.
Directors who are not also employees of the Company who retire with ten or
more years of service as members of the Board are paid an annual advisory fee
for life in an amount equal to the annual retainer paid to active directors at
the time of their retirement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, Messrs. LeBlond (Chairman), Christensen, Coombe and
Howe, directors of the Company, constituted the Stock Option/Compensation
Committee.
During fiscal 1995 and as of February 23, 1996, Mr. Petry, Chairman and
Chief Executive Officer of the Company, served as a director and as a member of
the compensation committee of The Wm. Powell Company. During fiscal 1995 and as
of February 23, 1996, Mr. Coombe was Chairman of the Board of The Wm. Powell
Company.
19
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of February 23, 1996, beneficial ownership of the Company's Common
Stock by all directors; each of the named executive officers (except Mr. Chubb
who retired effective February 1, 1996); and all directors and executive
officers as a group, was:
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
----------- ---------
DIRECTORS
Paul W. Christensen, Jr....................................... 38,000(1) *
V. Anderson Coombe............................................ 3,480(1) *
Roger L. Howe................................................. 0 *
Daniel W. LeBlond............................................. 0 *
Powell McHenry................................................ 1,000 *
Thomas E. Petry............................................... 129,102(2)(3) 1.17%
Eugene P. Ruehlmann........................................... 1,000 *
Andries Ruijssenaars.......................................... 52,433(2)(3) *
NAMED EXECUTIVE OFFICERS
David N. Hall................................................. 62,482(3) *
Wayne R. Wickens.............................................. 10,000(3) *
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (12 PERSONS)...... 369,027(4) 3.34%
- ----------
* Less than 1%.
(1) The following persons disclaim beneficial ownership as to the following
numbers of shares included herein which are beneficially owned by family
members: Mr. Christensen -- 13,000 shares; Mr. Coombe -- 1,520 shares.
(2) Messrs. Petry and Ruijssenaars are also executive officers of the Company;
their holdings of Company stock are listed here and not duplicated under the
Named Executive Officers individual listing immediately below.
(3) Includes shares subject to options to purchase within 60 days: Mr. Petry --
100,000; Mr. Ruijssenaars -- 50,000; Mr. Hall -- 50,000; Mr. Wickens --
10,000. The terms of the option grants make the options exercisable if the
last selling price per share on the New York Stock Exchange or its successor
is at least $3.00 on the day prior to the date on which the Company receives
written notice of the exercise.
(4) This figure includes 270,000 shares subject to options to purchase within 60
days on the same terms as set forth in footnote (3), above.
All shares shown above as owned were directly owned except as footnoted.
Directors and executive officers are considered control persons of the Company.
There were as of February 23, 1996 no beneficial owners of more than 5% of
the Company's Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Board of Directors has no knowledge of any significant transaction or
proposed significant transaction to which the Company or any subsidiary and any
director, officer or nominee for director, or any associate of such director,
officer, or nominee, were or are to be parties.
20
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) 1. All Financial Statements
Eagle-Picher Industries, Inc. (Incorporated by reference to the
Company's Annual Report for the fiscal year ended November 30, 1995,
Exhibit 13 -- See Part II above)
Independent Auditors' Report -- Incorporated by reference to Exhibit
13, page 36
3. Exhibits (numbers keyed to Item 601, Regulation S-K).
* 3.(i) Amended Articles of Incorporation as adopted May 1, 1985 and amended
May 28, 1986. Incorporated by reference to Exhibit 1 to Form S-8
Registration Statement No. 33-45179 for the Registrant's Stock
Option Plan of 1990.
* (ii) Code of Regulations of Eagle-Picher Industries, Inc., last amended
March 26, 1985. Incorporated by reference to Exhibit 3(b) to Report
on Form 10-K of Registrant for the fiscal year ended November 30,
1992.
* 4.(a) Form of Indenture relating to the $50,000,000 Eagle-Picher
Industries, Inc. 9 1/2% Sinking Fund Debentures due March 1, 2017,
dated as of March 1, 1987, between Eagle-Picher Industries, Inc. and
The Bank of New York. Incorporated by reference to Report on Form
8-K of Registrant dated March 5, 1987 (on file with the SEC; SEC
File No. 1-1499).
* (b)(i) Credit and Agency Agreement (debtor-in-possession financing
agreement) dated as of November 5, 1992. Incorporated by reference
to Exhibit 4(b) to Form 10-K of Registrant for the fiscal year ended
November 30, 1992.
* (ii) First Amendment to Credit Agreement dated as of August 29, 1994
incorporated by reference to Exhibit 4(b)(ii) to Report on Form 10-K
of Registrant for the fiscal year ended November 30, 1994.
*10.(a) Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as amended.
Incorporated by reference to Exhibit 28 to Post Effective Amendment
No. 1 dated April 10, 1990 and Appendix 2 dated May 30, 1991 to
Registrant's Form S-8 Registration Statement No. 33-5792.
* (b) Eagle-Picher Industries, Inc. Stock Option Plan of 1990.
Incorporated by reference to Appendix A to Registrant's Proxy
Statement for Annual Meeting of Shareholders, March 27, 1990 (on
file with the SEC; SEC File No. 1-1499).
* (c) Eagle-Picher Supplemental Executive Retirement Plan. Incorporated by
reference to Report on Form 10-Q of Registrant for the quarter ended
May 31, 1995.
* (d) Eagle-Picher Industries, Inc. Severance Plan dated as of June 25,
1991. Incorporated by reference to Report on Form 10-K of Registrant
for the fiscal year ended November 30, 1994.
13. Excerpts from Eagle-Picher Industries, Inc. Annual Report for the
fiscal year ended November 30, 1995.
21. Subsidiaries of the Registrant.
23. Independent Auditors' Consent.
24.(a),(b) Powers of Attorney.
27. Financial Data Schedules (submitted electronically to the SEC for
its information).
99. Plants and Locations.
(b) Reports on Form 8-K.
* (i) December 7, 1995 - Reporting December 4, 1995 decision of the U.S.
Bankruptcy Court presiding over chapter 11 cases of the Company and
seven of its domestic subsidiaries that the Company's estimated
aggregate liability on account of present and future
asbestos-related personal injury claims is $2,502,511,000.
- ----------
* Incorporated by reference.
21
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Eagle-Picher Industries, Inc.
By /s/ Thomas E. Petry
----------------------------
Thomas E. Petry
Chairman of the Board
and Chief Executive Officer
Date: February 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Thomas E. Petry Date: February 27, 1996
- -------------------------------------------
Thomas E. Petry, Chairman of the
Board and Chief Executive Officer
/s/ David N. Hall Date: February 27, 1996
- --------------------------------------------
David N. Hall, Senior Vice President-Finance
(Principal Financial Officer)
/s/ Carroll D. Curless* Date: February 27, 1996
- --------------------------------------------
Carroll D. Curless, Vice President
and Controller (Principal Accounting Officer)
/s/ Paul W. Christensen, Jr.* Date: February 27, 1996
- --------------------------------------------
Paul W. Christensen, Jr., Director
/s/ V. Anderson Coombe* Date: February 27, 1996
- --------------------------------------------
V. Anderson Coombe, Director
/s/ Roger L. Howe* Date: February 27, 1996
- --------------------------------------------
Roger L. Howe, Director
/s/ Daniel W. LeBlond* Date: February 27, 1996
- --------------------------------------------
Daniel W. LeBlond, Director
/s/ Powell McHenry* Date: February 27, 1996
- --------------------------------------------
Powell McHenry, Director
/s/ Eugene P. Ruehlmann* Date: February 27, 1996
- --------------------------------------------
Eugene P. Ruehlmann, Director
/s/ Andries Ruijssenaars* Date: February 27, 1996
- --------------------------------------------
Andries Ruijssenaars, Director
- ---------------
* By /s/ James A. Ralston
- --------------------------------------------
James A. Ralston
Attorney-in-fact
22
EXHIBIT INDEX
EXHIBIT
NUMBER
- ---------
3(i) -- Articles of Incorporation*
3(ii) -- Code of Regulations*
4(a) -- Form of Indenture, $50,000,000 9 1/2% Sinking Fund Debentures
due March 1, 2017*
4(b)(i) -- Credit and Agency Agreement dated as of November 5, 1992*
4(b)(ii) -- First Amendment to Credit Agreement, dated as of August 29,
1994*
10(a),(b) -- Eagle-Picher Industries, Inc. Stock Option Plans of 1983 and
1990*
10(c) -- Eagle-Picher Supplemental Executive Retirement Plan*
10(d) -- Eagle-Picher Industries, Inc. Severance Plan dated as of June
25, 1991*
13 -- Excerpts from Annual Report for the Fiscal Year Ended November
30, 1995
21 -- Subsidiaries of the Registrant
23 -- Independent Auditors' Consent
24(a),(b) -- Powers of Attorney
27 -- Financial Data Schedules (Submitted electronically to the SEC
for its information.)
99 -- Plants and Locations
- ----------
* Incorporated by reference. See page 21 above.
23
EXHIBIT 13
CONSOLIDATED STATEMENT OF INCOME (LOSS)
Years Ended November 30
-----------------------------------------
(In thousands of dollars, except per share) 1995 1994 1993
- ----------------------------------------------------------------------------------------
NET SALES $ 848,548 $ 756,741 $ 661,452
OPERATING COSTS AND EXPENSES
Cost of products sold 706,586 622,907 548,605
Selling and administrative 78,875 75,553 69,093
- ----------------------------------------------------------------------------------------
785,461 698,460 617,698
- ----------------------------------------------------------------------------------------
OPERATING INCOME 63,087 58,281 43,754
Provision for asbestos litigation (1,005,511) -- (1,135,500)
Provision for environmental and other claims -- -- (41,436)
Interest expense (contractual
interest of $8,897 in 1995, $8,940
in 1994 and $9,369 in 1993) (1,926) (1,809) (2,070)
Gain on sale of investment 11,505 -- --
Other income (expense) 199 703 (174)
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (932,646) 57,175 (1,135,426)
REORGANIZATION ITEMS (2,225) (3,426) (4,344)
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (934,871) 53,749 (1,139,770)
INCOME TAXES 9,300 5,000 5,000
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (944,171) 48,749 (1,144,770)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS -- -- (12,598)
- ----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (944,171) $ 48,749 $(1,157,368)
========================================================================================
INCOME (LOSS) PER SHARE:
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ (85.51) $ 4.42 $ (103.78)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS -- -- (1.14)
- ----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (85.51) $ 4.42 $ (104.92)
========================================================================================
See accompanying notes to consolidated financial statements.
13.
CONSOLIDATED BALANCE SHEET
November 30
-----------------------
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 93,330 $ 92,606
Receivables, less allowances of $1,860
in 1995 and $1,445 in 1994 127,044 109,130
Income tax refund receivable 4,402 2,246
Inventories 83,647 81,982
Prepaid expenses 17,695 10,295
- --------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 326,118 296,259
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 12,482 11,940
Buildings 84,549 79,937
Machinery and equipment 319,987 301,518
Construction in progress 24,939 14,623
- --------------------------------------------------------------------------------
441,957 408,018
Less accumulated depreciation 286,139 263,369
- --------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 155,818 144,649
- --------------------------------------------------------------------------------
DEFERRED INCOME TAXES 62,824 43,924
OTHER ASSETS 35,313 36,275
- --------------------------------------------------------------------------------
TOTAL ASSETS $580,073 $521,107
================================================================================
See accompanying notes to consolidated financial statements.
14. Eagle-Picher Industries, Inc.
CONSOLIDATED BALANCE SHEET
November 30
--------------------------
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 40,318 $ 43,691
Compensation and employee benefits 13,759 14,005
Long-term debt - current portion 1,525 1,726
Income taxes 4,789 5,223
Taxes other than income 4,772 4,611
Other accrued liabilities 17,460 16,705
- --------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 82,623 85,961
- --------------------------------------------------------------------------------------
LIABILITIES SUBJECT TO COMPROMISE 2,662,530 1,657,265
LONG-TERM DEBT, less current portion 19,103 19,896
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 21,720 21,070
OTHER LONG-TERM LIABILITIES 5,405 3,608
- --------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,791,381 1,787,800
- --------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIT)
Preference stock - no par value
Authorized 873,457 shares; none issued -- --
Common stock - $1.25 par value per share
Authorized 30,000,000 shares; issued
11,125,000 shares 13,906 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,261,289) (1,317,118)
Unrealized gain on investments 333 --
Foreign currency translation 1,277 2,054
- --------------------------------------------------------------------------------------
(2,209,395) (1,264,780)
Cost of 84,068 common treasury shares (1,913) (1,913)
- --------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,211,308) (1,266,693)
- --------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 580,073 $ 521,107
======================================================================================
See accompanying notes to consolidated financial statements.
15.
CONSOLIDATED STATEMENT OF CASH FLOWS
Years Ended November 30
-----------------------------------------
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (944,171) $ 48,749 $(1,157,368)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Provision for asbestos litigation 1,005,511 -- 1,135,500
Provision for environmental and
other claims -- -- 41,436
Cumulative effect of accounting change -- -- 12,598
Depreciation and amortization 28,708 26,143 24,955
Gain on sale of investment (11,505) -- --
Changes in assets and liabilities:
Receivables (17,914) (11,544) (10,764)
Inventories (1,665) (13,676) (4,098)
Deferred income taxes (18,900) (14,000) (12,137)
Accounts payable (3,373) 11,326 5,539
Other (6,235) (1,905) 2,015
- --------------------------------------------------------------------------------------------
Net cash provided by
operating activities 30,456 45,093 37,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment 11,505 -- --
Capital expenditures (40,558) (35,887) (28,512)
Other 340 1,800 335
- --------------------------------------------------------------------------------------------
Net cash used in investing
activities (28,713) (34,087) (28,177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 1,240 -- 810
Reduction of long-term debt (2,259) (2,974) (4,007)
Issuance of common shares -- -- 156
- --------------------------------------------------------------------------------------------
Net cash used in financing
activities (1,019) (2,974) (3,041)
- --------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 724 8,032 6,458
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 92,606 84,574 78,116
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 93,330 $ 92,606 $ 84,574
============================================================================================
See accompanying notes to consolidated financial statements.
16. Eagle-Picher Industries, Inc.
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
TOTAL
ADDITIONAL UNREALIZED FOREIGN SHAREHOLDERS'
COMMON PAID-IN ACCUMULATED GAIN ON CURRENCY TREASURY EQUITY
STOCK CAPITAL DEFICIT INVESTMENTS TRANSLATION STOCK (DEFICIT)
-----------------------------------------------------------------------------------------------
(In thousands of dollars)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1992 $ 13,906 $ 37,644 $ (208,499) $ -- $ 1,326 $ (3,335) $ (158,958)
Net loss -- -- (1,157,368) -- -- -- (1,157,368)
Stock options -- (1,266) -- -- -- 1,422 156
Foreign currency translation -- -- -- -- (1,036) -- (1,036)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1993 13,906 36,378 (1,365,867) -- 290 (1,913) (1,317,206)
Net income -- -- 48,749 -- -- -- 48,749
Foreign currency translation -- -- -- -- 1,764 -- 1,764
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1994 13,906 36,378 (1,317,118) -- 2,054 (1,913) (1,266,693)
Cumulative effect of change in
accounting for marketable
securities -- -- -- 5,377 -- -- 5,377
Net loss -- -- (944,171) -- -- -- (944,171)
Realized gain on investment -- -- -- (5,044) -- -- (5,044)
Foreign currency translation -- -- -- -- (777) -- (777)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1995 $ 13,906 $ 36,378 $(2,261,289) $ 333 $ 1,277 $ (1,913) $(2,211,308)
==================================================================================================================================
See accompanying notes to consolidated financial statements.
17.
QUARTERLY DATA
(Unaudited)
(In thousands of dollars, except per share)
- -----------------------------------------------------------------------------------------
1995 FIRST SECOND THIRD FOURTH YEAR
- -----------------------------------------------------------------------------------------
NET SALES $197,603 $225,378 $210,723 $214,844 $848,548
- -----------------------------------------------------------------------------------------
OPERATING INCOME 15,113 19,147 14,022 14,805 63,087
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) 13,032 16,776 23,394(1) (997,373)(2) (944,171)
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) PER SHARE 1.18 1.52 2.12 (90.33)(2) (85.51)
- -----------------------------------------------------------------------------------------
BID PRICES (3)
HIGH 23/32 9/32 3/16 7/32 23/32
- -----------------------------------------------------------------------------------------
LOW 1/16 1/32 1/16 3/32 1/32
- -----------------------------------------------------------------------------------------
ASK PRICES (3)
HIGH 1-1/32 1/2 11/32 11/32 1-1/32
- -----------------------------------------------------------------------------------------
LOW 3/16 5/32 3/16 7/32 5/32
- -----------------------------------------------------------------------------------------
1994 First Second Third Fourth Year
- -----------------------------------------------------------------------------------------
Net Sales $177,754 $196,994 $186,191 $195,802 $756,741
- -----------------------------------------------------------------------------------------
Operating Income 13,781 17,537 14,226 12,737 58,281
- -----------------------------------------------------------------------------------------
Net Income 11,039 14,669 11,733 11,308 48,749
- -----------------------------------------------------------------------------------------
Net Income Per Share 1.00 1.33 1.06 1.03 4.42
- ----------------------------------------------------------------------------------------
Bid Prices (3)
High 7/8 13/16 1/2 7/16 7/8
- ------------------------------------------------------------------------------------------
Low 1/16 1/4 7/32 1/16 1/16
- -----------------------------------------------------------------------------------------
Ask Prices (3)
High 1-3/8 1-1/4 7/8 11/16 1-3/8
- -----------------------------------------------------------------------------------------
Low 5/32 9/16 15/32 1/4 5/32
- -----------------------------------------------------------------------------------------
(1) The Company realized an $11.5 million gain on the sale of certain equity
investments in June 1995.
(2) In December 1995, the Bankruptcy Court ruled that the estimated aggregate
liability on account of present and future asbestos-related personal
injury claims is $2.5 billion. Accordingly, the Company recorded a
provision of approximately $1.0 billion to increase its asbestos liability
subject to compromise to $2.5 billion.
(3) Effective June 9, 1994, the Company's Common Stock was delisted from the
New York Stock Exchange. It is now trading on the Over-the-Counter Market
(trading symbol is EPIHQ). The sources of all prices are quotations from
the pink sheets and the OTC Bulletin Board. The bid and ask quotations
represent prices between dealers, do not include retail markup, markdown
or commission, and do not represent actual transactions.
18. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in the preparation of the consolidated
financial statements are summarized below. These policies conform to generally
accepted accounting principles and have been consistently applied.
The Company has accounted for all transactions related to the chapter 11
proceedings in accordance with Statement of Position 90-7 ("SOP 90-7"),
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,"
issued by the American Institute of Certified Public Accountants. Accordingly,
Liabilities Subject to Compromise under the chapter 11 proceedings have been
segregated on the Consolidated Balance Sheet and are recorded at the amounts
that have been or are expected to be allowed on known claims rather than
estimates of consideration those claims may receive in a plan of reorganization.
In addition, the Consolidated Statement of Income (Loss) separately discloses
expenses related to the chapter 11 proceedings.
Principles of Consolidation
The consolidated financial statements include the accounts of all of the
Company's subsidiaries which are more than 50% owned and controlled.
Intercompany accounts and transactions have been eliminated. Investments in
nonconsolidated companies which are at least 20% owned are accounted for using
the equity method.
Separate condensed combined financial statements of the entities in
chapter 11 have not been presented because they represent a substantial portion
of the Company. Additionally, entities not in chapter 11 represent identifiable
investments of those entities in chapter 11 and are therefore subject to the
chapter 11 process.
Cash and Cash Equivalents
Marketable securities with original maturities of three months or less are
considered to be cash equivalents. The carrying amount reported in the
Consolidated Balance Sheet approximates fair value.
Marketable Securities
Effective December 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115 ("FAS 115"), "Accounting for Certain
Investments in Debt and Equity Securities." On November 30, 1995, these
investments have been categorized as available for sale and, as a result, are
stated at fair value, based generally on quoted market prices. Unrealized
holding gains and losses are included as a component of Shareholders' Equity
(Deficit) until realized. Realized gains and losses on sales of investments, as
determined on a specific identification basis, are included in the Consolidated
Statement of Income.
Concentrations of Credit Risk
Financial instruments which potentially expose the Company to concentrations of
credit risk consist primarily of trade accounts receivable. The Company's
customer base includes all significant automotive manufacturers and their first
tier suppliers in North America and Europe. Although the Company is directly
affected by the well-being of the automotive industry, management does not
believe significant credit risk existed at November 30, 1995.
Inventories
Inventories are valued at the lower of cost or market, which approximates
current replacement cost. A substantial portion of domestic inventories are
valued using the last-in first-out ("LIFO") method while the balance of the
Company's inventories are valued using the first-in first-out method.
Property, Plant and Equipment
The Company records investments in plant, property and equipment at cost. The
Company provides for depreciation of plant and equipment using the straight-line
method over the estimated lives of the assets which are generally 20 to 40 years
for buildings and 3 to 12 years for machinery and equipment. Improvements which
extend the useful life of property are capitalized, while repair and maintenance
costs are charged to operations as incurred.
Cost in Excess of Net Assets Acquired
Amounts are being amortized using the straight-line method primarily over 40
years.
Income Taxes
Income taxes are provided based upon income for financial statement purposes.
Deferred tax assets and liabilities are established based on the difference
between the financial statement and income tax bases of assets and liabilities
using existing tax rates.
19.
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated at current
exchange rates, and income and expenses are translated using weighted average
exchange rates. Adjustments resulting from translation of financial statements
stated in local currencies generally are excluded from the results of operations
and accumulated in a separate component of Shareholders' Equity (Deficit). Gains
and losses from foreign currency transactions are included in the determination
of net income (loss) and were not material.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year
financial statement presentation.
B. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc. ("Company")
and seven of its domestic subsidiaries each filed a voluntary petition for
relief under chapter 11 of the United States Bankruptcy Code ("chapter 11") with
the United States Bankruptcy Court for the Southern District of Ohio, Western
Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing entity, other
than EDI, Inc., currently is operating its business as a debtor in possession in
accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed by
the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal
elements of a joint plan of reorganization. The agreement was with the ICC and
the RFC, the representatives of the holders of present and future
asbestos-related personal injury and other toxic tort claims in the Company's
chapter 11 case, and was reached with the assistance of the mediator. One of the
principal elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan did
not have the support of the UCC or the ESC because they did not agree with the
amount of the aggregate asbestos liability which had been negotiated and which
was used in the Original Plan to determine the allocation of the consideration
to be distributed to the unsecured creditor and shareholder classes. As a result
of the dispute, the Company was unable to move forward with the Original Plan.
In order to resolve this dispute, the Company filed a motion in July 1995
requesting that the Bankruptcy Court estimate the Company's aggregate liability
on account of present and future asbestos-related personal injury claims. The
Bankruptcy Court ruled in December 1995 that the Company's liability is $2.5
billion ("Estimation Ruling"). The UCC, the ESC and two individual members of
the UCC have filed notices of appeal of the Estimation Ruling. The Company does
not know whether the Appellate Court will hear the appeals or, if it does, when
any decision will be rendered.
The Company intends to file a First Amended Consolidated Plan of
Reorganization ("Amended Plan") which will reflect the Estimation Ruling. The
Company anticipates that the only substantive modification to the Original Plan
will relate to the allocation of the consideration to be distributed under the
plan to the various classes of unsecured claims.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan also will provide for the distribution of cash, notes, debentures, and
common stock
20. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of the reorganized Company to the Trust and to holders of allowed unsecured
claims on a pro-rata basis proportionate to the percentage of their claims to
the total of the Liabilities Subject to Compromise. Claims entitled to priority
under the Bankruptcy Code and convenience claims (general unsecured claims of
$500 or less or claims that will be reduced to that amount) will be paid in
full, in cash. In addition, it is contemplated that the Amended Plan will
resolve and discharge all asbestos property damage claims. Under the Bankruptcy
Code, shareholders are not entitled to any distribution under a plan of
reorganization unless all classes of pre-petition creditors receive satisfaction
in full of their allowed claims or accept a plan which allows shareholders to
participate in the reorganized company or to receive a distribution. It is
anticipated that under the Amended Plan, existing shareholders will receive no
distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity in
excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order to direct the United States
Trustee to disband the ESC on the basis that existing equity holders do not have
an economic interest in the chapter 11 cases. In January 1996, the Bankruptcy
Court ruled that the ongoing activities of the ESC shall be limited to pursuing
its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
Liabilities Subject to Compromise have been reported on the basis of the amount
of the allowed claims even though it is expected that the distributions under a
plan of reorganization with respect to such claims will be lesser amounts. Upon
confirmation of a plan of reorganization, the Company would utilize the
"fresh-start" reporting principles contained in SOP 90-7, which would result in
adjustments relating to the amounts and classification of recorded assets and
liabilities, determined as of the plan confirmation date. Pursuant to the
Amended Plan, the ultimate consideration to be received by all unsecured
creditors will be substantially less than the amounts shown in the accompanying
Consolidated Balance Sheet. Until a plan of reorganization is confirmed,
however, the Company cannot be certain of the final terms thereof or the
ultimate amount creditors will receive.
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Asbestos liability - Note K $2,502,511 $1,499,993
Long-term debt - Note E 62,003 62,004
Accounts payable 41,236 41,074
Accrued liabilities - Note L 56,780 54,194
- --------------------------------------------------------------------------------
$2,662,530 $1,657,265
- --------------------------------------------------------------------------------
The net expense resulting from the Company's chapter 11 filings has been
segregated from expenses related to ordinary operations in the accompanying
Consolidated Statement of Income (Loss) and includes the following:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Professional fees $ 7,047 $ 6,218 $ 5,865
Debt financing costs -- 200 --
Other expenses 181 296 863
Interest income (5,003) (3,288) (2,384)
- --------------------------------------------------------------------------------
$ 2,225 $ 3,426 $ 4,344
- --------------------------------------------------------------------------------
Interest income is attributable to the accumulation of cash and cash equivalents
subsequent to the petition date.
C. INVENTORIES
Inventories consisted of:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Raw materials and supplies $49,358 $52,146
Work-in-process 27,943 24,907
Finished goods 19,470 15,853
- --------------------------------------------------------------------------------
96,771 92,906
Allowance to value inventory at
cost on the LIFO method 13,124 10,924
- --------------------------------------------------------------------------------
$83,647 $81,982
- --------------------------------------------------------------------------------
The percentage of inventories valued using the LIFO method was 75% in 1995 and
81% in 1994. The effects of liquidations of LIFO inventory quantities carried at
lower costs prevailing in prior years were not material.
21.
D. OTHER ASSETS
Other assets consisted of:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Cost in excess of net assets acquired,
net of accumulated amortization of
$4,385 in 1995 and $3,973 in 1994 $12,382 $12,507
Notes receivable 5,137 5,778
Prepaid pension cost - Note I 7,545 7,879
Other 10,249 10,111
- --------------------------------------------------------------------------------
$35,313 $36,275
- --------------------------------------------------------------------------------
Notes receivable include $4,550,000 received as partial consideration for the
sale of a division. This note is payable in two equal installments in 1997 and
1998 and bears interest at 8%. Pursuant to the terms of the note, interest is
payable semiannually commencing in August 1994. The Company is receiving
interest payments in accordance with the terms of the note.
E. LONG-TERM DEBT AND SHORT-TERM BORROWINGS
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40,000,000 committed revolving credit facility
("Facility"). The entire amount of the Facility is available for both cash
borrowings and letters of credit. The Facility expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Letters of
credit totaling $30,205,000 and $32,941,000 were outstanding on November 30,
1995 and 1994, respectively, leaving the Company with $9,795,000 and $7,059,000,
respectively, in available borrowing capacity under the Facility. There were no
cash borrowings under the Facility at any time in 1995 or 1994.
The annual rate of interest under the Facility is the agent bank's prime
rate plus 1-1/2%. Fees for letters of credit range up to 2-1/2% per annum and a
commitment fee equal to 1/2% per annum is due on the unused portion. The
obligations are secured by accounts receivable and inventories and are afforded
administrative priority under the Bankruptcy Code. The Company has had
sufficient collateral to borrow the maximum amount under the Facility. The
Facility also contains affirmative and negative covenants which include, among
other things, limitations on capital expenditures and additional borrowings and
minimum quarterly and annual cash flow requirements. The Company has been in
compliance with these covenants throughout the term of the Facility.
The Company's foreign subsidiaries entered into agreements with various
banks which provided lines of credit in the amount of $17,100,000 that expire in
1998. At November 30, 1995, there were $1,200,000 in borrowings outstanding
leaving $15,900,000 in available borrowing capacity. The annual rates of
interest on these lines of credit range from 3/4% to 1-1/2% over the banks' base
rates. Some have no commitment fees; the fees on the others range from .25% to
.65% per annum on the unused portion. These agreements also contain covenants
which include restrictions on dividends and minimum financial requirements. The
Company is in compliance with these covenants at November 30, 1995.
Repayments of pre-petition debt obligations may be made only with the
approval of the Bankruptcy Court. The Bankruptcy Court has approved payments by
the Company with respect to certain pre-petition secured debt obligations in
order to provide the holders of such obligations with adequate protection of
their interests in their collateral security. These adequate protection payments
generally have been in the form of principal payments paid over the remaining
lives of the collateral assets in an aggregate amount equal to the determined
market value of those assets. The amount by which the original obligation and
pre-petition accrued interest exceeds the collateral value is deemed to be a
general unsecured claim. These claims are included in Liabilities Subject to
Compromise. Interest expense has not been recorded on these obligations for the
post-petition period because interest is not payable. Interest on undersecured
and other unsecured pre-petition debt obligations would have been $6,971,000,
$7,131,000 and $7,299,000 in 1995, 1994, and 1993, respectively.
Due to the chapter 11 filings and the anticipated reorganization, it is
not practicable to estimate the fair value of long-term debt which is described
below.
22. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-term debt consisted of:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
9-1/2% Sinking fund debentures, due 2017 $50,000 $50,000
Industrial revenue bonds 18,050 18,125
Secured notes 12,161 13,683
Debt of foreign subsidiaries 1,949 1,304
Other 471 514
- --------------------------------------------------------------------------------
82,631 83,626
Less:
Current portion 1,525 1,726
Subject to compromise 62,003 62,004
- --------------------------------------------------------------------------------
Long-term debt, less current portion $19,103 $19,896
- --------------------------------------------------------------------------------
Unsecured debt included in Liabilities
Subject to Compromise consisted of:
Sinking fund debentures $50,000 $50,000
Industrial revenue bonds 7,500 7,500
Unsecured portion of secured notes 4,131 4,132
Other 372 372
- --------------------------------------------------------------------------------
$62,003 $62,004
- --------------------------------------------------------------------------------
Interest rates averaged 5% in 1995, 4% in 1994, and 5% in 1993 on the industrial
revenue bonds, foreign and other long-term debt on which the Company is
obligated to pay interest. These long-term debt amounts are to mature at various
dates through 2004.
Long-term debt (excluding amounts subject to compromise) is scheduled to
mature as follows: $1,525,000 in 1996, $2,203,000 in 1997, $2,721,000 in 1998,
$1,179,000 in 1999, and $877,000 in 2000. The unsecured portion of long-term
debt will be resolved in a plan of reorganization.
During 1995, 1994, and 1993, the Company paid interest of $1,966,000,
$1,765,000, and $2,075,000, respectively.
F. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("FAS 109"), in 1993. The cumulative effect of
this change in accounting for income taxes was not material and prior year
financial statements were not restated to apply the provisions of FAS 109.
Total income tax benefit for the year ended November 30, 1993 of
$1,490,000 consisted of $5,000,000 expense from operations and $6,490,000 tax
benefit of the cumulative effect of the change in accounting for postretirement
benefits. The following is a summary of the components of income taxes (benefit)
from operations:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Federal - current $ 20,900 $ 15,600 $ 12,500
- deferred (18,900) (14,000) (11,800)
Foreign 3,400 900 2,700
State and local 3,900 2,500 1,600
- --------------------------------------------------------------------------------
$ 9,300 $ 5,000 $ 5,000
- --------------------------------------------------------------------------------
The sources of income (loss) before income tax expense (benefit) and cumulative
effect of accounting change are as follows:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
United States $ (941,971) $ 47,670 $(1,143,312)
Foreign 7,100 6,079 3,542
- --------------------------------------------------------------------------------
$ (934,871) $ 53,749 $(1,139,770)
- --------------------------------------------------------------------------------
The significant components of deferred income tax expense (benefit) attributable
to income from operations are as follows:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Deferred tax benefit (exclusive of the
effects of other components listed
below) $(351,800) $ (400) $(412,900)
Adjustments to deferred tax assets and
liabilities for enacted changes in
tax laws and rates -- -- (3,800)
Change in beginning-of-the-year balance
of the valuation allowance for
deferred tax assets 332,900 (13,600) 404,900
- --------------------------------------------------------------------------------
$ (18,900) $ (14,000) $ (11,800)
- --------------------------------------------------------------------------------
Components of deferred tax balances as of November 30 are as follows:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Deferred tax liabilities:
Property, plant and equipment $ (7,820) $ (6,608)
Prepaid pension (2,641) (2,758)
Other (3,338) (3,371)
- --------------------------------------------------------------------------------
Total deferred tax liabilities (13,799) (12,737)
- --------------------------------------------------------------------------------
Deferred tax assets:
Asbestos liability 877,171 524,998
Accrued liabilities (including amounts
subject to compromise) 26,246 26,223
Postretirement benefit liability 7,602 7,375
Other 4,483 4,048
- --------------------------------------------------------------------------------
Total deferred tax assets 915,502 562,644
- --------------------------------------------------------------------------------
Valuation allowance (838,879) (505,983)
- --------------------------------------------------------------------------------
Net deferred tax assets $ 62,824 $ 43,924
- --------------------------------------------------------------------------------
23.
Given the uncertainties surrounding the chapter 11 cases, the Company does not
believe that recognition of a significant portion of the deferred tax assets
relating to the asbestos liability and other pre-petition liabilities is
appropriate at this time. These liabilities have been recorded at the expected
amounts of the allowed claims; if the liabilities are settled for lesser
amounts, there will be a corresponding reduction in the deferred tax assets and
related valuation allowance. A significant portion of the net deferred tax asset
recognized at November 30, 1995 is expected to be recovered through the
carryback of amounts which will become deductible when the related liabilities
are paid. It is expected that the Company will realize the benefits related to
these deductions when it emerges from chapter 11. The changes in the valuation
allowance result from increased amounts provided for asbestos litigation and
other claims net of increases in the amounts recoverable through these
carrybacks.
The differences between the total income tax expense from operations and
the income tax expense (benefit) computed using the Federal income tax rate were
as follows:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Computed "expected" tax
expense (benefit) $(327,200) $ 18,800 $(398,900)
Change in valuation allowance 332,900 (13,600) 404,900
Change in Federal income tax rate -- -- (3,800)
Foreign tax rate differential 600 (1,500) 1,300
State and local taxes, net of
Federal benefit 2,500 1,600 1,000
Other 500 (300) 500
- --------------------------------------------------------------------------------
Total income tax expense $ 9,300 $ 5,000 $ 5,000
- --------------------------------------------------------------------------------
The Company paid income taxes, net of refunds received, in 1995, 1994, and 1993
of $28,800,000, $18,200,000, and $16,500,000, respectively.
G. INCOME (LOSS) PER SHARE
The calculation of net income (loss) per share is based upon the average number
of common shares outstanding assuming the exercise of stock options. The average
number of shares used in the computation of net income (loss) per share was
11,040,932 in 1995 and 1994 and 11,030,515 in 1993.
H. COMMON STOCK OPTIONS
At November 30, 1995, there were outstanding common stock options under a 1990
and a 1983 plan each authorizing 450,000 shares. The options expire at various
dates through 2000. No options could be exercised as of November 30, 1995.
Stock option transactions are summarized as follows:
Shares Option Price
- --------------------------------------------------------------------------------
Outstanding at November 30, 1992 597,000 $ 2.50 to $14.25
Exercised (62,500) $ 2.50
Expired (15,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1993 519,500 $ 2.50 to $14.25
Expired (20,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1994 499,500 $ 2.50 to $14.25
Expired (5,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1995 494,500 $ 2.50 to $14.25
- --------------------------------------------------------------------------------
There were 284,274 shares available for future grants at November 30, 1995.
I. RETIREMENT BENEFIT PLANS
Substantially all employees of the Company and its subsidiaries are covered by
various pension or profit sharing retirement plans. The cost of providing
retirement benefits was $1,900,000 in 1995, $998,000 in 1994, and $849,000 in
1993.
Plan benefits for salaried employees are based primarily on employees'
highest five consecutive years' earnings during the last ten years of
employment. Plan benefits for hourly employees typically are based on a dollar
unit multiplied by the number of service years.
Net periodic pension expense for the Company's defined benefit plans
included the following components:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Service cost - benefits earned
during the period $ 4,001 $ 4,684 $ 3,924
Interest cost on projected
benefit obligation 12,972 12,144 12,490
Actual gain on plan assets (40,975) (635) (20,658)
Net amortization and deferral 24,336 (17,052) 3,943
- --------------------------------------------------------------------------------
Net periodic pension costs $ 334 $ (859) $ (301)
- --------------------------------------------------------------------------------
The plans' assets consist primarily of listed equity securities and publicly
traded notes and bonds. The actual net return on plan assets was 21.2% in 1995,
.3% in 1994,
24. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and 11.3% in 1993, and generally reflects the performance of the equity and
bond markets.
The following table sets forth the plans' funded status and amounts recognized
in the Company's Consolidated Balance Sheet at November 30:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Actuarial present value of:
Vested benefit obligation $(167,376) $(143,249)
- --------------------------------------------------------------------------------
Accumulated benefit obligation $(174,515) $(148,243)
- --------------------------------------------------------------------------------
Projected benefit obligation $(191,831) $(161,089)
Plan assets at fair value 208,256 178,216
- --------------------------------------------------------------------------------
Projected benefit obligation
less than plan assets 16,425 17,127
Unrecognized net gain (1,942) (72)
Unrecognized prior service cost 2,244 1,192
Unrecognized net asset (9,182) (10,368)
- --------------------------------------------------------------------------------
Prepaid pension cost recognized $ 7,545 $ 7,879
- --------------------------------------------------------------------------------
The discount rate and weighted average rate of increase in future compensation
levels used in determining the actuarial present value of the projected benefit
obligation were 7.0% and 4.2%, and 8.0% and 4.2%, respectively, at November 30,
1995 and 1994, respectively. The expected long-term rate of return on assets was
9.0% in 1995 and in 1994. The Company's funding policy is to fund amounts on an
actuarial basis to provide for current and future benefits in accordance with
the funding guidelines of ERISA.
J. EMPLOYEE BENEFITS OTHER THAN PENSIONS
In addition to providing pension retirement benefits, the Company makes health
care and life insurance benefits available to certain retired employees on a
limited basis. Generally, the medical plans pay a stated percentage of medical
expenses reduced by deductibles and other coverages. Eligible employees may
elect to be covered by these health and life insurance benefits if they reach
early or normal retirement age while working for the Company. In most cases, a
retiree contribution for health insurance coverage is required. The Company
funds these benefit costs primarily on a pay-as-you-go basis.
In the fourth quarter of 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("FAS 106"). The Company recognized
the accumulated postretirement benefit obligation of $19,088,000 retroactively
to December 1, 1992 as an accounting change. On an aftertax basis, this charge
was $12,598,000 or $1.14 per share. Previously reported quarterly results in
1993 were restated to reflect the adoption of FAS 106 as of December 1, 1992.
The adoption of FAS 106 had no impact on consolidated cash flows. The components
of expense were as follows:
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
Service cost - benefits earned
during the period $ 396 $ 510 $ 467
Interest cost on accumulated
postretirement benefit obligation 1,202 1,327 1,394
Amortization of unrecognized net gain (179) -- --
- --------------------------------------------------------------------------------
Net periodic postretirement benefit costs $ 1,419 $ 1,837 $ 1,861
- --------------------------------------------------------------------------------
The accumulated postretirement benefit obligation at November 30 consisted of
the following components:
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
Retirees and dependents $12,021 $13,017
Eligible active participants 1,650 1,602
Other active participants 5,862 4,823
- --------------------------------------------------------------------------------
Accumulated postretirement
benefit obligation 19,533 19,442
Unrecognized net gain 2,187 1,628
- --------------------------------------------------------------------------------
Accrued postretirement benefit costs $21,720 $21,070
- --------------------------------------------------------------------------------
Benefit costs were estimated assuming retiree health care costs would initially
increase at an 11% annual rate which decreases to an ultimate rate of 6% in 5
years. If this annual trend rate would increase by 1%, the accumulated
postretirement obligation as of November 30, 1995 would increase by $2,021,000
with a corresponding increase of $267,000 in the postretirement benefit expense
in 1995. The discount rates used in determining the accumulated postretirement
obligation at November 30, 1995 and 1994 were 6.5% and 7.5%, respectively.
K. ASBESTOS LITIGATION AND CLAIMS
As discussed above in Note B, the Company currently intends to file a First
Amended Consolidated Plan of Reorganization ("Amended Plan") with the ICC and
the RFC. Like the Original Plan filed in 1995, the Amended Plan will provide,
among other things, that all present and future asbestos-related personal injury
claims
25.
will be channeled to and resolved by an independently administered claims trust.
Similar plans of reorganization have been confirmed in the chapter 11 cases of
certain other companies involved in asbestos litigation. It is also currently
contemplated that the Amended Plan will resolve and discharge all asbestos
property damage claims.
The asbestos-related claims, which consist of personal injury and property
damage claims, are discussed below.
Personal Injury
Prior to its chapter 11 filing, the Company had been named as a co-defendant in
a substantial number of lawsuits brought by present or former insulators,
shipyard workers, steel workers, tire workers and other persons alleging damage
to their health from exposure to dust from asbestos-containing industrial
insulation products. As a result of the chapter 11 filing by the Company, all
such litigation is automatically stayed pursuant to section 362 of the
Bankruptcy Code. As of the petition date, there were approximately 67,800
asbestos-related personal injury claims outstanding against the Company.
The Bankruptcy Court set September 30, 1992 as the bar date for present
asbestos-related claims. The Company implemented the Court-approved plan to
notify known and potential claimants of the bar date. All persons with a
pre-petition asbestos-related claim were required to file a proof of claim by
the bar date in order to participate in the reorganization cases. Approximately
160,000 proofs of claim were filed alleging personal injury. The Company
believes that approximately 11,000 of these claims are duplicates or were filed
by persons whose lawsuits were previously closed.
The vast majority of persons who had filed pre-petition lawsuits against
the Company, and whose lawsuits were pending as of the petition date, filed
proofs of claim in the reorganization cases. Therefore, approximately 81,200
previously undisclosed claims were filed as a result of the bar date. The
Company believes that most of the approximately 40,000 claimants who in 1991,
pursuant to a previous Bankruptcy Court order, notified the Company of their
intent to assert a claim against the Company, also filed claims pursuant to the
bar date. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Holders of these claims
were not required to file claims pursuant to the bar date.
In July 1995, the Company filed a motion requesting that the Bankruptcy
Court estimate the Company's aggregate liability on account of present and
future asbestos-related personal injury claims. The motion was filed because the
UCC and the ESC appointed in the Company's chapter 11 cases had not agreed with
the amount of such liability previously negotiated for settlement purposes among
the Company, the ICC and the RFC. In December 1995, the Bankruptcy Court ruled
that the Company's estimated liability for such claims is $2,502,511,000.
Appeals have been filed by certain creditors, the UCC and the ESC seeking to
have the Bankruptcy Court's ruling overturned. The Company does not know whether
the Appellate Court will hear the appeals or, if it does, when any decision may
be rendered.
Property Damage
There were forty-one lawsuits pending against the Company at the end of fiscal
1991 arising from the alleged presence of asbestos-containing products in
buildings. The pending lawsuits typically named numerous defendants, were filed
in both state and federal courts, and were brought by school districts, cities,
states, counties, universities, hospitals and commercial building owners. The
lawsuits typically demanded compensation for any costs incurred in identifying,
repairing, encapsulating or removing asbestos-containing products, or sought to
have the defendants do these things directly. Many lawsuits also sought punitive
damages. A few of the pending cases were certified as class actions. Prior to
filing its chapter 11 petition, the Company settled seven building related cases
for less than $22,000 in the aggregate.
Approximately 1,000 proofs of claim alleging such property damage claims
were filed in the chapter 11 cases pursuant to the bar date. These claims
include most of those asserted in the lawsuits described above that were pending
on the petition date. Many of the other claims also appear to be asserted by
claimants similar to those which had commenced pre-petition lawsuits.
In February 1996, after the close of the fiscal year, the hospital members
of the American Hospital Association, which filed asbestos-related property
damage claims against the Company in the alleged approximate amount of $300
million ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
(a) estimating the aggregate value of
26. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
all asbestos-related property damage claims against the Company and (b)
temporarily allowing such claims for purposes of voting on a plan of
reorganization. The motion states that the relief requested is not intended to
be a determination by the Bankruptcy Court of the Company's liability, if any,
on account of such claims or to assign a permanently fixed value for such
claims, but is sought in order to determine the appropriate distribution to
creditor classes under a plan of reorganization. Because the motion was just
filed, the Company has not yet made a determination as to how it intends to
respond. The Company does, however, intend to file with the Bankruptcy Court
shortly an objection on various grounds to many asbestos-related property damage
claims, including claims filed by the hospitals.
It is anticipated that the Amended Plan will provide alternative methods
for treatment of the asbestos-related property damage claims. If the class of
asbestos-related property damage claimants votes to accept the Amended Plan, a
second trust will be established to resolve the claims and the Company will fund
the trust with $3 million in cash. If such class votes to reject the Amended
Plan, but the Amended Plan is nevertheless confirmed, such claims will be
resolved and discharged pursuant to claims resolution procedures contained in
the Amended Plan. These procedures will require such claimants to prove by
application of a scientific protocol that the asbestos-containing insulation
products for which they are seeking damages were manufactured by the Company.
If the class of asbestos-related property damage claimants rejects the
Amended Plan and has its claims resolved through the claims resolution
procedures discussed above, the eventual outcome of its claims cannot be
reasonably predicted at this time. It should also be noted that the Company may
have insurance coverage for certain of these claims.
L. ENVIRONMENTAL AND OTHER LITIGATION CLAIMS
The Bankruptcy Court established a bar date of October 31, 1991 for all
pre-petition claims against the Company other than those arising from the sale
of asbestos-containing products. Pursuant to this general claims bar date,
numerous proofs of claim were filed alleging a right to payment from the estate
due to litigation matters. Certain of such claims are discussed below.
Environmental
The Company received 1,102 proofs of claim alleging a right to payment because
of environmental matters. These claims, relating primarily to various Superfund
sites, sought payment aggregating $27.9 billion, of which readily identifiable
duplicate claims approximated $27.5 billion. The Company has resolved the
majority of these environmental claims through negotiations with the United
States Environmental Protection Agency ("USEPA") and the United States
Department of Interior ("USDOI"). The USEPA is responsible for resolving, among
other things, claims arising from Superfund sites and the USDOI is responsible
for resolving the Company's liability for any natural resource damage that may
have occurred at the Superfund sites. Natural resource damage is damage caused
to the environment or to plants or animals by the release of hazardous materials
at Superfund sites. Pursuant to an agreement among the Company, USEPA, USDOI,
and certain states, which is subject to the approval of the Bankruptcy Court,
the agencies would be afforded allowed pre-petition general unsecured claims
aggregating approximately $43.0 million in full satisfaction of all of the
Company's alleged liability at most of its known Superfund sites, including any
liability for any natural resource damage. This amount has been provided for and
is included in Liabilities Subject to Compromise. In exchange for these allowed
claims, the agencies and such states would release the Company from liability at
these sites and grant the Company protection from claims of other parties that
may be co-liable at the sites. The intent of the settlement agreement is to
completely resolve all claims against the Company with respect to these sites.
With respect to the small number of sites as to which the USEPA believes
that it does not have sufficient information to negotiate a meaningful
settlement with the Company, the settlement agreement provides a process which
permits any liability with respect to these sites to be resolved in the future
when additional information is available. Pursuant to this process, the Company
retains all of its rights and defenses as to these sites and may settle or
litigate its liability at such future time. The settlement agreement also
provides that any future liability of the Company, when fixed, will be satisfied
essentially with the same type and amount of consideration that pre-petition
general unsecured
27.
creditors receive pursuant to a confirmed plan of reorganization in the
Company's chapter 11 case.
In November 1995, a hearing was held before the Bankruptcy Court on the
Company's motion seeking the approval of the settlement agreement. USEPA and
USDOI joined in the motion. Certain parties that may be liable at certain of the
sites resolved by the settlement agreement opposed the Company's motion. Such
opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objectants may have liability. The Company believes, however, that the terms and
provisions of the settlement agreement are fair and equitable and that the
objections raised have no basis. The Court has not yet ruled on the motion.
Lead Chemicals
The Bankruptcy Court received 131 timely proofs of claim asserting liability
based on personal injury or property damage from lead chemicals allegedly
manufactured and sold by the Company. Three additional claims were filed in
November 1993, after the 1991 bar date. While some of the timely filed claims
did not specify an amount, those that did sought an aggregate of $165 million.
All of the timely filed claims which specified an amount of damages have been
fully withdrawn without the allowance of any amount by the Company.
The three late filed claims referred to above were filed by the City of
New York or its agencies which had filed a pre-petition lawsuit against the
Company. In November 1994, the Bankruptcy Court sustained the Company's
objection to these claims and disallowed them because they were late filed. No
appeal of this ruling was sought by the claimants. As a result, the Company has
disposed of all filed lead-related property damage claims. The Company had also
filed objections to seven other claims that were filed against it seeking
damages for bodily injuries resulting from exposure to lead. Pursuant to the
objections, the Company sought an order of the Bankruptcy Court disallowing such
claims because the claimants' lawsuits asserting similar claims against other
defendants which were not in bankruptcy had been dismissed in the trial court.
In June 1995, the Bankruptcy Court disallowed all seven of such claims.
Currently, there are 113 remaining timely-filed lead-related personal injury
claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance
of all of the remaining lead-related personal injury claims. It is currently
contemplated that all lead-related personal injury claims that were filed that
are not disposed of pursuant to an objection filed by the Company, and all
future lead-related personal injury claims, will be channeled to and resolved by
the trust referred to in Note K above, to be established under the Amended Plan
for the benefit of holders of personal injury claims resulting from exposure to
asbestos or lead- containing products.
Other Litigation
The Company received, by the 1991 bar date, ninety-two claims arising out of
litigation matters other than those related to lead, asbestos or environmental
issues. These claims aggregated approximately $1.1 billion. The majority of
these claims have been resolved by disallowance, settlement pursuant to
Bankruptcy Court authority or by the allowance of a pre-petition general
unsecured claim for amounts that are not material to the Company or its
operations.
Summary
During the pendency of the chapter 11 cases, any unresolved litigation with
respect to pre-petition claims can proceed against the Company only with the
express permission of the Bankruptcy Court. The Company intends to defend all
litigation claims vigorously in the manner permitted by the Bankruptcy Code
and/or applicable law. All pre-petition claims against the Company arising from
litigation must be liquidated or otherwise addressed in the context of the
chapter 11 cases. Further, all such claims against the Company will be treated
in a plan of reorganization.
The Company has resolved most of the litigation claims that were asserted
by the October 31, 1991 bar date for claims other than those arising from the
sale of asbestos-containing products. The Company has filed objections to
certain of these litigation-based claims which have not been resolved, seeking
to reduce the amount of such claims or eliminate them entirely. The Company
anticipates filing additional objections to other such claims if they cannot be
resolved through negotiation. These objections will be vigorously litigated by
the Company pursuant to the provisions of the Bankruptcy Code and applicable
law.
28. Eagle-Picher Industries, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The eventual outcome of the environmental and other litigation claims
described herein cannot be reasonably predicted due to numerous uncertainties
that are inherent in the reorganization process. However, the Company believes
that its provision for these claims is adequate. In addition, the Company may
have insurance coverage for certain of these claims and other factual and legal
defenses available to it.
M. OTHER INCOME
The Company held certain equity investments having no cost basis, but which had
a fair value of approximately $5.4 million when FAS 115 was adopted. A
substantial portion of these investments related to shares of stock in a
Canadian mining concern that the Company received in 1990 in settlement of
certain indebtedness. The Company had previously deemed the investment to be
permanently impaired and had recorded a loss on the investment in the amount of
its full book value. The price of the stock, however, had recently increased
significantly. Substantially all of these investments were sold in June, 1995,
resulting in a realized gain of $11.5 million.
N. INDUSTRY SEGMENT INFORMATION
A general description of the products manufactured by the Company's three
industry segments is:
Industrial
Diatomaceous earth products, rubber products, rare metals, fiberglass reinforced
plastic parts and industrial chemicals.
Machinery
Earth moving machines, heavy-duty forklift trucks, aerospace and defense parts,
metal cleaning and finishing systems and aluminum castings.
Automotive
Mechanical, structural, and trim parts for passenger cars, trucks, vans and
utility vehicles for the OEM and replacement markets.
Sales between segments and foreign operations were not material.
Consolidated sales to Ford Motor Company amounted to $166,800,000 in 1995,
$165,300,000 in 1994, and $148,000,000 in 1993. No other customer accounted for
10% or more of consolidated sales with the exception of General Motors
Corporation ("GMC") in 1994 and 1993 when consolidated sales to GMC amounted to
$81,400,000 and $73,100,000, respectively.
Consolidated export sales were $92,500,000 in 1995, $76,900,000 in 1994
and $73,200,000 in 1993.
29.
INDUSTRY SEGMENT INFORMATION
Industrial Machinery Automotive
Years ended November 30 -----------------------------------------------------------------------------------------------
(In millions of dollars) 1995 1994 1993 1995 1994 1993 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
Sales $ 160.6 $ 141.4 $ 132.6 $ 254.7 $ 217.0 $ 171.7 $ 433.2 $ 398.3 $ 357.2
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income 15.6 14.5 15.0 24.1 18.8 9.1 42.1 43.7 37.4
- ----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets 80.6 78.2 72.7 112.0 109.8 92.8 217.1 190.6 168.2
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 6.1 5.5 4.9 4.7 4.0 3.4 17.6 16.2 16.2
- ----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 4.4 7.7 5.6 7.6 6.9 7.4 28.3 21.2 15.4
- ----------------------------------------------------------------------------------------------------------------------------------
Segment Total Corporate Total
-------------------------------------------------------------------------------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
Sales $ 848.5 $ 756.7 $ 661.5 $ -- $ -- $ -- $ 848.5 $ 756.7 $ 661.5
- -----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 81.8 77.0 61.5 (18.7) (18.7) (17.7) 63.1 58.3 43.8
- ----------------------------------------------------------------
Provision for asbestos ligitation (1,005.5) -- (1,135.5) (1,005.5) -- (1,135.5)
Provision for environmental and
other claims -- -- (41.4) -- -- (41.4)
Interest expense (1.9) (1.8) (2.1) (1.9) (1.8) (2.1)
Other income (expense) 11.6 .6 (.2) 11.6 .6 (.2)
Reorganization items (2.2) (3.4) (4.4) (2.2) (3.4) (4.4)
- ------------------------------------------------------------------------------------------------- --------------------------------
Income (loss) before taxes (934.9) 53.7 (1,139.8)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets 409.7 378.6 333.7 170.4 142.5 125.7 580.1 521.1 459.4
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 28.4 25.7 24.5 .3 .4 .5 28.7 26.1 25.0
- -----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 40.3 35.8 28.4 .3 .1 .1 40.6 35.9 28.5
- -----------------------------------------------------------------------------------------------------------------------------------
(1) Before cumulative effect of accounting changes.
30. Eagle-Picher Industries, Inc.
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS
EAGLE-PICHER INDUSTRIES, INC.:
We have audited the accompanying consolidated balance sheet of Eagle-Picher
Industries, Inc. and subsidiaries (debtor in possession, as of January 7, 1991)
as of November 30, 1995 and 1994, and the related consolidated statements of
income (loss), shareholders' equity (deficit), and cash flows for each of the
years in the three-year period ended November 30, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended November 30, 1995 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
B to the consolidated financial statements, on January 7, 1991, Eagle-Picher
Industries, Inc. and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code with
the United States Bankruptcy Court. Although the Company and its operating
subsidiaries, other than EDI, Inc., are currently operating their businesses as
debtors in possession under the jurisdiction of the Bankruptcy Court, the
continuation of their businesses as going concerns is contingent upon, among
other things, the ability to formulate a plan of reorganization which will gain
approval of the creditors and confirmation by the Bankruptcy Court. The filing
under chapter 11 and the continued uncertainty related to claims associated with
the Company's sale of asbestos products and certain other litigation, raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that may be
required in connection with restructuring the Company and its subsidiaries as
they reorganize under chapter 11 of the United States Bankruptcy Code.
As discussed in Note J, the Company adopted the provisions of the
Financial Accounting Standards Board's SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other than Pensions, on December 1, 1992.
KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Cincinnati, Ohio
February 14, 1996
31.
REPORT OF MANAGEMENT
The Company's management is responsible for the preparation and presentation of
the consolidated financial statements and related financial data included in
this annual report. The financial information has been prepared in conformity
with generally accepted accounting principles and as such includes amounts based
on judgments and estimates made by management.
The Company's system of internal accounting controls is designed to
provide reasonable assurance at reasonable costs that assets are safeguarded
from loss or unauthorized use, and that the financial records may be relied upon
for the preparation of the consolidated financial statements.
The consolidated financial statements have been audited by our independent
auditors, KPMG Peat Marwick LLP. Their audit is conducted in accordance with
generally accepted auditing standards and provides an independent assessment as
to the fair presentation, in all material respects, of the Company's
consolidated financial statements.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management and the independent auditors to
review internal accounting controls and the quality of financial reporting.
Financial management and the independent auditors have full and free access to
the Audit Committee.
Thomas E. Petry
- ------------------------
Thomas E. Petry
Chairman and Chief
Executive Officer
Andries Ruijssenaars
- ------------------------
Andries Ruijssenaars
President and Chief
Operating Officer
David N. Hall
- ------------------------
David N. Hall
Senior Vice President -
Finance
Cincinnati, Ohio
February 14, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
On a 12% sales increase, operating income increased 8% to $63.1 million in 1995
from $58.3 million in 1994. Comparative sales volume by industry segment showed
increases of 14% in the Industrial segment, 17% in the Machinery segment, and 9%
in the Automotive segment. Operating income increased 8% in the Industrial
segment and 28% in the Machinery segment, but decreased 4% in the Automotive
segment. The increase in operating income in the Industrial Segment was shared
by all operations within the segment. This segment tends not to experience
cyclical swings as its customers serve a range of consumer nondurable markets.
The increase in operating income in the Machinery segment was attributable
solely to the continuing improvements in both volume and operating efficiencies
in the operations making earth moving and material handling equipment. The
decrease in operating income in the Automotive segment was due to: 1) intense
pricing pressure by major customers demanding price concessions; 2) inability to
pass on raw material cost increases on a timely basis; and 3) start-up costs
associated with new business.
In December 1995, the Bankruptcy Court estimated the Company's aggregate
liability on account of present and future asbestos-related personal injury
claims to be $2.5 billion. As a result, the Company recorded a provision in the
fourth quarter of 1995 of $1.0 billion to increase the asbestos liability
subject to compromise to $2.5 billion.
Interest expense was $1.9 million in 1995 compared to $1.8 million in
1994.
A gain on sale of investments of $11.5 million resulted from the sale of
securities which the Company had received several years ago in settlement of
financing it had provided to a supplier.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note
F.
1994 COMPARED TO 1993
On a 14% sales increase, operating income increased 33% to $58.3 million in 1994
from $43.8 million in 1993.
32. Eagle-Picher Industries, Inc.
Comparative sales volume by industry segment showed increases of 7% in the
Industrial segment, 26% in the Machinery segment, and 12% in the Automotive
segment. Operating income decreased 3% in the Industrial segment, but increased
107% in the Machinery segment and 17% in the Automotive segment. The decrease in
operating income in the Industrial segment was attributable to pricing pressures
on diatomaceous earth products. The increase in operating income in the
Machinery segment was primarily associated with improvements in production of a
line of heavy-duty forklift trucks. An increase in sales volumes of metal
cleaning and finishing equipment also contributed to the increase in operating
income in the Machinery segment. The increase in operating income in the
Automotive segment was due to: 1) an increase in export sales and stronger
performance of our operations in Great Britain and Spain; 2) broader market
penetration coupled with record domestic auto production; and 3) favorable
product mix heavily weighted toward the light truck, van, and sport utility
segment of the market for which several divisions produce components.
In November 1993, the Company reached an agreement on the principal
elements of a plan of reorganization with the Injury Claimants' Committee and
the Legal Representative for Future Claimants, the representatives of the
holders of present and future asbestos-related personal injury and other toxic
tort claims in the Company's chapter 11 case. The agreement contemplated a
settlement of the Company's liability for all present and future
asbestos-related personal injury claims. As a consequence of the proposed
settlement, the Company recorded an additional provision of $1.135 billion for
all present and future asbestos-related personal injury claims, thereby
increasing the asbestos liability subject to the compromise on the Consolidated
Balance Sheet to $1.5 billion. In addition, in 1993 a provision of $41.4 million
was made for environmental and other litigation claims.
Interest expense decreased to $1.8 million from $2.1 million due primarily
to the repayment of certain foreign debt in 1994.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note
F.
INDUSTRY SEGMENT DATA
Industry segment data for 1995, 1994 and 1993 is summarized on page 30.
FINANCIAL CONDITION
The filing of the petitions for reorganization under chapter 11 on January 7,
1991 had a significant positive impact on the Company's liquidity. The filing
stayed all litigation against the Company with respect to pre-petition claims
and reduced the cash drain for asbestos litigation. In the third quarter of
1995, the Company filed a motion with the Bankruptcy Court presiding over the
Company's chapter 11 case asking the Court to estimate its aggregate liability
on account of present and future asbestos-related personal injury claims. In
December 1995, the Court ruled on the motion and estimated this liability to be
$2.5 billion. As a result, the Company recorded a provision in the fourth
quarter of 1995 of $1.0 billion to increase the asbestos liability subject to
compromise to $2.5 billion. At November 30, 1995, the balance of Liabilities
Subject to Compromise was $2.663 billion. These amounts were recorded based on
the expected amount of the allowed claims, not the amounts of consideration that
such allowed claims may receive pursuant to a plan of reorganization.
During 1995, there was a $.7 million increase in cash. Operating
activities provided $30.5 million. Items which affected cash provided by
operations include the following:
1) There was a significant increase in customer tooling costs from $15.0
million at the end of fiscal 1994, to $26.5 million at November 30, 1995. It is
common practice in the automotive industry to accumulate customer tooling costs
while the tooling is under construction and bill the customer upon its
completion. It is anticipated that customer tooling will return to a more
traditional level of $10.0 to $12.0 million by the end of 1996, which would
generate $14.5 to $16.5 million in cash in the coming fiscal year.
2) There was an increase in working capital, other than customer tooling
costs, which was in line with the 12% increase in sales volume.
3) While income tax expense for financial statement purposes was $9.3
million, the Company paid income taxes, net of a small refund, of $28.8 million.
4) The Company incurred interest expenses of $1.9 million and
reorganization costs of $2.2 million.
33.
In addition, the Company used cash of $28.7 million, net of an $11.5
million sale of an investment (Note M), for investing activities. The Company
had near record ($43.0 million in 1988) capital expenditures of $40.6 million in
1995. This compares to $35.9 million spent in 1994. The capital expenditures in
1995 included $10.3 of an approved $12.0 million expansion of a new coating line
for the manufacture of gasket materials which is to be completed in early 1996.
Finally, the Company used $1.0 million of cash for financing activities
which included repayment of debt in accordance with adequate protection payments
authorized by the Bankruptcy Court, combined with the financing activities of
the foreign subsidiaries. As of November 30, 1995, the Company had $82.6 million
of long-term debt compared to $83.6 million at the end of the prior year. The
disposition of unsecured debt included in liabilities subject to compromise of
$62.0 million will be treated in a plan of reorganization.
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40.0 million committed revolving credit facility.
This facility expires the earlier of December 31, 1996 or the effective date of
a plan of reorganization. Should a plan not become effective by the end of 1996,
the Company would expect to have the current facility extended for as long as
necessary. At November 30, 1995, $30.2 million in letters of credit were
outstanding under the facility leaving the Company with $9.8 million in
available borrowing capacity. There were no cash borrowings in 1995 under the
facility.
While the Company is reorganizing under chapter 11, it is prohibited from
paying interest or principal on pre-petition obligations without the approval of
the Bankruptcy Court. To the extent cash generated from operations exceeds
capital expenditures, working capital requirements, approved payments of secured
debt and administrative expenses of the reorganization, the Company will
continue to accumulate cash. Consequently, the liquidity of the Company should
improve.
The Company intends to file an amended plan of reorganization with the
Bankruptcy Court as soon as practicable. It is contemplated that such plan will
provide for a discharge of the Company's pre-petition liabilities (Liabilities
Subject to Compromise) and provide the reorganized Company with a capital
structure appropriate for an industrial products company which will enable the
Company to access financing in the credit and debt markets.
RECENT FASB PRONOUNCEMENTS
During the year, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"). This
statement requires that long-lived assets and certain identifiable intangibles
to be held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Measurement of an impairment loss on these assets should be
based on the fair value of the assets. FAS 121 is required to be adopted for
fiscal years beginning after December 15, 1995. As such, the Company will adopt
this standard the sooner of the fiscal year ended November 30, 1997 or the
effective date of a plan of reorganization. Management has not fully assessed
the impact of FAS 121; however, it is not anticipated that its adoption will
have a material impact on the financial statements.
Statement of Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), was also issued in 1995. This statement establishes a
fair value method of accounting for stock-based compensation plans. Adoption of
the fair value method is encouraged; however, entities may elect to continue to
account for stock-based compensation plans according to the provisions of
Accounting principles Bulletin No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), but provide the disclosures related to FAS 123. FAS 123
is effective for transactions entered into in fiscal years that begin after
December 15, 1995. Accordingly, the Company will adopt this standard the sooner
of the fiscal year ended November 30, 1997 or the effective date of a plan of
reorganization. As a result of the numerous uncertainties that are inherent in
the reorganization process, Management has not assessed the impact that adoption
of FAS 123 would have on the financial statements.
34. Eagle-Picher Industries, Inc.
SELECTED FINANCIAL DATA
(Unaudited)
(In thousands of dollars, except per share) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
Net Sales $ 848,548 $ 756,741 $ 661,452 $ 611,458 $ 598,631
- ------------------------------------------------------------------------------------------------------------------------------
Operating Income 63,087 58,281 43,754 46,560 18,849
- ------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before
Reorganization Items
and Taxes (932,646)(1) 57,175 (1,135,426)(2) 40,924 (788)
- ------------------------------------------------------------------------------------------------------------------------------
Reorganization Items(3) (2,225) (3,426) (4,344) (9,038) (12,124)
- ------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Taxes (934,871) 53,749 (1,139,770) 31,886 (12,912)
- ------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) (944,171) 48,749 (1,144,770)(4) 28,886 (15,812)
- ------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) Per Share (85.51) 4.42(4) (103.78)(4) 2.63 (1.44)
- ------------------------------------------------------------------------------------------------------------------------------
Common Dividend Per Share -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 580,073 521,107 459,360 419,435 398,990
- ------------------------------------------------------------------------------------------------------------------------------
Long-Term Debt, less current portion 19,103(5) 19,896(5) 21,712(5) 25,033(5) 32,001(5)
- ------------------------------------------------------------------------------------------------------------------------------
(1) Includes a provision for asbestos litigation of $1.0 billion in 1995.
(2) Includes a provision for asbestos litigation of $1.135 billion and a
provision for environmental and other claims of $41.4 million in 1993.
(3) On January 7, 1991, the Company and seven of its domestic subsidiaries
each filed a petition for relief under chapter 11 of the U.S. Bankruptcy
Code.
(4) Excludes cumulative adjustment for adoption of FAS 106 in 1993 which
decreased net income by $12.6 million ($1.14 per share).
(5) Long-term debt of $62.0 million in 1995, 1994 and 1993 and $61.7 million
in 1992, and 1991 has been included in liabilities subject to compromise.
35.
[THIS PAGE LEFT BLANK INTENTIONALLY]
EXHIBIT 21
EAGLE-PICHER INDUSTRIES, INC.
SUBSIDIARIES OF THE REGISTRANT
Cincinnati Industrial Machinery Sales Company [Ohio]
Daisy Parts, Inc. [Michigan]
Eagle-Picher Development Company, Inc. [Delaware]
Transicoil Inc. [Pennsylvania]
Transicoil (Malaysia) SDN. BHD. [Malaysia]
Michigan Automotive Research Corporation (MARCO) [Michigan]
EDI, Inc. [Michigan]
Eagle-Picher Espana, S.A. [Spain]
Eagle-Picher Europe, Inc. [Delaware]
Eagle-Picher Fluid Systems Ltd [England and Wales]
Eagle-Picher Far East, Inc. [Delaware]
Eagle-Picher, Inc. [Virgin Islands]
Eagle-Picher Industries of Canada Limited [Canada]
Eagle-Picher Industries GmbH [Germany]
Eagle-Picher Industries Materials GmbH [Germany]
Eagle-Picher Minerals, Inc. [Nevada]
Eagle-Picher Minerals International S.A.R.L. [France]
United Minerals Verwaltungs- und Beteiligungs GmbH [Germany]
United Minerals GmbH & Co. KG [Germany]
Equipos de Acuna, S.A. de C.V. [Mexico]
Hillsdale Tool & Manufacturing Co. [Michigan]
Eagle-Picher Industries Europe GmbH [Germany]
EPTEC, S.A. de C.V. [Mexico]
Eagle-Picher Fluid Systems, Inc. [Michigan]
- -----------
[ ] Brackets indicate state or country of incorporation and do not form part of
corporate name.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Eagle-Picher Industries, Inc.:
We consent to incorporation by reference in Registration Statement Nos. 2-50595,
33-5792, 33-31975 and 33-37518 on Form S-8 of Eagle-Picher Industries, Inc. of
our report, with explanatory paragraphs, dated February 14, 1996 relating to the
consolidated balance sheet of Eagle-Picher Industries, Inc. and subsidiaries
(debtor in possession, as of January 7, 1991) as of November 30, 1995 and 1994,
and the related consolidated statements of income (loss), shareholders' equity
(deficit), and cash flows for each of the years in the three-year period ended
November 30, 1995, which reports appear in the Company's 1995 Annual Report on
Form 10-K and in the 1995 Annual Report, which is incorporated by reference in
the Company's 1995 Annual Report on Form 10-K. Our report on the consolidated
financial statements refers to a change in accounting for postretirement
benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
February 27, 1996
EXHIBIT 24(a)
POWER OF ATTORNEY
Each of the undersigned officers and/or directors of Eagle-Picher Industries,
Inc. hereby consents to and appoints Thomas E. Petry and James A. Ralston, and
each of them, as his true and lawful attorneys-in-fact and agents with all power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the 1995 fiscal year of
Eagle-Picher Industries, Inc., a corporation organized and existing under the
laws of the State of Ohio, and any and all amendments thereto, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission pursuant to the requirements of the
Securities Exchange Act of 1934, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the same as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
In Witness Whereof, each of the undersigned has hereunto set his hand on this
14th day of February, 1996.
/s/ Thomas E. Petry
------------------------------------------------------
Thomas E. Petry
Director, Chairman of the Board
and Chief Executive Officer
/s/ Andries Ruijssenaars
------------------------------------------------------
Andries Ruijssenaars
Director, President and Chief
Operating Officer
/s/ David N. Hall
------------------------------------------------------
David N. Hall
Senior Vice President-Finance
(Principal Financial Officer)
/s/ Paul W. Christensen, Jr.
------------------------------------------------------
Paul W. Christensen, Jr.
Director
/s/ V. Anderson Coombe
------------------------------------------------------
V. Anderson Coombe
Director
/s/ Roger L. Howe
------------------------------------------------------
Roger L. Howe
Director
/s/ Daniel W. LeBlond
------------------------------------------------------
Daniel W. LeBlond
Director
/s/ Powell McHenry
------------------------------------------------------
Powell McHenry
Director
/s/ Eugene P. Ruehlmann
------------------------------------------------------
Eugene P. Ruehlmann
Director
EXHIBIT 24(b)
POWER OF ATTORNEY
The undersigned officer of Eagle-Picher Industries, Inc. hereby consents to and
appoints Thomas E. Petry and James A. Ralston, and each of them, as his true and
lawful attorneys-in-fact and agents with all power of substitution, for him and
in his name, place and stead, in any and all capacities, to sign the Annual
Report on Form 10-K for the 1995 fiscal year of Eagle-Picher Industries, Inc., a
corporation organized and existing under the laws of the State of Ohio, and any
and all amendments thereto, and to file the same, with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission pursuant to the requirements of the Securities Exchange Act of 1934,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the same as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
In Witness Whereof, the undersigned has hereunto set his hand on this 20th day
of February, 1996.
/s/ Carroll D. Curless
- ------------------------------------
Carroll D. Curless
Vice President and Controller
(Principal Accounting Officer)
EXHIBIT 99
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- -------------------------- ---------------
Cincinnati Industrial Machinery Sharonville, Ohio
3280 Hageman Street
Sharonville, Ohio 45241
Construction Equipment Lubbock, Texas
1802 E. 50th Street Acuna, Coahuila, Mexico
Lubbock, Texas 79404
Eagle-Picher Fluid Systems, Inc. Brighton, Michigan*
7854 Lochlin Drive
Brighton, Michigan 48116
Electronics Joplin, Missouri (6)
"C" and Porter Streets Colorado Springs, Colorado (2)
Joplin, Missouri 64801 Galena, Kansas
Grove, Oklahoma
Seneca, Missouri
Stella, Missouri
Socorro, New Mexico**
Fabricon Products River Rouge, Michigan
1721 West Pleasant Avenue Philadelphia, Pennsylvania
River Rouge, Michigan 48218 Riverton, New Jersey
Hillsdale Tool & Manufacturing Co. Hillsdale, Michigan (4)**
135 E. South Street Hamilton, Indiana
Hillsdale, Michigan 49242 Jonesville, Michigan
Vassar, Michigan
San Luis Potosi, Mexico
Michigan Automotive Ann Arbor, Michigan
Research Corporation (MARCO)
1254 North Main Street
Ann Arbor, Michigan 48104
Minerals Clark Station, Nevada
6110 Plumas Street Lovelock, Nevada
Reno, Nevada 89509 Vale, Oregon
- ----------
* Effective approximately March 1, 1996.
** The New Mexico plant and one of the Hillsdale, Michigan plants have
little, if any, manufacturing activity at this time.
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- -------------------------- ---------------
Orthane Denton, Texas***
1500 I-35 W. (at Airport Road)
Denton, Texas 76202
Plastics Grabill, Indiana
14123 Roth Road Ashley, Indiana
Grabill, Indiana 46741 Huntington, Indiana
Ross Aluminum Foundries Sidney, Ohio (2)
815 North Oak Avenue
Sidney, Ohio 45365
Rubber Molding Norwich, Connecticut
19 Ohio Avenue Pine Bluff, Arkansas
Norwich, Connecticut 06360 Stratford, Connecticut
Specialty Materials Quapaw, Oklahoma (2)
One Mile NE of Quapaw on Hwy. 69A Miami, Oklahoma (3)
Quapaw, Oklahoma 74363 Harrisonville, Missouri
Lenexa, Kansas
Suspension Systems Paris, Illinois
Route 133 West
Paris, Illinois 61944
Transicoil Inc. Trooper, Pennsylvania
2560 General Armistead Avenue Melaka, Malaysia
Trooper, Pennsylvania 19403
Trim Kalkaska, Michigan
829 U.S. Hwy. 131 NW
Kalkaska, Michigan 49646
Wolverine Gasket Inkster, Michigan
2638 Princess Street Blacksburg, Virginia
Inkster, Michigan 48141 Leesburg, Florida
Garden City, Michigan
Eagle-Picher Industries Europe GmbH Market Harborough, England
Soria, Spain
Ohringen, Germany
- ----------
*** A substantial portion of the business of the Denton, Texas facility was
sold on January 31, 1996. The remainder will be transferred to the
Brighton, Michigan plant, listed above.
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended May 31, 1996 Commission file number 1-1499
EAGLE-PICHER INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0268670
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
580 Walnut Street, P. O. Box 779, Cincinnati, Ohio 45201
- --------------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code 513-721-7010
(Not Applicable)
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No [ ]
11,040,932 shares of common capital stock, par value $1.25 per share, were
outstanding at July 12, 1996.
1
TABLE OF CONTENTS
Page
Number
------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements.................................... 3
Consolidated Statement of Income............................ 3
Consolidated Balance Sheet.................................. 4
Consolidated Statement of Cash Flows........................ 6
Notes to Consolidated Financial Statements.................. 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 14
Item 3. Defaults Upon Senior Securities......................... 14
Item 6. Exhibits and Reports on Form 8-K........................ 15
Signature........................................................ 16
Exhibit Index.................................................... 17
2
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands except per share amounts)
Three Months Ended Six Months Ended
May 31 May 31
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
Net Sales $ 235,126 $ 225,378 $ 443,708 $ 422,981
--------- --------- --------- ---------
Operating Costs and Expenses:
Cost of products sold 194,276 186,658 368,640 349,946
Selling and administrative 21,569 19,573 42,416 38,775
--------- --------- --------- ---------
215,845 206,231 411,056 388,721
--------- --------- --------- ---------
Operating Income 19,281 19,147 32,652 34,260
Interest expense (462) (500) (949) (987)
Other income 30 21 357 406
--------- --------- --------- ---------
Income Before Reorganization
Items and Taxes 18,849 18,668 32,060 33,679
Reorganization items 22 (331) 90 (756)
--------- --------- --------- ---------
Income Before Taxes 18,871 18,337 32,150 32,923
Income Taxes 2,115 1,561 3,886 3,115
--------- --------- --------- ---------
Net Income $ 16,756 $ 16,776 $ 28,264 $ 29,808
========= ========= ========= =========
Income per Share $ 1.52 $ 1.52 $ 2.56 $ 2.70
========= ========= ========= =========
See accompanying notes to the consolidated financial statements.
3
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
ASSETS May 31 Nov. 30
1996 1995
---------- ----------
CURRENT ASSETS
Cash and cash equivalents $ 109,719 $ 93,330
Receivables, less allowances 131,289 127,044
Income tax refund receivable 679 4,402
Inventories:
Raw materials and supplies 37,060 42,140
Work in process 30,842 23,349
Finished goods 17,069 18,158
---------- ----------
84,971 83,647
Prepaid expenses 12,057 17,695
---------- ----------
Total current assets 338,715 326,118
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 452,153 441,957
Less accumulated depreciation 294,861 286,139
---------- ----------
Net property, plant and equipment 157,292 155,818
DEFERRED INCOME TAXES 70,024 62,824
OTHER ASSETS 35,493 35,313
---------- ----------
Total Assets $ 601,524 $ 580,073
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 35,026 $ 40,318
Long-term debt - current portion 2,611 1,525
Income taxes 4,836 4,789
Other current liabilities 36,666 35,991
---------- ----------
Total current liabilities 79,139 82,623
---------- ----------
LIABILITIES SUBJECT TO COMPROMISE 2,662,414 2,662,530
LONG-TERM DEBT - less current portion 17,572 19,103
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 22,278 21,720
OTHER LONG TERM LIABILITIES 4,714 5,405
---------- ----------
Total liabilities 2,786,117 2,791,381
---------- ----------
4
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
May 31 Nov. 30
1996 1995
----------- -----------
SHAREHOLDERS' EQUITY (DEFICIT)
Common shares - par value $1.25 per share
authorized 30,000,000 shares, issued
11,125,000 shares $ 13,906 $ 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,233,025) (2,261,289)
Unrealized gain on investments 396 333
Foreign currency translation (335) 1,277
----------- -----------
(2,182,680) (2,209,395)
Cost of 84,068 common treasury shares (1,913) (1,913)
----------- -----------
Total Shareholders' Equity (Deficit) (2,184,593) (2,211,308)
----------- -----------
Total Liabilities and Shareholders' Equity
(Deficit) $ 601,524 $ 580,073
=========== ===========
See accompanying notes to the consolidated financial statements.
5
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
May 31
-----------------------
1996 1995
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 28,264 $ 29,808
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 15,299 14,572
Changes in assets and liabilities:
Receivables (4,245) (8,538)
Inventories (1,324) (5,300)
Deferred taxes (7,200) (9,500)
Accounts payable (5,292) (492)
Accrued liabilities 675 4,122
Other 8,834 (6,394)
-------- --------
Net cash provided by
operating activities 35,011 18,278
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (19,109) (13,978)
Other 687 908
-------- --------
Net cash used in
investing activities (18,422) (13,070)
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt (200) (980)
-------- --------
Net cash used in
financing activities (200) (980)
6
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
Six Months Ended
May 31
----------------------
1996 1995
---- ----
Net increase in cash and cash equivalents 16,389 4,228
Cash and cash equivalents, beginning of period 93,330 92,606
-------- --------
Cash and cash equivalents, end of period $109,719 $ 96,834
======== ========
Supplemental cash flow information:
Cash paid during the year:
Interest paid $ 842 $ 955
Income taxes paid (net of refunds received) $ 7,316 $ 10,119
Cash paid during the quarter:
Interest paid $ 432 $ 462
Income taxes paid (net of refunds received) $ 6,216 $ 9,478
See accompanying notes to consolidated financial statements.
7
EAGLE-PICHER INDUSTRIES, INC.
Notes to Consolidated Financial Statements
A. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc.
("Company") and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code
("chapter 11") in the United States Bankruptcy Court for the Southern District
of Ohio, Western Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing
entity, other than EDI, Inc., is currently operating its business as a debtor in
possession in accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC"), and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed by
the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal
elements of a joint plan of reorganization. The agreement was with the ICC and
the RFC, the representatives of the holders of present and future
asbestos-related personal injury and other toxic tort claims in the Company's
chapter 11 case, and was reached with the assistance of the mediator. One of the
principal elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims in anticipation of
settlement of such claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan did
not have the support of the UCC or the ESC because they did not agree with the
amount of the aggregate asbestos liability which had been negotiated and which
was used in the Original Plan to determine the allocation of the consideration
to be distributed to the unsecured creditor and shareholder classes. As a result
of the dispute, the Company was unable to move forward with the Original Plan.
In order to resolve this dispute, the Company filed a motion in July 1995
requesting that the Bankruptcy Court estimate the Company's aggregate liability
on account of present and future asbestos-related personal injury claims. The
Bankruptcy Court ruled in December 1995 that such estimated liability is $2.5
billion ("Estimation Ruling"). The UCC, the ESC and two individual members of
the UCC have appealed the Estimation Ruling. The U.S. District Court for the
Southern District of Ohio, Western Division heard oral argument on these appeals
in June 1996. A decision is pending.
On April 9, 1996, the Company filed a First Amended Consolidated Plan of
Reorganization ("Amended Plan") reflecting the Estimation Ruling, and a proposed
First Amended Joint Disclosure Statement ("Disclosure Statement"). The principal
substantive modification to the Original Plan relates to the allocation of the
consideration to be distributed under the plan to the various classes of
unsecured claims. A hearing before the Bankruptcy Court to consider approval of
the Disclosure Statement has been scheduled for July 22, 1996. Pursuant
8
to the Bankruptcy Code, the acceptance or rejection of a plan of reorganization
may not be solicited from the holder of a claim unless at the time of or before
such solicitation there is transmitted to such holder the plan or a summary of
the plan and a disclosure statement approved by the Bankruptcy Court as
containing information of a kind and in sufficient detail that would enable a
hypothetical reasonable investor typical of holders of claims to make an
informed judgment about the plan.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan provides for the distribution of cash, notes and common stock of the
reorganized Company to the Trust and to holders of allowed unsecured claims on a
pro-rata basis proportionate to the percentage of their claims to the total of
the Liabilities Subject to Compromise. Accordingly, pursuant to the Amended
Plan, it is anticipated that the Trust will be distributed approximately 94% of
such cash, notes and stock, and claimants holding environmental-related and
other pre-petition unsecured claims will be distributed approximately 6% of such
cash, notes and stock.
Pursuant to the Amended Plan, claims entitled to priority under the
Bankruptcy Code and "convenience claims" (pre-petition general unsecured claims
of $500 or less or claims that are reduced to that amount) will be paid in full,
in cash. The Amended Plan also provides for the resolution of all
asbestos-related property damage claims, as further discussed in Note B below.
Under the Bankruptcy Code, shareholders are not entitled to any distribution
under a plan of reorganization unless all classes of pre-petition creditors
receive satisfaction in full of their allowed claims or accept a plan which
allows shareholders to participate in the reorganized company or to receive a
distribution. Under the Amended Plan, existing shareholders will receive no
distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of
approximately $1.0 billion to increase the asbestos liability subject to
compromise to the amount estimated by the Bankruptcy Court. This resulted in a
negative shareholders' equity in excess of $2.2 billion. As a result, the
Company filed a motion in the Bankruptcy Court in December 1995 seeking an order
directing the United States Trustee to disband the ESC on the basis that
existing equity holders do not have an economic interest in the chapter 11
cases. In January 1996, the Bankruptcy Court ruled that the ongoing activities
of the ESC shall be limited to pursuing its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
liabilities subject to compromise listed above have been reported on the basis
of the expected amount of the allowed claims even though they may be settled for
lesser amounts. Upon confirmation of a plan of reorganization, the Company would
utilize the "fresh-start" reporting principles contained in the AICPA's
Statement of Position 90-7, which would result in adjustments relating to the
amounts and classification of recorded assets and liabilities, determined as of
the plan confirmation date. Pursuant to the Amended Plan, the ultimate
consideration to be received by unsecured creditors will be substantially less
than the amounts shown in the accompanying Consolidated Balance Sheet. Until a
plan of reorganization is confirmed, however, the Company cannot be certain of
the final terms and provisions thereof or the ultimate amount creditors will
receive.
9
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following (in thousands of dollars):
May 31, November 30,
1996 1995
---------- ----------
Asbestos liability $2,502,511 $2,502,511
Long-term debt (unsecured portion) 62,003 62,003
Accounts payable 41,181 41,236
Accrued and other liabilities 56,719 56,780
---------- ----------
$2,662,414 $2,662,530
========== ==========
The net expense (income) resulting from the Company's administration of
the chapter 11 cases has been segregated from expenses related to ordinary
operations in the accompanying financial statements and includes the following
(in thousands):
Three Months Six Months
Ended Ended
May 31 May 31
------------------ --------------------
1996 1995 1996 1995
---- ---- ---- ----
Professional fees and other
expenses directly related
to bankruptcy $ 1,248 $ 1,563 $ 2,401 $ 3,078
Interest income (1,270) (1,232) (2,491) (2,322)
------- ------- ------- -------
$ (22) $ 331 $ (90) $ 756
======= ======= ======= =======
Interest income is attributable to the accumulation of cash and short-term
investments subsequent to the petition date.
B. LITIGATION
As discussed in Note K to the Consolidated Financial Statements included
in the Company's Annual Report and Form 10-K for the fiscal year ended November
30, 1995 and Note A above, the accompanying Consolidated Financial Statements
include an estimated liability related to personal injury claims resulting from
the Company's sale of asbestos-containing insulation products. Litigation with
respect to asbestos-related claims was stayed by reason of the chapter 11
filing.
Approximately 1,000 proofs of claim alleging asbestos-related property
damage were filed in the chapter 11 cases pursuant to the September 30, 1992 bar
date for asbestos-related claims. Under the Amended Plan, a second trust will be
established to resolve asbestos-related property damage claims. If the class of
asbestos-related property damage claims votes to accept the Amended Plan, such
trust will be funded with $3 million in cash. If such class votes to reject the
Amended Plan, but the Amended Plan is nevertheless confirmed, the trust will be
funded with the pro-rata share of plan consideration allocable to
asbestos-related property damage claims in the aggregate, based upon the
Bankruptcy Court's estimate of the aggregate value of such claims. It cannot be
reasonably predicted at this time what the Bankruptcy Court's estimate of the
aggregate value of such claims would be. The Company may have insurance coverage
for certain of these claims.
In February 1996, the hospital members of the American Hospital
Association, which had filed asbestos-related property damage claims against the
Company ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
estimating the aggregate value of all
10
asbestos-related property damage claims against the Company and temporarily
allowing such claims for purposes of voting on a plan of reorganization. The
Company and the RFC opposed the motion on the basis that, should the class of
asbestos-related property damage claims accept the Amended Plan, an estimation
of these claims would be unnecessary. The Company also argued that voting issues
should be addressed in connection with the Company's motion for an order from
the Bankruptcy Court establishing the voting procedures with respect to the
Amended Plan. At a hearing held in May 1996, the Bankruptcy Court denied the
Hospitals' motion.
In February and May 1996, the Company filed with the Bankruptcy Court
objections to many asbestos-related property damage claims, including claims
filed by the Hospitals, because the claims are barred by the applicable time
limitations under state laws for prosecuting the claims, the claims fail to
state the requisite legal and factual bases therefor, and/or the claims fail to
provide any evidence that the Company's products were located in the claimants'
facilities. The holders of approximately 365 claims did not respond to the
objections; some of these claims have been disallowed by the Bankruptcy Court
and the Company's request for disallowance of the other such claims is pending
with the Bankruptcy Court. With respect to the remaining claims that were
objected to, the Bankruptcy Court has not yet issued a ruling.
The Company is a defendant in other litigation which was pending as of the
petition date which was discussed in Note L to the Consolidated Financial
Statements for the fiscal year ended November 30, 1995. The Company intends to
defend all litigation claims vigorously in the manner permitted by the
Bankruptcy Code and/or applicable law. All pre-petition claims against the
Company arising from litigation must be liquidated or otherwise addressed in the
context of the chapter 11 cases and will be treated in any plan of
reorganization.
The Company has resolved most of the litigation-based claims that were
asserted pursuant to the October 31, 1991 bar date for claims other than those
arising from the sale of asbestos-containing products. In June 1996, the
Bankruptcy Court approved the settlement agreement among the Company, the EPA,
the U.S. Department of Interior and certain states which resolves the majority
of the environmental claims asserted against the Company. The terms of the
settlement agreement were discussed in Note L to the Consolidated Financial
Statements included in the Company's Annual Report and Form 10-K for the fiscal
year ended November 30, 1995. Certain parties that may be liable at certain of
the sites resolved by the settlement agreement have appealed the Bankruptcy
Court's decision.
The Company has filed objections to certain of the litigation-based claims
that have not yet been resolved, seeking to reduce the amount of such claims or
eliminate them entirely. The Company anticipates filing additional objections to
other such claims if they cannot be resolved through negotiation. These
objections will be vigorously pursued by the Company. The Company believes that
its provisions for these claims is adequate, and, in addition, the Company may
have insurance coverage for certain of them.
C. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report and Form 10-K for the fiscal year ended November 30,
1995.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the
three month and six month periods ended May 31, 1996 and 1995. Results of
operations for interim periods are not necessarily indicative of results to be
expected for an entire year.
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales for the second quarter ended May 31, 1996 were $235.1 million
compared with $225.4 million for the second quarter of 1995. Operating income
was $19.3 million compared with $19.1 million for the same period last year. Net
income for the second quarter of 1996 was $16.8 million or $1.52 per share which
was equal to that of the second quarter of 1995.
There was an organizational change during the second quarter of 1996. The
Electronics Division was merged with the Specialty Materials Division to form
the Eagle-Picher Technologies Division. Those operations of the Eagle-Picher
Technologies Division which are included within the Machinery Group (formerly
the operations of the Electronics Division) constitute the largest international
supplier of power systems for commercial, military and weather satellites. These
operations also produce special purpose batteries for a variety of other
purposes. Those operations of the Eagle-Picher Technologies Division which are
included within the Industrial Group (formerly the operations of the Specialty
Materials Division) produce germanium substrates for solar cells which are used
on satellites, boron isotopic components and certified clean sample containers
for environmental testing.
Sales for the Automotive Group for the second quarter of 1996 were ahead
of the levels for the second quarter of 1995, while operating income was
essentially the same as that of the second quarter of 1995. Despite a strike at
the General Motor's Delphi Division, increased production levels in the North
American market and a favorable product mix were important factors in the
improving trend during the second quarter of 1996. European operations did well
during the second quarter as these operations continue to increase market share.
Start-up costs associated with expansions, and continued delays by one customer
in meeting anticipated production schedules, placed pressure on profit margins
during the quarter.
Sales for the Machinery Group were essentially equal to those for the
second quarter of last year, while operating income declined. The primary reason
for the decline in operating income was reduced shipments of earth moving
machinery by the Construction Equipment Division. Shipments of special purpose
batteries by the Eagle-Picher Technologies Division were strong. Results for the
remaining operations in the Machinery Group were mixed.
Sales and operating income for the Industrial Group increased in the
second quarter of 1996 over the results for last year's second quarter.
Shipments of diatomaceous earth products, both to the domestic and to the
international markets, continue to be at a high level. Diatomaceous earth
products are used for high purity filtration in the food and beverage industry
and in a variety of general industrial applications. Eagle-Picher Technologies'
operations in the Industrial Group enjoyed an outstanding quarter. The increase
in cellular communications has expanded demand for satellite components.
Additionally, although the price of certain raw materials has increased over the
past year, it has had a minimal impact on margins as the raw material price
increases were absorbed by the customer. Shipments of boron isotopic compounds
were also at a high level. Recent penetration of the European nuclear market has
provided an excellent growth opportunity for boron products.
It is expected that economic activity will be at a reasonably high level
during the second half of 1996. Several operations are serving growing markets
and/or are increasing market share, while others are serving sluggish segments
of the economy. On balance, and based on forecasts from the Company's Divisions,
results for the second half of 1996 should approximate those of the second half
of 1995.
Interest expense did not change appreciably in the second quarter or the
first six months of 1996 compared to the same periods in 1995. Contractual
interest on debt outstanding was $2.2 million in the second quarters of 1996 and
1995 and $4.4 and $4.5 million in the six
12
month periods ended May 31, 1996 and 1995, respectively.
Interest income on the cash balances accumulated as a result of the
reorganization slightly exceeded the expenses of the reorganization effort
throughout 1996.
FINANCIAL CONDITION
The cash balance of the Company increased from $93.3 million at November
30, 1995 to $109.7 million at May 31, 1996, an increase of $16.4 million. One
component of this increase was the reduction in the amount of customer tooling
carried on the balance sheet to $16.7 million at May 31, 1996 from $26.5 million
at November 30, 1995. It is custom practice in the automotive industry to
accumulate customer tooling costs while the tooling is under construction and
bill the customer upon its completion. It is anticipated that the amount of
customer tooling on the balance sheet will decline further throughout the
remainder of the year. There were increases in working capital, which are
typical in periods in which sales growth is experienced, which partially offset
the effects of the decrease in tooling.
Capital expenditures totaled $9.4 million in the second quarter of 1996
and $19.1 million for the six months ended May 31, 1996 compared to $7.5 million
and $14.0 million in the respective periods of 1995. The Company presently
expects, however, that the total amount of capital expenditures in the 1996
fiscal year will be comparable to that of 1995.
On April 9, 1996, the Company filed a First Amended Consolidated Plan of
Reorganization with the Bankruptcy Court. Such plan provides for the
satisfaction and discharge of the Company's pre-petition liabilities
(Liabilities Subject to Compromise) and for the reorganized Company to have a
capital structure appropriate for an industrial products company that is
intended to enable the Company to access financing in the credit and debt
markets. Decisions with respect to the appeals of the Estimation Ruling and the
hearing on the Disclosure Statement, as further discussed in Note A to the
Consolidated Financial Statements contained herein, will have a direct impact on
the reorganization process. Accordingly, at this time it is not possible to
predict when a plan of reorganization will be confirmed and become effective.
13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In May 1996, the Bankruptcy Court denied the motion of the Hospitals
seeking an order estimating the aggregate value of all asbestos-related property
damage claims against the Company and temporarily allowing such claims for
purposes of voting on a plan of reorganization. This motion, as well as
objections the Company has filed with the Bankruptcy Court to many of the
asbestos-related property damage claims, are discussed in Note B to the
Consolidated Financial Statements contained herein.
Following the close of the quarter, on June 6, 1996, the Bankruptcy Court
issued a judgment and decision in which it granted the motions of the Company
and the United States seeking an order approving the settlement agreement among
the Company, the EPA, the U.S. Department of Interior and certain states
relating to certain environmental claims asserted against the Company. The
settlement agreement provides, among other things, that the agencies and certain
states will be granted allowed pre-petition unsecured claims in the Company's
chapter 11 case aggregating approximately $43.0 million in full satisfaction of
all of the Company's alleged liability at 23 specified Superfund sites,
including any liability for any natural resource damage. The settlement
agreement also provides that the liability, if any, of the Company at certain
other sites will be determined in the future and be satisfied at that time in
substantially the same manner and with the same value as such claims would have
been satisfied if they had been treated under a reorganization plan. The
settlement agreement was discussed in the Company's Report on Form 10-K for the
fiscal year ended November 30, 1995. Certain parties that may be liable at
certain of the sites resolved by the settlement agreement have filed a notice of
appeal of the Bankruptcy Court's decision.
Following the close of the quarter, on June 14, 1996, the U.S. District
Court for the Southern District of Ohio heard oral argument on the appeals of
the Estimation Ruling filed by the UCC, the ESC and two individual members of
the UCC. The Estimation Ruling is further discussed in Note A to the
Consolidated Financial Statements contained herein. The parties who filed the
appeals argued, among other things, that the Bankruptcy Court lacked
jurisdiction to estimate the Company's liability with respect to
asbestos-related personal injury claims and that it erred in its determination
of the amount of such liability. The Company, the ICC and the FRC have opposed
the appeals. The District Court has not yet ruled on the appeals.
Following the close of the quarter, on June 21, 1996, the UCC withdrew the
motion it had filed with the Bankruptcy Court seeking relief from the Estimation
Ruling. In its motion, the UCC had argued that, through inadvertence or mistake,
the Bankruptcy Court overestimated the Company's liability for future
asbestos-related personal injury claims by approximately $500 million. Because
this issue was also raised in the appeal filed by the UCC to the Estimation
Ruling, the UCC withdrew it from present consideration by the Bankruptcy Court.
This motion was reported in the Company's Report on Form 10-Q for the quarter
ended February 29, 1996.
The Bankruptcy Court has scheduled a hearing for July 22, 1996 to consider
the adequacy of the Debtors' First Amended Joint Disclosure Statement, which the
Company submitted in connection with the filing of the Amended Plan, as further
discussed in Note A to the Consolidated Financial Statements contained herein.
Following the close of the quarter, at a hearing in June 1996, the Bankruptcy
Court granted the Company's Motion for an Order Establishing Procedures for
Solicitation and Tabulation of Votes to Accept or Reject the Consolidated Plan
of Reorganization, subject to such procedures being modified to provide that
individual creditors holding multiple claims shall have a separate vote for each
allowed claim they hold.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The chapter 11 filings constituted a default under substantially all of
the
14
Company's and its 'affiliates' senior securities. The obligations under the
Company's pre-petition credit facility and other obligations owing to the
lenders who were party to the pre-petition credit facility have been addressed
in the debtor in possession financing agreement approved by the Bankruptcy Court
on May 24, 1991. At that time, certain of such obligations were repaid and the
remaining of such obligations were deemed to be post-petition.
With respect to certain other secured obligations, the Company (or its
affiliates) have been making settlements or "adequate protection" payments
approved by orders of the Bankruptcy Court.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
Report on Form 8-K (File 1-1499), dated April 9, 1996, in which the
Company reported that on April 9, 1996 the Company and seven of its
domestic subsidiaries filed a First Amended Consolidated Plan of
Reorganization in their chapter 11 cases pending before the U.S.
Bankruptcy Court for the Southern District of Ohio, Western Division.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER INDUSTRIES, INC.
/s/ David N. Hall
-------------------------------
David N. Hall,
Senior Vice President - Finance and
Chief Financial Officer
DATE July 12, 1996
16
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule (submitted
electronically to the Securities
and Exchange Commission for its
information)
17
[THIS PAGE LEFT BLANK INTENTIONALLY]
EAGLE-PICHER INDUSTRIES, INC.
SIGNIFICANT ASSUMPTIONS FOR FINANCIAL PROJECTIONS
For purposes of developing the Plan of Reorganization (the "Plan") and
evaluating its feasibility, the following financial projections were prepared.
These financial projections reflect the Debtors' estimate of their expected
consolidated financial position, results of operations and cash flows.
Accordingly, the projections reflect Management's judgment, as of the date of
this Disclosure Statement, of expected future operating and business conditions,
which are subject to change.
All estimates and assumptions shown within the projections were developed by
Management. The assumptions disclosed herein are those that Management believes
to be significant to the projections. Although the Debtors are of the opinion
that these assumptions are reasonable in the circumstances, such assumptions are
subject to significant uncertainties, such as the cyclical nature of the
automotive industry. There will be differences between projected and actual
results because events and circumstances frequently do not occur as expected.
Further, such assumptions may be affected by other events and circumstances
outside of the Debtors' control. Consequently, actual financial results could
vary significantly from projected results.
THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR WARRANTY BY THE
DEBTORS OR ANY OTHER PERSON AS TO THE ACCURACY OF THE PROJECTIONS OR THAT THE
PROJECTIONS WILL BE REALIZED.
The financial projections were prepared by the Debtors; they have not been
audited or reviewed by independent accountants. The significant assumptions used
in the preparation of the financial projections are stated below.
THE FINANCIAL PROJECTIONS, INCLUDING THE UNDERLYING ASSUMPTIONS, SHOULD BE
CAREFULLY REVIEWED IN EVALUATING THE PLAN.
It is projected that the Debtors will emerge from chapter 11 December 1, 1996
(the "Effective Date"). The reorganization will be accounted for in accordance
with the American Institute of Certified Public Accountants' Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7").
The projections included herein are:
1. Pro Forma Consolidated Balance Sheet of Reorganized Eagle-Picher as of the
Effective Date which reflects the projected accounting effects of the
Plan's consummation and of "fresh start" accounting as promulgated by SOP
90-7.
C-1
2. Projected Consolidated Balance Sheets of Reorganized Eagle- Picher as of
the Effective Date and November 30 for each of the years from 1997 through
2001.
3. Projected Consolidated Statements of Income of Reorganized Eagle-Picher
for each of the six fiscal years in the period ended November 30, 2001.
4. Projected Consolidated Statements of Cash Flow of Reorganized Eagle-Picher
for each of the six fiscal years in the period ended November 30, 2001.
5. Projected Capital Structure of Reorganized Eagle-Picher as of the
Effective Date.
The projections have been prepared on the basis of generally accepted accounting
principles consistent with those currently utilized by Eagle-Picher in the
preparation of its consolidated financial statements except as noted in the
following assumptions. The projections should be read in conjunction with the
significant assumptions, qualifications and notes set forth below and with the
audited consolidated financial statements for the fiscal year ended November 30,
1995 contained in the 1995 Annual Report included in Exhibit C.
WHILE MANAGEMENT BELIEVES THE ASSUMPTIONS UNDERLYING THE PROJECTED FINANCIAL
INFORMATION, WHEN CONSIDERED ON AN OVERALL BASIS, ARE REASONABLE IN LIGHT OF
CURRENT CIRCUMSTANCES AND EXPECTATIONS, NO ASSURANCE CAN BE GIVEN THAT THE
PROJECTIONS WILL BE REALIZED.
A. GENERAL ASSUMPTIONS
The sales volumes of many of the Debtors' operations fluctuate with general
economic cycles. In the interest of presenting a balanced view of their
prospects, the Debtors have assumed that there will be an economic recession in
the years 1997 and 1998.
Other factors considered in formulating the projections are discussed below:
Automotive Segment
The Debtors' automotive operations serve the automotive industry worldwide as a
tier one supplier to the original equipment manufacturers or as a supplier to
other manufacturers that supply automotive manufacturers with component parts or
assemblies. Major factors considered in developing the projections for the
Automotive Segment include:
1. Automotive industry production in North America in 1995 was approximately
15.3 million units of passenger cars, vans, utility vehicles and light
trucks. A new record of 15.7
C-2
million units was reached in 1994, surpassing the record of 15.1 million
units in 1978.
2. Projections for 1996 assume North American automotive production levels
will be down 2%.
3. The effects of the cyclical recession projected in 1997 and 1998 are
comparable to those of the last two downturns of the automotive industry.
4. Economic recovery will begin in the last few months of 1998 moving toward
record automotive production worldwide by 2000.
5. The Debtors will achieve broader market penetration of their products,
particularly in the light truck, van, and sport utility vehicle segment of
the automotive market.
6. There will be increased emphasis on growth opportunities within the
European automotive market.
7. The intense pricing pressure from the automotive manufacturers will
continue and, on occasion, Eagle-Picher will be unable to recover cost
increases from customers on a timely basis.
Machinery Segment
The Debtors' operations in the Machinery Segment manufacture several lines of
earth moving, material handling and other industrial machinery and equipment,
components for a wide range of capital goods and systems and components for
aerospace and commercial aviation markets as well as the defense industry.
Specific factors considered in developing the projections of the Machinery
Segment include:
1. The U.S. Government will continue to cut defense spending. However,
significant operations of the Debtors are more dependent on certain
portions of the defense budget which are less subject to funding cuts than
other areas.
2. The level of worldwide commercial and industrial activity will decline
with the projected economic recession in 1997 and 1998 and will begin
recovery thereafter.
3. Government and commercial aerospace spending, particularly in the
communication satellite area, will remain healthy over the next several
years.
Industrial Segment
The Debtors' operations in the Industrial Segment can be characterized as
serving niche markets where they enjoy a position
C-3
of market leadership based on technical capabilities, proprietary advantages,
manufacturing know-how or marketing skills. These operations generally are not
impacted by fluctuations of the general economy. Specific factors considered in
developing the projections for the Industrial Segment include:
1. Recent historic trends in the performance of individual product lines were
analyzed to develop these projections.
2. Opportunities exist in certain niche markets where the Debtors have a
specific competitive advantage.
3. Since the demand for the Industrial products is not impacted by economic
fluctuations, these products are characterized as being somewhat
"recession proof."
4. In 1997, construction will be completed and production will begin at a new
$14 million facility which will process diatomaceous earth products,
primarily for export markets.
B. DISTRIBUTIONS UNDER THE PLAN
Cash, debt securities and common stock of Reorganized Eagle-Picher will be
distributed pursuant to the Plan.
Cash Distributions
The Debtors expect to distribute cash on the Effective Date as follows:
a) Approximately $10.3 million will be distributed with respect to
Priority Claims, Convenience Claims, certain Secured Claims and certain
Administrative Expenses;
b) Assuming the class of asbestos property damage claimants votes to
approve the Plan, $3.0 million will be used to establish a Qualified
Settlement Fund which will be responsible for satisfying asbestos property
damage claims (the "PD Trust").
c) Approximately $89.0 million will be distributed with respect to the PI
Trust and other unsecured creditors.
Debt Securities
It is anticipated that existing secured debt of Eagle-Picher approximating $6.0
million will be restructured. Such indebtedness will bear interest at an
appropriate market rate and, for the most part, be repaid in installments. An
existing $10 million secured industrial revenue bond financing is expected to be
reinstated. In addition, debt securities, as described below, will be issued on
the Effective Date:
C-4
a) Tax Refund Notes in the anticipated principal amount of $71 million. It
is assumed that these notes will mature on June 1, 1998 based on the
assumed Effective Date of December 1, 1996.
b) Divestiture Notes in the principal amount of $50 million which will
mature three years after the Effective Date. These Divestiture Notes will
be redeemed in the event the Debtors consummate major asset sales.
c) Senior Unsecured Sinking Fund Debentures ("Debentures") in the
principal amount of $250 million, which will mature 10 years after the
Effective Date. The Debentures will have a mandatory sinking fund of $20
million per year on each of the third through ninth anniversaries of the
Effective Date with a final maturity of $110 million.
The assumed interest rates for each of the foregoing is set forth in
Section C below.
Common Stock
Common stock of the Reorganized Eagle-Picher will also be issued pursuant to the
Plan. Based on, among other things, its analysis of the projections, the market
value of securities of other companies serving similar markets and their
capitalization rates, the Debtors' financial advisors, McDonald & Company
Securities, Inc. ("McDonald & Co."), have calculated that the residual value of
such common stock is $254.8 million.
The stockholders' existing Eagle-Picher Common Stock will not receive any
distribution under the Plan, and their equity will be canceled.
Pursuant to the Plan, the holders of Unsecured Claims and Environmental Claims
will receive 50% of their distribution value in Divestiture Notes and 50% cash.
The PI Trust will receive the balance of the cash and Divestiture Notes as
consideration, as well as the entire issues of the Tax Refund Notes and the
Debentures and all of the common stock of the Reorganized Eagle-Picher.
C. OTHER SPECIFIC ASSUMPTIONS
Cash
It is assumed interest of 6% will be earned on cash balances exceeding $15
million. It is also assumed Eagle-Picher will have a line of credit available to
it for certain letters of credit and, if necessary, working capital and
operating needs. Any borrowings on this line of credit will carry an interest
rate of 8%. For these purposes, borrowings will be made on December 1 to fund
cash
C-5
needs on that day and payments on those borrowings will be made the
following December 1. Interest was calculated accordingly.
Property, Plant and Equipment
To adjust net property, plant and equipment to an estimate of its fair value in
accordance with the fresh-start accounting provisions of SOP 90-7, Eagle-Picher
plans to review its property, plant and equipment and obtain appraisals to
determine what revisions, if any, should be made to individual accounts. Since
the appraisal process is not yet complete, $20 million is an estimate used for
purposes of the projections. The actual adjustment at the Effective Date could
be higher or lower. Any adjustment to this allocation would have no impact on
cash flow.
For purposes of this projection, the fair value adjustment of the property,
plant and equipment is to be amortized over eight years, which approximates the
estimated remaining useful life of the assets. However, actual amortization
periods used at the Effective Date could be shorter or longer.
Reorganization Goodwill
In accordance with SOP 90-7, the reorganization value in excess of amounts
allocable to identifiable assets is an intangible asset. The amortization period
of this intangible asset is assumed for these purposes to be 7 years, but the
actual amortization period utilized at the Effective Date could be shorter or
longer. This item has no tax or cash flow implications.
Debt
The Tax Refund Notes, the Divestiture Notes and the Debentures will bear
interest at a rate these debt securities should bear in order to have a market
value of 100% of their principal amount on the Effective Date. For purposes of
these projections, it is assumed that such interest rates would be 8% for the
Tax Refund Notes, 9 1/2% for the Divestiture Notes and 10 1/2% for the
Debentures.
All payments of principal are assumed to be made on the anniversary of the
Effective Date and interest will be paid semiannually, unless otherwise
specified.
It is assumed the the Tax Refund Notes will be repaid when the majority of the
tax refunds are received, approximately June 1, 1998.
For these purposes, it was assumed the Divestiture Notes will be repaid by their
maturity date.
It is assumed that sinking fund payments on the Debentures will be made as
scheduled throughout the projections.
C-6
Income Taxes
It is assumed that Eagle-Picher will receive tax deductions for cash and the
value of stock distributed to the PI Trust upon such distribution. With respect
to Debt Securities distributed to the PI Trust, deductions are received as the
Debt Securities are repaid or refunded. These deductions will result in
substantial tax net operating losses.
An income tax receivable of $67.8 million will result from the carryback of tax
net operating losses to years in which income is available for carryback. An
additional refund of $3.2 million, which arose from results of prior years'
audits, is expected to be received in 1997. Assuming the Effective Date is
December 1, 1996, $55.4 million will be received approximately June 1, 1998,
$9.3 million will be received in 1999, $2.7 million will be received in 2001 and
$.4 million will be received in 2002.
A deferred income tax asset results from tax net operating losses and deferred
deductions available to offset income tax payments in future years. General
business credit carryforwards have been ignored, since it is expected that they
will expire unutilized. For purposes of these projections, it is assumed that
all other tax benefits are available upon the Effective Date and no valuation
allowance is necessary.
A statutory federal income tax rate of 35% is assumed throughout the projection
period. The differences between the statutory and the effective tax rates for
the projection period are due primarily to the amortization of the
reorganization gain, depletion deductions and foreign and state taxes. Due to
the large tax net operating loss carryforward, the Debtor's current Federal tax
liability will be limited to alternative minimum taxes. Approximately $6.6
million of alternative minimum taxes will be paid in 1999; however, of this
amount, $5.9 million will be refunded in 2002.
Liabilities Subject to Compromise
Liabilities Subject to Compromise will be discharged at the Effective Date. This
will result in a gain for forgiveness of debt. This, along with the
establishment of the deferred taxes and reorganization gain will offset the
retained deficit.
C-7
EAGLE-PICHER INDUSTRIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
BEFORE REORGANIZATION AFTER
REORGANIZATION ADJUSTMENTS REORGANIZATION
Cash $118,237 ($102,338)(1) $15,899
Escrow cash 5,125 5,500 (2) 10,625
Accts receivable, net 129,000 (1,800)(2) 127,200
Inventories, net 82,600 11,800 (2,3) 94,400
Income tax receivable 3,200 67,800 (4) 71,000
Prepaid expenses 14,700 (50)(2) 14,650
----------------------------------------------
Total current assets 352,862 (19,088) 333,774
Property, plant &
equipment, net 164,318 18,750 (2,5) 183,068
Deferred income taxes 80,124 42,360 (4) 122,484
Reorganization goodwill -- 75,438 (6) 75,438
Other assets 34,000 (4,000)(7) 30,000
----------------------------------------------
Total assets $631,304 $113,460 $744,764
==============================================
Accounts payable $38,000 (600)(2) $37,400
Accr. liabilities 32,999 (3,049)(1,2) 29,950
Short-term debt -- 71,000 (8) 71,000
Secured debt - current 2,163 (20)(1) 2,143
New debt - current -- --
Income tax payable 5,289 5,289
----------------------------------------------
Total current liab 78,451 67,331 145,782
Secured debt 17,676 (615)(1) 17,061
New debt-10 year -- 250,000 (8) 250,000
New debt-3 year -- 50,000 (8) 50,000
Other long-term liabilities 27,125 27,125
Liabilities subject to
compromise 2,160,493 (2,160,493)(8) --
Equity (1,652,441) 1,907,237 (9) 254,796
----------------------------------------------
Total liab. & equity $631,304 $113,460 $744,764
==============================================
C-8
EAGLE-PICHER INDUSTRIES, INC.
NOTES TO PRO-FORMA CONSOLIDATED BALANCE SHEET
1. Cash projected to be paid at the Effective Date of the Plan includes
distributions with respect to Priority Claims, Convenience Claims, certain
Secured Claims and Administrative Expenses of approximately $10.3 million,
the Asbestos Property Damage Claim of $3.0 million, and approximately
$89.0 million to be distributed to the unsecured creditors and the PI
Trust.
2. To reflect the sale of the Fabricon Products Division for $5.5 million,
which approximates the book value of the assets. The proceeds will be
deposited to an Escrow Cash account, which is held for the purpose of
repaying the Divestiture Notes due December 1, 1999. The proceeds from the
sale of the Orthane Division, which took place in early 1996, are also
included in the Escrow cash account.
3. To adjust inventory to its approximated fair value through elimination of
the LIFO reserve. Inventory will continue to be calculated on the LIFO
method for tax purposes, which results in a deferred tax liability. For
purposes of this statement, this has been treated as a reduction of
deferred tax assets existing at the Effective Date.
4. Eagle-Picher will receive tax deductions for cash and the value of equity
securities contributed to the PI Trust. An income tax receivable of $67.8
million will result from carryback of losses to years with available
income. Additional deferred income tax assets of $57.4 million result from
net operating losses and deferred deductions available to offset income
tax payments in future years. For purposes of these projections, it was
assumed that all tax benefits, other than general business credit
carryforwards, are available upon the Effective Date and no valuation
allowance is necessary. General business credit carryforwards were ignored
because they are expected to expire unutilized.
5. To adjust net property, plant and equipment to an estimate of its fair
value in accordance with the fresh-start accounting provisions of SOP
90-7. Since the appraisal process is not yet complete, $20 million is an
estimate used for purposes of the projections.
6. To record reorganization value in excess of amounts allocable to
identifiable assets in accordance with SOP 90-7.
7. To write off existing goodwill of approximately $12.0 million. This is
offset by a $8.0 million increase to the prepaid pension asset to the
amount by which the plan assets exceed the projected benefit obligations.
C-9
8. To record the discharge of Liabilities Subject to Compromise through the
distribution pursuant to the Plan of debt securities, common stock, and
the cash previously mentioned in Note 1. This will result in a gain for
forgiveness of debt.
a) Eagle-Picher will issue Tax Refund Notes in the principal amount of
$71.0 million.
b) Eagle-Picher will issue three-year Divestiture Notes in the principal
amount of $50 million.
c) Eagle-Picher will issue Senior Unsecured Sinking Fund Debentures in the
principal amount of $250 million.
d) New Eagle-Picher Common Stock with an estimated value of $254.8 million
will be issued. Existing Eagle-Picher Common Stock will be canceled and
the holders thereof will receive no distribution.
9. To eliminate the retained deficit and record the new equity of
Eagle-Picher.
C-10
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30 UNLESS OTHERWISE NOTED
(IN THOUSANDS - UNAUDITED)
DEC. 1 REORGANIZED COMPANY
---------------------- ----------------------------------------------------
1996 1996 1997 1998 1999 2000 2001
Cash $118,237 $15,899 $49,738 $46,350 $67,850 $58,046 $69,605
Escrow cash 5,125 10,625 11,225 11,875 12,575 -- --
Accts receivable, net 129,000 127,200 127,700 129,000 135,000 141,000 148,000
Inventories, net 82,600 94,400 94,200 94,600 96,100 97,600 98,600
Income tax receivable 3,200 71,000 67,800 12,400 3,100 3,100 6,300
Prepaid expenses 14,700 14,650 14,650 15,650 16,150 16,650 17,150
---------------------- ----------------------------------------------------
Total current assets 352,862 333,774 365,313 309,875 330,775 316,396 339,655
Property, plant &
equipment, net 164,318 183,068 185,568 186,668 186,368 184,668 181,568
Deferred income taxes 80,124 122,484 118,112 113,084 111,674 100,998 80,974
Reorganization goodwill -- 75,438 64,661 53,884 43,107 32,330 21,553
Other assets 34,000 30,000 28,000 26,500 27,500 28,000 28,000
---------------------- ----------------------------------------------------
Total assets $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
Accounts payable $38,000 $37,400 $36,400 $37,400 $38,400 $39,400 $39,900
Accr. liabilities 32,999 29,950 48,140 45,300 45,800 43,675 42,725
Short-term debt -- 71,000 71,000 -- -- 20,000 10,000
Secured debt - current 2,163 2,143 2,237 1,159 856 1,490 80
New debt - current -- -- -- -- 70,000 20,000 20,000
Income tax payable 5,289 5,289 5,289 5,289 5,289 5,289 5,289
---------------------- ----------------------------------------------------
Total current liab 78,451 145,782 163,066 89,148 160,345 129,854 117,994
Secured debt 17,676 17,061 14,824 13,666 12,809 11,320 11,240
New debt-10 year -- 250,000 250,000 250,000 230,000 210,000 190,000
New debt-3 year -- 50,000 50,000 50,000 -- -- --
Other long-term liabilities 27,125 27,125 26,825 26,825 26,325 26,325 25,825
Liabilities subject to
compromise 2,160,493 -- -- -- -- -- --
Equity (1,652,441) 254,796 256,939 260,372 269,945 284,893 306,691
---------------------- ----------------------------------------------------
Total liab. & equity $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
C-11
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF INCOME
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
REORGANIZED COMPANY
-------- ------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Net sales $865,923 $854,000 $855,500 $912,000 $963,000 $1,017,000
Operating Costs and Expenses
Cost of products sold 724,071 711,325 713,350 762,225 805,900 849,775
Selling and administrative 80,100 81,600 82,500 83,700 86,300 88,900
-------- ------------------------------------------------------------------
804,171 792,925 795,850 845,925 892,200 938,675
-------- ------------------------------------------------------------------
Operating Income 61,752 61,075 59,650 66,075 70,800 78,325
Amortization:
Reorganization asset -- (10,777) (10,777) (10,777) (10,777) (10,777)
Property, plant and equipment
adjustment -- (2,500) (2,500) (2,500) (2,500) (2,500)
Interest expense (2,000) (39,155) (35,540) (32,525) (27,175) (24,150)
Interest income 500 2,400 2,200 2,400 1,000 1,300
Other income (expense) 502,515 -- -- -- -- --
Reorganization items (500) -- -- -- -- --
-------- ------------------------------------------------------------------
Income before income taxes
and non-recurring item 562,267 11,043 13,033 22,673 31,348 42,198
Income taxes 3,400 8,900 9,600 13,100 16,400 20,400
-------- ------------------------------------------------------------------
Income before non-
recurring item 558,867 2,143 3,433 9,573 14,948 21,798
Gain on discharge of debt -- 1,561,853 -- -- -- --
Fresh start adjustments -- 91,388 -- -- -- --
Administrative items related
to reorganization -- (800) -- -- -- --
-------- ------------------------------------------------------------------
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
======== ==================================================================
BY INDUSTRY SEGMENT:
Sales
Automotive 432,136 450,370 451,680 491,700 532,220 569,740
Machinery 248,481 233,140 230,110 240,050 244,990 255,930
Industrial 185,306 170,490 173,710 180,250 185,790 191,330
-------- ------------------------------------------------------------------
Total sales 865,923 854,000 855,500 912,000 963,000 1,017,000
======== ==================================================================
Operating Income
Automotive 32,462 36,785 37,560 42,835 48,095 52,895
Machinery 20,086 16,855 15,780 17,455 17,145 18,895
Industrial 12,555 12,495 13,020 14,145 15,240 16,215
Corporate items (3,351) (5,060) (6,710) (8,360) (9,680) (9,680)
-------- ------------------------------------------------------------------
Total operating income 61,752 61,075 59,650 66,075 70,800 78,325
======== ==================================================================
C-12
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
REORGANIZED COMPANY
------- -------------------------------------------------------------
1996 1997 1998 1999 2000 2001
Operating Cash:
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
Reduction of asbestos liability (502,511) -- -- -- -- --
Gain on discharge of debt -- (1,561,853) -- -- -- --
Fresh start adjustments -- (91,388) -- -- -- --
Administrative items related
to reorganization -- 800 -- -- -- --
Depreciation & amortization 31,200 43,277 44,677 46,077 47,477 48,877
Deferred taxes (17,300) 4,372 5,028 1,410 10,676 20,024
Working capital (637) 18,590 (3,040) (8,000) (9,625) (9,450)
Income tax refunds 1,202 3,200 55,400 9,300 -- (3,200)
------- -------------------------------------------------------------
Operating cash 70,821 71,582 105,498 58,360 63,476 78,049
Investing Cash:
Capital expenditures (40,000) (35,000) (35,000) (35,000) (35,000) (35,000)
Financing Cash:
Escrow activity (5,125) (600) (650) (700) 12,575 --
Short-term borrowings -- -- (71,000) -- 20,000 (10,000)
Repayments (789) (2,143) (2,236) (1,160) (70,855) (21,490)
------- -------------------------------------------------------------
Financing cash (5,914) (2,743) (73,886) (1,860) (38,280) (31,490)
Cash Payments Pursuant
to the Plan -- (102,338) -- -- -- --
Increase (decrease) in cash 24,907 (68,499) (3,388) 21,500 (9,804) 11,559
Beginning cash balance 93,330 118,237 49,738 46,350 67,850 58,046
------- -------------------------------------------------------------
118,237 49,738 46,350 67,850 58,046 69,605
======= =============================================================
C-13
EAGLE-PICHER INDUSTRIES, INC.
CALCULATION OF EQUITY VALUE
NOVEMBER 30 1996
Total Value of Estate* $734.0 million
Less: Cash Distributed 89.0
Secured Debt 19.2
Tax Refund Notes 71.0
Divestiture Notes 50.0
Debentures 250.0
------
Value of Equity $254.8 million
* Excludes Priority Claims and Remaining Expenses of Administration
CAPITAL STRUCTURE OF REORGANIZED COMPANY
Value Percentage
Secured Notes $19.2 3.0%
Tax Refund Notes 71.0 11.0
Divestiture Notes 50.0 7.8
Debentures 250.0 38.8
Common Equity 254.8 39.5
------ -----
$645.0 100.0%
C-14
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ----------------------------------- )
EXHIBIT "D"
BALLOT SOLICITATION AND TABULATION PROCEDURES, AS APPROVED BY AN ORDER OF
THE BANKRUPTCY COURT, DATED JULY 23, 1996
PLEASE CALL THE SOLICITATION AGENT,
HILL AND KNOWLTON, INC., AT (212) 885-0555,
IF YOU HAVE ANY QUESTIONS ABOUT THESE PROCEDURES.
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TABLE OF CONTENTS
1. Definitions................................................................ D-1
2. Publication Notice......................................................... D-3
3. Distribution of Solicitation Packages by the Tabulation Agent.............. D-3
a. Scheduled Claims............................................. D-3
b. Filed Claims................................................. D-4
c. Primary Asbestos Personal Injury Claims...................... D-4
i. Proofs of Claim Signed by Individual Claimants.... D-4
ii. Proofs of Claim Signed by Disqualified
Attorneys......................................... D-4
iii. Proofs of Claim Signed by Attorneys............... D-4
d. Asbestos Property Damage Claims:............................. D-6
e. Unimpaired Claims............................................ D-6
f. Determination of Holders of Record........................... D-6
4. Distribution of Solicitation Packages by the Solicitation Agent............ D-7
a. Registered Debt Securities................................... D-7
i. List of Record Holders............................ D-7
ii. Determination of Number of Beneficial Owners...... D-7
iii. Distribution to Record Holders other than Debt
Nominees.......................................... D-7
iv. Distribution to Debt Nominees in Unimpaired
Classes........................................... D-7
v. Distribution to Debt Nominees in Impaired
Classes........................................... D-8
(1) Options for Obtaining Votes........... D-8
(2) Reimbursement of Expenses............. D-9
b. Bearer Debt Securities....................................... D-9
i. Lists of Holders of Bearer Debt Securities........ D-9
ii. Notices........................................... D-10
iii. Contents of Individual, Non-Prevalidated Ballots
for Bearer Debt Securities........................ D-10
iv. Bearer Debt Securities Held by a Depositary....... D-11
v. Reimbursement of Expenses......................... D-12
c. Equity Interests............................................. D-12
i. List of Equity Holders............................ D-12
ii. Distribution of Solicitation Packages to Holders
of Equity Interests............................... D-13
5. Return of Ballots.......................................................... D-13
a. Claimants That Are Entitled to Vote.......................... D-13
b. Place to Send Completed Ballots.............................. D-13
c. Deadline for Receiving Completed Ballots..................... D-13
i. Deadline For Receipt By Tabulation Agent.......... D-13
ii. Deadline For Receipt By Solicitation Agent........ D-14
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6. Tabulation of Ballots...................................................... D-14
a. Determination of Amount of Claims Voted...................... D-14
i. Bearer Debt Securities............................ D-14
ii. Registered Debt Securities:....................... D-15
iii. Claims other than Debt Securities, Asbestos
Property Damage Claims, Asbestos Personal
Injury Claims, Environmental Claims, and Lead
Personal Injury Claims............................ D-16
iv. Asbestos Property Damage Claims, Asbestos
Personal Injury Claims, and Lead Personal
Injury Claims..................................... D-17
v. Environmental Claims.............................. D-17
b. Determination of Number of Claims Voted...................... D-17
i. Specific Rules Relating to Registered Debt
Securities and Bearer Debt Securities............. D-18
ii. Specific Rules Relating to Class Asbestos
Property Damage Claims:........................... D-18
c. Ballots Excluded:............................................ D-18
d. General Voting Procedures and Standard Assumptions........... D-18
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BALLOT SOLICITATION AND TABULATION PROCEDURES
The following procedures (these "Voting Procedures") are adopted with respect to
(a) the distribution of ballot solicitation materials with respect to the
chapter 11 plan jointly proposed by the Debtors, the Official Injury Claimants'
Committee, and the Future Claimants' Representative (as such plan may be amended
from time to time, the "Plan") and (b) the return and tabulation of ballots and
master ballots.
1. DEFINITIONS:
a. "ASBESTOS BAR DATE ORDER" means the order of the Bankruptcy Court,
dated June 11, 1992, which fixed the deadline for filing proofs of
claim against the Debtors' estates for all Asbestos Property Damage
Claims and Primary Asbestos Personal Injury Claims.
b. "BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Ohio, Western Division.
c. "BEARER DEBT SECURITIES" means debt securities of the Debtors that
are not registered as to principal or are registered to "bearer."
d. "BEARER DEBT SECURITIES TRUSTEE" means the indenture trustee for any
issue of debt securities of the Debtors as to which some or all of
such debt securities constitute Bearer Debt Securities.
e. "CONFIRMATION HEARING" means the hearing on the confirmation of the
Plan, as such hearing may be adjourned from time to time.
f. "DEBT NOMINEES" means institutional holders of record of Registered
Debt Securities who hold Registered Debt Securities in "street name"
on behalf of beneficial owners or otherwise represent such
beneficial holders.
g. "DEPOSITARY" means a trust company, bank, or other depositary having
trust powers recognized by the Federal Reserve System of the United
States.
h. "DISCLOSURE STATEMENT" means the disclosure statement in connection
with the Plan, as approved by the Bankruptcy Court in the Disclosure
Statement Order.
i. "DISCLOSURE STATEMENT ORDER" means the Order of the Bankruptcy Court
approving the Disclosure Statement.
j. "EQUITY NOMINEE" means an institutional holder of record that may
hold shares of common stock of Eagle-Picher in "street name" on
behalf of beneficial owners or otherwise represent such beneficial
owners.
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k. "GENERAL BAR DATE ORDER" means the order of the Bankruptcy Court,
dated July 19, 1991, which fixed the deadline for filing proofs of
claim against the Debtors' estates for all Claims other than
Asbestos Property Damage Claims and Primary Asbestos Personal Injury
Claims.
l. "MASTER BALLOT" means a ballot (a) filed on behalf of one or more
beneficial owners of Registered Debt Securities or Bearer Debt
Securities in accordance with the procedures set forth in section
4.a.v.(1) or section 4.b.iv. respectively, of these Voting
Procedures, (b) filed on behalf of one or more holders of Primary
Asbestos Personal Injury Claims pursuant to section of these Voting
Procedures, or (c) filed by an Asbestos Property Damage Claim class
member pursuant to section 3.d of these Voting Procedures.
m. "PRIMARY ASBESTOS PERSONAL INJURY CLAIM" means an Asbestos Personal
Injury Claim other than an Asbestos or Lead Contribution Claim.
n. "PUBLICATION NOTICE" means a published notice of (a) the approval of
the Disclosure Statement and the scheduling of the Confirmation
Hearing and (b) the procedure for holders of Claims and Equity
Interests to obtain a Solicitation Package.
o. "RECORD AMOUNT" means the amount shown on the records of the
Registered Debt Securities Trustees and the Debt Nominees (as
confirmed by record and depositary listings) as of the Voting Record
Date.
p. "REGISTERED DEBT SECURITIES" means debt securities of the Debtors
that are either fully registered or registered as to principal only,
but excluding debt securities registered to "bearer."
q. "REGISTERED DEBT SECURITIES TRUSTEE" means the indenture trustee for
any issue of debt securities of the Debtors as to which all or some
of such debt securities constitute Registered Debt Securities.
r. "SCHEDULES" means the Debtors' schedules of liabilities previously
filed with the Bankruptcy Court, as amended or reconstituted.
s. "SOLICITATION AGENT" means Hill and Knowlton, Inc., or such other
firm that may be retained by the Debtors to act as the Solicitation
Agent with respect to the Plan.
t. "SOLICITATION PACKAGE" means, and will consist of, all of the
following:
i. Disclosure Statement Order.
ii. Disclosure Statement (with the Plan attached as an exhibit
thereto).
iii. For entities entitled to vote, appropriate ballots and voting
instructions.
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iv. For entities entitled to vote, pre-addressed, postage-paid,
return envelopes.
v. Any other materials ordered by the Bankruptcy Court to be
included as part of the Solicitation Package.
u. "TABULATION AGENT" means Federated Claims Service Group, or such
other firm that may be retained by the Debtors to act as the
Tabulation Agent with respect to the Plan.
v. "TRANSFER AGENT" means Key Corp., the transfer agent for
Eagle-Picher's common stock, or such other transfer agent as may be
acting for Eagle-Picher at the relevant time.
w. "UNIMPAIRED CLASSES SOLICITATION PACKAGE" means, collectively, (a)
notice that the class in which an entity's Claim is classified is
designated in the Plan as unimpaired and that, upon written request
by such entity to the Solicitation Agent, a copy of the Solicitation
Package shall be furnished to such entity at the Debtors' expense
and (b) notice of the Confirmation Hearing and the time fixed for
filing objections to confirmation or the Plan.
x. "VOTING DEADLINE" means the date that is established by the
Bankruptcy Court as the deadline for the return of ballots on the
Plan.
y. "VOTING RECORD DATE" means the date that is five (5) business days
after the date on which the Disclosure Statement Order is entered by
Bankruptcy Court.
Any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan.
2. PUBLICATION NOTICE:
The Debtors will cause the Publication Notice to be published twice in The
Wall Street Journal (all U.S. editions) and The New York Times (national
edition).
3. DISTRIBUTION OF SOLICITATION PACKAGES BY THE TABULATION AGENT:
The Tabulation Agent will cause Solicitation Packages to be served as
follows:
a. SCHEDULED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) listed in the Schedules as of the Voting
Record Date as liquidated,
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undisputed, and not contingent (other than holders of Registered
Debt Securities and Bearer Debt Securities).
b. FILED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) represented by a proof of claim against
any of the Debtors that has not been disallowed by an order entered
on or before the Voting Record Date, other than a proof of claim
asserting (a) Claims under, or evidenced by, any Registered Debt
Securities or Bearer Debt Securities, (b) Primary Asbestos Personal
Injury Claims, or (c) Asbestos Property Damage Claims.
c. PRIMARY ASBESTOS PERSONAL INJURY CLAIMS:
Upon the holders of Primary Asbestos Personal Injury Claims, as
follows:
i. PROOFS OF CLAIM SIGNED BY INDIVIDUAL CLAIMANTS:
Each holder of a Primary Asbestos Personal Injury Claim that
filed a proof of claim asserting a Primary Asbestos Personal
Injury Claim against any of the Debtors that has not been
disallowed by an order entered on or before the Voting Record
Date and who personally signed such proof of claim shall
receive a Solicitation Package.
ii. PROOFS OF CLAIM SIGNED BY DISQUALIFIED ATTORNEYS:
If a proof of claim asserting a Primary Asbestos Personal
Injury Claim against any of the Debtors was signed and filed
by an attorney purporting to represent the holder of such
Claim, and (a) the Debtors know that such attorney has been
disqualified from representing such holder, and (b) such
Primary Asbestos Personal Injury Claim has not been disallowed
by an order entered on or before the Voting Record Date, the
Solicitation Package shall be served directly upon the holder
of such Primary Asbestos Personal Injury Claim, if such
holder's address is known. Otherwise, the Solicitation Package
shall be served upon the last-known attorney of record for
such holder, with instructions for such attorney to forward
the Solicitation Package to the holder of such Primary
Asbestos Personal Injury Claim within two (2) business days
after receipt of the Solicitation Package.
iii. PROOFS OF CLAIM SIGNED BY ATTORNEYS:
If any proofs of claim asserting Primary Asbestos Personal
Injury Claims against any of the Debtors were signed and filed
by an attorney purporting to represent the holders of such
Claims, and such Primary Asbestos Personal Injury Claims have
not been disallowed by an order or orders entered on or before
the Voting Record Date, a single Solicitation Package
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shall be served upon such attorney, and (except to the extent
that individual holders of such Primary Asbestos Personal
Injury Claims also signed such proofs of claims) Solicitation
Packages WILL NOT be served upon the individual holders
thereof. The Solicitation Package will contain a separate copy
of these Voting Procedures and a Master Ballot for the
computation of votes on the Plan. The following procedures
will govern the completion and return of such Master Ballot:
(1) The Master Ballot to be sent to each such attorney will
contain as an exhibit thereto a computer-generated
listing of each individual holder of a Primary Asbestos
Personal Injury Claim for whom such attorney signed and
filed a proof of claim, by name and Claim number, with a
separate box next to each entry to note, if necessary,
whether such individual holder accepts or rejects the
Plan.
(2) The Master Ballot will contain a certification to be
completed by such attorney pursuant to which such
attorney will certify that, except as otherwise noted on
the exhibit thereto by the striking of the name of the
holder of a Primary Asbestos Personal Injury Claim, such
attorney has the authority to cast a ballot on the Plan
on behalf of the holders of Primary Asbestos Personal
Injury Claims listed on such exhibit. If such attorney
is unable to make such certification with respect to any
holders of Primary Asbestos Personal Injury Claims on
whose behalf such attorney signed and filed proofs of
claim, such attorney shall, within ten (10) business
days after the receipt of the Solicitation Package,
furnish the Tabulation Agent with the names and
addresses of such holders, on a preprinted form to be
included with the Solicitation Package.
(3) The Master Ballot shall contain, in substantially
similar form, the following options for voting, one of
which shall be marked by the attorney:
(a) "All claimants listed on the exhibit accompanying
this ballot ACCEPT the Plan."
(b) "All claimants listed on the exhibit accompanying
this ballot REJECT the Plan."
(c) "All claimants listed on the exhibit accompanying
this ballot ACCEPT the Plan, EXCEPT as marked on
such exhibit."
(d) "All claimants listed on the exhibit accompanying
this ballot REJECT the Plan, EXCEPT as marked on
such exhibit."
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(4) If any exceptions to the certification are noted
pursuant to section 3.c.iii.(2), or if any exceptions
are noted pursuant to section 3.c.iii.(3)(c) or
3.c.iii.(3)(d), the attorney shall note such exceptions
on the exhibit accompanying the ballot and shall return
the ENTIRE exhibit, together with the completed Master
Ballot, to the Tabulation Agent in accordance with
section of these Voting Procedures. Otherwise, the
attorney need only return the completed Master Ballot,
without the exhibit, to the Tabulation Agent in
accordance with section of these Voting Procedures.
d. ASBESTOS PROPERTY DAMAGE CLAIMS:
Upon each holder of an Asbestos Property Damage Claim that filed a
proof of claim asserting an Asbestos Property Damage Claim that (i)
does not purport to constitute a class proof of claim and (ii) has
not been disallowed by an order entered on or before the Voting
Record Date. With respect to Asbestos Property Damage Claims filed
by representatives of classes of Asbestos Property Damage Claims
that have been certified or conditionally certified in pending
federal or state court actions, the Tabulation Agent will select 100
members of each class at random from a list of class members
provided to the Tabulation Agent by the class representative. The
class representative shall provide such list to the Tabulation Agent
within ten (10) business days after receipt by such class
representative of a written request therefor from Eagle-Picher. If
the class representative does not timely provide such list,
Eagle-Picher shall have no obligation to solicit the votes of such
class. The Tabulation Agent will send a Solicitation Package to each
randomly selected class member and to the class representative, and,
unless individual class members filed separate proofs of claim in
accordance with the Asbestos Bar Date Order, individual class member
shall not receive Solicitation Packages.
e. UNIMPAIRED CLAIMS:
Each entity that, as of the Voting Record Date, has a Claim (other
than a Claim pursuant to Registered Debt Securities or Bearer Debt
Securities) that is unimpaired under the Plan will receive an
Unimpaired Classes Solicitation Package.
f. DETERMINATION OF HOLDERS OF RECORD:
Except with respect to Primary Asbestos Personal Injury Claims and
Claims under, or evidenced by, any Registered Debt Securities or
Bearer Debt Securities, the Solicitation Package or Unimpaired
Solicitation Package, as the case may be, will be served upon the
entity that holds a Claim as of the Voting Record Date, and the
Debtors will have no obligation to cause a Solicitation Package or
Unimpaired Solicitation Package, as the case may be, to be served
upon any subsequent holder of such Claim (as evidenced by any notice
of assignment of such Claim entered on the Bankruptcy Court's docket
after the Voting Record Date or otherwise).
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4. DISTRIBUTION OF SOLICITATION PACKAGES BY THE SOLICITATION AGENT:
The Solicitation Agent will cause Solicitation Packages to be served as
follows:
a. REGISTERED DEBT SECURITIES:
To all holders of Registered Debt Securities, according to the
following procedures:
i. LIST OF RECORD HOLDERS:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e), within five
(5) business days after the Voting Record Date, the Registered
Debt Securities Trustee shall provide to the Solicitation
Agent (a) a copy of the list of the names, addresses, and
holdings of the holders of Registered Debt Securities as of
the Voting Record Date, (b) a set of mailing labels for such
holders, and (c) such other information as the Solicitation
Agent deems reasonably necessary to perform its duties
hereunder. Upon request by the Solicitation Agent, the
Registered Debt Securities Trustee shall provide additional
sets of mailing labels. The Solicitation Agent shall use such
lists, mailing labels, and other information only for purposes
consistent with these Voting Procedures.
ii. DETERMINATION OF NUMBER OF BENEFICIAL OWNERS:
As soon as practicable after the entry of the Disclosure
Statement Order, the Solicitation Agent shall attempt to
contact the institutional holders of record of the Registered
Debt Securities to determine whether such holders hold as Debt
Nominees and to ascertain the number of beneficial owners of
such Registered Debt Securities holding through each such Debt
Nominee.
iii. DISTRIBUTION TO RECORD HOLDERS OTHER THAN DEBT NOMINEES:
The Solicitation Agent will cause to be served upon each
record holder (other than Debt Nominees), as of the Voting
Record Date, of any Registered Debt Securities either (a) a
Solicitation Package (if the Registered Debt Securities are in
a class that is impaired under the Plan) or (b) an Unimpaired
Classes Solicitation Package (if the Registered Debt
Securities are in a class that is not impaired under the
Plan).
iv. DISTRIBUTION TO DEBT NOMINEES IN UNIMPAIRED CLASSES:
For Registered Debt Securities that are in a class that is not
impaired under the Plan, the Solicitation Agent will cause to
be served upon each Debt Nominee materials comprising
Unimpaired Classes Solicitation Packages, in sufficient
numbers estimated to allow dissemination of Unimpaired Classes
Solicitation Packages to each of the beneficial owners of
Registered
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Debt Securities for which they serve, together with a copy of
these Voting Procedures, and with instructions to such Debt
Nominee to (i) contact the Solicitation Agent for additional
sets of Unimpaired Classes Solicitation Packages, if
necessary, and (ii) promptly (within five (5) business days
after receipt of the Unimpaired Classes Solicitation Packages)
distribute the Unimpaired Classes Solicitation Packages to the
beneficial owners for which they serve.
v. DISTRIBUTION TO DEBT NOMINEES IN IMPAIRED CLASSES:
For Registered Debt Securities that are in a class that is
impaired under the Plan, the Solicitation Agent will cause to
be served upon each Debt Nominee materials comprising
Solicitation Packages, in sufficient numbers estimated to
allow dissemination of Solicitation Packages to each of the
beneficial owners of Registered Debt Securities for which they
serve, together with a copy of these Voting Procedures, and
with instructions to such Debt Nominee to (i) contact the
Solicitation Agent for additional sets of Solicitation
Packages, if necessary, and (ii) promptly (within five (5)
business days after receipt of the Solicitation Packages)
distribute the Solicitation Packages to the beneficial owners
for which they serve. Upon request by a Registered Debt
Securities Trustee or an entity purporting to be a Debt
Nominee or a beneficial owner of Registered Debt Securities,
the Solicitation Agent shall send any such entity a
Solicitation Package.
(1) OPTIONS FOR OBTAINING VOTES:
Debt Nominees will have two options for obtaining the
votes of beneficial owners of Registered Debt Securities
in impaired classes, consistent with customary practices
for obtaining the votes of securities held in street
name:
(a) The Debt Nominee may "prevalidate" the individual
ballot contained in the Solicitation Package and
then forward the Solicitation Package to the
beneficial owner of the Registered Debt Securities
for voting, with the beneficial owner then
returning the individual ballot directly to the
Solicitation Agent in the return envelope to be
provided in the Solicitation Package. A Debt
Nominee "prevalidates" a beneficial owner's ballot
by indicating thereon the record holder of the
Registered Debt Securities voted, the amount of
Registered Debt Securities held by the beneficial
owner, and the appropriate account numbers through
which the beneficial owner's holdings are derived.
(b) The Debt Nominee may forward the Solicitation
Package to the beneficial owner of the Registered
Debt Securities
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for voting along with a return envelope provided
by and addressed to the Debt Nominee, with the
beneficial owner then returning the individual
ballot to the Debt Nominee. In such case, the Debt
Nominee will summarize the votes of its respective
beneficial owners on a Master Ballot that will be
provided to the Debt Nominee separately by the
Solicitation Agent, in accordance with any
instructions set forth in the instructions to the
Master Ballot, and then return the Master Ballot
to the Solicitation Agent. THE DEBT NOMINEE SHOULD
ADVISE THE BENEFICIAL OWNERS TO RETURN THEIR
INDIVIDUAL BALLOTS TO THE DEBT NOMINEE BY A DATE
CALCULATED BY THE DEBT NOMINEE TO ALLOW IT TO
PREPARE AND RETURN THE MASTER BALLOT TO THE
SOLICITATION AGENT SO THAT THE MASTER BALLOT IS
ACTUALLY RECEIVED BY THE SOLICITATION AGENT BY THE
VOTING DEADLINE.
(c) Debt Nominees that elect to use the Master Ballot
voting process are required to retain the ballots
cast by their respective beneficial owners for
inspection for one (1) year following the Voting
Deadline, unless otherwise instructed in writing
by the Debtors or ordered by the Bankruptcy Court.
Each Debt Nominee that elects to "prevalidate"
ballots must maintain a list of those beneficial
owners as of the Voting Record Date to whom
ballots were sent for one (1) year following the
Voting Deadline, unless otherwise instructed in
writing by the Debtors or ordered by the
Bankruptcy Court.
(2) REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request, reimburse Debt
Nominees (or their agents) for their reasonable, actual,
and necessary out-of-pocket expenses incurred in
performing the tasks described above.
b. BEARER DEBT SECURITIES:
To all holders of Bearer Debt Securities, according to the following
procedures:
i. LISTS OF HOLDERS OF BEARER DEBT SECURITIES:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e), within five
(5) business days after the Voting Record Date, the Bearer
Debt Securities Trustee shall provide to the Solicitation
Agent (a) a copy of any list of the last-known names,
addresses, and holdings of the holders of Bearer Debt
Securities and the identity and address of each Depositary
believed to hold Bearer Debt Securities, (b) a set of mailing
labels to such holders or Depositaries,
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if practicable and appropriate, and (c) such other information
as the Solicitation Agent deems reasonably necessary to
perform its duties hereunder. Upon request by the Solicitation
Agent, the Bearer Debt Securities Trustee shall provide
additional sets of mailing labels. The Solicitation Agent
shall use such lists, mailing labels, and other information
only for purposes consistent with these Voting Procedures.
ii. NOTICES:
In addition to the Publication Notice, the Solicitation Agent
will provide notice of the approval of the Disclosure
Statement and the scheduling of the Confirmation Hearing and
will solicit votes concerning the Plan from the holders of
Bearer Debt Securities in the following manner:
(1) The Solicitation Agent shall cause to be mailed to each
last-known holder of Bearer Debt Securities, whose name
and address is furnished by the Bearer Debt Securities
Trustee pursuant to section 4.b.i above, a copy of the
Publication Notice.
(2) The Solicitation Agent will cause to be mailed to each
Depositary whose name and address is furnished by the
Bearer Debt Securities Trustee pursuant to section 4.b.i
above or who is otherwise believed to hold Bearer Debt
Securities on behalf of customers a copy of the
Publication Notice and will provide Solicitation
Packages to any such Depositary, as requested in
accordance with section 4.b.ii.(2)(a) below.
(a) The Publication Notice will provide that to obtain
a Solicitation Package, holders of Bearer Debt
Securities or Depositaries may either (i) call the
Solicitation Agent at the number that will be
listed in the Publication Notice or (ii) request a
Solicitation Package in writing, either addressed
to the Solicitation Agent at the address specified
in the Publication Notice or telecopied to the
Solicitation Agent at the telecopy number
specified in the Publication Notice. Upon being
contacted by entities purporting to be either
holders of Bearer Debt Securities or Depositaries,
the Solicitation Agent will provide such purported
holders or Depositaries with Solicitation Packages
and will make reasonable efforts to encourage such
purported holders or Depositaries to return their
ballots.
iii. CONTENTS OF INDIVIDUAL, NON-PREVALIDATED BALLOTS FOR BEARER
DEBT SECURITIES:
All ballots to be completed directly by holders of Bearer Debt
Securities (i.e., other than a Master Ballot submitted by a
Depositary or an individual
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ballot that is not prevalidated in accordance with section
4.b.iv.(1)) will require the holder, inter alia, to sign and
date the ballot and to list the aggregate amount and the
individual certificate numbers of such holder's Bearer Debt
Securities. Signature of such ballot will constitute a
certification by such holder that such holder, as of the date
thereof, holds the Bearer Debt Securities listed on such
ballot. In addition, each holder of Bearer Debt Securities
that submits a ballot directly will be required to have a
Depositary certify on the ballot that the holder identified
therein presented the original Bearer Debt Securities bearing
the certificate numbers listed on such ballot to the
Depositary for verification by such Depositary as of the date
of such certification.
iv. BEARER DEBT SECURITIES HELD BY A DEPOSITARY:
If a holder has deposited its Bearer Debt Securities with a
Depositary, the Depositary will have two options for obtaining
the votes of holders of Bearer Debt Securities:
(1) The Depositary may "prevalidate" the individual ballot
contained in the Solicitation Package and then forward
the Solicitation Package to the holder of the Bearer
Debt Securities for voting, with the holder then
returning the individual ballot directly to the
Solicitation Agent in the return envelope to be provided
in the Solicitation Package. A Depositary "prevalidates"
a holder's ballot by dating the ballot and (i) listing
thereon the identity of the holder and the certificate
numbers of all the Bearer Debt Securities deposited by
such holder with the Depositary, or (ii) (A) listing
thereon the holder's account number and the certificate
numbers of all the Bearer Debt Securities deposited by
such holder and (B) stating that the appropriate number
of Bearer Debt Securities has been "blocked" with
respect to such holder. The ballot will provide for the
certification of such information by the Depositary.
(a) Bearer Debt Securities will only be considered
"blocked" when the Depositary prevents the Bearer
Debt Securities from being withdrawn, moved, or
used for any purpose, other than allowing the
holder to vote on the Plan, until after entry of
the order confirming the Plan.
(b) When requested by the Solicitation Agent, each
Depositary will be required to provide to the
Solicitation Agent a list of the certificate
numbers of all Bearer Debt Securities being
blocked by such Depositary.
(2) The Depositary may forward the Solicitation Package to
the holder of the Bearer Debt Securities for voting,
along with a return
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envelope provided by and addressed to the Depositary,
with such holder then returning the individual ballot to
the Depositary. In such case, the Depositary will
summarize the votes of its respective holders on a
Master Ballot that will be provided separately to the
Depositary, in accordance with the instructions set
forth in the instructions to the Master Ballot, and then
return the Master Ballot to the Solicitation Agent.
Among other things, the instructions will direct the
Depositary to list (i) by beneficial owner, the
certificate numbers of all Bearer Debt Securities on
deposit with the Depositary as of the Voting Deadline or
(ii) only if the Bearer Debt Securities are blocked as
of the Voting Deadline, by account number, the
certificate numbers of all Bearer Debt Securities on
deposit with the Depositary as of the Voting Deadline.
Only votes with respect to Bearer Debt Securities that
are held by the Depositary as of the date of such ballot
may be listed on the ballot. THE DEPOSITARY SHOULD
ADVISE THE INDIVIDUAL HOLDERS TO RETURN THEIR BALLOTS TO
THE DEPOSITARY BY A DATE CALCULATED BY THE DEPOSITARY TO
ALLOW IT TO PREPARE AND RETURN THE MASTER BALLOT SO THAT
THE MASTER BALLOT IS ACTUALLY RECEIVED BY THE
SOLICITATION AGENT BY THE VOTING DEADLINE.
Each Depositary will maintain a photocopy of each
"prevalidated" ballot and each individual ballot for a period
of one (1) year after the Confirmation Date, unless otherwise
instructed by the Debtors or ordered by the Bankruptcy Court.
v. REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request, reimburse Depositaries
(or their agents) for their reasonable, actual, and necessary
out-of-pocket expenses incurred in performing the tasks
described above.
c. EQUITY INTERESTS:
i. LIST OF EQUITY HOLDERS:
Within five (5) business days after the Voting Record Date,
the Transfer Agent shall furnish to the Solicitation Agent (a)
a list of the names and addresses of all holders of record of
Eagle-Picher common stock as of the Voting Record Date, (b) a
set of mailing labels for such holders, and (c) such other
information as the Solicitation Agent deems reasonably
necessary to perform its duties hereunder. Upon request by the
Solicitation Agent, the Transfer Agent shall provide
additional sets of mailing labels. The Solicitation Agent
shall use such lists, mailing labels, and other information
only for purposes consistent with these Voting Procedures.
D-12
ii. DISTRIBUTION OF SOLICITATION PACKAGES TO HOLDERS OF EQUITY
INTERESTS:
The Solicitation Agent will cause a Solicitation Package to be
served upon each such holder of record. In addition, the
Solicitation Agent shall notify each Equity Nominee that it
may receive additional Solicitation Packages by contacting the
Solicitation Agent. The Equity Nominees shall promptly (within
five (5) business days after receipt of the Solicitation
Packages) distribute the Solicitation Packages to the
beneficial owners for which they serve.
5. RETURN OF BALLOTS:
a. CLAIMANTS THAT ARE ENTITLED TO VOTE:
Each claimant that has a Claim for which a Claim amount may be
determined pursuant to section hereof and which Claim is not treated
as unimpaired under the Plan as of the Voting Deadline is entitled
to vote to accept or reject the Plan.
b. PLACE TO SEND COMPLETED BALLOTS:
i. All ballots (other than ballots with respect to Registered
Debt Securities or Bearer Debt Securities) will be accompanied
by return envelopes addressed to the Eagle-Picher Ballot
Tabulation Center c/o Federated Claims Service Group, P.O. Box
8041, 9111 Duke Blvd., Mason, Ohio 45040.
ii. All ballots with respect to Registered Debt Securities or
Bearer Debt Securities (i.e., record holder ballots, master
ballots and prevalidated owner ballots), except those
beneficial owner ballots that are to be returned to the Debt
Nominees or Depositaries, will be accompanied by return
envelopes addressed to Hill and Knowlton, Inc., 466 Lexington
Avenue, 3rd Floor, New York, New York 10007, Attention:
Eagle-Picher Ballot Tabulation Center.
c. DEADLINE FOR RECEIVING COMPLETED BALLOTS:
i. DEADLINE FOR RECEIPT BY TABULATION AGENT
All ballots, except ballots with respect to Registered Debt
Securities or Bearer Debt Securities (i.e., record holder
ballots, master ballots and prevalidated owner ballots), must
be ACTUALLY RECEIVED at the Eagle-Picher Ballot Tabulation
Center by 5:00 p.m., Cincinnati, Ohio, time, by the Voting
Deadline. Such ballots may be received at the Eagle-Picher
Ballot Tabulation Center at the address set forth on the
return envelope. The Tabulation Agent will NOT accept ballots
submitted by facsimile transmission. The Tabulation Agent will
date and time-stamp all ballots when it receives them. In
addition, the Tabulation Agent will make a
D-13
photocopy of all such ballots it receives (including all
ballots forwarded to it by the Solicitation Agent) and will
retain a copy of such ballots for a period of one (1) year
after the Effective Date of the Plan, unless otherwise
instructed by the Debtors, in writing.
ii. DEADLINE FOR RECEIPT BY SOLICITATION AGENT
All ballots with respect to Registered Debt Securities or
Bearer Debt Securities (i.e., record holder ballots, master
ballots and prevalidated owner ballots) must be ACTUALLY
RECEIVED by the Solicitation Agent by the Voting Deadline.
Such ballots may be received by the Solicitation Agent at the
address set forth on the return envelope. The Solicitation
Agent will NOT accept ballots submitted by facsimile
transmission. The Solicitation Agent will date and time-stamp
all such ballots when it receives them. In addition, after the
Voting Deadline and after tabulation of the ballots received
with respect to Registered Debt Securities and Bearer Debt
Securities, the Solicitation Agent will forward to the
Tabulation Agent the tabulation of the ballots relating to the
Registered Debt Securities and Bearer Debt Securities and all
such ballots it receives.
6. TABULATION OF BALLOTS:
a. DETERMINATION OF AMOUNT OF CLAIMS VOTED:
i. BEARER DEBT SECURITIES:
With respect to the tabulation of ballots cast by Depositaries
and holders of Bearer Debt Securities, the amount that will be
used to tabulate acceptance or rejection of the Plan will be
the amount shown on the ballot, except as follows:
(1) To the extent that the aggregate amount of Bearer Debt
Securities voted exceeds the amount outstanding, the
Solicitation Agent will attempt to resolve such overvote
prior to the date of the Confirmation Hearing. In
resolving such overvote, the Solicitation Agent may
require Depositaries to provide certificate numbers for
all Bearer Debt Securities held by the Depositaries as
of the Voting Deadline.
(2) In the event that blocked Bearer Debt Securities are
"unblocked" (i.e., withdrawn, moved, or otherwise
transferred) prior to the Voting Deadline, the
Depositary will notify the Solicitation Agent
immediately, in writing, by providing the Solicitation
Agent with, among other things, the request by the
holder to unblock the Bearer Debt Securities, a
photocopy of the ballot corresponding to the unblocked
Bearer Debt Securities, the account number of the
D-14
holder of such unblocked Bearer Debt Securities, and the
certificate numbers of the unblocked Bearer Debt
Securities.
(3) In the event the Solicitation Agent receives conflicting
ballots (i.e., ballots received from different holders
of Bearer Debt Securities with respect to Bearer Debt
Securities having the same certificate numbers) and in
the absence of contrary information, the holder
submitting the latest-dated ballot, as evidenced by the
Depositary's certification (whether by separate
certification, prevalidation, or completion of a master
ballot), prior to the Voting Deadline shall be deemed to
be the holder of the Bearer Debt Securities that are the
subject of such conflict for voting purposes. In
attempting to resolve such conflict, the Solicitation
Agent may require such holders to furnish such evidence
as the Solicitation Agent deems reasonably necessary.
ii. REGISTERED DEBT SECURITIES:
With respect to the tabulation of ballots cast by record
holders and beneficial owners of Registered Debt Securities,
for purposes of voting, the amount that will be used to
tabulate acceptance or rejection of the Plan will be the
Record Amount. The following additional rules will apply to
the tabulation of ballots cast by record holders and
beneficial owners of Registered Debt Securities:
(1) Votes cast by beneficial owners holding Registered Debt
Securities through a Debt Nominee will be applied
against the positions held by such entities in the
applicable Registered Debt Securities as of the Voting
Record Date, as evidenced by the record and depositary
listings. Votes submitted by a Debt Nominee, whether
pursuant to a Master Ballot or prevalidated ballots,
will not be counted in excess of the Record Amount of
Registered Debt Securities held by such Debt Nominee.
(2) To the extent that conflicting votes or "overvotes" are
submitted by a Debt Nominee, whether pursuant to a
Master Ballot or prevalidated ballots, the Solicitation
Agent will attempt to resolve the conflict or overvote
prior to the Confirmation Hearing.
(3) To the extent that overvotes on a Master Ballot or
prevalidated ballots are not reconcilable prior to the
Confirmation Hearing, the Solicitation Agent will apply
the votes to accept and to reject the Plan in the same
proportion as the votes to accept and reject the Plan
submitted on the Master Ballot or prevalidated ballot
that contained the overvote, but only to the extent of
the Debt Nominee's position in the applicable Registered
Debt Security.
D-15
(4) Multiple Master Ballots may be completed by a single
Debt Nominee and delivered to the Solicitation Agent.
Votes reflected by multiple Master Ballots will be
counted, except to the extent that they are duplicative
of other Master Ballots. If two or more Master Ballots
are inconsistent, the latest Master Ballot received
prior to the Voting Deadline will, to the extent of such
inconsistency, supersede and revoke any prior Master
Ballot.
(5) For purposes of tabulating votes, each record holder or
beneficial owner of a Registered Debt Security will be
deemed to have voted the full amount of its Claim
relating to such Registered Debt Security.
iii. CLAIMS OTHER THAN DEBT SECURITIES, ASBESTOS PROPERTY DAMAGE
CLAIMS, ASBESTOS PERSONAL INJURY CLAIMS, ENVIRONMENTAL CLAIMS,
AND LEAD PERSONAL INJURY CLAIMS:
With respect to the tabulation of ballots for all Claims other
than (a) Registered Debt Securities, (b) Bearer Debt
Securities, (c) Asbestos Property Damage Claims, (d) Asbestos
Personal Injury Claims, (e) Environmental Claims, and (f) Lead
Personal Injury Claims, for purposes of voting, the amount to
be used to tabulate acceptance or rejection of the Plan is as
follows (in order of priority):
(1) If, prior to the Voting Deadline, (i) the Bankruptcy
Court enters an order fully or partially allowing a
Claim, whether for all purposes or for voting purposes
only, (ii) a Claim is fully or partially allowed for all
purposes in accordance with the Claims Settlement
Guidelines, or (iii) the Debtors and the holder of a
Claim agree to fully or partially allow such Claim for
voting purposes only and no objection to such allowance
is received by the Debtors within seven (7) days after
service by first-class mail of notice of such agreement
to the Primary Recipients' List (as such term is defined
in the First Amended Case Management Order, entered on
November 20, 1991, as amended from time to time), the
amount allowed thereunder.
(2) The liquidated amount specified in a proof of claim
timely filed in accordance with the General Bar Date
Order, so long as such proof of claim has not been
disallowed by the Bankruptcy Court and is not the
subject of an objection pending as of the Voting Record
Date.
(3) The Claim amount listed in the Schedules as
unliquidated, undisputed, and not contingent.
D-16
(4) If a proof of claim has been timely filed in accordance
with the General Bar Date Order and such Claim is wholly
contingent or unliquidated, the Claim amount, for voting
purposes only, shall be $1.00 so long as such proof of
claim has not been disallowed by the Court and is not
the subject of an objection pending as of the Voting
Record Date.
iv. ASBESTOS PROPERTY DAMAGE CLAIMS, ASBESTOS PERSONAL INJURY
CLAIMS, AND LEAD PERSONAL INJURY CLAIMS:
With respect to the tabulation of ballots for all Asbestos
Property Damage Claims, Asbestos Personal Injury Claims and
Lead Personal Injury Claims, for voting purposes only, the
amount to be used to tabulate acceptance or rejection of the
Plan will be $1.00 for each Asbestos Property Damage Claim,
Asbestos Personal Injury Claim, and Lead Personal Injury Claim
proof of which was filed in accordance with the General Bar
Date Order or, in the case of Primary Asbestos Personal Injury
Claims and Asbestos Property Damage Claims, the Asbestos Bar
Date Order, so long as any such Claim is not the subject of an
objection that is pending as of the Voting Record Date. With
respect to Claims filed by representatives of classes of
Asbestos Property Damage Claims that have been certified or
conditionally certified in pending federal or state court
actions, each of the class members that is selected in
accordance with section of these Voting Procedures shall have
votes in the aggregate amount of $1.00 times the number of
members in the class of Asbestos Property Damage Claims of
which such Claimant is a member divided by 100.
v. ENVIRONMENTAL CLAIMS:
With respect to the tabulation of ballots for Environmental
Claims, for voting purposes only, the amount to be used to
tabulation acceptance or rejection of the Plan will be (i) as
to each holder of an Environmental Claim that is a party to
the Environmental Settlement Agreement, the amount of the
claim allowed to each such holder on account of the Liquidated
Sites (as such term is defined in the Environmental Settlement
Agreement) and (ii) as to any other holder of an Environmental
Claim, the amount of any liquidated claim allowed pursuant to
the settlement agreement between any of the Debtors and such
holder plus the amount of any additional claims that such
holder, pursuant to such agreement, may be entitled to assert
in the future.
D-17
b. DETERMINATION OF NUMBER OF CLAIMS VOTED:
i. SPECIFIC RULES RELATING TO REGISTERED DEBT SECURITIES AND
BEARER DEBT SECURITIES:
Each beneficial owner of Registered Debt Securities or Bearer
Debt Securities is entitled to one (1) vote on account of its
holdings of Registered Debt Securities and Bearer Debt
Securities.
ii. SPECIFIC RULES RELATING TO CLASS ASBESTOS PROPERTY DAMAGE
CLAIMS:
With respect to Claims filed by representatives of classes of
Asbestos Property Damage Claims that have been certified or
conditionally certified in pending federal or state court
actions, each of the class members that is selected in
accordance with section of these Voting Procedures shall have
a number of votes equal to the number of members in the class
of Asbestos Property Damage Claims of which such Claimant is a
member divided by 100. The ballot to be supplied to such
members will allow them to specify how many votes they are
voting to accept the plan and how many votes they are voting
to reject the Plan.
c. BALLOTS EXCLUDED:
A ballot will not be counted if any of the following applies to such
ballot:
i. The holder submitting the ballot is not entitled to vote,
pursuant to section 5.a.
ii. The ballot is not ACTUALLY RECEIVED at the Eagle-Picher Ballot
Tabulation Center or by the Solicitation Agent, as the case
may be, in the manner set forth in section 5.b hereof by the
Voting Deadline.
iii. A ballot that is not completed - including, without
limitation, a master ballot with respect to a Primary Asbestos
Personal Injury Claim on which the attorney fails to make the
required certification - but other than a ballot that is
otherwise complete but on which the acceptance or rejection of
the Plan is not noted.
d. GENERAL VOTING PROCEDURES AND STANDARD ASSUMPTIONS:
In addition, the following voting procedures and standard
assumptions will be used in tabulating ballots:
D-18
i. Each holder of Claims will be deemed to have voted the full
amount of its Claims in each class in which it submits a
ballot.
ii. If multiple ballots are received for a holder of Claims, the
last ballot received from such holder prior to the Voting
Deadline will be the ballot that is counted.
iii. If multiple ballots are received from different holders
purporting to hold the same Claim, in the absence of contrary
information establishing which claimant held such Claim as of
the Voting Deadline or, in the case of Registered Debt
Securities, the Voting Record Date, the latest-dated ballot
that is received prior to the Voting Deadline will be the
ballot that is counted.
iv. If multiple ballots are received from a holder of a Claim and
someone purporting to be his, her, or its attorney or agent,
the ballot received from the holder of the Claim will be the
ballot that is counted, and the vote of the purported attorney
or agent will not be counted.
v. A ballot that is completed, but on which the claimant did not
note whether to accept or reject the Plan shall be counted as
a vote to accept the Plan.
D-19
[THIS PAGE LEFT BLANK INTENTIONALLY]
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "E"
THE DEBTORS' LIQUIDATION ANALYSIS
[THIS PAGE LEFT BLANK INTENTIONALLY]
EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION ANALYSIS
The Liquidation Analysis reflects the Debtors' estimate of the proceeds that
would be realized if the Debtors were to be liquidated under chapter 7 of the
Bankruptcy Code. Underlying the Liquidation Analysis are a number of estimates
and assumptions that, although developed and considered reasonable by
Management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies beyond the control of the Debtors
and their Management, and upon assumptions with respect to the liquidation
decisions which could be subject to change. THERE CAN BE NO ASSURANCE THAT THE
VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF THE DEBTORS
WOULD UNDERGO SUCH A LIQUIDATION, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM
THOSE SHOWN HERE.
For the purposes of preparing the Liquidation Analysis, the liquidation was
assumed to commence on December 1, 1996 and the sales of the Operating
Businesses (as defined below) were assumed to be completed within six months of
that date. At that point, on May 31, 1997 (the "Liquidation Distribution Date"),
distributions would be made to unsecured creditors. Any funds received
subsequent to the Liquidation Distribution Date would be applied to separate
accounts set up to fund the Debtors' liabilities for workers' compensation,
postretirement benefits and indemnification liabilities resulting from the sales
of the Operating Businesses. Depending on actual circumstances, the six-month
sale and liquidation period ("Liquidation Period") could be significantly longer
or, while the Debtors believe it highly unlikely, shorter.
The Debtors have assumed, for purposes of making distributions to the PI Trust,
in the Liquidation Analysis, that the aggregate value of Asbestos Personal
Injury Claims and Lead Personal Injury Claims that would be allowed in a chapter
7 case is equal to the $2.5 billion that was ruled to be the aggregate value by
the Bankruptcy Court. The Debtors also have assumed, in the Liquidation
Analysis, that in a chapter 7 case the value of the Environmental Claims
addressed in the Environmental Settlement Agreement would be as reflected
therein. There can be no assurance that the EPA, the DOI, and the states listed
therein would agree to the liquidated amounts of their claims set forth in the
Environmental Settlement Agreement in the context of a chapter 7 liquidation.
The following notes describe the significant assumptions used in the Liquidation
Analysis.
A. ESTIMATED LIQUIDATION PROCEEDS
The businesses of the Debtors are conducted through various subsidiaries and
divisions (the "Operating Businesses"). For
E-1
purposes of the Liquidation Analysis, it is assumed that the assets of the
subsidiaries and divisions would be sold on a going concern basis. It is
believed that the sales of the Operating Businesses on a going concern basis
would result in greater proceeds than liquidating the assets of the Operating
Businesses themselves. There can be no assurance, however, that any such going
concern sales could be consummated. The Debtors' financial advisors, McDonald &
Co., estimated the potential proceeds from such dispositions of the Operating
Businesses.
The following information and factors, not listed in any order of importance,
were, among others, considered by McDonald & Co. in estimating the proceeds
which might be received from the sale of the Operating Businesses:
1) The historical financial statements, relevant historical operating
information and projected financial operating performance of the Operating
Businesses;
2) Market valuations of public companies in the same or similar businesses
as the Operating Businesses;
3) The product lines, manufacturing expertise, operating advantages and
disadvantages of the Operating Businesses;
4) The limited base of potential buyers for certain Operating Businesses;
5) The potential impact of a chapter 7 proceeding upon the Operating
Businesses themselves and upon potential buyers' pricing strategies;
6) The relatively short period of time in which the sales of the Operating
Businesses would take place; and
7) The point in the economic cycle in which the sales of the Operating
Businesses would take place.
General economic conditions as well as current conditions in the Operating
Business' industries were also considered in estimating the liquidation
proceeds. However, significant uncertainties exist, such as the cyclical nature
of the automotive industry and the political nature of defense funding. Just as
these items could have an adverse effect on sales and operating income, they
could also adversely affect the price which could be realized in the short-term
from the dispositions of Operating Businesses depending on the timing of these
dispositions.
Transaction costs on the sales of the Operating Businesses were estimated to be
5% of the gross proceeds.
E-2
For purposes of the Liquidation Analysis, it has been assumed that all
subsidiary and division level employees will be retained by the buyers of the
respective Operating Businesses. In the event of actual sale, it is likely that
substantial employee severance costs would reduce sale proceeds.
B. NOTES RECEIVABLE
Eagle-Picher is holding several notes receivable received as partial
consideration for the sale of assets previously consummated. Those that are due
after the Liquidation Distribution Date would be used to fund the
indemnification liability resulting from the sales of the Operating Businesses.
C. INCOME TAXES
Sale of the Operating Businesses will trigger taxable gains for Eagle-Picher,
and Eagle-Picher will receive tax deductions for cash paid to unsecured
creditors on the Liquidation Distribution Date. The resulting tax net operating
loss will be fully absorbed by carryback to years in which income is available
for carryback, resulting in income tax refunds of $70.9 million. Since these
refunds will not be available until after the Liquidation Distribution Date,
they will be assigned to the accounts for Indemnification. The present value of
such refunds is $56.7 million.
Since Eagle-Picher will cease to exist under this scenario, the tax benefit for
deferred deductions for workers' compensation, postretirement benefits and
indemnification liabilities will expire.
D. CLAIMS AND EXPENSES PAID AT THE EFFECTIVE DATE
Under the Liquidation Analysis, it has been assumed that all Administrative
Expenses (including expenses of a chapter 7 trustee and any related professional
fees) and Priority Claims aggregating $8.8 million are paid in full. It is also
assumed that Secured Claims totaling $21.8 million are repaid in full from
proceeds of the collateral securing such sums.
E. ASBESTOS PROPERTY DAMAGE CLAIMS
It has been assumed that the Court values Asbestos Property Damage Claims in the
aggregate approximate amount of $12.0 million.
F. CASHFLOW FROM OPERATIONS DURING THE LIQUIDATION PERIOD
The Debtors estimate that there will be a decrease in cash from operations of
approximately $5 million resulting from adverse effects of a chapter 7
situation. Interest income expected to be
E-3
earned on excess cash held during the Liquidation Period is included in this
estimate.
G. OVERHEAD COSTS OF LIQUIDATION
It has been assumed that overhead costs of a liquidation, including severance
costs associated with general office personnel, will approximate $8 million.
Terminations would take place as reduction of properties permitted.
H. WORKERS' COMPENSATION OBLIGATIONS
The Debtors estimate workers' compensation obligations to be approximately $20
million. This includes existing liabilities and liabilities that will not be
assumed by buyers when the Operating Businesses are sold. The Debtors have
assumed that any buyer of an Operating Business would not assume any obligations
for workers' compensation claims for injuries occurring prior to the date a sale
of the Operating Business is consummated.
I. PENSION AND POSTRETIREMENT BENEFIT OBLIGATIONS
The Debtors currently make health care and life insurance benefits available to
certain retired employees on a limited basis. In most cases, retirees are
required to contribute to the cost of their health insurance coverage. These
benefits are funded on a pay-as-you-go basis. For purposes of this Liquidation
Analysis, it has been assumed that the Debtors' policy would be amended to
exclude current active employees from this benefit. Therefore, the Debtors would
be liable only for the portion of this liability relating to current retirees
and those eligible for retirement.
The pension plans are currently over funded. It is unlikely, however, that there
would be excess funds available to the Debtors in the event of a liquidation
after transfers of pension assets and related liabilities were made to pension
plans of buyers of the Operating Businesses.
J. CANCELLATION OF LEASE OBLIGATIONS
It has been assumed that the Debtors will be liable for claims associated with
the cancellation of certain lease obligations, primarily that of the General
Office in Cincinnati, Ohio. It has also been assumed that the leases of
operating plants would be assumed by buyers of the respective Operating
Businesses.
K. INDEMNIFICATION OF THE SALE OF THE OPERATING BUSINESSES
It has been assumed that the buyer of any Operating Business would require
certain amounts held in escrow for the indemnification of existing and potential
liabilities at the date of the sale. Potential indemnification items include
environmental liabilities
E-4
and warranty obligations for incidents occurring prior to the date the Operating
Businesses were sold.
E-5
EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION PROCEEDS COMPUTATION
AS OF DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
LIQUIDATION PROCEEDS:
Proceeds from asset sales $ 496,000
Less transaction costs (24,800)
---------
Net liquidation proceeds 471,200
Add: Cash and cash equivalents 118,200
Notes receivable and other investments 7,500
Present value of tax refunds receivable 56,700
---------
Cash available 653,600
Less distributions:
Priority claims 3,000
Administrative expenses 5,800
Secured debt 21,800
After-tax net decrease in cash from operations
during six-month disposition period 5,000
Corporate payroll and overhead costs of
liquidation 8,000
Worker's compensation obligation 20,000
Postretirement benefit obligation 13,700
Cancelation of lease obligations 700
Indemnification resulting from disposition
of businesses 50,000
---------
Total distributions 128,000
---------
Net estimated liquidation proceeds available
to unsecured creditors $ 525,600
=========
PAYMENT OF PREPETITION UNSECURED CLAIMS:
Percentage
Claims Proceeds Recovery
---------- -------- ----------
Asbestos and lead personal injury claims $2,502,511 $493,547 20%
Unsecured claims 150,521 29,686 20%
Asbestos property damage claims 12,000 2,367 20%
Equity interests 0 0 0%
E-6
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "F"
THE DEBTORS' SUBSIDIARIES AND DIVISIONS
[THIS PAGE LEFT BLANK INTENTIONALLY]
7/15/96
================================================================================
EAGLE-PICHER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
WHOLLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
CINCINNATI INDUSTRIAL MACHINERY SALES COMPANY EAGLE-PICHER ESPANA, S.A.
- ----------------------------------------------------------------------------------------------------------------------------------
DAISY PARTS, INC. EAGLE-PICHER FLUID SYSTEMS LTD
- ----------------------------------------------------------------------------------------------------------------------------------
EDI, INC. EAGLE-PICHER HILLSDALE LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC. EAGLE-PICHER HOLDING B.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER EUROPE, INC. EAGLE-PICHER INDUSTRIES OF CANADA LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FAR EAST, INC. EAGLE-PICHER, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC. EAGLE-PICHER INDUSTRIES GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER MINERALS, INC. EAGLE-PICHER INDUSTRIES EUROPE GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
HILLSDALE TOOL & MANUFACTURING CO. EAGLE-PICHER INDUSTRIES MATERIALS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION EAGLE-PICHER MINERALS INTERNATIONAL S.A.R.L.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL INC. EAGLE-PICHER UK LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EPTEC, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EQUIPOS DE ACUNA, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL (MALAYSIA) SDN. BHD.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
NONE DIEHL & EAGLE-PICHER GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
DONG YANG EAGLE-PICHER LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS VERWALTUNGS- UND BETEILIGUNGS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS GMBH & CO. KG
- ----------------------------------------------------------------------------------------------------------------------------------
YAMANAKA EP CORPORATION
- ----------------------------------------------------------------------------------------------------------------------------------
F-1
================================================================================
EAGLE-PICHER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED PARTNERSHIPS
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
CREATIVE INVESTMENTS ASSOCIATES NONE
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NAMEHOLDER SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
FABRICON CORPORATION NONE
- ----------------------------------------------------------------------------------------------------------------------------------
FABRICON PRODUCTS CORPORATION OF PENNSYLVANIA
- ----------------------------------------------------------------------------------------------------------------------------------
ROSS ALUMINUM FOUNDRIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE FABRICATING AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE GASKET AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
DIVISIONS
- --------------------------------------------------------------------------------
CINCINNATI INDUSTRIAL MACHINERY
CONSTRUCTION EQUIPMENT
FABRICON PRODUCTS
PLASTICS
ROSS ALUMINUM FOUNDRIES
RUBBER MOLDING
SUSPENSION SYSTEMS
TECHNOLOGIES
TRIM
WOLVERINE GASKET
================================================================================
F-2
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "G"
THE DIRECTORS AND OFFICERS OF THE DEBTORS (OTHER THAN EAGLE-PICHER)
EAGLE-PICHER SUBSIDIARIES WHICH FILED BANKRUPTCY-OFFICERS & DIRECTORS 9/9/1996
NAME- DIRECTORS- PRESIDENT SR.V.P. V.P. V.P.
- --------------------------- ----------------- -------------------- -------------- ---------------- ---------------
DAISY PARTS, INC. WAYNE R. WICKENS MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
JAMES A. RALSTON
HARRY A. NEELY
EAGLE-PICHER MINERALS, INC. ANDRIES RUIJSSENAARS WESLEY D. LEE JAMES A. RALSTON HARRY A. NEELY
JAMES A. RALSON
HARRY A. NEELY
EDI, INC. WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
MICHAEL J. BOERMA
JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
MANUFACTURING CO. WAYNE R. WICKENS
JAMES A. RALSTON
MICHIGAN AUTOMOTIVE WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
RESEARCH CORPORATION MICHAEL J. BOERMA
JAMES A. RALSTON
TRANSICOIL INC. ANDRIES RUIJSSENAARS ROBERT N. CARLSON MARK M. JOHNSON HARRY A. NEELY
JAMES A. RALSTON
HARRY A. NEELY
NAME- TREASURER V.P.1 SECRETARY ASST.TREAS. ASST.SEC. OTHER
- -------------------------- ------------------- --------------- ------------------- ----------- --------------- -------
DAISY PARTS, INC. HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
EAGLE-PICHER MINERALS, INC. HARRY A. NEELY DAVID N. EVANS JAMES A. RALSTON
EDI, INC. TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
MANUFACTURING CO.
MICHIGAN AUTOMOTIVE TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
RESEARCH CORPORATION
TRANSICOIL INC. HARRY A. NEELY MARK M. JOHNSON JAMES A. RALSTON
G-1
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