UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 33)
Michaels Stores, Inc.
Common Stock, Par Value $0.10 Per Share
(Title of Class of Securities)
594087-10-8
(CUSIP Number)
Eric R. Markus, Esq.
Wilmer Cutler Pickering Hale and Dorr LLP
2445 M Street, N.W.
Washington, D.C. 20037
(202) 663-6000
_____________________________________________________________________________
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
September 24, 2002 */
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§ 240.13d-1(e), 240.13d-1(f), or 240.13d-1(g), check the following box. £
Note: Schedules filed in paper format shall include a signed original and five copies of this Schedule, including all exhibits. See Rule 240.13d-7 for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting persons initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed to be filed for the purpose of Section 18 of the Securities Exchange Act of 1934, as amended (the Exchange Act) or otherwise subject to the liabilities of that section of the Exchange Act but shall be subject to all other provisions of the Exchange Act (however, see the Notes).
CUSIP No. 594087-10-8 | Page 2 of 32 pages |
||||||
1 |
NAMES OF REPORTING PERSONS
|
||||||
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
|
|||||||
Sam Wyly | |||||||
2 |
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
||||||
(a) þ | |||||||
(b) o | |||||||
3 |
SEC USE ONLY
|
||||||
4 |
SOURCE OF FUNDS
|
||||||
BK, OO, WC | |||||||
5 |
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM
2(d) or 2(e)
|
||||||
o | |||||||
6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
|
||||||
United States of America | |||||||
NUMBER OF SHARES
BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE
VOTING POWER
|
|||||
351,792 shares as of September 24, 2002 |
|||||||
8 | SHARED VOTING POWERS | ||||||
0
shares as of September 24, 2002 (1,108,000 as of September 24, 2002 assuming
that certain shares held by subsidiaries of the Foreign Trusts may be deemed
to be beneficially owned by Sam Wyly (see discussion below)) |
|||||||
9 | SOLE
DISPOSITIVE POWER
|
||||||
1,537,625 as of September 24, 2002 | |||||||
10 | SHARED DISPOSITIVE POWER | ||||||
0 shares as of September 24, 2002 (1,108,000 as of September 24, 2002 assuming that certain shares held by subsidiaries of the Foreign Trusts may be deemed to be beneficially owned by Sam Wyly (see discussion below)) | |||||||
11 |
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
|
o | |||||
1,537,625 shares as of September 24, 2002 (2,645,625
as of September 24, 2002 assuming that certain shares held by subsidiaries
of the Foreign Trusts may be
deemed to be beneficially owned by Sam Wyly (see discussion below)) |
|||||||
12 |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|
o | |||||
13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
||||||
2.29% as of September 24, 2002 (3.94% as of September
24, 2002 assuming that certain shares held by subsidiaries
of the Foreign Trusts may be
deemed to be beneficially owned by Sam Wyly (see discussion below)) |
|||||||
14 |
TYPE
OF PERSON REPORTING
|
||||||
IN |
CUSIP No. 594087-10-8 | Page 3 of 32 pages |
||||||
1 |
NAMES OF REPORTING PERSONS
|
||||||
I.R.S. IDENTIFICATION NO. OF ABOVE PERSONS (ENTITIES ONLY)
|
|||||||
Charles J. Wyly, Jr. | |||||||
2 |
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP
|
||||||
(a) þ | |||||||
(b) o | |||||||
3 |
SEC USE ONLY
|
||||||
4 |
SOURCE OF FUNDS
|
||||||
BK, OO, WC | |||||||
5 |
CHECK
BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEM
2(d) or 2(e)
|
||||||
o | |||||||
6 |
CITIZENSHIP OR PLACE OF ORGANIZATION
|
||||||
United States of America | |||||||
NUMBER OF SHARES
BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH
|
7 | SOLE
VOTING POWER
|
|||||
932,988 as
of September 24, 2002 |
|||||||
8 | SHARED VOTING POWERS | ||||||
0
as of September 24, 2002 (1,533,602 as of September 24, 2002 assuming
that certain shares held by subsidiaries of the Foreign Trusts may be deemed
to be beneficially owned by Charles J. Wyly, Jr. (see discussion below)) |
|||||||
9 | SOLE
DISPOSITIVE POWER
|
||||||
1,752,154 as of September 24, 2002 | |||||||
10 | SHARED DISPOSITIVE POWER | ||||||
0 as of September 24, 2002 (1,533,602 as of September 24, 2002 assuming that certain shares held by subsidiaries of the Foreign Trusts may be deemed to be beneficially owned by Charles J. Wyly, Jr. (see discussion below)) | |||||||
11 |
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
|
o | |||||
1,752,154 as of September 24, 2002 (3,285,756
as of September 24, 2002 assuming that certain shares held by subsidiaries
of the Foreign Trusts may be
deemed to be beneficially owned by Charles J. Wyly, Jr. (see discussion
below)) |
|||||||
12 |
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
|
o | |||||
13 |
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
|
||||||
2.61% as of September 24, 2002 (4.90% as of September
24, 2002 assuming that certain shares held by subsidiaries
of the Foreign Trusts may be
deemed to be beneficially owned by Charles J. Wyly, Jr. (see discussion below)) |
|||||||
14 |
TYPE
OF PERSON REPORTING
|
||||||
IN |
CUSIP
No. 594087-10-8
|
Page 4 of 32 Pages |
Preamble
This Amendment No. 33 (this Amendment) relates to the Schedule 13D originally filed on June 12, 1984 (the Original Schedule 13D), as amended by Amendment Nos. 1 through 32 (the Prior Amendments) filed between October 26, 1984 and January 28, 2002 (as amended by the Prior Amendments, the Prior Schedule 13D and, as amended by this Amendment, the Schedule 13D) by Sam Wyly and Charles J. Wyly, Jr. (collectively, the Reporting Persons) in connection with the common stock, par value $0.10 per share (the Common Stock), of Michaels Stores, Inc. (Michaels). As described in more detail below, the Reporting Persons have re-evaluated whether or not they may be deemed to beneficially own for purposes of Section 13(d) of the Securities Exchange Act of 1934 certain shares of Michaels Common Stock, as well as options and warrants to purchase Common Stock, owned by subsidiaries of certain foreign trusts during the applicable years. This Amendment reflects the manner in which Prior Amendments would have been required to have been filed if the Reporting Persons were deemed to have beneficially owned such securities during the applicable years.1/
On April 13, 1992, Sam Wyly transferred exercisable options and warrants to purchase an aggregate of 585,000 shares of Common Stock to corporate subsidiaries of the Bulldog Non-Grantor Trust (the Bulldog Trust), an irrevocable trust formed under the laws of the Isle of Man that he had established for the benefit of certain charities and, at a future date, his children and issue. In consideration of the options and warrants transferred to the subsidiaries of the Bulldog Trust, those subsidiaries issued to Sam Wyly private annuity agreements under which those subsidiaries agreed to make certain payments to the holder of the agreement during the lifetime of Sam Wyly. The transfer by Sam Wyly of the foregoing options and warrants to subsidiaries of an irrevocable trust was previously disclosed in Amendment No. 18 to the Original Schedule 13D filed on April 23, 1992 and in Michaelss Proxy Statement dated April 29, 1993.
On April 13, 1992, Charles J. Wyly, Jr. transferred exercisable options and warrants to purchase an aggregate of 375,000 shares of Common Stock to corporate subsidiaries of the Pitkin Non-Grantor Trust (the Pitkin Trust and, together with the Bulldog Trust, the First Foreign Trusts), an irrevocable trust formed under the laws of the Isle of Man that he had established for the benefit of certain charities and, at a future date, his children and issue. In consideration of the options and warrants transferred to the subsidiaries of the Pitkin Trust, those subsidiaries issued to Charles J. Wyly, Jr., or his spouse, as applicable, private annuity agreements under which those subsidiaries agreed to make certain payments to the holder of the agreement during the lifetime of Charles J. Wyly, Jr., or his spouse, as applicable. The transfer by Charles J. Wyly, Jr. of the foregoing options and warrants to subsidiaries of an irrevocable trust was previously disclosed in Amendment No. 18 to the Original Schedule 13D filed on April 23, 1992 and in Michaelss Proxy Statement dated April 29, 1993.2/ Each of the options and warrants described in this and the preceding paragraph had an exercise price of $3.00 per share and was valued for purposes of the transactions described in such paragraphs at the difference between such exercise price and $20.625 (the closing price of the Common Stock on the date of transfer).
On April 22, 1992, Lorne House Trust Limited (Lorne House), the trustee of the First Foreign Trusts, filed a Schedule 13D disclosing the trustees beneficial ownership of the options and warrants transferred by the Reporting Persons to subsidiaries of those
2/ Amendment No. 18 to the Original
Schedule 13D reported that Sam Wyly and Charles J. Wyly, Jr. transferred,
respectively, options for 635,000 shares and 325,000 shares to subsidiaries of
certain foreign trusts, whereas the Michaels Proxy Statement, dated April 29,
1993, reported that Sam Wyly and Charles J. Wyly, Jr. transferred,
respectively, options for 585,000 shares and options for 375,000 shares to
those entities. The information contained in the proxy statement is correct.
The discrepancy is accounted for by the fact that Sam Wyly was originally
granted options to acquire 485,000 shares, as well as a warrant to acquire
150,000 shares and Charles J. Wyly, Jr. was originally granted an option to
acquire 325,000 shares; however, Sam Wyly gave Charles J. Wyly, Jr. the right
to acquire 50,000 of his warrants, which Charles J. Wyly, Jr. in fact did prior
to the transfers described above. This footnote is intended to amend and
restate Amendment No. 18 with respect to the number of options and warrants
transferred by each of the Reporting Persons.
In addition, there are two other typographical errors in Amendment No. 18,
both of which were corrected in the subsequent Schedule 13D amendment. First,
Amendment No. 18 discloses that Charles J. Wyly, Jr. owned 780,050 shares
directly; that number should have been 788,050. Second, the Amendment tallies
the number of shares held by trusts of which Charles J. Wyly, Jr. is the
trustee, and reports a total of 801,489. The number should have been 891,489.
Both corrections were made in Amendment No. 19.
CUSIP
No. 594087-10-8 |
Page 5 of 32 Pages |
trusts. On June 3, 1992, Lorne House filed Amendment No. 1 to Schedule 13D reporting that, after certain transactions involving the options and warrants transferred to the First Foreign Trusts, Lorne Houses beneficial ownership of Common Stock and options to purchase Common Stock was below 5% of the outstanding shares of Michaels Common Stock. According to its website, Lorne House was formed in 1982 under the laws of the Isle of Man and provides trust, corporate and investment services to its clients.
On December 30, 1995, Sam Wyly directly or indirectly transferred 900,000 options to purchase Common Stock to the Tallulah International Trust (the Tallulah Trust), an irrevocable trust formed under the laws of the Isle of Man. 3/ Sam Wyly established the Tallulah Trust in 1992 for the benefit of his children; and pursuant to an amendment to the trust agreement on December 20, 1995, Sam Wyly, his spouse and his issue also became beneficiaries of the Tallulah Trust. All of the options transferred by Sam Wyly on December 30, 1995 had an exercise price of $17.00 per share. On February 22, 1996, the Tallulah Trust transferred the options to a corporate subsidiary of the Bessie Trust (the Bessie Trust), an irrevocable trust established under the laws of the Isle of Man for the benefit, inter alia, of Sam Wyly, his spouse, his children and issue, in exchange for a private annuity agreement under which the corporate subsidiary agreed to make certain payments to the holder of the annuity agreement during the lifetime of Sam Wyly. The December 1995 transfer by Sam Wyly was disclosed in a Form 4 filed by him on January 11, 1996 and in Michaelss Proxy Statement dated October 23, 1996. When the Tallulah Trust terminated in December 1996, the annuity agreement it received from a subsidiary of the Bessie Trust was distributed to Sam Wyly.
On December 29, 1995, Charles J. Wyly, Jr. transferred 350,000 options to purchase Common Stock to the Maroon Creek Trust (the Maroon Creek Trust), an irrevocable trust formed under the laws of the Isle of Man. On December 30, 1995, he transferred 100,000 options to purchase Common Stock to the Woody International Trust (the Woody Trust), an irrevocable trust formed under the laws of the Isle of Man. Charles J. Wyly, Jr. established the Maroon Creek Trust in 1995 for the benefit of Charles J. Wyly, Jr., his spouse, and his issue. Charles J. Wyly, Jr. established the Woody Trust in 1992 for the benefit of his children; and pursuant to an amendment to the trust agreement on December 20, 1995, Charles J. Wyly, Jr. and his spouse and his issue also became beneficiaries of the Woody Trust. All of the options transferred by Charles J. Wyly, Jr. on December 29, 1995 and December 30, 1995 had an exercise price of $17.00 per share. On February 22, 1996, the Maroon Creek Trust transferred 350,000 options to a corporate subsidiary of the Castle Creek International Trust (the Castle Creek Trust), an irrevocable trust formed under the laws of the Isle of Man. Charles J. Wyly, Jr. established the Castle Creek Trust in 1992 for the benefit of certain charities and, at a future date, his children and issue. Also on February 22, 1996, the Woody Trust transferred 100,000 options to a corporate subsidiary of the Tyler Trust (the Tyler Trust), an irrevocable trust formed under the laws of the Isle of Man. The Tyler Trust was established in 1994 for the benefit of, inter alia, Charles J. Wyly, Jr., his spouse, and his issue. These transfers were in exchange for private annuity agreements under which the corporate subsidiaries agreed to make certain payments to the holder of the annuity agreement during the lifetime of Charles J. Wyly, Jr. The December 1995 transfers by Charles J. Wyly, Jr. were disclosed in a Form 4 filed by him on January 11, 1996 and in Michaelss Proxy Statement dated October 23, 1996. When the Woody Trust and Maroon Creek Trust terminated in December 1996, the annuity agreements they received from subsidiaries of the Castle Creek Trust and The Tyler Trust were distributed to Charles J. Wyly, Jr.
As of March 29, 1996, Michaels entered into a private placement transaction to sell 433,333 shares of Common Stock for cash to a corporate subsidiary of the Bessie Trust, and 900,000 shares of Common Stock for cash to a corporate subsidiary of the Bulldog Trust. The purchase price was $12.50 per share. This transaction was described in a Michaels press release dated March 29, 1996 and disclosed in Michaelss Proxy Statement dated October 23, 1996 and in Michaelss Form 10-K for the fiscal year ended February 1, 1997. On December 24, 1996, Michaels entered into a private placement transaction to sell options to purchase 1,333,333 shares of Michaels Common Stock for cash to a corporate subsidiary of the La Fourche Trust (the La Fourche Trust), an irrevocable trust which had been established under the laws of the Isle of Man for the benefit of, inter alia, Sam Wyly, his spouse, and his issue. This transaction was described in a Michaels press release dated December 26, 1996 and disclosed in Michaelss Form 10-K for the fiscal year ended February 1, 1997. The options were purchased for $0.50 per share and entitled the holder to purchase shares for $10.50 per share.
As of March 29, 1996, Michaels entered into a private placement transaction to sell 666,667 shares of Common Stock for cash to a corporate subsidiary of the Castle Creek Trust. The purchase price was $12.50 per share. This transaction was described in a Michaels press release dated March 29, 1996 and disclosed in Michaelss Proxy Statement dated October 23, 1996 and in Michaelss Form 10-K for the fiscal year ended February 1, 1997. On December 24, 1996, Michaels entered into a private placement transaction to sell options to purchase 666,667 shares of Michaels Common Stock for cash to a corporate subsidiary of the Red Mountain Trust
CUSIP No. 594087-10-8
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Page 6 of 32 Pages |
(the Red Mountain Trust), an irrevocable trust which had been established under the laws of the Isle of Man for the benefit of, inter alia, Charles J. Wyly, Jr., his spouse, and his issue. This transaction was described in a Michaels press release dated December 26, 1996 and disclosed in Michaelss Form 10-K for the fiscal year ended February 1, 1997. The options were purchased for $0.50 per share and entitled the holder to purchase shares for $10.50 per share. Each of the press releases referred to in this and the previous paragraph disclosed, inter alia, that the securities involved (Common Stock for the March transactions and options to purchase Common Stock for the December transactions) were sold to separate entities owned by independent trusts of which Wyly family members are beneficiaries.
The Tyler Trust, the Castle Creek Trust, the Red Mountain Trust, the Bessie Trust, and the La Fourche Trust are collectively referred to as the Second Foreign Trusts and, together with the First Foreign Trusts, as the Foreign Trusts.4/
On January 2, 1997, Trident Trust Company (IOM) Limited (Trident), then the trustee of the Red Mountain Trust and the La Fourche Trust, filed a Schedule 13D disclosing the trustees beneficial ownership of the options purchased in the December 24, 1996 transactions. On May 20, 1997, Trident filed Amendment No. 1 to Schedule 13D disclosing certain transactions that took place on February 25 and 28, 1997. On December 12, 1997, Trident filed Amendment No. 2 to Schedule 13D reporting that, after certain transactions undertaken between October 22 and December 9, 1997, Tridents beneficial ownership of shares and options to purchase shares of Michaels Common Stock was below 5% of the outstanding shares of Michaels Common Stock. According to its website, Trident has provided trust, corporate, investment and other services for over 25 years to professional advisors, financial institutions, corporations and high net worth families worldwide.
Since December 30, 1995, the Reporting Persons have not transferred any Michaels Common Stock or options to the Foreign Trusts or the subsidiaries thereof. Since December 24, 1996, the Foreign Trusts and their subsidiaries have not acquired Michaels Common Stock or options from Michaels (except upon the exercise of Michaels options). The subsidiaries of the Foreign Trusts holding Michaels Common Stock or options have from time to time since December 24, 1996 exercised Michaels options and sold Michaels Common Stock in the market. The subsidiaries of the Foreign Trusts holding Michaels Common Stock and options have also from time to time since that date transferred Common Stock and options to subsidiaries of the same or other Foreign Trusts.
During the period after April 13, 1992 covered by the Prior Amendments, the Reporting Persons did not consider the holdings of the Foreign Trusts or their subsidiaries for purposes of calculating their beneficial ownership of Michaels Common Stock or report such beneficial ownership in their Prior Amendments to Schedule 13D. Recently, a question has been raised as to whether the Reporting Persons should have included the holdings of the corporate subsidiaries of the Foreign Trusts in their Prior Amendments to Schedule 13D and the Reporting Persons have re-evaluated whether or not they may be deemed to be the beneficial owners of the Michaels Common Stock and options legally owned by the Foreign Trusts or their subsidiaries. Because the Reporting Persons may be deemed to be the beneficial owners of the Common Stock and options held by subsidiaries of the Foreign Trusts for purposes of Section 13(d) of the Securities Exchange Act of 1934, they are filing this Amendment No. 33 to the Original Schedule 13D.
This Amendment No. 33 amends and supplements the Prior Schedule 13D to reflect (i) the additional information that would have been required to be reported in the Prior Amendments if each of the Reporting Persons was deemed to be the beneficial owner of the Michaels Common Stock, options and warrants held by the subsidiaries of the Foreign Trusts for which he was a settlor or beneficiary; (ii) the further amendments to Schedule 13D that would have been required to be filed after April 13, 1992, if each of the Reporting Persons was deemed to be the beneficial owner of the Michaels Common Stock, options and warrants held by the subsidiaries of the Foreign Trusts for which he was a settlor or beneficiary; and (iii) the transactions in Michaels Common Stock of the subsidiaries of the Foreign Trusts occurring after April 13, 1992 that the Reporting Persons would have been required to report if each of the Reporting Persons was deemed to be the beneficial owner of the Michaels Common Stock, options and warrants held by the subsidiaries of the Foreign Trusts for which he was a settlor or beneficiary.
This Amendment No. 33 does not include any Common Stock or options beneficially owned by Evan Wyly, Sam Wylys son, nor any Common Stock or options that Evan Wyly may be deemed to beneficially own by virtue of any relationship to the Foreign Trusts (and subsidiaries thereof). Sam Wyly disclaims any beneficial interest in the Common Stock or options beneficially owned or that may be deemed to be beneficially owned by Evan Wyly.
CUSIP No. 594087-10-8
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Page 7 of 32 Pages |
ITEM 1. Security and Issuer
This statement relates to the ownership of Common Stock of Michaels Stores, Inc., a Delaware corporation. Michaelss principal executive offices are located at 8000 Bent Branch Drive, Irving, Texas 75063.
Michaels Common Stock split on a two-for-one basis on two separate occasions during the relevant period: November 12, 2001 and October 12, 2004. All transactions and holdings reported herein prior to November 12, 2001 do not reflect any such stock splits. All transactions and holdings reported herein on or after November 12, 2001 and prior to October 12, 2004 reflect the first such two-for-one stock split. All transactions and holdings reported herein on or after October 12, 2004 reflect both the first and second such stock splits.
ITEM 2. Identity and Background
This Statement is being filed by Sam Wyly and Charles J. Wyly, Jr.
The business address for each of the Reporting Persons is 300 Crescent Court, Suite 1000, Dallas, Texas 75201. Sam Wylys present principal occupation is as an entrepreneur who is self-employed. Charles J. Wyly, Jr.s present principal occupation is as Chairman of the Board of Directors of Michaels.
Neither Reporting Person has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) or been a party to a civil proceeding of a judicial or administrative body resulting in subjection to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Sam Wyly and Charles J. Wyly, Jr. is each a citizen of the United States of America.
ITEM 3. Source and Amount of Funds or Other Consideration.
As disclosed above in the Preamble, the consideration used by subsidiaries of the Foreign Trusts to make purchases of Michaels options from the Reporting Persons was the issuance of private annuity agreements. Also as disclosed in the Preamble, when the Maroon Creek Trust, the Woody Trust and the Tallulah Trust terminated, the annuity agreements each had received from the subsidiaries of the Foreign Trusts in exchange for Michaels options were distributed to the relevant Reporting Person. The consideration used by certain subsidiaries of the Foreign Trusts in both the private placement transactions between those subsidiaries and Michaels, and the consideration used by those subsidiaries to purchase Common Stock upon the exercise of Michaels options, took the form of cash. The cash was generally derived from the working capital of the relevant subsidiaries of the Foreign Trusts (including from the sale of United Sates government securities owned by such subsidiaries).
ITEM 4. Purpose of Transaction
The Common Stock and options acquired by the Reporting Persons were acquired for investment. Depending upon market conditions and other factors that they deem material to an investment decision, the Reporting Persons may purchase additional shares of Common Stock from time to time or may dispose of all or a portion of the shares of Common Stock they now beneficially own or may hereafter acquire. Except as set forth in this Item 4, neither of the Reporting Persons has any present plans or proposals that relate to or would result in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule 13D.
On September 24, 2002, Devotion Limited (Devotion), a corporate subsidiary of the LaFourche Trust, and Bank of America entered into a prepaid forward stock variable purchase transaction with respect to 800,000 shares of Michaels Common Stock held by Devotion. Pursuant to the terms of the prepaid forward, Bank of America paid Devotion $25,045,589.50 and in exchange Devotion agreed to deliver to the bank a variable portion of the 800,000 shares depending on the closing price of the Common Stock when the forward matured in September 2007. In addition, Bank of America was granted a security interest in the 800,000 shares and given certain rights in respect of such shares as a secured creditor. Copies of the relevant transaction documents for the prepaid forward transaction are included in Item 7 as Exhibit 4.
CUSIP No. 594087-10-8
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Page 8 of 32 Pages |
ITEM 5. Interest in Securities of the Issuer
(a) This Item 5(a) includes a statement of the individual and aggregate number and percentage of Michaels Common Stock, and options and warrants to purchase Common Stock, that would have been required to be reported by each of the Reporting Persons if such persons were deemed to have been beneficial owners of the Common Stock, options and warrants held by the subsidiaries of the Foreign Trusts in which each was a settlor or beneficiary as of: (i) April 13, 1992; (ii) each date since April 13, 1992 on which the Reporting Persons filed an amendment to the Original Schedule 13D; (iii) each date since April 13, 1992 on which an amendment to the Original Schedule 13D would have been required but was not filed; and (iv) March 31, 2005.5/
(i) As of April 13, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,360,962 shares, or approximately 8.95% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 401,765 of such shares directly; (ii) 594,677 of such shares by virtue of his ownership of a controlling interest in The First Dallas Wealth Management Corporation; (iii) 7,918 of such shares as the guardian of a minor child; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 340,766 of such shares as the trustee of the Sam Wyly Trusts listed below:
Number of Shares | |||||||
Name of Trust | Beneficially Owned | ||||||
1.
|
The Christiana Parker Wyly Trust */ | 46,440 | |||||
2.
|
The Andrew David Sparrow Wyly Trust */ |
46,440 | |||||
3.
|
The Laurie L. Wyly Revocable Trust | 123,943 | |||||
4.
|
The Lisa Wyly Revocable Trust | 123,943 |
*/
|
This figure excludes 35,953 shares beneficially held by the Trust as a limited partner in First Dallas Wealth Management Corporation. |
Sam Wyly possessed sole voting power with respect to 766,285 shares of Common Stock and sole dispositive power with respect to 766,285 shares of Common Stock. He possessed shared voting power and shared dispositive power with respect to 594,677 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 585,000 Common Stock options held by subsidiaries of the Foreign Trusts, or approximately 3.85% of the outstanding shares of Common Stock.6/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,680,100 shares, or approximately 11.04% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 788,050 of such shares directly; (ii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; and (iii) an aggregate of 891,489 of such shares as trustee of the Charles Wyly Trusts listed below:
6/ For the sake of simplicity, Item 5 groups warrants held by the subsidiaries of the Foreign Trusts into the total number of options listed in each entry, and does not differentiate between options and warrants.
CUSIP No. 594087-10-8
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Page 9 of 32 Pages |
Number of Shares | ||||||
Name of Trust | Beneficially Owned | |||||
1.
|
The Charles Joseph Wyly III Trust | 191,913 | ||||
2.
|
The Martha Caroline Wyly Trust | 192,313 | ||||
3.
|
The Emily Ann Wyly Trust | 191,813 | ||||
4.
|
The Jennifer Lynn Wyly Trust | 191,507 | ||||
5.
|
The Sam Wyly and Rosemary Wyly Childrens Trust No. 1 of 1965 for the benefit of Kelly Wyly | 123,943 |
Charles J. Wyly, Jr. possessed sole voting power with respect to 1,680,100 shares of Common Stock and sole dispositive power with respect to 1,680,100 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 375,000 Common Stock options held by subsidiaries of the Foreign Trusts, or approximately 2.47% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,041,062 shares of Common Stock, or approximately 19.99% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting and sole dispositive power with respect to 2,446,385 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 960,000 Common Stock options held by subsidiaries of the Foreign Trusts, or approximately 6.31% of the outstanding shares of Common Stock.
(ii) The Reporting Persons previously filed Amendments to the Original Schedule 13D which listed the following dates as those which required filing of the Amendment: September 30, 1992 (Amendment No. 19); June 20, 1993 (Amendment No. 20); May 12, 1994 (Amendment No. 21); June 20, 1994 (Amendment No. 22); February 23, 1995 (Amendment No. 23); March 15, 1995 (Amendment No. 24); September 5, 1995 (Amendment No. 25); November 22, 1996 (Amendment No. 26); April 30, 1997 (Amendment No. 27); July 29, 1997 (Amendment No. 28); January 21, 1998 (Amendment No. 29); March 1, 1999 (Amendment No. 30); August 31, 2000 (Amendment No. 31); and October 4, 2001 (Amendment No. 32). The Reporting Persons respective and combined ownership as of each of these dates is set forth in this paragraph (ii):7/
(1) As of September 30, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,060,962 shares, or approximately 13.55% of the outstanding shares of Common Stock. Sam Wyly beneficially owned: (i) 600,000 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (ii) 924,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 100,000 of such shares as general partner of First Dallas, Limited; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 412,672 as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 2,060,962 shares, Sam Wyly possessed sole dispositive power with respect to 1,960,962 shares of Common Stock and sole voting power with respect to 1,360,962 shares. In addition, Sam Wyly may be deemed to beneficially own 107,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 0.70% of the outstanding shares of Common Stock.
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Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,080,100 shares, or approximately 13.67% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned: (i) 300,000 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (ii) 788,050 of such shares directly; (iii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 100,000 of such shares as general partner of First Dallas Limited; and (v) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly Jr.s family. Of the foregoing 2,080,100 shares, Charles J. Wyly, Jr. possessed sole dispositive power with respect to 1,980,100 shares of Common Stock and sole voting power with respect to 1,680,100 shares. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 83,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 0.55% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,041,062 shares of Common Stock, or approximately 26.56% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,141,062 shares of Common Stock and sole dispositive power with respect to 4,041,062 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 190,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 1.25% of the outstanding shares of Common Stock.
(2) As of June 20, 1993:
Sam Wyly beneficially owned 2,160,962 shares, or approximately 14.21% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 100,000 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (ii) 1,524,536 of such shares as the sole general partner of Tallulah, Ltd. (including 924,536 shares of Common Stock and 600,000 options to purchase shares of Common Stock); (iii) 100,000 of such shares as general partner of First Dallas Limited; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 412,672 as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 2,160,962 shares, Sam Wyly possessed sole dispositive power with respect to 2,060,962 shares and sole voting power with respect to 1,360,962 shares of Common Stock.
Charles J. Wyly, Jr. beneficially owned 2,112,050 shares, or approximately 13.88% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 350,000 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (ii) 770,000 of such shares as a general partner of Brush Creek, Limited (Brush Creek); (iii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 100,000 of such shares as general partner of First Dallas Limited; and (v) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly Jr.ss family. Of the foregoing 2,112,050 shares, Charles J. Wyly, Jr. possessed sole dispositive power with respect to 2,012,050 and sole voting power with respect to 1,662,050 shares of Common Stock.
The Reporting Persons as a group beneficially owned an aggregate of 4,173,012 shares of Common Stock, or approximately 27.43% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,123,012 shares of Common Stock and sole dispositive power with respect to 4,173,012 shares of Common Stock.
(3) As of May 12, 1994:
Sam Wyly beneficially owned 2,801,887 shares, or approximately 16.78% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 200,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,474,536 of such shares as the sole general partner of Tallulah, Ltd. (including 874,536 shares of Common Stock and 600,000 options to purchase shares of Common Stock); (iii) 200,000 of such shares as general partner of Maverick Entrepreneurs Fund, Ltd. (MEF, Ltd.);8/ (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the
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shares of two adult children; (vi) 490,925 of such shares as trustee and as a member of the Investment Committee for Michaels Stores, Inc. Employees 401(k) Plan and Trust (based on a 401(k) Plan statement dated March 25, 1994); and (vii) an aggregate of 412,672 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,310,962 shares of Common Stock and sole dispositive power with respect to 2,110,962 shares of Common Stock.
Charles J. Wyly, Jr. beneficially owned 2,227,550 shares, or approximately 13.34% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 400,000 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 200,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 872,176 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,627,550 shares of Common Stock and sole dispositive power with respect to 2,027,550 shares of Common Stock.
The Reporting Persons as a group beneficially owned an aggregate of 4,829,437 shares of Common Stock, or approximately 28.92% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,138,512 shares of Common Stock and sole dispositive power with respect to 4,338,512 shares of Common Stock.
(4) As of June 20, 1994:
The holdings the Reporting Persons would have reported as of June 20, 1994 are the same as what they would have reported as of May 12, 1994. See Item 5(a)(ii)(3) above.9/
(5) As of February 23, 1995:
Sam Wyly beneficially owned 2,534,905 shares, or approximately 11.88% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 300,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,474,536 of such shares as the sole general partner of Tallulah, Ltd. (including 874,536 shares of Common Stock and 600,000 options to purchase shares of Common Stock); (iii) 200,000 of such shares as general partner of MEF, Ltd.; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 536,615 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,434,905 shares of Common Stock and sole dispositive power with respect to 2,334,905 shares of Common Stock.
Charles J. Wyly, Jr. beneficially owned 2,147,607 shares, or approximately 10.17% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 450,000 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 200,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 742,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,497,607 shares of Common Stock and sole dispositive power with respect to 1,947,607 shares of Common Stock.
The Reporting Persons as a group beneficially owned an aggregate of 4,482,512 shares of Common Stock, or approximately 21.01% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,132,152 shares of Common Stock and sole dispositive power with respect to 4,482,512 shares of Common Stock.
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(6) As of March 15, 1995:
The holdings the Reporting Persons would have reported as of March 15, 1995 are the same as what they would have reported as of February 23, 1995. See Item 5(a)(ii)(5) above.10/
(7) As of September 5, 1995:11/
Sam Wyly beneficially owned 2,684,905 shares, or approximately 12.54% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 300,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,524,536 of such shares as the sole general partner of Tallulah, Ltd. (including 924,536 shares of Common Stock and 600,000 options to purchase shares of Common Stock); (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 536,615 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,484,905 shares of Common Stock and sole dispositive power with respect to 2,384,905 shares of Common Stock.
Charles J. Wyly, Jr. beneficially owned 2,247,607 shares, or approximately 10.50% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 450,000 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 742,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,497,607 shares of Common Stock and sole dispositive power with respect to 1,947,607 shares of Common Stock.
The Reporting Persons as a group beneficially owned an aggregate of 4,632,512 shares of Common Stock, or approximately 21.63% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,282,512 shares of Common Stock and sole dispositive power with respect to 4,632,512 shares of Common Stock.
(8) As of November 22, 1996:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,565,238 shares, or approximately 10.90% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,265,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,233,333 shares held by subsidiaries of the Foreign Trusts, or approximately 9.08% of the outstanding shares of Common Stock, including: 1) 1,333,333 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 9.63% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of
11/ Sam Wyly became trustee of the Kelly Wyly Elliot Trust on September 15, 1995. Prior to that date, Charles J. Wyly, Jr. had been trustee for the Kelly Wyly Elliot Trust. The change is reflected in this Item 5(a)(ii)(7).
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attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,116,667 shares held by subsidiaries of the Foreign Trusts, or 4.75% of the outstanding shares of Common Stock, including: 1) 666,667 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,530,262 shares of Common Stock, or approximately 19.26% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,529,512 shares of Common Stock and sole dispositive power with respect to 4,530,262 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,350,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 14.24% of the outstanding shares of Common Stock.12/
(9) As of April 30, 1997:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,565,238 shares, or approximately 10.89% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,265,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 3,566,666 shares held by subsidiaries of the Foreign Trusts, or approximately 15.14% of the outstanding shares of Common Stock, including: 1) 2,666,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 9.61% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,783,334 shares held by subsidiaries of the Foreign Trusts, or 7.57% of the outstanding shares of Common Stock, including: 1) 1,333,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,530,262 shares of Common Stock, or approximately 19.23% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,529,512 shares of Common Stock and sole dispositive power with respect to 4,530,262 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 5,350,000 shares of
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Common Stock held by subsidiaries of the Foreign Trusts, or approximately 22.71% of the outstanding shares of Common Stock.13/
(10) As of July 29, 1997:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 3,034,405 shares, or approximately 11.60% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,200,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 2,500 of such shares by virtue of his wife, Cheryl Wylys, ownership of options to purchase shares;14/ (iii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 200,000 of such shares as general partner of MEF, Ltd.; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,834,405 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,666,666 shares held by subsidiaries of the Foreign Trusts, or approximately 10.20% of the outstanding shares of Common Stock, including: 1) 1,766,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,067,607 shares, or approximately 7.91% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 500,000 of such shares as general partner of Brush Creek; (ii) 600,000 of such shares by virtue of his ownership of options; (iii) 200,000 of such shares as general partner of MEF, Ltd.; and (iv) an aggregate of 767,607 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,267,607 shares of Common Stock and sole dispositive power with respect to 1,867,607 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,483,334 shares held by subsidiaries of the Foreign Trusts, or 5.67% of the outstanding shares of Common Stock, including: 1) 1,033,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,902,012 shares of Common Stock, or approximately 18.75% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,099,512 shares of Common Stock and sole dispositive power with respect to 4,902,012 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 4,150,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 15.87% of the outstanding shares of Common Stock.
(11) As of January 21, 1998:15/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,061,905 shares, or approximately 7.14% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,125,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 75,000 options by virtue of his wife, Cheryl Wylys ownership of options to purchase Common Stock;
14/ Sam Wyly does not know when these 2,500 options were granted by the Company to Cheryl Wyly. This Amendment assumes that these options were granted to Cheryl Wyly immediately prior to July 29, 1997. On August 18, 1997, Cheryl Wyly exercised options to purchase 2,500 shares and sold the underlying shares on the same day. The transaction was not included the Prior Amendments, although the transaction was disclosed in a Form 4 filing by Sam Wyly.
15/ Sam Wyly transferred options to purchase 75,000 shares of Common Stock to his spouse, Cheryl Wyly, on January 1, 1998, and Cheryl Wyly exercised those options on May 10, 2000. These transactions were disclosed in two separate Form 4s filed by Sam Wyly. Sam Wyly also included these options in his holdings in the Prior Amendments.
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(iii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 256,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 861,905 shares of Common Stock and sole dispositive power with respect to 2,061,905 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,266,666 shares held by subsidiaries of the Foreign Trusts, or approximately 7.85% of the outstanding shares of Common Stock, including: 1) 1,366,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,066,444 shares, or approximately 3.69% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 80,000 of such shares as general partner of Brush Creek; (ii) 600,000 of such shares by virtue of his ownership of options; and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 1,066,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,283,334 shares held by subsidiaries of the Foreign Trusts, or 4.44% of the outstanding shares of Common Stock, including: 1) 833,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,128,349 shares of Common Stock, or approximately 10.84% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,328,349 shares of Common Stock and sole dispositive power with respect to 3,128,349 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,550,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 12.30% of the outstanding shares of Common Stock.
(12) As of March 1, 1999:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,402,962 shares, or approximately 8.42% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,525,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 75,000 of such shares by virtue of his wife, Cheryl Wylys, ownership of options to purchase Common Stock; (iii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 197,590 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 802,962 shares of Common Stock and sole dispositive power with respect to 2,402,962 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,245,333 shares held by subsidiaries of the Foreign Trusts, or approximately 7.86% of the outstanding shares of Common Stock, including: 1) 1,345,333 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,266,444 shares, or approximately 4.44% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 80,000 of such shares as general partner of Brush Creek; (ii) 800,000 of such shares by virtue of his ownership of options; and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 1,266,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,266,801 shares held by subsidiaries of the Foreign Trusts, or 4.44% of the outstanding shares of Common Stock, including: 1) 816,801 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,669,406 shares of Common Stock, or approximately 12.85% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,269,406 shares of Common Stock and sole dispositive power with respect to 3,669,406 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,512,134 shares of
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Common Stock held by subsidiaries of the Foreign Trusts, or approximately 12.30% of the outstanding shares of Common Stock.
(13) August 31, 2000:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,336,822 shares, or approximately 4.02% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 172,500 of such shares held individually; (ii) 500,000 of such shares by virtue of his ownership of options to purchase Common Stock; (iii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; and (iv) an aggregate of 74,786 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 836,822 shares of Common Stock and sole dispositive power with respect to 1,336,822 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 1,629,333 shares held by subsidiaries of the Foreign Trusts, or approximately 4.91% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 716,444 shares, or approximately 2.16% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 50,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 280,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 200,000 of which by virtue of Stargates ownership of options); and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 716,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,266,801 shares held by subsidiaries of the Foreign Trusts, or 3.81% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 2,053,266 shares of Common Stock, or approximately 6.18% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,303,266 shares of Common Stock and sole dispositive power with respect to of 2,053,266 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,896,134 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 8.72% of the outstanding shares of Common Stock.
(14) As of October 4, 2001:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 742,286 shares, or approximately 2.29% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 567,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 100,000 of such shares as the sole general partner of Tallulah, Ltd.; and (iii) an aggregate of 74,786 of such shares held by Sam Wylys spouse and held by Sam Wyly as the trustee of certain domestic trusts for the benefit of his family. Sam Wyly possessed sole voting power with respect to 174,786 shares of Common Stock and sole dispositive power with respect to 742,286 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 940,600 shares held by subsidiaries of the Foreign Trusts, or approximately 2.92% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 833,944 shares, or approximately 2.57% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 167,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 280,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 200,000 of which by virtue of Stargates ownership of options); and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 833,944 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,066,801 shares held by subsidiaries of the Foreign Trusts, or 3.29% of the outstanding shares of Common Stock.
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Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 1,576,230 shares of Common Stock, or approximately 4.86% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 641,230 shares of Common Stock and sole dispositive power with respect to of 1,576,230 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,007,401 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 6.19% of the outstanding shares of Common Stock.
(iii) If the Reporting Persons were deemed to have beneficial ownership of the shares of Common Stock held by the subsidiaries of the Foreign Trusts on and after April 14, 1992 (subject to the assumptions set forth above), (a) the Reporting Persons would have been required to file Schedule 13D Amendments on the following dates:16/ May 29, 1992; June 9, 1992; July 31, 1992; August 19, 1992; November 9, 1994; March 29, 1996; December 23, 1996; June 23, 1997; June 30, 1997; July 23, 1997; December 1, 1997; January 12, 2000; April 18, 2000; May 8, 2000; September 7, 2001; November 7, 2001, and September 24, 2002; and (b) the Reporting Persons respective and combined beneficial ownership under these assumptions as of each of these dates would have been as set forth in this paragraph (iii):
(1) As of May 29, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,360,962 shares, or approximately 8.95% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 401,765 of such shares directly; (ii) 594,677 of such shares by virtue of his ownership of a controlling interest in The First Dallas Wealth Management Corporation; (iii) 7,918 of such shares as the guardian of a minor child; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 340,766 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 1,360,692 shares, Sam Wyly possessed sole voting power with respect to 766,285 shares of Common Stock and sole dispositive power with respect to 766,285 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 475,000 shares held by subsidiaries of the Foreign Trusts, or approximately 3.12% of the outstanding shares of Common Stock, including: 1) 300,000 shares of Common Stock; and 2) options to purchase an additional 175,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,680,100 shares, or approximately 11.04% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 788,050 of such shares directly; (ii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; and (iii) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly Jr.s family. Of the foregoing 1,680,100 shares, Charles J. Wyly, Jr. possessed sole voting power with respect to 1,680,100 shares of Common Stock and sole dispositive power with respect to 1,680,100 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 325,000 shares held by subsidiaries of the Foreign Trusts, or approximately 2.14% of the outstanding shares of Common Stock, including: 1) 150,000 shares of Common Stock; and 2) options to purchase an additional 175,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,041,062 shares of Common Stock, or approximately 19.99% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power and sole dispositive power with respect to 2,446,385 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 800,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 5.26% of the outstanding shares of Common Stock.
In addition, as noted above in Item 5(a), this Amendment No. 33 to Schedule 13D makes the simplifying assumption for reporting purposes in this Item 5(a)(iii) that all options were vested when first granted. See note 5 supra.
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(2) As of June 9, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,360,962 shares, or approximately 8.95% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 401,765 of such shares directly; (ii) 594,677 of such shares by virtue of his ownership of a controlling interest in The First Dallas Wealth Management Corporation; (iii) 7,918 of such shares as the guardian of a minor child; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 340,766 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 1,360,692 shares, Sam Wyly possessed sole voting power with respect to 766,285 shares of Common Stock and sole dispositive power with respect to 766,285 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 327,000 shares held by subsidiaries of the Foreign Trusts, or approximately 2.15% of the outstanding shares of Common Stock, including: 1) 152,000 shares of Common Stock; and 2) options to purchase an additional 175,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,680,100 shares, or approximately 11.04% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 788,050 of such shares directly; (ii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; and (iii) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly, Jr.s family. Of the foregoing 1,680,100 shares, Charles J. Wyly, Jr. possessed sole voting power with respect to 1,680,100 shares of Common Stock and sole dispositive power with respect to 1,680,100 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 248,000 shares held by subsidiaries of the Foreign Trusts, or approximately 1.63% of the outstanding shares of Common Stock, including: 1) 73,000 shares of Common Stock; and 2) options to purchase an additional 175,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,041,062 shares of Common Stock, or approximately 19.99% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power and sole dispositive power with respect to 2,446,385 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 575,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 3.78% of the outstanding shares of Common Stock.
(3) As of July 31, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,360,962 shares, or approximately 8.95% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 401,765 of such shares directly; (ii) 594,677 of such shares by virtue of his ownership of a controlling interest in The First Dallas Wealth Management Corporation; (iii) 7,918 of such shares as the guardian of a minor child; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 340,766 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 1,360,692 shares, Sam Wyly possessed sole voting power with respect to 766,285 shares of Common Stock and sole dispositive power with respect to 766,285 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 218,500 shares held by subsidiaries of the Foreign Trusts, or approximately 1.44% of the outstanding shares of Common Stock, including: 1) 43,500 shares of Common Stock; and 2) options to purchase an additional 175,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,680,100 shares, or approximately 11.05% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 788,050 of such shares directly; (ii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; and (iii) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly Jr.s family. Of the foregoing 1,680,100 shares, Charles J. Wyly, Jr. possessed sole voting power with respect to 1,680,100 shares of Common Stock and sole dispositive power with respect to 1,680,100 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 175,000 options to purchase Common Stock held by subsidiaries of the Foreign Trusts, or approximately 1.15% of the outstanding shares of Common Stock.
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Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,041,062 shares of Common Stock, or approximately 19.99% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power and sole dispositive power with respect to 2,446,385 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 393,500 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 2.59% of the outstanding shares of Common Stock.
(4) As of August 19, 1992:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,960,962 shares, or approximately 12.89% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 401,765 of such shares directly; (ii) 600,000 shares of Common Stock by virtue of his ownership of options; (iii) 594,677 of such shares by virtue of his ownership of a controlling interest in The First Dallas Wealth Management Corporation; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 340,766 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Of the foregoing 1,960,962 shares, Sam Wyly possessed sole voting power with respect to 766,285 shares and sole dispositive power with respect to 1,366,285 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 127,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 0.83% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,980,100 shares, or approximately 13.02% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 788,050 of such shares directly; (ii) 300,000 shares by virtue of his ownership of options; (iii) 561 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; and (iv) an aggregate of 891,489 of such shares as trustee of certain domestic trusts for the benefit of Charles J. Wyly, Jr.s family. Of the foregoing 1,980,100 shares, Charles J. Wyly, Jr. possessed sole voting power with respect to 1,680,100 shares and sole dispositive power with respect to 1,980,100 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 100,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 0.66% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,941,062 shares of Common Stock, or approximately 25.91% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 2,446,385 shares and sole dispositive power with respect to 3,346,385 shares. In addition, the Reporting Persons may be deemed to beneficially own 227,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 1.49% of the outstanding shares of Common Stock.
(5) November 9, 1994:
Sam Wyly beneficially owned 2,534,905 shares, or approximately 11.95% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 300,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,474,536 of such shares as the sole general partner of Tallulah, Ltd. (including 874,536 shares of Common Stock and 600,000 options to purchase shares of Common Stock); (iii) 200,000 of such shares as general partner of MEF, Ltd.; (iv) 7,918 of such shares as the guardian of a minor child; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 536,615 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,434,905 shares of Common Stock and sole dispositive power with respect to 2,334,905 shares of Common Stock.
Charles J. Wyly, Jr. beneficially owned 2,153,607 shares, or approximately 10.16% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 450,000 shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 200,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 748,233 of such shares as trustee of certain domestic trusts for the
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benefit of Charles J. Wyly Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,503,607 shares of Common Stock and sole dispositive power with respect to 1,953,607 shares of Common Stock.
The Reporting Persons as a group beneficially owned an aggregate of 4,488,512 shares of Common Stock, or approximately 21.17% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,138,512 shares of Common Stock and sole dispositive power with respect to 4,448,512 shares of Common Stock.
(6) As of March 29, 1996:17/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,568,238 shares, or approximately 11.96% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 544,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,634,905 of such shares of Common Stock and sole dispositive power with respect to 2,268,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,233,333 shares held by subsidiaries of the Foreign Trusts, or approximately 10.40% of the outstanding shares of Common Stock, including: 1) 1,333,333 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 10.54% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned: (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,116,667 shares held by subsidiaries of the Foreign Trusts, or 5.20% of the outstanding shares of Common Stock, including: 1) 666,667 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,533,262 shares of Common Stock, or approximately 21.10% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,532,512 shares of Common Stock and sole dispositive power with respect to 4,533,262 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,350,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 15.59% of the outstanding shares of Common Stock.
(7) As of December 23, 1996:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,565,238 shares, or approximately 10.89% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit
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of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,265,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 3,566,666 shares held by subsidiaries of the Foreign Trusts, or approximately 15.14% of the outstanding shares of Common Stock, including: 1) 1,333,333 shares of Common Stock; and 2) options to purchase an additional 2,233,333 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 9.62% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,783,334 shares held by subsidiaries of the Foreign Trusts, or 7.57% of the outstanding shares of Common Stock , including: 1) 666,667 shares of Common Stock; and 2) options to purchase an additional 1,116,667 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,530,262 shares of Common Stock, or approximately 19.23% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,529,512 shares of Common Stock and sole dispositive power with respect to 4,530,262 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 5,350,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 22.71% of the outstanding shares of Common Stock.
(8) As of June 23, 1997:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,565,238 shares, or approximately 9.81% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,265,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 3,048,466 shares held by subsidiaries of the Foreign Trusts, or approximately 11.66% of the outstanding shares of Common Stock, including: 1) 2,148,466 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 8.66% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned: (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,783,334 shares held by subsidiaries of the Foreign Trusts, or 7.57% of the outstanding shares of Common Stock, including: 1) 1,333,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,530,262 shares of Common Stock, or approximately 17.32% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,529,512 shares of Common Stock and sole dispositive power with respect to 4,530,262 shares of
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Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 4,831,800 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 18.48% of the outstanding shares of Common Stock.
(9) As of June 30, 1997:18/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,565,238 shares, or approximately 9.81% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 633,333 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 300,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,265,238 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,666,666 shares held by subsidiaries of the Foreign Trusts, or approximately 10.20% of the outstanding shares of Common Stock, including: 1) 1,766,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,265,024 shares, or approximately 8.66% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 755,000 of such shares as general partner of Brush Creek; (ii) 367,417 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 300,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,597,607 shares of Common Stock and sole dispositive power with respect to 1,965,024 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,483,334 shares held by subsidiaries of the Foreign Trusts, or 5.67% of the outstanding shares of Common Stock, including: 1) 1,033,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,530,262 shares of Common Stock, or approximately 17.32% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,529,512 shares of Common Stock and sole dispositive power with respect to 4,530,262 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 4,150,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 15.87% of the outstanding shares of Common Stock.
(10) As of July 23, 1997:19/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 3,031,905 shares, or approximately 11.59% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) options to purchase 1,200,000 shares; (ii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 200,000 of such shares as general partner of MEF, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting
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power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,831,905 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,666,666 shares held by subsidiaries of the Foreign Trusts, or approximately 10.20% of the outstanding shares of Common Stock, including: 1) 1,766,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,242,607 shares, or approximately 10.30% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 600,000 of such shares as general partner of Brush Creek; (ii) 600,000 of such shares by virtue of his ownership of options; (iii) 374 of such shares by virtue of his holding a power of attorney to vote the shares of four adult children; (iv) 200,000 of such shares as general partner of MEF, Ltd.; and (v) an aggregate of 842,233 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,442,607 shares of Common Stock and sole dispositive power with respect to 2,042,607 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,483,334 shares held by subsidiaries of the Foreign Trusts, or 5.67% of the outstanding shares of Common Stock, including: 1) 1,033,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 5,074,512 shares of Common Stock, or approximately 14.81% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,274,512 shares of Common Stock and sole dispositive power with respect to 5,074,512 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 4,150,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 15.87% of the outstanding shares of Common Stock.
(11) As of December 1, 1997:20/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 3,031,905 shares, or approximately 10.50% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,125,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 75,000 of such shares by virtue of his spouse, Cheryl Wylys ownership of options to purchase Common Stock; (iii) 1,074,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 200,000 of such shares as general partner of MEF, Ltd.; (v) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (vi) an aggregate of 541,533 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 1,631,905 shares of Common Stock and sole dispositive power with respect to 2,831,905 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,266,666 shares held by subsidiaries of the Foreign Trusts, or approximately 7.85% of the outstanding shares of Common Stock , including: 1) 1,366,666 shares of Common Stock; and 2) options to purchase an additional 900,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 2,067,607 shares, or approximately 7.16% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 500,000 of such shares as general partner of Brush Creek; (ii) 600,000 of such shares by virtue of his ownership of options; (iii) 200,000 of such shares as general partner of MEF, Ltd.; and (iv) an aggregate of 767,607 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 1,267,607 shares of Common Stock and sole dispositive power with respect to 1,867,607 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,283,334 shares held by subsidiaries of the Foreign Trusts, or 4.44% of the outstanding shares of Common Stock, including: 1) 833,334 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
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Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 4,899,512 shares of Common Stock, or approximately 16.97% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 3,099,512 shares of Common Stock and sole dispositive power with respect to 4,899,512 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,550,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 12.30% of the outstanding shares of Common Stock.
(12) As of January 12, 2000:21/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,280,158 shares, or approximately 7.38% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,525,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 75,000 of such shares by virtue of his spouse, Cheryl Wylys ownership of options to purchase Common Stock; (iii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 74,786 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 680,158 shares of Common Stock and sole dispositive power with respect to 2,280,158 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 1,783,333 shares held by subsidiaries of the Foreign Trusts, or approximately 5.77% of the outstanding shares of Common Stock, including: 1) 1,345,333 shares of Common Stock; and 2) options to purchase an additional 438,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,266,444 shares, or approximately 4.10% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 880,000 of such shares as general partner of Brush Creek (80,000 of which by virtue of Brush Creeks ownership of Common Stock, and 800,000 of which by virtue of Brush Creeks ownership of options); and (ii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 1,266,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,266,801 shares held by subsidiaries of the Foreign Trusts, or 4.10% of the outstanding shares of Common Stock, including: 1) 816,801 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,546,602 shares of Common Stock, or approximately 11.47% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,146,602 shares of Common Stock and sole dispositive power with respect to 3,546,602 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 3,050,134 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 9.87% of the outstanding shares of Common Stock.
(13) As of April 18, 2000:22/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,280,158 shares, or approximately 7.38% of the outstanding shares of Common Stock. Sam
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Wyly beneficially owned (i) 1,525,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 75,000 of such shares by virtue of his spouse, Cheryl Wylys ownership of options to purchase Common Stock; (iii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (v) an aggregate of 74,786 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 680,158 shares of Common Stock and sole dispositive power with respect to 2,280,158 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 1,638,133 shares held by subsidiaries of the Foreign Trusts, or approximately 5.30% of the outstanding shares of Common Stock, including: 1) 1,354,133 shares of Common Stock; and 2) options to purchase an additional 284,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 996,444 shares, or approximately 3.22% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 610,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 530,000 of which by virtue of Stargates ownership of options); and (ii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 996,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,266,801 shares held by subsidiaries of the Foreign Trusts, or 4.10% of the outstanding shares of Common Stock, including: 1) 816,801 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,276,602 shares of Common Stock, or approximately 10.60% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,146,602 shares of Common Stock and sole dispositive power with respect to 3,276,602 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,904,934 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 9.40% of the outstanding shares of Common Stock.
(14) As of May 8, 2000:23/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,252,658 shares, or approximately 4.05% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 572,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; (iii) 15,836 of such shares by virtue of a power of attorney to vote the shares of two adult children; and (iv) an aggregate of 74,786 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 680,158 shares of Common Stock and sole dispositive power with respect to 1,252,658 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 1,629,333 shares held by subsidiaries of the Foreign Trusts, or approximately 5.27% of the outstanding shares of Common Stock, including: 1) 1,345,333 shares of Common Stock; and 2) options to purchase an additional 284,000 shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 666,444 shares, or approximately 2.16% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 280,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 200,000 of which by virtue of Stargates ownership of options); and (ii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 666,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,266,801 shares held by subsidiaries of the Foreign Trusts,
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or 4.10% of the outstanding shares of Common Stock, including: 1) 816,801 shares of Common Stock; and 2) options to purchase an additional 450,000 shares.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 1,919,102 shares of Common Stock, or approximately 6.21% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,146,602 shares of Common Stock and sole dispositive power with respect to 1,919,102 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,896,134 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 9.40% of the outstanding shares of Common Stock.
(15) As of September 7, 2001:24/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,214,322 shares, or approximately 3.76% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 550,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 589,536 of such shares as the sole general partner of Tallulah, Ltd.; and (iii) an aggregate of 74,786 of such shares as the trustee of certain domestic trusts for the benefit of Sam Wylys family. Sam Wyly possessed sole voting power with respect to 664,322 shares of Common Stock and sole dispositive power with respect to 1,214,322 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 940,600 shares held by subsidiaries of the Foreign Trusts, or approximately 2.92% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 816,444 shares, or approximately 2.53% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 150,000 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 280,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 200,000 of which by virtue of Stargates ownership of options); and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 816,444 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,066,801 shares held by subsidiaries of the Foreign Trusts, or 3.31% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 2,030,766 shares of Common Stock, or approximately 6.30% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,130,766 shares of Common Stock and sole dispositive power with respect to of 2,030,766 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,007,401 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 6.30% of the outstanding shares of Common Stock.
(16) As of November 7, 2001:25/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 742,286 of such shares, or approximately 2.29% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 567,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 100,000 of such shares as the sole general partner of Tallulah, Ltd.; and (iii) an aggregate of 74,786 of such shares held by Sam Wylys spouse and held by Sam Wyly as the trustee of certain domestic trusts for the
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benefit of his family. Sam Wyly possessed sole voting power with respect to 174,786 shares of Common Stock and sole dispositive power with respect to 742,286 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 540,600 shares held by subsidiaries of the Foreign Trusts, or approximately 1.67% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 833,944 shares, or approximately 2.57% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 167,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 280,000 of such shares as general partner of Stargate, Ltd. (80,000 of which by virtue of Stargates ownership of Common Stock, and 200,000 of which by virtue of Stargates ownership of options); and (iii) an aggregate of 386,444 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 466,444 shares of Common Stock and sole dispositive power with respect to 833,944 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 766,801 shares held by subsidiaries of the Foreign Trusts, or 2.36% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 1,576,230 shares of Common Stock, or approximately 4.86% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 641,230 shares of Common Stock and sole dispositive power with respect to of 1,576,230 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 1,307,401 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 4.03% of the outstanding shares of Common Stock.
(17) As of September 24, 2002:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 1,554,292 shares, or approximately 2.31% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,202,500 of such shares by virtue of his ownership of options to purchase Common Stock; (ii) 200,000 of such shares as the sole general partner of Tallulah, Ltd.; and (iii) an aggregate of 151,792 of such shares of such shares held by Sam Wylys spouse and held by Sam Wyly as the trustee of certain domestic trusts for the benefit of his family. Sam Wyly possessed sole voting power with respect to 351,792 shares of Common Stock and sole dispositive power with respect to 1,554,292 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 1,081,200 shares held by subsidiaries of the Foreign Trusts, or approximately 1.61% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 1,785,488 shares, or approximately 2.66% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 100 of such shares individually; (ii) 452,500 of such shares by virtue of his ownership of options to purchase Common Stock; (iii) 560,000 of such shares as general partner of Stargate, Ltd. (160,000 of which by virtue of Stargates ownership of Common Stock, and 400,000 of which by virtue of Stargates ownership of options); and (iv) an aggregate of 772,888 of such shares as trustee of certain domestic trusts established for the benefit of Charles J. Wyly, Jr.s family. Charles J. Wyly, Jr. possessed sole voting power with respect to 932,988 shares of Common Stock and sole dispositive power with respect to 1,785,488 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 1,533,602 shares held by subsidiaries of the Foreign Trusts, or 2.29% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 3,339,780 shares of Common Stock, or approximately 4.98% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 1,284,780 shares of Common Stock and sole dispositive power with respect to of 3,339,780 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 2,614,802 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 3.90% of the outstanding shares of Common Stock.
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(iv) As of March 31, 2005:
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Sam Wyly beneficially owned 2,770,534 shares, or approximately 2.03% of the outstanding shares of Common Stock. Sam Wyly beneficially owned (i) 1,568,351 of such shares individually; (ii) 474,999 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (iii) 400,000 of such shares as the sole general partner of Tallulah, Ltd.; (iv) 28,040 of such shares owned by his spouse; and (v) an aggregate of 299,144 of such shares as the trustee of the Sam Wyly Trusts listed below:
Number of Shares | ||||||
Name of Trust | Beneficially Owned | |||||
1.
|
The Christiana Parker Wyly Trust | 149,572 | ||||
2.
|
The Andrew David Sparrow Wyly Trust | 149,572 |
Sam Wyly possessed sole voting power with respect to 2,295,535 shares of Common Stock and sole dispositive power with respect to 2,770,534 shares of Common Stock. In addition, Sam Wyly may be deemed to beneficially own 2,052,000 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 1.50% of the outstanding shares of Common Stock.26/
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, Charles J. Wyly, Jr. beneficially owned 3,178,614 shares, or approximately 2.33% of the outstanding shares of Common Stock. Charles J. Wyly, Jr. beneficially owned (i) 142,729 of such shares individually; (ii) 774,999 of such shares by virtue of his ownership of options to purchase shares of Common Stock; (iii) 760,410 of such shares as a trustee of the general partner of Stargate, Ltd.; (iv) 410,208 as general partner of Shadywood, Ltd.; and (v) an aggregate of 1,090,268 of such shares as trustee of the Charles J. Wyly, Jr. Trusts listed below:
Name of Trust | Number of Shares Beneficially Owned |
|||||
1.
|
The Martha Caroline Wyly Trust | 282,876 | ||||
2.
|
The Charles J. Wyly III Trust | 405,312 | ||||
3.
|
The Jennifer Lynn Wyly Trust | 402,080 |
Charles J. Wyly, Jr. possessed sole voting power with respect to 2,403,615 shares of Common Stock and sole dispositive power with respect to 3,178,614 shares of Common Stock. In addition, Charles J. Wyly, Jr. may be deemed to beneficially own 2,867,204 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 2.10% of the outstanding shares of Common Stock.
Without regard to the securities owned by the subsidiaries of the Foreign Trusts, the Reporting Persons as a group beneficially owned an aggregate of 5,949,148 shares of Common Stock, or approximately 4.35% of the outstanding shares of Common Stock. The Reporting Persons as a group had sole voting power with respect to 4,699,150 shares of Common Stock and sole dispositive power with respect to 5,949,148 shares of Common Stock. In addition, the Reporting Persons may be deemed to beneficially own 4,919,204 shares of Common Stock held by subsidiaries of the Foreign Trusts, or approximately 3.60% of the outstanding shares of Common Stock.
(b) If the Reporting Persons were deemed to have been the beneficial owners of the Common Stock and options held by subsidiaries of the Foreign Trusts in which either is a settlor or beneficiary, that beneficial ownership would be shared, for purposes of Section 13(d) of the Securities Exchange Act of 1934, with the trustees of the relevant Foreign Trusts as well as the relevant subsidiaries of those trusts. Exhibit 5, attached hereto, lists the names of the trustees of the Foreign Trusts, the dates they served as trustees, and the other Item 2 information related to those trustees (to the extent known by the Reporting Persons). To the knowledge
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of the Reporting Persons, each of the trustees of the Foreign Trusts listed on Exhibit 5 is (or, during the periods relevant to this Amendment, was) in business of providing trust and related services to corporations, investors and various other persons.
(c) Attached as Exhibit 2 is a chart listing each transaction in Michaels Common Stock and options described in the Preamble by which Common Stock or options were acquired by a Foreign Trust (or subsidiary thereof), and each transaction (i) of subsidiaries of the Foreign Trusts whose Common Stock and options Sam Wyly may be deemed to beneficially own occurring within 60 days of the dates of Prior Amendment Nos. 18 to 32, and (ii) of Sam Wyly and the subsidiaries of the Foreign Trusts whose Common Stock and options Sam Wyly may be deemed to beneficially own occurring within 60 days of the dates set forth in Item 5(a)(iii). Attached as Exhibit 3 is a chart listing each transaction in Michaels Common Stock and options described in the Preamble by which Common Stock or options were acquired by a Foreign Trust (or subsidiary thereof), and each transaction (i) of the subsidiaries of the Foreign Trusts whose Common Stock and options Charles J. Wyly, Jr. may be deemed to beneficially own occurring within 60 days of the dates of Prior Amendment Nos. 18 to 32, and (ii) of Charles J. Wyly, Jr. and the subsidiaries of the Foreign Trusts whose Common Stock and options Charles J. Wyly, Jr. may be deemed to beneficially own occurring within 60 days of the dates set forth in Item 5(a)(iii). Exhibits 2 and 3 do not include any transactions whereby one Foreign Trust or a subsidiary thereof transferred Common Stock or options to a subsidiary of the same Foreign Trust or to another Foreign Trust with the same beneficiary or settlor or a subsidiary thereof. Exhibits 2 and 3 also do not include transfers of Common Stock or options between the Reporting Persons and their family members, between the Reporting Persons and certain domestic limited partnerships of which the Reporting Persons are or were general partners, or between the Reporting Persons and certain domestic trusts for which the Reporting Persons are or were trustees.
(d) Except as and to the extent disclosed above, no other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities.
ITEM 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
The Foreign Trusts were established under the laws of the Isle of Man. Under the terms of the Foreign Trusts, the trustees generally have the sole power, among other things, to direct the acquisition or disposition of trust assets (including decisions to purchase or sell securities), the voting of securities held as trust assets, and the distribution of trust assets to beneficiaries. The subsidiaries of the Foreign Trusts generally have one or more directors, officers or managing agents; these generally are persons affiliated with the corporate trustees. The documents establishing the Foreign Trusts also generally provide for the appointment of one or more protectors (the Committee) to provide advice to the trustees. Under the terms of the Foreign Trusts, the Committee had the power in each instance to remove or replace the trustees; in addition, in some but not all instances, the Committee had the power to consent to the appointment or exclusion of a beneficiary, to consent to a distribution and/or to inspect the trusts books and records. The number and persons who have served on the Committee have changed over time. The persons who have served on the Committee have had various business relationships with the Reporting Persons. The Reporting Persons have communicated with the Committee from time to time concerning, among other things, potential transactions involving shares, and options and warrants to purchase shares, of Michaels Common Stock, and voting of shares of Michaels Common Stock. As a general matter, the Committee has made recommendations to the trustees concerning transactions involving shares, and options and warrants to purchase shares, of Michaels Common Stock, and voting of shares of Michaels Common Stock. The subsidiaries of the Foreign Trusts generally have taken action consistent with those recommendations.
ITEM 7. Material to be Filed as Exhibits
Exhibit 1: | Agreement pursuant to Rule 13d-1(k)(1)(iii). | |||
Exhibit 2: | Chart listing each transaction in Michaels Common Stock, options and warrants described in the Preamble by which Common Stock or options were acquired by a Foreign Trust (or subsidiary thereof) and each transaction occurring between April 14, 1992 and March 31, 2005 (i) of subsidiaries of the Foreign Trusts whose Common Stock and options Sam Wyly may be deemed to beneficially own occurring within 60 days of the dates of Prior Amendment Nos. 18 to 32, and (ii) of Sam Wyly and subsidiaries of the Foreign Trusts whose Common Stock and options Sam Wyly may be deemed to beneficially own occurring within 60 days of the dates set forth in Item 5(a)(iii). Chart excludes: (x) transactions whereby one Foreign Trust or a subsidiary thereof transferred Common Stock or options to a subsidiary of the same Foreign Trust or to another Foreign Trust with the same beneficiary or settlor or a subsidiary thereof; (y) transfers of Common Stock or options between the Reporting Persons and their family members; and (z) transfers of Common Stock or options between the Reporting Persons and certain domestic limited partnerships of which the Reporting Persons are or were general partners, |
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or between the Reporting Persons and certain domestic trusts for which the Reporting Persons are or were trustees. | ||||
Exhibit 3: | Chart listing each transaction in Michaels Common Stock and options described in the Preamble by which Common Stock or options were acquired by a Foreign Trust (or subsidiary thereof) and each transaction occurring between April 14, 1992 and March 31, 2005 (i) of subsidiaries of the Foreign Trusts whose Common Stock and options Charles J. Wyly, Jr. may be deemed to beneficially own occurring within 60 days of the dates of Prior Amendment Nos. 18 to 32, and (ii) of Charles J. Wyly, Jr. and subsidiaries of the Foreign Trusts whose Common Stock and options Charles J. Wyly, Jr. may be deemed to beneficially own occurring within 60 days of the dates set forth in Item 5(a)(iii). Chart excludes: (x) transactions whereby one Foreign Trust or a subsidiary thereof transferred Common Stock or options to a subsidiary of the same Foreign Trust or to another Foreign Trust with the same beneficiary or settlor or a subsidiary thereof; (y) transfers of Common Stock or options between the Reporting Persons and their family members; and (z) transfers of Common Stock or options between the Reporting Persons and certain domestic limited partnerships of which the Reporting Persons are or were general partners, or between the Reporting Persons and certain domestic trusts for which the Reporting Persons are or were trustees. | |||
Exhibit 4: | STARS Variable Share Prepaid Forward Transaction: (a) Transaction Confirmation; (b) Pledge Agreement; (c) Transaction Acknowledgment; (d) Master Stock Purchase Agreement. | |||
Exhibit 5: | Listing of Trustees of Foreign Trusts. |
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Signatures
After reasonable inquiry and to the best of my knowledge and belief, each of us certifies that the information set forth in this amendment to this statement is true, complete and correct.
Dated: April 7, 2005 | /s/ Sam Wyly Sam Wyly |
|
/s/ Charles J. Wyly, Jr. Charles J. Wyly, Jr. |
CUSIP No. 594087-10-8
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Page 32 of 32 Pages |
Exhibit 1
Pursuant to Rule 13d-1(k)(1)(iii) of Regulation 13D-G of the General Rules and Regulations of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended, the undersigned agree that the statement to which this Exhibit is attached is filed on behalf of each of them.
Dated: April 7, 2005 | ||
/s/ Sam Wyly | ||
Sam Wyly | ||
/s/ Charles J. Wyly, Jr. | ||
Charles J. Wyly, Jr. |
Transaction | Where and How | |||||||||||||||||||||||
Transaction | Options or | Price | Exercise
Price |
Transaction Was | ||||||||||||||||||||
Date | Legal Owner | Code | Security Type4 | Shares | Warrants | (per share) | (per share) | Effected | ||||||||||||||||
4/13/1992
|
Subsidiary of Bulldog Non-Grantor Trust | B | Options | 375,000 | n/a1 | $ | 3.00 | Private | ||||||||||||||||
4/13/1992
|
Subsidiary of Bulldog Non-Grantor Trust | B | Options | 110,000 | n/a1 | $ | 3.00 | Private | ||||||||||||||||
4/13/1992
|
Subsidiary of Bulldog Non-Grantor Trust | B | Options | 100,000 | n/a1 | $ | 3.00 | Private | ||||||||||||||||
4/13/1992
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Sam Wyly | S | Options | (585,000 | ) | n/a1 | $ | 3.00 | Private | |||||||||||||||
5/18/1992
|
Subsidiary of Bulldog Non-Grantor Trust | E | Options | 10,000 | (10,000 | ) | $ | 3.00 | Option exercise with Michaels | |||||||||||||||
5/18/1992
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (10,000 | ) | $ | 21.50 | Transaction through broker | ||||||||||||||||
5/29/1992
|
Subsidiary of Bulldog Non-Grantor Trust | E | Options | 200,000 | (200,000 | ) | $ | 3.00 | Option exercise with Michaels | |||||||||||||||
5/29/1992
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Subsidiary of Bulldog Non-Grantor Trust | E | Options | 200,000 | (200,000 | ) | $ | 3.00 | Option exercise with Michaels | |||||||||||||||
5/29/1992
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (50,000 | ) | $ | 22.00 | Transaction through broker | ||||||||||||||||
5/29/1992
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (50,000 | ) | $ | 22.00 | Transaction through broker | ||||||||||||||||
6/8/1992
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (25,000 | ) | $ | 21.13 | Transaction through broker | ||||||||||||||||
6/8/1992
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (25,000 | ) | $ | 21.13 | Transaction through broker | ||||||||||||||||
6/9/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (51,000 | ) | $ | 21.06 | Transaction through broker | ||||||||||||||||
6/9/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (47,000 | ) | $ | 21.06 | Transaction through broker | ||||||||||||||||
7/27/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (25,000 | ) | $ | 20.38 | Transaction through broker | ||||||||||||||||
7/27/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (26,000 | ) | $ | 20.38 | Transaction through broker | ||||||||||||||||
7/30/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (10,000 | ) | $ | 20.00 | Transaction through broker | ||||||||||||||||
7/31/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (15,000 | ) | $ | 20.38 | Transaction through broker | ||||||||||||||||
7/31/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (5,000 | ) | $ | 20.88 | Transaction through broker | ||||||||||||||||
7/31/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (15,000 | ) | $ | 20.88 | Transaction through broker | ||||||||||||||||
7/31/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (12,500 | ) | $ | 20.38 | Transaction through broker | ||||||||||||||||
8/3/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (10,000 | ) | $ | 21.38 | Transaction through broker | ||||||||||||||||
8/3/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (10,000 | ) | $ | 21.63 | Transaction through broker | ||||||||||||||||
8/3/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (4,500 | ) | $ | 21.50 | Transaction through broker | ||||||||||||||||
8/3/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (5,500 | ) | $ | 21.50 | Transaction through broker | ||||||||||||||||
8/5/1992
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Subsidiary of Bulldog Non-Grantor Trust | E | Options | 175,000 | (175,000 | ) | $ | 3.00 | Option exercise with Michaels | |||||||||||||||
8/5/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (13,500 | ) | $ | 21.63 | Transaction through broker | ||||||||||||||||
8/5/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (8,000 | ) | $ | 21.50 | Transaction through broker | ||||||||||||||||
8/5/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (12,000 | ) | $ | 21.38 | Transaction through broker | ||||||||||||||||
8/5/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (12,000 | ) | $ | 21.25 | Transaction through broker | ||||||||||||||||
8/6/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (16,000 | ) | $ | 20.63 | Transaction through broker | ||||||||||||||||
8/19/1992
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Sam Wyly | G | Options | 600,000 | $ | 20.63 | Option grant by Michaels | |||||||||||||||||
9/30/1992
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (20,000 | ) | $ | 28.53 | Transaction through broker |
Transaction | Where and How | |||||||||||||||||||||||
Transaction | Options or | Price | Exercise Price | Transaction Was | ||||||||||||||||||||
Date | Legal Owner | Code | Security Type4 | Shares | Warrants | (per share) | (per share) | Effected | ||||||||||||||||
11/9/1994
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Sam Wyly | O | Stock | (490,925 | ) | n/a2 | n/a | |||||||||||||||||
12/30/1995
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Tallulah International Trust | B | Options | 600,000 | n/a1 | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Tallulah International Trust | B | Options | 100,000 | n/a1 | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Tallulah International Trust | B | Options | 100,000 | n/a1 | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Tallulah International Trust | B | Options | 100,000 | n/a1 | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Sam Wyly | S | Options | (100,000 | ) | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Sam Wyly | S | Options | (100,000 | ) | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Sam Wyly | S | Options | (100,000 | ) | $ | 17.00 | Private | ||||||||||||||||
12/30/1995
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Sam Wyly/Tallulah, Ltd. | S | Options | (600,000 | ) | $ | 17.00 | Private | ||||||||||||||||
3/4/1996
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Subsidiary of Bessie Trust | C | Options | (900,000 | ) | $ | 17.00 | Option cancellation by Michaels | ||||||||||||||||
3/4/1996
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Subsidiary of Bessie Trust | G | Options | 900,000 | $ | 12.50 | Option grant by Michaels | |||||||||||||||||
3/29/1996
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Subsidiary of Bessie Trust | B | Stock | 433,333 | $ | 12.50 | Transaction with Michaels | |||||||||||||||||
3/29/1996
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Subsidiary of Bulldog Non-Grantor Trust | B | Stock | 900,000 | $ | 12.50 | Transaction with Michaels | |||||||||||||||||
4/1/1996
|
Sam Wyly | G | Options | 633,333 | $ | 14.38 | Option grant by Michaels | |||||||||||||||||
12/23/1996
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Subsidiary of La Fourche Trust | B | Options | 1,333,333 | $ | 0.50 | $ | 10.50 | Transaction with Michaels | |||||||||||||||
2/28/1997
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Subsidiary of La Fourche Trust | E | Options | 750,000 | (750,000 | ) | $ | 10.50 | Option exercise with Michaels | |||||||||||||||
2/28/1997
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Subsidiary of Delhi International Trust | E | Options | 300,000 | (300,000 | ) | $ | 10.50 | Option exercise with Michaels | |||||||||||||||
2/28/1997
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Subsidiary of Lake Providence Trust | E | Options | 283,333 | (283,333 | ) | $ | 10.50 | Option exercise with Michaels | |||||||||||||||
6/17/1997
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (15,000 | ) | $ | 20.88 | Transaction through broker | ||||||||||||||||
6/17/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (28,200 | ) | $ | 20.00 | Transaction through broker | ||||||||||||||||
6/18/1997
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (75,000 | ) | $ | 20.68 | Transaction through broker | ||||||||||||||||
6/19/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (40,000 | ) | $ | 20.64 | Transaction through broker | ||||||||||||||||
6/20/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (60,000 | ) | $ | 20.79 | Transaction through broker | ||||||||||||||||
6/23/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (300,000 | ) | $ | 20.77 | Transaction through broker | ||||||||||||||||
6/24/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (131,800 | ) | $ | 21.33 | Transaction through broker | ||||||||||||||||
6/25/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (50,000 | ) | $ | 21.03 | Transaction through broker | ||||||||||||||||
6/26/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (65,000 | ) | $ | 21.13 | Transaction through broker | ||||||||||||||||
6/27/1997
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Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (80,000 | ) | $ | 20.77 | Transaction through broker | ||||||||||||||||
6/30/1997
|
Subsidiary of Bulldog Non-Grantor Trust | S | Stock | (55,000 | ) | $ | 20.94 | Transaction through broker | ||||||||||||||||
7/17/1997
|
Sam Wyly | E | Options | 30,000 | (30,000 | ) | $ | 14.38 | Option exercise with Michaels | |||||||||||||||
7/17/1997
|
Sam Wyly | S | Stock | (30,000 | ) | $ | 22.00 | Transaction through broker | ||||||||||||||||
7/22/1997
|
Sam Wyly | E | Options | 67,042 | (67,042 | ) | $ | 14.38 | Option exercise with Michaels | |||||||||||||||
7/22/1997
|
Sam Wyly | S | Stock | (67,042 | ) | $ | 21.40 | Transaction through broker | ||||||||||||||||
7/23/1997
|
Sam Wyly | E | Options | 47,500 | (47,500 | ) | $ | 14.38 | Option exercise with Michaels |
Transaction | Where and How | |||||||||||||||||||||||
Transaction | Options or | Price | Exercise Price | Transaction Was | ||||||||||||||||||||
Date | Legal Owner | Code | Security Type4 | Shares | Warrants | (per share) | (per share) | Effected | ||||||||||||||||
7/23/1997
|
Sam Wyly | S | Stock | (47,500 | ) | $ | 21.38 | Transaction through broker | ||||||||||||||||
7/24/1997
|
Sam Wyly | E | Stock | 92,500 | (92,500 | ) | $ | 14.38 | Option exercise with Michaels | |||||||||||||||
7/24/1997
|
Sam Wyly | S | Stock | (92,500 | ) | $ | 21.02 | Transaction through broker | ||||||||||||||||
7/25/1997
|
Sam Wyly | E | Options | 396,291 | (396,291 | ) | $ | 14.38 | Option exercise with Michaels | |||||||||||||||
7/25/1997
|
Sam Wyly | G | Options | 633,333 | $ | 21.38 | Option grant by Michaels | |||||||||||||||||
7/25/1997
|
Sam Wyly | G | Options | 566,667 | $ | 21.38 | Option grant by Michaels | |||||||||||||||||
7/25/1997
|
Sam Wyly | S | Stock | (396,291 | ) | $ | 20.88 | Transaction through broker | ||||||||||||||||
7/25/1997
|
MEF, Ltd. | S | Stock | (100,000 | ) | $ | 20.88 | Transaction through broker | ||||||||||||||||
10/22/1997
|
Subsidiary of La Fourche Trust | S | Stock | (7,500 | ) | $ | 32.58 | Transaction through broker | ||||||||||||||||
11/17/1997
|
Subsidiary of La Fourche Trust | S | Stock | (82,500 | ) | $ | 29.41 | Transaction through broker | ||||||||||||||||
11/20/1997
|
Subsidiary of La Fourche Trust | S | Stock | (81,000 | ) | $ | 29.35 | Transaction through broker | ||||||||||||||||
12/1/1997
|
Subsidiary of La Fourche Trust | S | Stock | (60,000 | ) | $ | 33.06 | Transaction through broker | ||||||||||||||||
12/2/1997
|
Subsidiary of La Fourche Trust | S | Stock | (24,000 | ) | $ | 34.33 | Transaction through broker | ||||||||||||||||
12/3/1997
|
Subsidiary of La Fourche Trust | S | Stock | (60,000 | ) | $ | 35.05 | Transaction through broker | ||||||||||||||||
12/4/1997
|
Subsidiary of La Fourche Trust | S | Stock | (16,500 | ) | $ | 35.76 | Transaction through broker | ||||||||||||||||
12/5/1997
|
Subsidiary of La Fourche Trust | S | Stock | (15,000 | ) | $ | 36.63 | Transaction through broker | ||||||||||||||||
12/8/1997
|
Subsidiary of La Fourche Trust | S | Stock | (5,000 | ) | $ | 36.25 | Transaction through broker | ||||||||||||||||
12/11/1997
|
Subsidiary of La Fourche Trust | S | Stock | (20,000 | ) | $ | 35.31 | Transaction through broker | ||||||||||||||||
12/12/1997
|
Subsidiary of La Fourche Trust | S | Stock | (16,500 | ) | $ | 35.08 | Transaction through broker | ||||||||||||||||
12/15/1997
|
Subsidiary of La Fourche Trust | S | Stock | (12,000 | ) | $ | 34.41 | Transaction through broker | ||||||||||||||||
12/8/1999
|
Sam Wyly | O | Stock | (63,861 | ) | n/a3 | n/a | |||||||||||||||||
12/22/1999
|
Sam Wyly | O | Stock | (58,943 | ) | n/a3 | n/a | |||||||||||||||||
1/11/2000
|
Subsidiary of Bessie Trust | E | Options | 154,000 | (154,000 | ) | $ | 12.50 | Option exercise with Michaels | |||||||||||||||
1/11/2000
|
Subsidiary of Bessie Trust | S | Stock | (154,000 | ) | $ | 31.45 | Transaction through broker | ||||||||||||||||
1/12/2000
|
Subsidiary of Bessie Trust | E | Options | 198,000 | (198,000 | ) | $ | 12.50 | Option exercise with Michaels | |||||||||||||||
1/12/2000
|
Subsidiary of Bessie Trust | S | Stock | (198,000 | ) | $ | 31.64 | Transaction through broker | ||||||||||||||||
1/14/2000
|
Subsidiary of Bessie Trust | E | Options | 110,000 | (110,000 | ) | $ | 12.50 | Option exercise with Michaels | |||||||||||||||
1/14/2000
|
Subsidiary of Bessie Trust | S | Stock | (22,000 | ) | $ | 31.08 | Transaction through broker | ||||||||||||||||
1/14/2000
|
Subsidiary of Bessie Trust | S | Stock | (88,000 | ) | $ | 32.00 | Transaction through broker | ||||||||||||||||
4/26/2000
|
Subsidiary of Bessie Trust | E | Options | 8,800 | (8,800 | ) | $ | 12.50 | Option exercise with Michaels | |||||||||||||||
5/1/2000
|
Subsidiary of Bessie Trust | S | Stock | (8,800 | ) | $ | 42.50 | Transaction through broker | ||||||||||||||||
5/9/2000
|
Sam Wyly | E | Options | 135,000 | (135,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/9/2000
|
Sam Wyly | S | Stock | (135,000 | ) | $ | 43.00 | Transaction through broker | ||||||||||||||||
5/10/2000
|
Sam Wyly | E | Options | 35,000 | (35,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
Option exercise with Michaels |
Transaction | Where and How | |||||||||||||||||||||||
Transaction | Options or | Price | Exercise Price | Transaction Was | ||||||||||||||||||||
Date | Legal Owner | Code | Security Type4 | Shares | Warrants | (per share) | (per share) | Effected | ||||||||||||||||
5/10/2000
|
Cheryl Wyly | E | Options | 75,000 | (75,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/10/2000
|
Sam Wyly | S | Stock | (75,000 | ) | $ | 41.31 | Transaction through broker | ||||||||||||||||
5/10/2000
|
Sam Wyly | S | Stock | (35,000 | ) | $ | 41.31 | Transaction through broker | ||||||||||||||||
5/11/2000
|
Sam Wyly | E | Options | 210,000 | (210,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/11/2000
|
Sam Wyly | S | Stock | (210,000 | ) | $ | 41.05 | Transaction through broker | ||||||||||||||||
5/12/2000
|
Sam Wyly | E | Options | 245,000 | (245,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/12/2000
|
Sam Wyly | S | Stock | (245,000 | ) | $ | 42.19 | Transaction through broker | ||||||||||||||||
5/15/2000
|
Sam Wyly | E | Options | 105,000 | (105,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/15/2000
|
Sam Wyly | S | Stock | (105,000 | ) | $ | 42.46 | Transaction through broker | ||||||||||||||||
5/16/2000
|
Sam Wyly | E | Options | 157,500 | (157,500 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/16/2000
|
Sam Wyly | S | Stock | (157,500 | ) | $ | 42.28 | Transaction through broker | ||||||||||||||||
5/17/2000
|
Sam Wyly | E | Options | 45,000 | (45,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/17/2000
|
Sam Wyly | S | Stock | (45,000 | ) | $ | 40.60 | Transaction through broker | ||||||||||||||||
5/18/2000
|
Sam Wyly | E | Options | 20,000 | (20,000 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
5/18/2000
|
Sam Wyly | S | Stock | (20,000 | ) | $ | 40.89 | Transaction through broker | ||||||||||||||||
7/19/2000
|
Sam Wyly | E | Options | 172,500 | (172,500 | ) | $ | 21.38 | Option exercise with Michaels | |||||||||||||||
8/23/2000
|
Subsidiary of Bessie Trust | E | Options | 284,000 | (284,000 | ) | $ | 12.50 | Option exercise with Michaels | |||||||||||||||
8/31/2000
|
Sam Wyly | G | Options | 10,000 | $ | 35.00 | Option grant by Michaels | |||||||||||||||||
9/7/2001
|
Subsidiary of Lake Providence Trust | S | Stock | (122,500 | ) | $ | 42.21 | Transaction through broker | ||||||||||||||||
9/7/2001
|
Subsidiary of Lake Providence Trust | S | Stock | (135,833 | ) | $ | 42.40 | Transaction through broker | ||||||||||||||||
9/10/2001
|
Subsidiary of Bessie Trust | S | Stock | (26,100 | ) | $ | 42.17 | Transaction through broker | ||||||||||||||||
9/11/2001
|
Subsidiary of Bessie Trust | S | Stock | (177,500 | ) | $ | 42.50 | Transaction through broker | ||||||||||||||||
10/4/2001
|
Tallulah, Ltd. | S | Stock | (489,536 | ) | $ | 41.26 | Transaction through broker | ||||||||||||||||
10/5/2001
|
Sam Wyly | G | Options | 17,500 | $ | 42.00 | Option grant by Michaels | |||||||||||||||||
11/7/2001
|
Subsidiary of La Fourche Trust | S | Stock | (75,000 | ) | $ | 52.70 | Transaction through broker | ||||||||||||||||
11/8/2001
|
Subsidiary of La Fourche Trust | S | Stock | (125,000 | ) | $ | 54.86 | Transaction through broker | ||||||||||||||||
11/8/2001
|
Subsidiary of La Fourche Trust | S | Stock | (150,000 | ) | $ | 55.35 | Transaction through broker | ||||||||||||||||
11/9/2001
|
Subsidiary of La Fourche Trust | S | Stock | (50,000 | ) | $ | 54.96 | Transaction through broker | ||||||||||||||||
8/7/2002
|
Sam Wyly | G | Options | 50,000 | $ | 34.10 | Option grant by Michaels |
1 | For a description of the transaction terms for this transaction, see Preamble of this Amendment. | |
2 | On 5/12/1994, Sam Wyly became a trustee and member of the Investment Committee for the Michaels Stores, Inc. Employees 401(k) Plan and Trust (Plan), and began reporting beneficial ownership of the shares held by the Plan. On 11/9/1994, Sam Wyly ceased being a member of that committee and ceased reporting beneficial ownership of such shares. | |
3 | On the dates indicated, one of the Reporting Persons ceased reporting beneficial ownership of the shares held by a domestic trust for the benefit of a child of such Reporting Person. | |
4 | For the sake of simplicity, this table groups warrants held by the subsidiaries of the Foreign Trusts into the total number of options listed in each entry, and does not differentiate between options and warrants. |
Transaction | Where and How | |||||||||||||||||||||||||||||||||
Transaction | Options or | Price | Exercise Price | Transaction Was | ||||||||||||||||||||||||||||||
Date | Legal Owner | Code | Security Type4 | Shares | Warrants | (per share) | (per share) | Effected |
TRANSACTION CODES:
B (i) transaction by which securities were acquired by foreign trusts or subsidiaries thereof or (ii) purchase transaction.
S (i) transaction by which securities were tranasferred to foreign trusts or subsidiaries thereof or (ii) sale transaction.
E exercise of option or warrant.
G grant of option or warrant by Michaels.
C cancellation of option or warrant by Michaels.
O other transaction.
Exhibit 3
TRANSACTION CONFIRMATION
The purpose of this agreement (this Confirmation) is to confirm the terms and conditions of
the transaction entered into between Devotion Ltd. (Seller) and Bank of America, N.A. (Buyer),
on the Trade Date specified below (the Transaction). This Confirmation constitutes a Transaction
Confirmation as referred to in the Master Stock Purchase Agreement (as amended or supplemented from
time to time, the Master Stock Purchase Agreement) dated as of September 13, 2002 between Seller
and Buyer. This Confirmation supplements, forms a part of, and is subject to, the Master Stock
Purchase Agreement. All provisions contained in the Master Stock Purchase Agreement govern this
Confirmation except as expressly modified below. Seller and Buyer are parties to a Pledge Agreement
(the Pledge Agreement) dated as of the date of the Master Stock Purchase Agreement. Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to them in the Master
Stock Purchase Agreement and the Pledge Agreement.
1
2. The parties hereto affirm their respective representations and warranties set forth in the
Master Stock Purchase Agreement and the Pledge Agreement as if made on the Trade Date. In
addition, Seller represents and warrants to Buyer that:
(a) Seller is not an affiliate, within the meaning of Rule 144 under the Securities Act, of
the Company.
(b) Delivery of shares of Common Stock (or security entitlements in respect thereof) by Seller
pursuant to the Master Stock Purchase Agreement and this Confirmation will pass to Buyer title to
such shares (or security entitlements) free and clear of any Liens, except for those created
pursuant to the Pledge Agreement.
(c) Seller (i) owns and, at all times prior to the release of the Collateral pledged in
respect of the Transaction to which this Confirmation relates pursuant to the terms of the Pledge
Agreement, will own such Collateral free and clear of any Liens (other than the Security Interests)
or Transfer Restrictions (other than any Existing Transfer Restrictions applicable to such
Collateral) and (ii) is not and will not become a party to or otherwise bound by any agreement,
other than the Pledge Agreement and this Confirmation, that (x) restricts in any
2
manner the rights of any present or future owner of such Collateral with respect thereto or
(y) provides any person other than Seller, Buyer or any securities intermediary through whom any
such Collateral is held (but, in the case of any such securities intermediary, only in respect of
Collateral held through it) with Control with respect to any such Collateral.
(d) Seller is not, on the Trade Date, in possession of any material non-public information
concerning the Company. The transactions contemplated in this Confirmation, the Master Stock
Purchase Agreement and the Pledge Agreement do not violate any corporate policy of the Company or
any rules or regulations of the Company applicable to Seller.
3. In addition to the covenants contained in Article 6 of the Master Stock Purchase Agreement,
Seller agrees that Seller shall notify Buyer immediately of its intention to (i) purchase Common
Stock (or security entitlements in respect thereof) or any other equity security of the Company in
an amount that would cause Seller to become the beneficial owner, directly or indirectly, of more
than three percent of the outstanding shares of any equity security of the Company, (ii) permit any
of its officers or directors to accept a position as an officer or director of the Company, (iii)
take any action that would cause Seller to possess, directly or indirectly, the power to direct or
cause the direction of the management and policies of the Company, whether by ownership of voting
securities, by contract or otherwise, or (iv) take any other action that could reasonably be
expected to result in Seller becoming an affiliate, within the meaning of Rule 144 under the
Securities Act, of the Company. Seller shall not take any such action unless a period of fifteen
Business Days shall have elapsed after receipt of such notice by Buyer and Buyer shall not have
objected in writing to such action during such period.
4. For purposes of this Transaction only, the third line of Section 3.03 of the Master Stock
Purchase Agreement is hereby amended by deleting the words 30 Trading Days prior to the first
Settlement Date and replacing them with the words 10 Trading Day prior to the first Maturity
Date and the 14th line of Section 3.03 of the Master Stock Purchase Agreement is hereby amended by
deleting the words 30th Trading Day prior to the first Settlement Date and replacing them with
the words 10th Trading Day prior to the first Maturity Date.
5. Upon the written consent of Buyer, Seller shall be permitted to assign this Transaction.
IN WITNESS WHEREOF, the parties have signed this Confirmation as of this 24th day of
September, 2002.
SELLER:
DEVOTION LTD.
By:_________________________________ 3
BUYER:
BANK OF AMERICA, N.A.
By: /S/ Robert J. Dilworth 4
TABLE OF CONTENTS
THIS AGREEMENT is made as of the date stated
on the last page hereof between the counterparty
name on the last page hereof (Pledgor) and
BANK OF AMERICA, N.A. (Secured Party).
WHEREAS, pursuant to the Master Stock
Purchase Agreement (as amended from time to time,
the Master Stock Purchase Agreement) dated as of
the date hereof between Pledgor and Secured
Party, from time to time Pledgor may agree to
sell and Secured Party may agree to purchase
shares of common stock of one or more issuers (or
security entitlements in respect thereof), or
cash in lieu thereof, subject to the terms and
conditions of the Master Stock Purchase Agreement
and certain confirmations thereunder;
WHEREAS, it is a condition to the
obligations of Secured Party under the Master
Stock Purchase Agreement that Pledgor and Secured
Party enter into this Agreement and that Pledgor
grant the pledge provided for herein;
NOW, THEREFORE, in consideration of their
mutual covenants contained herein and to secure
the performance by Pledgor of its obligations
under the Master Stock Purchase Agreement and any
Transaction Confirmation (as defined in the
Master Stock Purchase Agreement) and the
observance and performance of the covenants and
agreements contained herein and in the Master
Stock Purchase Agreement, the parties hereto,
intending to be legally bound, hereby mutually covenant and agree as
follows:
Section 1. The Security Interests.
In order to secure the full and punctual
observance and performance of the covenants and
agreements contained herein and in the Master
Stock Purchase Agreement and each Transaction
Confirmation:
(a) Pledgor hereby assigns and pledges to
Secured Party, and grants to Secured Party,
security interests in and to, and a lien upon and
right of set-off against, and transfers to
Secured Party, as and by way of a security
interest having priority over all other security
interests, with power of sale, all of its right,
title and interest in and to (i) the Pledged
Items described in paragraph (b); (ii) all
additions to and substitutions for such Pledged
Items (including, without limitation, any
securities, instruments or other property
delivered or pledged pursuant to Section 4(a) or
5(b)) (such additions and substitutions, the
Additions and Substitutions); (iii) all income,
proceeds and collections received or to be
received, or derived or to be derived, now or any
time hereafter (whether before or after the
commencement of any proceeding under applicable
bankruptcy, insolvency or similar law, by or
against Pledgor, with respect to Pledgor) from or
in connection with the Pledged Items or the
Additions and Substitutions (including, without
limitation, any shares of capital stock issued by
the Company in respect of any Common Stock (or
security entitlements in respect thereof)
constituting Collateral or any cash, securities
or other property distributed in respect of or
exchanged for any Common Stock (or security
entitlements in respect thereof) constituting
Collateral, or into which any such Common Stock
(or security entitlements in respect thereof) is
converted, in connection with any Merger Event or
otherwise), and any security entitlements in
respect of any of the foregoing; (iv) the
Collateral Account and all securities and other
financial assets (each as defined in Section
8-102 of the UCC), including the Pledged Items
and the Additions and Substitutions, and other
funds, property or assets from time to time held
therein or credited thereto; and (v) all powers
and rights now owned or hereafter acquired under
or with respect to the Pledged Items or the
Additions and Substitutions (such Pledged Items,
Additions and Substitutions, proceeds,
collections, powers, rights, Collateral Account
and assets held therein or credited thereto being
herein collectively called the Collateral).
Secured Party shall have all of the rights,
remedies and recourses with respect to the
Collateral afforded a secured party by the UCC,
in addition to, and not in limitation of, the
other rights, remedies and recourses afforded to Secured Party
by this Agreement.
(b) On or prior to the Payment Date for each
Transaction entered into pursuant to the Master
Stock Purchase Agreement, Pledgor shall deliver
to Secured Party in the manner described in
Section 5(c) in pledge hereunder Eligible
Collateral for such Transaction consisting of a
number of shares of the relevant Common Stock (or
security entitlements in respect thereof) equal
to the Maximum Deliverable Number on such Payment
Date for such Transaction, in the manner provided
in Section 5(c).
(c) In the event that the Company at any
time issues to Pledgor in respect of any Common
Stock (or security entitlements in respect
thereof) constituting Collateral hereunder any
additional or substitute shares of capital stock
of any class (or any security entitlements in
respect thereof), Pledgor shall immediately
pledge and deliver to Secured Party in accordance
with Section 5(c) all such shares and security
entitlements as additional Collateral hereunder.
(d) The Security Interests are granted as
security only and shall not subject Secured Party
to, or transfer or in any way affect or modify,
any obligation or liability of Pledgor or any
Company that is the issuer of Common Stock that
is the subject of any Transaction under the
Master Stock Purchase Agreement with respect to
any of the Collateral or any transaction in
connection therewith.
(e) The parties hereto expressly agree that
all rights, assets and property at any time held
in or credited to the Collateral Account shall be
treated as financial assets (as defined in
Section 8-102 of the UCC).
Section 2. Definitions.
Capitalized terms used and not otherwise defined
herein shall have the meanings ascribed to them
in the Master Stock Purchase Agreement. As used
herein, the following words and phrases shall
have the following meanings:
Additions and Substitutions has the
meaning provided in Section 1(a).
Authorized Officer of Pledgor means, if
Pledgor is not a natural person, any officer,
trustee, or general partner (or any officer
thereof) as to whom
Pledgor shall have delivered notice to Secured
Party that such trustee, general partner, or
officer is authorized to act hereunder on behalf
of Pledgor.
Collateral has the meaning provided in
Section 1(a).
Collateral Account has the meaning
provided in Section 5(c).
Collateral Event of Default means, at any
time, the occurrence of either of the following:
(A) failure of the Collateral in respect of each
Transaction under the Master Stock Purchase
Agreement to include, as Eligible Collateral, at
least the Maximum Deliverable Number for such
Transaction of shares of the relevant Common
Stock or (B) failure at any time of the Security
Interests to constitute valid and perfected
security interests in all of the Collateral,
subject to no prior or equal Lien, and, with
respect to any Collateral consisting of
securities or security entitlements (each as
defined in Section 8-102 of the UCC), as to which
Secured Party has Control, or, in each case,
assertion of such by Pledgor in writing.
Control means control as defined in
Section 8-106 and Section 9-106 of the UCC.
Default Settlement Date has the meaning
provided in Section 7(a).
Dividend Proceeds has the meaning provided
in Section 6(a).
Eligible Collateral means, for any
Transaction, shares of the Common Stock that is
the subject of such Transaction (or security
entitlements in respect thereof) provided that
Pledgor has good and marketable title thereto,
free of all Liens (other than the Security
Interests) and Transfer Restrictions (other than
any Existing Transfer Restrictions applicable to
such shares) and that Secured Party has a valid,
first priority perfected security interest
therein, a first lien thereon and Control with
respect thereto, and provided further that to the
extent the number of shares of Common Stock or
security entitlements in respect thereof pledged
hereunder in respect of any Transaction exceeds
at any time the Maximum Deliverable Number
thereof, such excess shares shall not be Eligible
Collateral.
Existing Transfer Restrictions means, with
respect to any shares of Common Stock or security
entitlements in respect thereof pledged as
Collateral
2
hereunder in connection with any
Transaction, the Existing Transfer Restrictions
identified in the applicable Transaction
Confirmation.
Location means, with respect to any party,
the place such party is located within the
meaning of Section 9-307 of the UCC.
Maximum Deliverable Number means, on any
date for any Transaction, a number of shares of
Common Stock or security entitlements in respect
thereof equal to the sum of the Base Amounts for
each Maturity Date for such Transaction with
respect to which settlement under the Master
Stock Purchase Agreement and the Transaction
Confirmation with respect to such Transaction has
not been fully made multiplied successively by
each adjustment that shall have been calculated
on or prior to such date pursuant to Section 7.01
of the Master Stock Purchase Agreement.
Ordinary Dividend means any cash dividend
on any Common Stock that is the subject of a
Transaction under the Master Stock Purchase
Agreement that does not constitute an
Extraordinary Dividend for such Transaction.
Person means an individual, a corporation,
a partnership, an association, a trust or any
other entity or organization, including a
government or political subdivision or an agency
or instrumentality thereof.
Pledged Items means, as of any date, any
and all securities and instruments delivered by
Pledgor to be held by or on behalf of Secured
Party under this Agreement as Collateral.
rehypothecate has the meaning provided in
Section 5(i).
Security Interests means the security
interests in the Collateral created hereby.
UCC means the Uniform Commercial Code as
in effect in the State of New York.
Section 3. Representations and
Warranties of Pledgor. Pledgor hereby
represents and warrants to Secured Party that:
(a) Other than financing statements or other
similar or equivalent documents or instruments
with respect to the Security Interests, no
financing statement, security agreement or
similar or equivalent document or instrument
covering all or any part of the Collateral is on
file or of record in any jurisdiction in which
such filing or recording would be effective to
perfect a lien, security interest or other
encumbrance of any kind on such Collateral.
(b) All shares of Common Stock at any time
pledged hereunder (or in respect of which
security entitlements are pledged hereunder) are
and will be issued by an issuer organized under
the laws of the United States, any State thereof
or the District of Columbia and (i) certificated (and the
certificate or certificates in respect of such
shares of Common Stock are and will be located in
the United States) and registered in the name of
Pledgor or held through a securities intermediary
whose securities intermediarys jurisdiction
(within the meaning of Section 8-110(e) of the
UCC) is located in the United States or (ii)
uncertificated and either registered in the name
of Pledgor or held through a securities
intermediary whose securities intermediarys
jurisdiction (within the meaning of Section
8-110(e) of the UCC) is located in the United
States; provided that this representation shall
not be deemed to be breached if, at any time, any
such Collateral is issued by an issuer that is
not organized under the laws of the United
States, any State thereof or the District of
Columbia, and the parties hereto agree to
procedures or amendments hereto necessary to
enable Secured Party to maintain a valid and
continuously perfected security interest in such
Collateral, in respect of which Secured Party
will have Control, subject to no prior Lien. The
parties hereto agree to negotiate in good faith
any such procedures or amendments.
(c) (i) Upon the delivery of certificates
evidencing any Common Stock to Secured Party in
accordance with Section 5(c)(A) or the
registration of uncertificated Common Stock in
the name of Secured Party or its nominee in
accordance with Section 5(c)(B), and, in each
case, the crediting of such securities or
financial assets to the Collateral Account,
Secured Party will have a valid and, as long as
Secured Party retains possession of such
certificates or such uncertificated Common Stock
remains so registered, perfected security
interest therein, in respect of which Secured
Party will have Control, subject to no prior Lien
and (ii) upon the crediting of any Common Stock
to the Collateral Account, Secured Party will
have a valid and, so long as such Common Stock
continues to be credited to the Collateral
Account, perfected security interest in a
securities entitlement in respect thereof, in
3
respect of which Secured Party will have Control
subject to no prior Lien.
(d) No registration, recordation or filing
with any governmental body, agency or official is
required in connection with the execution and
delivery of this Agreement or any Transaction
Confirmation or necessary for the validity or
enforceability hereof or thereof or for the
perfection or enforcement of the Security
Interests.
(e) Pledgor has not performed and will not
perform any acts that might prevent Secured Party
from enforcing any of the terms of this
Agreement or that might limit Secured Party
in any such enforcement.
(f) The Location of Pledgor is the address
set forth in Section 9(d), and under the Uniform
Commercial Code as in effect in such Location, no
local filing is required to perfect a security
interest in collateral consisting of general
intangibles.
Section 4. Certain Covenants of
Pledgor. Pledgor agrees that, so long as any of
its obligations under the Master Stock Purchase
Agreement remain outstanding:
(a) Pledgor shall ensure at all times that a
Collateral Event of Default shall not occur, and
shall pledge additional Collateral in the manner
described in Sections 5(b) and 5(c) as necessary
to cause such requirement to be met.
(b) Pledgor shall, at the expense of Pledgor
and in such manner and form as Secured Party may
require, give, execute, deliver, file and record
any financing statement, notice, instrument,
document, agreement or other papers that may be
necessary or desirable in order (i) to create,
preserve, perfect, substantiate or validate any
security interest granted pursuant hereto, (ii)
to create or maintain Control with respect to any
such security interests in any investment
property (as defined in Section 9-102(49) of the
UCC) or (iii) to enable Secured Party to exercise
and enforce its rights hereunder with respect to
such security interest. To the extent permitted
by applicable law, Pledgor hereby authorizes
Secured Party to execute and file, in the name of
Pledgor or otherwise, UCC financing or
continuation statements (which may be carbon,
photographic, photostatic or other reproductions
of this Agreement or of a financing statement
relating to this Agreement) that Secured Party in
its sole discretion may deem necessary or
appropriate to further perfect, or maintain the
perfection of, the Security Interests.
(c) Pledgor shall warrant and defend its
title to the Collateral, subject to the rights of
Secured Party, against the claims and demands of
all persons. Secured Party may elect, but without
an obligation to do so, to discharge any Lien of
any third party on any of the Collateral.
(d) Pledgor agrees that it shall not change
(1) its name or identity, and if the Pledgor is
not a natural person, its corporate or
partnership structure in any manner or (2) its
Location, unless in either case (A) it shall have
given Secured Party not less than 30 days prior notice thereof and
(B) such change shall not cause any of the
Security Interests to become unperfected, cause
Secured Party to cease to have Control in respect
of any of the Security Interests in any
Collateral consisting of investment property (as
defined in Section 9-102(49) of the UCC) or
subject any Collateral to any other Lien.
(e) Pledgor agrees that it shall not (1)
create or permit to exist any Lien (other than
the Security Interests) or any Transfer
Restriction (other than any Existing Transfer
Restrictions) upon or with respect to the
Collateral, (2) sell or otherwise dispose of, or
grant any option with respect to, any of the
Collateral or (3) enter into or consent to any
agreement pursuant to which any person other than
the Pledgor, Secured Party and any securities
intermediary through whom any of the Collateral
is held (but in the case of any such securities
intermediary only in respect of Collateral held
through it) has or will have Control in respect
of any Collateral.
Section 5. Administration of the
Collateral and Valuation of the Securities.
(a) The Calculation Agent shall determine on
each Business Day whether a Collateral Event of
Default shall have occurred.
(b) Pledgor may pledge additional Eligible
Collateral hereunder at any time. Concurrently
with the delivery of any additional Eligible
Collateral, Pledgor shall deliver to Secured
Party a certificate of an Authorized Officer in
form and substance satisfactory to Secured Party
and dated the date of such delivery, (A)
identifying the additional items of Eligible
Collateral being pledged, (B) identifying the
Transaction Confirmation relating to the
Transaction in
4
respect of which such Eligible Collateral is being pledged, and (C) certifying
that with respect to such items of additional
Eligible Collateral the representations and
warranties contained in paragraphs (a), (b), (c)
and (d) of Section 3 and paragraph (d) of Section
2 of such Transaction Confirmation are true and
correct with respect to such Eligible Collateral
on and as of the date thereof. Pledgor hereby
covenants and agrees to take all actions required
under Section 5(c) and any other actions
necessary to create for the benefit of Secured
Party a valid, first priority, perfected security
interest in, and a first lien upon, such
additional Eligible Collateral, as to which
Secured Party will have Control.
(c) Any delivery of Common Stock (or
security entitlements in respect thereof) as
Collateral to Secured Party by Pledgor shall be
effected (A) in the case of Collateral consisting
of certificated Common Stock registered in the
name of Pledgor, by delivery of certificates
representing such Common Stock to Secured Party,
accompanied by any required transfer tax stamps,
and in suitable form for transfer by delivery or
accompanied by duly executed instruments of
transfer or assignment in blank, with signatures
appropriately guaranteed, all in form and
substance satisfactory to Secured Party, and the
crediting by Secured Party of such securities to
a securities account (as defined in Section 8-501
of the UCC) (the Collateral Account) of Secured
Party maintained at Banc of America Securities
LLC, (B) in the case of Collateral consisting of
uncertificated Common Stock registered in the
name of Pledgor, by transmission by Pledgor of an
instruction to the issuer of such Common Stock
instructing such issuer to register such Common
Stock in the name of Secured Party or its
nominee, accompanied by any required transfer tax
stamps, the issuers compliance with such
instructions and the crediting by Secured Party
of such securities to the Collateral Account, (C)
in the case of Common Stock in respect of which
security entitlements are held by Pledgor through
a securities intermediary, by the crediting of
such Common Stock, accompanied by any required
transfer tax stamps, to a securities account of
Secured Party at such securities intermediary or,
at the option of Secured Party, at another
securities intermediary satisfactory to Secured
Party and the crediting by Secured Party of such
securities to the Collateral Account or (D) in
any case, by complying with such alternative
delivery instructions as Secured Party shall
provide to Pledgor in writing. Upon delivery of
any such Pledged Item under this Agreement,
Secured Party shall examine such Pledged
Item and any certificates delivered pursuant to
Section 5(b) or otherwise pursuant to the terms
hereof in connection therewith to determine that
they comply as to form with the requirements for
Eligible Collateral.
(d) If on any Business Day Secured Party
determines that a Collateral Event of Default
shall have occurred, Secured Party shall promptly
notify Pledgor of such determination by telephone
call to an Authorized Officer of Pledgor followed
by a written confirmation of such call.
(e) If on any Business Day Secured Party
determines that no Event of Default or failure by
Pledgor to meet any of its obligations under
Sections 4 or 5 hereof has occurred and is
continuing, Pledgor may obtain the release from
the Security Interests of any Collateral upon
delivery to Secured Party of a written notice from an Authorized
Officer of Pledgor indicating the items of
Collateral to be released so long as, after such
release, no Collateral Event of Default shall
have occurred.
(f) On each Settlement Date for each
Transaction under the Master Stock Purchase
Agreement, unless (i) Pledgor shall have
otherwise effected the deliveries required by
Section 3.02(b) of the Master Stock Purchase
Agreement or shall have delivered the Cash
Settlement Amount to Secured Party in lieu of
shares of Common Stock (or security entitlements
in respect thereof) in accordance with Section
3.03 of the Master Stock Purchase Agreement on
each Settlement Date in respect of such
Transaction or (ii) the shares of Common Stock
(or security entitlements in respect thereof)
then held by or on behalf of Secured Party
hereunder in respect of such Transaction are not
Free Shares, Secured Party shall deliver or cause
to be delivered to itself or an affiliate of
Secured Party designated by Secured Party from
the Collateral Account, in whole or partial, as
the case may be, satisfaction of Pledgors
obligations to deliver shares of such Common
Stock (or security entitlements in respect
thereof) to itself or an affiliate of Secured
Party designated by Secured Party on such
Settlement Date pursuant to the Master Stock
Purchase Agreement) shares of such Common Stock
(or security entitlements in respect thereof)
then held by or on behalf of Secured Party
hereunder in respect of such Transaction
representing the number of shares of such Common
Stock (or security entitlements in respect
thereof) required to be delivered under the
Master Stock Purchase Agreement on such
Settlement Date. Upon any such delivery, Secured
Party or such affiliate of
5
Secured Party shall hold such shares of such
Common Stock (or security entitlements in respect
thereof) absolutely and free from any claim or
right whatsoever (including, without limitation,
any claim or right of Pledgor).
(g) Secured Party may at any time or from
time to time, in its sole discretion, cause any
or all of the Common Stock pledged hereunder (or
in respect of which security entitlements are
pledged hereunder) registered in the name of
Pledgor or its nominee to be transferred of
record into the name of Secured Party or its
nominee. Pledgor shall promptly give to Secured
Party copies of any notices or other
communications received by Pledgor with respect
to Common Stock (or security entitlements in
respect thereof) pledged hereunder registered, or
held through a securities intermediary, in the
name of Pledgor or Pledgors nominee and Secured
Party shall promptly give to Pledgor copies of
any notices and communications received by Secured Party
with respect to Common Stock (or security
entitlements in respect thereof) pledged
hereunder registered, or held through a
securities intermediary, in the name of Secured
Party or its nominee.
(h) Pledgor agrees that Pledgor shall
forthwith upon demand pay to Secured Party:
(i) the amount of any taxes that
Secured Party may have been required to
pay by reason of the Security Interests
or to free any of the Collateral from any
Lien thereon, and
(ii) the amount of any and all
out-of-pocket expenses, including the
fees and disbursements of counsel and of
any other experts, that Secured Party may
incur in connection with (A) the
enforcement of this Agreement, including
such expenses as are incurred to preserve
the value of the Collateral and the
validity, perfection, rank and value of
the Security Interests, (B) the
collection, sale or other disposition of
any of the Collateral, (C) the exercise
by Secured Party of any of the rights
conferred upon it hereunder or (D) any
Event of Default.
Any such amount not paid on demand shall bear
interest (computed on the basis of a year of 360
days and payable for the actual number of days
elapsed) at a rate per annum equal to 5% plus the
prime rate as published in The Wall Street
Journal, Eastern Edition in effect from time to
time during the period from the date hereof to
the date of the termination of this Agreement.
(i) Without limiting the rights and
obligations of the parties under this Pledge
Agreement, Secured Party shall, notwithstanding
Section 9-207 of the UCC, upon the consent of
Pledgor, have the right to sell, lend, pledge,
rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its
business (collectively, rehypothecate) any
Collateral it holds in connection with a
Confirmation, free from any claim or right of any
nature whatsoever of Pledgor, including any
equity or right of redemption by Pledgor,
provided that Secured Party will, in each case in
a manner consistent with industry practice for
loans of equity securities, (i) replace any
rehypothecated Collateral (with the same
Collateral or identical substitute Collateral)
upon three Business Days notice from Pledgor,
(ii) if not already replaced, replace such
Collateral immediately prior to the time at which
such Collateral ceases to be subject
to the Security Interests and (iii) prior to
replacement of such Collateral, pay Pledgor
amounts equivalent to dividends paid or other
distributions made on such Collateral, whereupon
the amount so paid or the assets so delivered
shall be proceeds of the Collateral and shall be
subject to Section 6. All determinations related
to the immediately preceding sentence shall be
made by the Calculation Agent. For purposes of
determining the occurrence of a Collateral Event
of Default, the rehypothecation of any Collateral
pledged hereunder shall not affect the status of
such Collateral as Collateral or Eligible
Collateral hereunder.
(j) Pledgor hereby acknowledges that during
such time as the Collateral is held by Secured
Party pursuant to the terms of this Agreement,
Pledgor will not receive periodic account
statements with respect to the value thereof.
Section 6. Income and Voting
Rights in Collateral.
(a) Secured Party shall have the right to
receive and retain as Collateral hereunder (i)
all proceeds (other than cash dividends that are
Ordinary Dividends) of the Collateral and (ii)
upon the occurrence and during the continuance of
an Event of Default, all proceeds of the
Collateral, including without limitation all
proceeds consisting of Ordinary Dividends or
interest (Dividend Proceeds), and Pledgor shall
take all such action as Secured Party shall
6
deem necessary or appropriate to give effect to such
right. All such proceeds including, without
limitation, all dividends and other payments and
distributions that are received by Pledgor shall
be received in trust for the benefit of Secured
Party and, if Secured Party so directs (but only,
in the case of Dividend Proceeds, upon the
occurrence and during the continuance of an Event
of Default), shall be segregated from other funds
of Pledgor and shall, forthwith upon demand by
Secured Party (but only, in the case of Dividend
Proceeds, during the continuance of an Event of
Default), be delivered over to Secured Party as
Collateral in the same form as received (with any
necessary endorsement). After all Events of
Default have been cured, Secured Partys right to
retain Dividend Proceeds in the Collateral
Account under this Section 6(a) shall cease and
Secured Party shall pay over to Pledgor out of
the Collateral Account any such Collateral
consisting of Dividend Proceeds retained in the
Collateral Account during the continuance of an
Event of Default.
(b) Unless an Event of Default shall have
occurred and be continuing, Pledgor shall have
the right, from time to time, to vote and to give
consents, ratifications and waivers with
respect to the Collateral (other than Collateral
that has been rehypothecated by Secured Party
pursuant to Section 5(i)), and Secured Party
shall, upon receiving a written request from
Pledgor accompanied by a certificate of an
Authorized Officer of Pledgor stating that no
Event of Default has occurred and is continuing,
deliver to Pledgor or as specified in such
request such proxies, powers of attorney,
consents, ratifications and waivers in respect of
any of the Collateral that is registered, or held
through a securities intermediary, in the name of
Secured Party or its nominee as shall be
specified in such request and shall be in form
and substance satisfactory to Secured Party.
(c) If an Event of Default shall have
occurred and be continuing, Secured Party shall
have the right, to the extent permitted by law,
and Pledgor shall take all such action as may be
necessary or appropriate to give effect to such
right, to vote and to give consents,
ratifications and waivers, and to take any other
action with respect to any or all of the
Collateral with the same force and effect as if
Secured Party were the absolute and sole owner
thereof.
Section 7. Remedies upon Events of Default.
(a) If any Event of Default shall have
occurred and be continuing, Secured Party may
exercise all the rights of a secured party under
the Uniform Commercial Code (whether or not in
effect in the jurisdiction where such rights are
exercised) and, in addition, without being
required to give any notice, except as herein
provided or as may be required by mandatory
provisions of law, shall: (i) deliver or cause
to be delivered to itself or to an affiliate of
Secured Party designated by Secured Party from
the Collateral Account all Collateral consisting
of shares of Common Stock (or security
entitlements in respect thereof) (but not in
excess of the number thereof deliverable under
the Master Stock Purchase Agreement at such time)
on the date of the Acceleration Amount Notice
relating to such Event of Default (the Default
Settlement Date) in satisfaction of Pledgors
obligations to deliver Common Stock (or security
entitlements in respect thereof) under the Master
Stock Purchase Agreement, whereupon Secured Party
shall hold such shares of Common Stock (or
security entitlements in respect thereof)
absolutely free from any claim or right of
whatsoever kind, including any equity or right of
redemption of Pledgor that may be waived or any
other right or claim of Pledgor, and Pledgor, to
the extent permitted by law, hereby specifically
waives all rights
7
of redemption, stay or
appraisal that Pledgor
has or may have under any law now existing
or hereafter adopted; and (ii) if such delivery
shall be insufficient to satisfy in full all of
the obligations of Pledgor under the Master Stock
Purchase Agreement or hereunder, sell all of the
remaining Collateral, or such lesser portion
thereof as may be necessary to generate proceeds
sufficient to satisfy in full all of the
obligations of Pledgor under the Master Stock
Purchase Agreement or hereunder, at public or
private sale or at any brokers board or on any
securities exchange, for cash, upon credit or for
future delivery, and at such price or prices as
Secured Party may deem satisfactory. Pledgor
covenants and agrees that it will execute and
deliver such documents and take such other action
as Secured Party deems necessary or advisable in
order that any such sale may be made in
compliance with law. Upon any such sale Secured
Party shall have the right to deliver, assign and
transfer to the buyer thereof the Collateral so
sold. Each buyer at any such sale shall hold the
Collateral so sold absolutely and free from any
claim or right of whatsoever kind, including any
equity or right of redemption of Pledgor that may
be waived or any other right or claim of Pledgor,
and Pledgor, to the extent permitted by law,
hereby specifically waives all rights of
redemption, stay or appraisal that Pledgor has or
may have under any law now existing or hereafter
adopted. The notice (if any) of such sale
required by Section 9-611 of the UCC shall (1) in
case of a public sale, state the time and place
fixed for such sale, (2) in case of sale at a
brokers board or on a securities exchange, state
the board or exchange at which such sale is to be
made and the day on which the Collateral, or the
portion thereof so being sold, will first be
offered for sale at such board or exchange, and
(3) in the case of a private sale, state the day
after which such sale may be consummated. Any
such public sale shall be held at such time or
times within ordinary business hours and at such
place or places as Secured Party may fix in the
notice of such sale. At any such sale the
Collateral may be sold in one lot as an entirety
or in separate parcels, as Secured Party may
determine. Secured Party shall not be obligated
to make any such sale pursuant to any such
notice. Secured Party may, without notice or
publication, adjourn any public or private sale
or cause the same to be adjourned from time to
time by announcement at the time and place fixed
for the sale, and such sale may be made at any
time or place to which the same may be so
adjourned. In case of any sale of all or any
part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained
by Secured Party until the selling price is paid
by the buyer thereof, but Secured Party shall not
incur any liability in case of the failure of
such buyer to take up and pay for the Collateral
so sold and, in case of any such failure, such
Collateral may again be sold upon like notice.
Secured Party, instead of exercising the power of
sale herein conferred upon it, may proceed by a
suit or suits at law or in equity to foreclose
the Security Interests and sell the Collateral,
or any portion thereof, under a judgment or
decree of a court or courts of competent
jurisdiction.
(b) Pledgor hereby irrevocably appoints
Secured Party Pledgors true and lawful attorney,
with full power of substitution, in the name of
Pledgor, Secured Party or otherwise, for the sole
use and benefit of Secured Party, but at the
expense of Pledgor, to the extent permitted by
law, to exercise, at any time and from time to
time while an Event of Default has occurred and
is continuing, all or any of the following powers
with respect to all or any of the Collateral:
(i) to demand, sue for, collect,
receive and give acquittance for any and
all monies due or to become due upon or
by virtue thereof,
(ii) to settle, compromise,
compound, prosecute or defend any action
or proceeding with respect thereto,
(iii) to sell, transfer, assign or
otherwise deal in or with the same or the
proceeds or avails thereof, as fully and
effectually as if Secured Party were the
absolute owner thereof (including,
without limitation, the giving of
instructions and entitlement orders in
respect thereof), and
(iv) to extend the time of payment
of any or all thereof and to make any
allowance and other adjustments with
reference thereto;
provided that Secured Party shall give Pledgor
not less than one days prior written notice of
the time and place of any sale or other intended
disposition of any of the Collateral, except any
Collateral that threatens to decline speedily in
value, including, without limitation, equity
securities, or is of a type customarily sold on a
recognized market. Secured Party and Pledgor
agree that such notice constitutes reasonable
authenticated notification within the meaning of
Section 9-611 of the UCC.
(c) Upon any delivery or sale of all or any
part of any Collateral made either under the
power of delivery or sale given hereunder or
under judgment or decree in any judicial
proceedings for foreclosure or otherwise for the
enforcement of this Agreement, Secured Party is hereby
irrevocably appointed the true and lawful
attorney of Pledgor, in the name and stead of
Pledgor, to make all necessary deeds, bills of
sale, instruments of assignment, transfer or
conveyance of the property, and all instructions
and entitlement orders in respect of the
property, thus delivered or sold. For that
purpose Secured Party may execute all such
documents, instruments, instructions and
entitlement orders. This power of attorney shall
be deemed coupled with an interest, and Pledgor
hereby ratifies and confirms that which Pledgors
attorney acting under such power, or such
attorneys successors or agents, shall lawfully
do by virtue of this Agreement. If so requested
by Secured Party or by any buyer of the
Collateral or a portion thereof, Pledgor shall
further ratify and confirm any such delivery or
sale by executing and delivering to Secured Party
or to such buyer or buyers at the expense of
Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance or
transfer, releases, instructions and
8
entitlement orders as may be designated in any such request.
(d) In the case of an Event of Default,
Secured Party may proceed to realize upon the
security interest in the Collateral against any
one or more of the types of Collateral, at any
time, as Secured Party shall determine in its
sole discretion subject to the foregoing
provisions of this Section 7. The proceeds of
any sale of, or other realization upon, or other
receipt from, any of the Collateral shall be
applied by Secured Party in the following order
of priorities:
first, to the payment to Secured
Party of the expenses of such sale or
other realization, including reasonable
compensation to the agents and counsel of
Secured Party, and all expenses,
liabilities and advances incurred or made
by Secured Party in connection therewith,
including brokerage fees in connection
with the sale by Secured Party of any
Collateral;
second, to the payment to Secured
Party of an amount in respect of each
Transaction under the Master Stock
Purchase Agreement equal to the aggregate
Market Value of a number of shares of the
relevant Common Stock equal to (i) the
number of shares of such Common Stock (or
security entitlements in respect thereof)
that would be required to be delivered
under Section 8.01 of the Master Stock
Purchase Agreement on the Default
Settlement Date in respect of such
Transaction without giving effect to the
proviso therein minus (ii)
the number of shares of such Common
Stock (or security entitlements in
respect thereof) delivered to Secured
Party on the Default Settlement Date in
respect of such Transaction as described
in Section 7(a);
finally, if all of the obligations
of Pledgor hereunder and under the Master
Stock Purchase Agreement have been fully
discharged or sufficient funds have been
set aside by Secured Party, at the
request of Pledgor for the discharge
thereof, any remaining proceeds shall be
released to Pledgor.
Section 8. Netting and Set-off.
(a) If on any date, cash would otherwise be
payable or shares of Common Stock or other property would otherwise be
deliverable (including, for the avoidance of
doubt, the replacement, as required by Section
5(i), of shares of Common Stock that have been
rehypothecated pursuant to such Section) pursuant
to the Master Stock Purchase Agreement or this
Agreement by Secured Party to Pledgor and by
Pledgor to Secured Party and the type of property
required to be paid or delivered by each such
party on such date is the same, then, on such
date, each such partys obligation to make such
payment or delivery will be automatically
satisfied and discharged and, if the aggregate
amount that would otherwise have been payable or
deliverable by one such party exceeds the
aggregate amount that would otherwise have been
payable or deliverable by the other such party,
replaced by an obligation upon the party by whom
the larger aggregate amount would have been
payable or deliverable to pay or deliver to the
other party the excess of the larger aggregate
amount over the smaller aggregate amount.
(b) In addition to and without limiting any
rights of set-off that Secured Party may have as
a matter of law, pursuant to contract or
otherwise, upon the occurrence of a Termination
Date to which Section 7.04 of the Master Stock
Purchase Agreement applies or an Acceleration
Date, Secured Party shall have the right to
terminate, liquidate and otherwise close out the
transactions contemplated by the Master Stock
Purchase Agreement, each Transaction Confirmation
and this Agreement pursuant to the terms thereof
and hereof, and to set off any obligation it may
have to (i) release from the Security Interests
or return to Pledgor any Collateral pursuant to
Section 5(e) or Section 10 or (ii) replace any
rehypothecated Collateral pursuant to Section
5(i), against any right Secured Party or any of
its affiliates may have against Pledgor,
including without limitation any right to receive a
payment or delivery pursuant to any provision of
the Master Stock Purchase Agreement. In the case
of a set-off of any obligation to return or
replace assets against any right to receive
assets of the same type, such obligation and
right shall be set off in kind. In the case of a
set-off of any obligation to return or replace
assets against any right to receive assets of any
other type, the value of each of such obligation
and such right shall be determined by the
Calculation Agent and the result of such set-off
shall be that the net obligor shall pay or
deliver to the other party an amount of cash or
assets, at the net obligors option, with a value
(determined, in the case of a delivery of assets,
by the Calculation Agent) equal to that of the
net obligation. In determining the value of any
obligation to release or
9
deliver Common Stock or
right to receive Common Stock, the value at any
time of such obligation or right shall be
determined by reference to the market value of
the Common Stock at such time. If an obligation
or right is unascertained at the time of any such
set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation
or right, in which case set-off will be effected
in respect of that estimate, and the relevant
party shall account to the other party at the
time such obligation or right is ascertained.
Section 9. Miscellaneous.
(a) Whenever any of the parties hereto is
referred to, such reference shall be deemed to
include the successors and assigns of such party.
All the covenants and agreements herein
contained by or on behalf of Pledgor shall bind,
and inure to the benefit of, Pledgors respective
successors and assigns whether so expressed or
not, and shall be enforceable by and inure to the
benefit of Secured Party and its successors and
assigns.
(b) To the extent permitted by law, the
unenforceability or invalidity of any provision
or provisions of this Agreement shall not render
any other provision or provisions herein
contained unenforceable or invalid.
(c) Any provision of this Agreement may be
amended or waived if, and only if, such amendment
or waiver is in writing and signed, in the case
of an amendment, by Pledgor and Secured Party or,
in the case of a waiver, by the party against
whom the waiver is to be effective. No failure
or delay by either party in exercising any right,
power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial
exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of
any rights or remedies provided by law.
(d) All notices and other communications
hereunder shall be in writing and shall be deemed
to have been duly given if mailed or transmitted
by any standard forms of telecommunication.
Notices to Pledgor shall be directed to it at the
address specified on the last page hereof;
notices to Secured Party shall be directed to it
care of Banc of America Securities LLC, 9 West
57th Street, New York, New York 10019, Telecopy
No. 212-583-8569, Attention: Michelle Bacal.
(e) This Agreement shall in all respects be
construed in accordance with and governed by the
laws of the State of New York (without reference
to choice of law doctrine); provided that as to
Pledged Items located in any jurisdiction other
than the State of New York, Secured Party shall
have, in addition to any rights under the laws of
the State of New York, all of the rights to which
a secured party is entitled under the laws of
such other jurisdiction. The parties hereto
hereby agree that Secured Partys and Banc of
America Securities LLCs jurisdiction, within the
meaning of Section 8-110(e) of the UCC, insofar
as it acts as a securities intermediary hereunder
or in respect hereof, is the State of New York.
(f) Each party hereby irrevocably and
unconditionally submits to the non-exclusive
jurisdiction of the Federal and state courts
located in the Borough of Manhattan, in the City
of New York in any suit or proceeding arising out
of or relating to the Master Stock Purchase
Agreement, each Transaction Confirmation or this
Agreement, or the transactions contemplated
thereby or hereby.
(g) Each party hereby irrevocably and
unconditionally waives any and all right to trial
by jury in any legal proceeding arising out of or
related to the Master Stock Purchase Agreement,
each Transaction Confirmation or this Agreement
or the transactions contemplated thereby or
hereby.
(h) This Agreement may be executed,
acknowledged and delivered in any number of
counterparts and all such counterparts taken
together shall be deemed to constitute one and
the same agreement.
Section 10. Termination of Pledge
Agreement. This Agreement and the rights hereby
granted by Pledgor in the Collateral shall cease,
terminate and be void upon fulfillment of
all of the obligations of Pledgor under the
Master Stock Purchase Agreement, under each
Transaction Confirmation and hereunder. Any
Collateral remaining at the time of such
termination shall be fully released and
discharged from the Security Interests and
delivered to Pledgor by Secured Party, all at the
request and expense of Pledgor.
10
*************
Date of Agreement: September 13, 2002
Pledgor: Devotion Ltd., a corporation
Pledgors Address for Notices: *************
IN WITNESS WHEREOF, the parties have
signed this Agreement as of the date and year
first above written.
PLEDGOR:
DEVOTION LTD. SECURED PARTY:
BANK OF AMERICA, N.A. 11
Transaction Acknowledgement September 16, 2002
Devotion Limited Dear Sirs:
This confirms certain economic terms and conditions of the STARS variable share prepaid forward
transaction (the Transaction) that you have agreed to enter into with Bank of America, N.A.
(Bank of America). This is a summary only; full and definitive documentation of the Transaction
will be in the form of a Transaction Confirmation which shall supplement, form a part of, and be
subject to the Master Stock Purchase Agreement and Pledge Agreement which, if not yet signed by
you, will be duly signed and executed by you. Such Transaction Confirmation will be signed by you
promptly upon our completion of the hedging transactions described below and final specification of
amounts expressed below as approximate or, where expressed as percentages, in U.S. Dollars.
9 West 57th Street New York, New York 10019 (212) 583-8000
2
3
You acknowledge that upon our receipt of your signature by fax as requested below, we will enter
into hedging transactions in reliance on your consent to this Transaction Acknowledgement. You
agree that you will return a signed copy of the Transaction Confirmation within thirty (30)
business days of the date thereof and if you fail to do so, Bank of America may elect to terminate
the Transaction and in such event, you will be liable for all losses, costs and expenses of Bank of
America and its affiliates related to such termination (including market risk) and in partial or
full satisfaction thereof, Bank of America and its affiliates may set off obligations owed to you
by them or apply any of your property in their possession, whether as collateral or otherwise,
against same.
Please indicate your understanding of and agreement with the above terms and conditions and your
instruction for Bank of America to begin execution by signing below, and returning to me by fax at
(212) 583-8457 and by returning originals to my attention at:
Equity Financial Products Group Agreed to and accepted by:
4
TABLE OF CONTENTS
ARTICLE 1 Section 1.01. Definitions
ARTICLE 2 Section 2.01. Transaction Confirmations ARTICLE 3 Section 3.01. Sale and Purchase ARTICLE 4 Section 4.01. Representations and Warranties of Seller
ARTICLE 5 Section 5.01. Conditions
ARTICLE 6 Section 6.01. Taxes ARTICLE 7 Section 7.01. Dilution Adjustments ARTICLE 8 Section 8.01. Acceleration
ARTICLE 9 Section 9.01. Notices THIS AGREEMENT is made as of the date stated
on the last page hereof between the counterparty
named on the last page hereof (Seller) and BANK
OF AMERICA, N.A. (Buyer).
WHEREAS, Seller owns or may own from time to
time shares of common stock of one or more
issuers, or security entitlements in respect
thereof;
WHEREAS, Seller has agreed, pursuant to the
Pledge Agreement (as defined herein), to grant
Buyer a security interest in certain Common Stock
to secure the obligations of Seller hereunder;
WHEREAS, Seller and Buyer may wish to sell
and purchase shares of such common stock, or
security
entitlements in respect thereof, from
time to time and on the terms set forth herein
and in certain confirmations hereunder;
NOW, THEREFORE, in consideration of their
mutual covenants herein contained, the parties
hereto, intending to be legally bound, hereby
mutually covenant and agree as follows:
ARTICLE 1 SECTION 1.01. Definitions.
As used herein, the following words and phrases
shall have the following meanings:
"Acceleration Amount has the meaning
provided in Section 8.01.
"Acceleration Amount Notice has the meaning
provided in Section 8.01.
"Acceleration Date has the meaning provided
in Section 8.01.
"Acceleration Value has the meaning
provided in Section 8.01.
"Bankruptcy Code has the meaning provided
in Section 6.04.
"Base Amount means with respect to any
Maturity Date for any Transaction, the number
designated as such in the applicable Transaction
Confirmation.
"Business Day means any day on which
commercial banks are open for business in New
York City and the New York Stock Exchange is not
closed.
"Calculation Agent means Bank of America,
N.A.
"Cash Settlement Amount means, for any
Settlement Date, an amount of cash equal to the
product of the Settlement Price for such
Settlement Date and the number of shares of
Common Stock (or security entitlements in respect
thereof) required to be delivered (but for
Section 3.03) pursuant to Section 3.02(b) on such
Settlement Date in connection with such
Transaction.
"Closing Price means, with respect to any
security on any Trading Day (the Valuation
Date), the closing sale price (or, if no closing
price is reported, the last reported sale price)
of such security on the Exchange for the regular
trading session on the Valuation Date or, if such
security is not so reported, the last quoted bid
price for such security in the over-the-counter
market for the regular trading session as
reported by the National Quotation Bureau or
similar organization or, if such bid price is not
available, the market value of such security on
the Valuation Date as determined by the
Calculation Agent in a commercially reasonable
manner; provided that if there is a Market
Disruption Event on any Valuation Date, then the
Valuation Date shall be the first succeeding
Business Day on which there is no
Market Disruption Event, unless there is a
Market Disruption Event on each of the five
Business Days immediately following the original
date that, but for the Market Disruption Event,
would have been the Valuation Date, in which case
(i) that fifth Business Day shall be deemed to be
the Valuation Date, notwithstanding the Market
Disruption Event and (ii) the Calculation Agent
shall, in a commercially reasonable manner,
determine the Closing Price as of that fifth
Business Day.
"Collateral Account has the meaning
provided in the Pledge Agreement.
"Common Stock means, for any Transaction,
the common stock that is the subject of such
transaction, as identified in the applicable
Transaction Confirmation.
"Company means, for any Transaction, the
issuer of the Common Stock that is the subject of
such Transaction, as identified in the applicable
Transaction Confirmation.
"De-Listing has the meaning provided in
Section 7.03.
"Downside Protection Threshold Price means,
for any Transaction, the price specified as the
Downside Protection Threshold Price in the
applicable Transaction Confirmation.
"Event of Default has the meaning provided
in Section 8.01.
"Exchange means, for any Transaction at any
time, the principal national securities exchange
or automated quotation system, if any, on which
the
2
Common Stock that is the subject of such
Transaction is listed or quoted at such time.
Extraordinary Dividend has the meaning
provided in Section 7.01(b)(iii).
Free Shares means shares of Common Stock
(or security entitlements in respect thereof)
that are not subject to any Transfer Restrictions
in the hands of Seller immediately prior to
delivery to Buyer or an affiliate of Buyer
designated by Buyer hereunder and would not be
subject to any Transfer Restrictions in the hands
of Buyer or such affiliate of Buyer upon delivery
to Buyer or such affiliate of Buyer.
Insolvency has the meaning provided in
Section 7.03.
Lien means any lien, mortgage, security
interest, pledge, charge or encumbrance of any
kind.
Market Disruption Event means, for any
Transaction, the occurrence or the existence at
any time on any day of any suspension of or
limitation in trading in the Common Stock that is
the subject of such Transaction or in listed
options on such Common Stock, if any, (by reason
of movements in price exceeding limits permitted
by the Exchange or otherwise), if, in the
determination of the Calculation Agent, such
suspension or limitation is material.
Market Value means, as of any date with
respect to any share of Common Stock, the Closing
Price per share of Common Stock for the Trading
Day prior to such date.
Maturity Date means, for any Transaction,
each date specified as a Maturity Date in the
applicable Transaction Confirmation.
Merger Date has the meaning provided in
Section 7.02.
Merger Event has the meaning provided in
Section 7.02.
Nationalization has the meaning provided
in Section 7.03.
New Shares has the meaning provided in
Section 7.02.
Payment Date means, for any Transaction,
the date specified as the Payment Date in the
applicable Transaction Confirmation.
Person means an individual, a corporation,
a partnership, an association, a trust or any
other entity or organization, including a
government or political subdivision or an agency
or instrumentality thereof.
Pledge Agreement means the Pledge
Agreement dated as of the date hereof between
Seller and Buyer, as amended from time to time.
Potential Adjustment Event has the meaning
provided in Section 7.01.
Preliminary Cash Settlement Amount means,
for any Settlement Date, 105% of the Cash
Settlement Amount that would apply if the
Maturity Date with respect to such Settlement
Date were the Preliminary Cash Settlement Pricing
Date with respect to such Settlement Date.
Preliminary Cash Settlement Date means,
with respect to any Settlement Date, the
Business Day immediately following the
Preliminary Cash Settlement Pricing Date with
respect to such Settlement Date.
Preliminary Cash Settlement Pricing Date
means, with respect to any Settlement Date, the
third scheduled Trading Day immediately prior to
the Maturity Date with respect to such Settlement
Date.
Purchase Price means, for any Transaction,
the amount specified as the Purchase Price in the
applicable Transaction Confirmation.
Securities Act means the Securities Act of
1933, as amended.
Settlement Date means, with respect to any
Maturity Date, the third Trading Day immediately
following such Maturity Date (and,
correspondingly, the Maturity Date with respect
to any Settlement Date means the third Trading
Day immediately preceding such Settlement Date).
Settlement Price means, for any Settlement
Date, the Closing Price per share of the relevant
Common Stock on the Maturity Date with respect to
such Settlement Date.
3
Settlement Ratio means, for any Settlement
Date, the ratio determined in the manner set
forth in the applicable Transaction Confirmation.
Share-for-Share has the meaning provided
in Section 7.02.
Termination Amount has the meaning
provided in Section 7.04.
Termination Amount Notice has the meaning
provided in Section 7.04.
Termination Date has the meaning provided
in Section 7.04.
Threshold Appreciation Price means, for
any Transaction, the price specified as the
Threshold Appreciation Price in the applicable
Transaction Confirmation.
Trading Day means, with respect to any
security, a day on which the Exchange is open for
trading or quotation.
Transaction has the meaning provided in
Section 2.01.
Transaction Confirmation has the meaning
provided in Section 2.01.
Transfer Restriction means, with respect
to any share of Common Stock (or security
entitlements in respect thereof) or item of
collateral pledged under the Pledge Agreement,
any condition to or restriction on the ability of
the holder thereof to sell, assign or otherwise
transfer such share of Common Stock (or security
entitlements in respect thereof) or item of
collateral or to enforce the provisions thereof
or of any document related thereto whether set
forth in such item of collateral itself or in any
document related thereto, including, without
limitation, (i) any requirement that any sale,
assignment or transfer or enforcement of such
share of Common Stock (or security entitlements
in respect thereof) or item of collateral be
consented to or approved by any person,
including, without limitation, the issuer thereof
or any other obligor thereon, (ii) any
limitations on the type or status, financial or
otherwise, of any purchaser, pledgee, assignee or
transferee of such share of Common Stock (or
security entitlements in respect thereof) or item
of collateral, (iii) any requirement of the
delivery of any certificate, consent, agreement,
opinion of counsel, notice or any other document
of any person to the issuer of, any other obligor
on or any registrar or transfer agent for, such
share of Common Stock (or security entitlements
in respect thereof) or item of collateral, prior
to the sale, pledge, assignment or other transfer
or enforcement of such share of Common Stock (or
security entitlements in respect thereof) or item
of collateral and (iv) any registration or
qualification requirement or prospectus delivery
requirement for such share of Common Stock (or
security entitlements in respect thereof) or item
of collateral pursuant to any federal, state or
foreign securities law (including, without
limitation, any such requirement arising as a
result of Rule 144 or Rule 145 under the
Securities Act); provided that the required
delivery of any assignment, instruction or
entitlement order from the seller, pledgor,
assignor or transferor of such share of Common
Stock (or security entitlements in respect
thereof) or item of collateral, together with any
evidence of the corporate or other authority of
such Person, shall not constitute a Transfer
Restriction.
ARTICLE 2
TRANSACTIONS
SECTION 2.01. Transaction
Confirmations. At any time and from time to time,
Seller and Buyer may execute a transaction
confirmation agreement substantially in the form
of Exhibit A hereto (a Transaction
Confirmation) pursuant to which Seller and Buyer
shall enter into a forward purchase and sale
transaction (a Transaction) on the terms
set forth herein and in such Transaction
Confirmation.
SECTION 2.02. Single Agreement. All
Transactions entered into pursuant to this
Agreement (as supplemented by each Transaction
Confirmation) are entered into in reliance on the
fact that this Agreement and all Transaction
Confirmations form a single agreement between the
parties, and the parties would not otherwise
enter into any Transactions.
ARTICLE 3
SALE AND PURCHASE
SECTION 3.01. Sale and
Purchase. Upon the terms and subject to the
conditions of this Agreement and the Transaction
Confirmation relating to each Transaction, Seller
agrees to sell to Buyer, and Buyer agrees to
purchase and acquire from Seller, a number of
shares of the Common Stock that is the subject of
such Transaction (or security entitlements in
respect thereof) determined in accordance with
Section 3.02.
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SECTION 3.02. Payment for and
Delivery of Shares. (a) Upon the terms and
subject to the conditions of this Agreement and
the Transaction Confirmation relating to each
Transaction, Buyer shall deliver to Seller the
Purchase Price for such Transaction on the
Payment Date for such Transaction at the offices
of Buyer, care of Banc of America Securities LLC,
9 West 57th Street, New York, New York 10019, or
at such other place as shall be agreed upon by
Buyer and Seller, paid in immediately available
funds by wire transfer to an account designated
by Seller.
(b) On each Settlement Date for such
Transaction, Seller agrees, subject to Section
3.03, to deliver to Buyer or an affiliate of
Buyer designated by Buyer a number of Free Shares
of the relevant Common Stock (the Contract
Shares) equal to the product of (A) the Base
Amount for such Settlement Date and (B) the
Settlement Ratio for such Settlement Date,
rounded down to the nearest whole number, and
cash in an amount equal to the value (based on
the Settlement Price for such Settlement Date) of
any fractional share not delivered as a result of
such rounding. In addition, if applicable, Seller
agrees (subject to the relevant Transaction
Confirmation) to pay to Buyer the Additional Cash
Payment (as defined in the relevant Transaction
Confirmation). If (x) by 10:00 A.M., New York
City time on such Settlement Date, Seller has not
otherwise effected such delivery of Common Stock
(or security entitlements in respect thereof) or
delivered cash in lieu thereof pursuant to
Section 3.03 by 5:00 New
York City time on the Preliminary Cash
Settlement Date and (y) the collateral under the
Pledge Agreement held by or on behalf of Buyer in
respect of such Transaction includes a number of
Free Shares of the relevant Common Stock at least
equal to the number thereof required to be so
delivered on such Settlement Date, then (i)
Seller shall be deemed not to have elected to
deliver cash in lieu of Free Shares pursuant to
Section 3.03 (notwithstanding any notice by
Seller to the contrary) and (ii) the delivery
provided by this Section 3.02(b) shall be
effected by delivery from the Collateral Account
to Buyer or an affiliate of Buyer designated by
Buyer of a number of Free Shares of such Common
Stock then held by or on behalf of Buyer as
collateral under the Pledge Agreement in respect
of such Transaction equal to the number thereof
required to be delivered by Seller to Buyer or an
affiliate of Buyer designated by Buyer pursuant
to this Section 3.02(b); provided that,
notwithstanding the foregoing and without
limiting the generality of Section 8.01, if
Seller gives notice of its election to deliver
cash or is deemed to have elected to deliver
cash, in each case, in lieu of Common Stock on
any Settlement Date pursuant to Section 3.03 and
fails to deliver the Preliminary Cash Settlement
Amount on the Preliminary Cash Settlement Date
with respect to such Settlement Date as provided
in Section 3.03 or to make any payment required
by Section 3.03, Seller shall be in breach of
this Agreement and shall be liable to Buyer for
any losses incurred by Buyer or such affiliate of
Buyer as a result of such breach, including
without limitation losses incurred in connection
with any decrease in the Closing Price of the
relevant Common Stock subsequent to the Maturity
Date with respect to such Settlement Date.
SECTION 3.03. Cash Settlement
Option. (a) Seller may, upon written notice
delivered to Buyer at least 30 Trading Days prior
to the first Settlement Date for any Transaction,
elect to deliver the Cash Settlement Amount for
any Settlement Date under such Transaction to
Buyer on such Settlement Date by wire transfer of
immediately available funds to an account
designated by Buyer, in lieu of the shares of
Common Stock (or security entitlements in respect
thereof) to be delivered on such Settlement Date
pursuant to Section 3.02(b); provided, however,
that notwithstanding the foregoing, in the event
that the Seller would be unable to deliver Free
Shares as of 4:00 p.m. New York City Time on the
30th Trading Day prior to the first
Settlement Date for any Transaction, the Seller
shall be deemed to have elected to deliver the
Cash Settlement Amount to the Buyer on each
Settlement Date for such Transaction
by wire transfer of immediately available
funds to an account designated by the Buyer.
(b) If Seller elects to deliver cash in lieu
of shares of Common Stock pursuant to Section
3.03(a) or the Seller is deemed to have elected
to deliver cash in lieu of Common Stock pursuant
to Section 3.03(a) with respect to any Settlement
Date, Seller shall pay the Preliminary Cash
Settlement Amount to Buyer on the Preliminary
Cash Settlement Date with respect to such
Settlement Date by wire transfer of immediately
available funds to an account designated by
Buyer.
(c) If the Preliminary Cash Settlement
Amount for any Settlement Date exceeds the Cash
Settlement Amount for such Settlement Date, Buyer
shall pay to Seller the amount of such excess on
such Settlement Date. If the Cash Settlement
Amount for any Settlement Date exceeds the
Preliminary Cash Settlement Amount for such
Settlement Date, Seller shall pay to Buyer the
amount of such excess on such Settlement Date.
Any payment pursuant to this Section
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3.03(c) shall be made by wire transfer of immediately available funds, if paid by Buyer, to an
account designated by Seller, or, if paid by Seller, to an account designated by Buyer.
ARTICLE 4 Section 4.01. Representations and Warranties of Seller. Seller represents and
warrants to Buyer that:
(a) Seller has been duly incorporated and is validly existing as a corporation in good
standing under the laws of its jurisdiction of incorporation.
(b) Seller has all corporate power to enter into this Agreement, each Transaction
Confirmation and the Pledge Agreement and each other document relating hereto and thereto and
to consummate the transactions contemplated hereby and thereby. Each of this Agreement, each
Transaction Confirmation and the Pledge Agreement and each other document relating hereto and
thereto has been duly authorized and validly executed and delivered by Seller and constitutes
a valid and legally binding obligation of Seller enforceable in accordance with its terms,
subject to applicable bankruptcy, insolvency and similar laws affecting creditors rights
generally and to general equitable principles.
(c) The execution and delivery by Seller of, and the compliance by Seller with all of
the provisions of, this Agreement, each Transaction Confirmation and the Pledge Agreement and
the consummation of the transactions herein and therein contemplated will not (i) conflict
with or result in a breach of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or any other agreement or
instrument to which Seller or any of its subsidiaries is a party or by which Seller or any of
its subsidiaries is bound or to which any of the property or assets of Seller or any of its
subsidiaries is subject, nor will such action result in any violation of the provisions of
the Certificate of Incorporation or By-laws or other constitutive documents of Seller or any
statute or any order, rule or regulation of any court or governmental agency or body having
jurisdiction over Seller or any of its subsidiaries or any of their respective properties or
(ii) require any consent, approval, authorization or order of, or filing or qualification
with, any governmental body, agency, official, self-regulatory organization or court or other
tribunal, whether foreign or domestic.
(d) Seller is acting for its own account, and has made its own independent decision to enter
into this Agreement, each Transaction Confirmation and the Pledge Agreement and as to whether this
Agreement, any Transaction Confirmation or the Pledge Agreement are appropriate or proper for it
based upon its own judgment and upon advice of such advisors as it deems necessary. Seller
acknowledges and agrees that it is not relying, and has not relied, upon any communication (written
or oral) of Buyer or any affiliate of Buyer with respect to the legal, accounting, tax or other
implications of this Agreement, any Transaction Confirmation or the Pledge Agreement and that it
has conducted its own analyses of the legal, accounting, tax and other implications hereof and
thereof; it being understood that information and explanations related to the terms and conditions
of this Agreement, any Transaction Confirmation or the Pledge Agreement shall not be considered
investment advice or a recommendation to enter into this Agreement, any Transaction Confirmation or
the Pledge Agreement. Seller further acknowledges and confirms that it has taken independent tax
advice with respect to this Agreement, the Pledge Agreement and each Transaction.
(e) Seller is entering into this Agreement and each Transaction Confirmation with a full
understanding of all of the terms and risks hereof and thereof (economic and otherwise) and is
capable of evaluating and understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks. Seller is also capable of
assuming (financially and otherwise), and assumes, those risks.
(f) Seller acknowledges that neither Buyer nor any affiliate of Buyer is
6
acting as a fiduciary for or an advisor to Seller in respect of this Agreement, any Transaction
Confirmation or the Pledge Agreement.
(g) Seller has a valid business purpose for entering into this Agreement, and each Transaction
Confirmation, and the transactions contemplated hereby and thereby are consistent with Sellers
overall investment strategy.
(h) Seller is an eligible contract participant (as such term is defined in Section 1(a)(12)
of the Commodity Exchange Act, as amended (the CEA)) because one or more of the following under
(x) or (y) is true:
(x) Seller is an individual who:
(A) has total assets in excess of $10,000,000; or
(B) has total assets in excess of $5,000,000 and has entered into this Agreement in
order to manage the risk associated with an asset owned or liability incurred, or reasonably
likely to be owned or incurred, by Seller; or
(y) Seller is a corporation, partnership, proprietorship, organization, trust or other
entity and:
(A) Seller has total assets in excess of $10,000,000; or
(B) the obligations of Seller hereunder are guaranteed, or otherwise supported by a
letter of credit or keepwell, support or other agreement, by an entity of the type described
in Section 1a(12)(A)(i) through (iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of the
CEA; or
(C) Seller has a net worth in excess of $1,000,000 and has entered into this Agreement
in connection with the conduct of Sellers business or to manage the risk associated with an asset or liability owned
or incurred or reasonably likely to be owned or incurred by Seller in the conduct of
Sellers business.
ARTICLE 5 Section 5.01. Conditions. The obligation of Buyer to deliver the Purchase
Price on the Payment Date for each Transaction is subject to the satisfaction of the following
conditions:
(a) The representations and warranties of Seller contained in Article 4, in the relevant
Transaction Confirmation and in the Pledge Agreement shall be true and correct as of such
Payment Date.
(b) The Pledge Agreement shall have been executed by the parties thereto, and Seller
shall have delivered to Buyer in accordance therewith the collateral required to be delivered
pursuant to Section 1(b) thereof in connection with such Transaction.
(c) Seller shall have performed all of the covenants and obligations to be performed by
it hereunder and under the Pledge Agreement on or prior to such Payment Date.
ARTICLE 6 Section 6.01. Taxes. Seller shall pay any and all documentary, stamp, transfer
or similar taxes and charges that may be payable in respect of the entry into this Agreement, the
Pledge Agreement and each Transaction Confirmation and the transfer and delivery of any Common
Stock (or security entitlements in respect thereof) or item of collateral pursuant hereto and
thereto. Seller further agrees to make all payments in respect of this Agreement, the Pledge
Agreement and each Transaction Confirmation free and clear of, and without withholding or deduction
for or on account of, any present or future taxes, duties, fines, penalties,
7
assessments or other governmental charges of whatsoever nature (or interest on any taxes, duties,
fines, penalties, assessments or other governmental charges of whatsoever nature) imposed, levied,
collected, withheld or assessed by, within or on behalf of (a) the United States or any political
subdivision or governmental authority thereof or therein having power to tax or (b) any
jurisdiction from or through which payment on the Agreement, the Pledge Agreement or any
Transaction Confirmation is made by the Seller, or any political subdivision or governmental
authority thereof or therein having power to tax. In the event such withholding or deduction is
imposed, Seller agrees to indemnify the Buyer for the full amount of such withholding or deduction,
as well as any liability (including penalties, interest and expenses) arising therefrom or with
respect thereto.
Section 6.02. Notices. Seller will cause to be delivered to Buyer:
(a) Immediately upon the occurrence of any Event of Default hereunder or under the
Pledge Agreement, or upon any officer of Seller obtaining knowledge that any of the
conditions or events of the type described in Sections 8.01(a) or 8.01(b) shall have occurred
with respect to the Company, notice of such occurrence; and
(b) In case at any time Seller receives notice, or any officer of Seller obtains
knowledge, that any event requiring that an adjustment be calculated pursuant to Section 7.01
or 7.02 hereof or any Nationalization, Insolvency or De-Listing with respect to any Company
that is the issuer of the Common Stock that is the subject of any Transaction shall have
occurred or be pending, then Seller shall promptly cause to be delivered to Buyer a notice
identifying such event and stating, if known to Seller, the date on which such event occurred
or is to occur and, if applicable, the record date relating to such event. Seller shall
cause further notices to be delivered to Buyer if Seller shall subsequently receive notice,
or any officer of Seller shall obtain knowledge, of any further or revised information
regarding the terms or timing of such event or any record date relating thereto.
Section 6.03. Further Assurances. From time to time, each of the parties hereto
shall use its reasonable best efforts to take, or cause to be taken, all actions and to do, or
cause to be done, all things necessary, proper and advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this Agreement, the Pledge Agreement and
each Transaction Confirmation in accordance with the terms and conditions hereof and thereof,
including (i) using reasonable best efforts to remove any legal impediment to the consummation of
such transactions and (ii) the execution and delivery of all such deeds, agreements, assignments
and further instruments of transfer and conveyance necessary, proper or advisable to consummate and
make effective the transactions contemplated by this Agreement, the Pledge Agreement and each
Transaction Confirmation in accordance with the terms and conditions hereof and thereof.
Section 6.04. Securities Contract. The parties hereto recognize that the Buyer is a
financial institution within the meaning of Section 101(22) of Title 11 of the United States Code
(the Bankruptcy Code). The parties hereto further recognize that this Agreement as supplemented
by each Transaction Confirmation is a securities contract, as such term is defined in Section
741(7) of the Bankruptcy Code, entitled to the protection of Section 555 of the Bankruptcy Code.
Section 6.05. Indemnity. In the event that Buyer or any of its affiliates becomes
involved in any capacity in any action, proceeding or investigation brought by or against any
person in connection with any matter referred to in this Agreement, the Pledge Agreement or any
Transaction Confirmation, the Seller shall reimburse Buyer or such affiliate for its reasonable
legal and other out-of-pocket expenses (including the cost of any investigation and preparation)
incurred in connection therewith within 30 days of receipt of notice of such expenses, and shall
indemnify and hold Buyer or such affiliate harmless on an after-tax basis against any losses,
claims, damages or liabilities to which Buyer or such affiliate may become subject in connection
with any such action, proceeding or investigation. Notwithstanding the foregoing, such obligation
to hold harmless shall not apply to any action, proceeding, or investigation which is finally
determined as having resulted from Buyers gross negligence, willful misconduct, or breach of this
Agreement. The reimbursement and indemnity obligations of the Seller under this Section shall be in
addition to any liability that the Seller may otherwise have, shall extend upon the same terms and
conditions
8
to the partners, directors, officers, agents, employees and controlling persons (if any), as the
case may be, of Buyer and its affiliates and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Seller, Buyer, any such affiliate
and any such person. The Seller also agrees that neither Buyer nor any of such affiliates,
partners, directors, officers, agents, employees or controlling persons shall have any liability to
the Seller for or in connection with any matter referred to in this Agreement, the Pledge Agreement
or any Transaction Confirmation except to the extent that any losses, claims, damages, liabilities
or expenses incurred by the Seller result from the gross negligence or bad faith of Buyer or a
breach by Buyer of any of its covenants or obligations hereunder. The foregoing provisions shall
survive any termination or completion of this Agreement.
ARTICLE 7 Section 7.01. Dilution Adjustments. (a) Following any Potential Adjustment Event
with respect to the Common Stock which is the subject of any Transaction hereunder, the Calculation
Agent will determine whether such Potential Adjustment Event has a material effect on the
theoretical value of such Common Stock or options relating to such Common Stock and, if so, will
(i) make the corresponding adjustment, if any, to any one or more of any Base Amount, any
Settlement Ratio, the Threshold Appreciation Price, the Downside Protection Threshold Price, any
Closing Price and any other variable relevant to the exercise, settlement or payment terms of each
such Transaction (including but not limited to the payment of any dividends to Buyer) contemplated
hereby as the Calculation Agent determines appropriate to account for that material effect and
(ii) determine the effective date of the adjustment. The Calculation Agent may (but need not)
determine the appropriate adjustment by reference to the adjustment in respect of such Potential
Adjustment Event made by an options exchange to options on the Common Stock traded on that options
exchange.
(b) For these purposes, Potential Adjustment Event means any of the following:
(i) a subdivision, consolidation or reclassification of shares of such Common Stock
(which does not constitute a Merger Event), or a free distribution or dividend of any shares
of such Common Stock to existing holders of such Common Stock by way of bonus, capitalization
or similar issue;
(ii) a distribution or dividend to existing holders of such Common Stock of (i) shares
of such Common Stock, or (ii) other share capital or securities granting the right to payment
of dividends and/or the proceeds of such liquidation of such Company equally or
proportionately with such payments to holders of such Common Stock, or (iii) other type of
securities, rights or warrants or other assets, in any case for payment (cash or other) at
less than the prevailing market price as determined by the Calculation Agent;
(iii) any dividend or distribution (an Extraordinary Dividend) consisting of cash
and/or other property (other than securities of a type described in sub-paragraph (b)(i) and
(b)(ii) of this Section 7.01), excluding any regular cash dividend on the Common Stock to the
extent the dividend per share of the Common Stock does not exceed the Ordinary Dividend as
set forth in the relevant Transaction Confirmation;
(iv) a call by such Company in respect of shares of such Common Stock that are not fully
paid;
(v) a repurchase by such Company of shares of such Common Stock, whether out of profits
or capital and whether the consideration for such repurchase is cash, securities or
otherwise;
(vi) any tender offer with respect to the Common Stock which is not a Merger Event and
is deemed to be material in the determination of the Calculation Agent; or
(vii) any event that may have a material effect on the theoretical value of such Common
Stock or options relating to such Common Stock.
Section 7.02. Merger Events. (a) Buyer shall have the right, upon becoming aware of
the occurrence of any Share-for-Share Merger Event with respect to any Company that is the issuer
of the Common Stock that is the subject of any Transaction hereunder, to
9
notify Seller that the number of New Shares to which a holder of shares of such Common Stock equal
to each Base Amount with respect to such Transaction would be entitled upon consummation of the
Share-for-Share Merger Event will be deemed the Base Amount for the applicable Maturity Date and
the New Shares and their issuer will be deemed the Common Stock and the Company for such
Transaction, respectively, and that the Calculation Agent will make corresponding adjustments, if
any, to any one or more of any Base Amount, any Settlement Ratio, the Threshold Appreciation Price,
the Downside Protection Threshold Price, any Closing Price and any other variable relevant to the
exercise, settlement or payment terms of each such Transaction contemplated hereby. Notwithstanding
the above, the Calculation Agent will determine if any such Merger Event adjustment affects the
theoretical value of any such Transaction, and if so, may in its sole discretion make an adjustment
to any one or more of any Base Amount, any Settlement Ratio, the Threshold Appreciation Price, the
Downside Protection Threshold Price, any Closing Price and any other variable relevant to the
exercise, settlement or payment terms of such Transaction to reflect the characteristics
(including, without limitation, the volatility, dividend practice and policy and liquidity) of the
New Shares. Any adjustment made pursuant to this paragraph will be effective as of the date
determined by the Calculation Agent.
(b) Buyer shall have the right, upon becoming aware of the occurrence of any Merger Event with
respect to any Company that is the issuer of the Common Stock that is the subject of any
Transaction hereunder that is not a Share-for-Share Merger Event, to notify Seller of such event
and terminate each such Transaction and the related Transaction Confirmation, following which
Seller shall make a payment to Buyer as provided in Section 7.04.
(c) Merger Event means, in respect of the Common Stock of any issuer that is the subject of
a Transaction hereunder, any (A) reclassification or change of such Common Stock that results in a
transfer of or an irrevocable commitment to transfer all of the outstanding shares of such Common
Stock, (B) consolidation, amalgamation or merger of such Company with or into another entity (other
than a consolidation, amalgamation or merger in which such Company is the continuing entity and
which does not result in reclassification or change of all of the outstanding shares of such Common
Stock), or (C) other takeover offer for shares of such Common Stock that results in a transfer of
or an irrevocable commitment to transfer all of the shares of such Common Stock (other than such
shares of such Common Stock owned or controlled by the offeror), in each case if the Merger Date is
on or before the relevant Settlement Date. Merger Date means, in respect of any Merger Event,
the date upon which holders of the necessary number of shares of the relevant Common Stock (other
than, in the case of a takeover offer, shares of such Common Stock owned or controlled by the
offeror) have agreed or have irrevocably become obligated to transfer their shares of such Common
Stock. In respect of each Merger Event, the following terms have the meanings given below:
(i) Share-for-Share means, in respect of a Merger Event, that the consideration for
such Common Stock consists (or, at the option of the holder of such Common Stock, may
consist) solely of New Shares; and
(ii) New Shares means shares of common stock (whether of the offeror or a third party)
received in connection with a Merger Event.
Section 7.03. Nationalization, Insolvency and De-Listing. If, prior to the final
Settlement Date, all the shares of any Common Stock that is the subject of a Transaction hereunder
or all the assets or substantially all the assets of the Company that is the issuer of such Common
Stock are nationalized, expropriated or are otherwise required to be transferred to any
governmental agency, authority or entity (a Nationalization); or by reason of the voluntary or
involuntary liquidation, bankruptcy or insolvency of or any analogous proceeding affecting the
Company, (A) all the shares of such Common Stock are required to be transferred to a trustee,
liquidator or other similar official, (B) holders of the shares of such Common Stock become legally
prohibited from transferring them or (C) any of the events specified in Section 8.01(b) occur with
respect to the Company (an Insolvency); or the shares of Common Stock that are the subject of any
Transaction cease to be listed on, or quoted by, any of the New York Stock Exchange, the American
Stock Exchange or the Nasdaq Stock Market (or their respective successors) for any reason (other
than a Merger Event) (a De-Listing) then, in any such event, Buyer shall have the right, upon
becoming aware of the occurrence of a Nationalization, Insolvency or De-Listing, to notify Seller
of such event and terminate
10
each such Transaction and the related Transaction Confirmation as of the date set forth in such
notice following which Seller shall make payment to Buyer as provided in Section 7.04.
Section 7.04. Termination and Payment. Following termination of any Transaction as a
result of any Merger Event, Nationalization, Insolvency or De-Listing, Seller shall pay to Buyer an
amount in cash (the Termination Amount) equal to the Acceleration Value for such Transaction
(calculated, for purposes of this Section 7.04, as if the Termination Date were the Acceleration
Date, calculated on the basis of, in addition to the factors indicated in Section 8.01, a value
ascribed to the relevant Common Stock equal to the consideration, if any, paid in respect of such
Common Stock at the time of the Merger Event, Nationalization, Insolvency or De-Listing, as the
case may be) in settlement of such Transaction and the related Transaction Confirmation. As
promptly as reasonably practicable after calculation of the Acceleration Value, as the case may be,
Buyer shall deliver to Seller a notice (the Termination Amount Notice) specifying the Termination
Amount. Not later than three Business Days following delivery of a Termination Amount Notice by
Buyer, Seller shall make a cash payment, by wire transfer of immediately available funds to an
account designated by Buyer, to Buyer in an amount equal to the Termination Amount.
Termination Date means (i) in respect of a Merger Event, the Merger Date, (ii) in respect of
a Nationalization, the date of the first public announcement of a firm intention to nationalize and
(iii) in respect of an Insolvency, the earlier of (A) the date the shares of the relevant Common
Stock are required to be transferred to a trustee, liquidator or other similar official, (B) the
date the holders of shares of such Common Stock become legally prohibited from transferring such
Common Stock that, in the case of a Nationalization or an Insolvency (whether or not amended or on
the terms originally announced), leads to the Nationalization or the Insolvency, as the case may
be, and (C) the date of the occurrence of any of the events specified in Section 8,01(b) with
respect to the Company, and (iv) in respect of a De-Listing, the date of the first announcement of
an intention to de-list the shares of Common Stock, in each case as determined by Buyer.
ARTICLE 8 Section 8.01. Acceleration. If one or more of the following events (each an
Event of Default) shall occur:
(a) any legal proceeding shall have been instituted or any other event shall have occurred or
condition shall exist that in Buyers judgment could have a material adverse effect on the
financial condition of Seller or on Sellers ability to perform Sellers obligations hereunder or
under the Pledge Agreement or any Transaction Confirmation, or that calls into question the
validity or binding effect of any agreement of Seller hereunder or under the Pledge Agreement or
any Transaction Confirmation;
(b) Seller makes an assignment for the benefit of creditors, files a petition in bankruptcy,
is adjudicated insolvent or bankrupt, petitions or applies to any tribunal for any receiver of or
any trustee for Seller or any substantial part of Sellers property, commences any proceeding
relating to Seller under any reorganization, arrangement, readjustment of debt, dissolution or
liquidation law or statute of any jurisdiction, whether now or hereafter in effect, or there is
commenced against or with respect to Seller or any substantial portion of its property any such
proceeding and an order for relief is issued or such proceeding remains undismissed for a period of
30 days;
(c) at any time, any representation made or repeated or deemed to have been made or repeated
by Seller under this Agreement, any Transaction Confirmation or the Pledge Agreement or any
certificate delivered pursuant hereto or thereto would be incorrect or misleading in any material
respect if made or repeated as of such time;
(d) Seller fails to fulfill or discharge when due any of its obligations, covenants or
agreements under or relating to this Agreement, any Transaction Confirmation or the Pledge
Agreement, including Sellers obligations to deliver shares of Common Stock (or security
entitlements in respect thereof) or cash on any Settlement Date for any Transaction entered into
hereunder;
(e) due to the adoption of, or any change in, any applicable law after the date hereof, or due
to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory
authority with
11
competent jurisdiction of any applicable law after the date hereof, it becomes unlawful for Seller
to perform any absolute or contingent obligation to make payment or delivery hereunder or to comply
with any other material provision of this Agreement, any Transaction Confirmation or the Pledge
Agreement;
(f) a Hedging Disruption Event with respect to any Transaction. Hedging Disruption Event
means with respect to Buyer as determined in its reasonable discretion, the inability or
impracticality, due to market illiquidity, illegality, lack of hedging transactions, credit worthy
market participants or otherwise, to establish, re-establish or maintain any transactions necessary
or advisable to hedge, directly or indirectly, the equity price risk of entering into and
performing under the Transaction on terms reasonable to Buyer or an affiliate in its reasonable
discretion, including the event that at any time Buyer concludes that it or any of its affiliates
are unable to establish, reestablish or maintain a full hedge of its position in respect of the
Transaction through share borrowing arrangements on terms deemed reasonable to Buyer and otherwise
at a cost not significantly greater than that on the Trade Date; provided, however, that, solely
with respect to any such increase in costs, no Hedging Disruption Event shall be deemed to have
occurred if Seller agrees to such adjustments to the terms of the Transaction as the Calculation
Agent, in its sole discretion, deems necessary to compensate Buyer for such increase in costs;
(g) (i) if the Seller is a trust, the trust agreement or declaration of trust with respect to
the Seller is terminated or revoked or amended or modified in any manner adverse to the Sellers
obligations under this Agreement; (ii) if the Seller is a partnership, (x) any partner breaches any
provision of the partnership agreement or (y) the partnership is liquidated pursuant to the terms
of the partnership agreement; if the Seller is a limited partnership, any General Partner breaches
any provision of the partnership agreement of Seller; (iii) if the Seller is a limited liability
company, any Managing Member breaches any provision of the Operating Agreement of Seller; or
(h) a Collateral Event of Default within the meaning of the Pledge Agreement shall occur;
then, upon notice to Seller from Buyer at any time following an Event of Default, an Acceleration
Date shall occur, and Seller shall become obligated to deliver to an affiliate of Buyer designated
by Buyer immediately upon receipt of the Acceleration Amount Notice a number of Free Shares of each
Common Stock that is the subject of a Transaction hereunder equal to the Acceleration Amount for
such Common Stock; provided that if Buyer proceeds to realize upon any collateral pledged under the
Pledge Agreement and to apply the proceeds of such realization as provided in paragraph second of
Section 7(d) thereof, then, to the extent of such application of proceeds, Sellers obligation to
deliver Common Stock pursuant to this paragraph shall be deemed to be an obligation to deliver an
amount of cash equal to the aggregate Market Value of such Free Shares on the Acceleration Date.
The Acceleration Amount of any Common Stock means the quotient obtained by dividing: (i) the
aggregate Acceleration Value for all Transactions hereunder of which such Common Stock is the
subject, by (ii) the Market Value per share of such Common Stock on the Acceleration Date.
The Acceleration Value means, for any Transaction hereunder, an amount determined by the
Calculation Agent representing the fair value to Buyer and its affiliates of an agreement with
terms that would preserve for Buyer the economic equivalent of the aggregate payments and
deliveries in respect of such Transaction that Buyer and its affiliates would, but for the
occurrence of the Acceleration Date, have been entitled to receive under Article 3 (taking into
account any adjustments pursuant to Section 7.01 that may have been calculated on or prior to the
Acceleration Date). The Calculation Agent shall calculate such amount based on the following
factors (and such other factors as it deems appropriate): (i) the volatility of the Common Stock
that is the subject of such Transaction, (ii) dividends on such Common Stock, (iii) prevailing
interest rates and (iv) in the event of a Merger Event, a term equal to the number of days from the
Merger Event Announcement Date through and including the Maturity Date (as defined in the relevant
Transaction Confirmation).
Merger Event Announcement Date means in respect of a Merger Event, the date of the first
public announcement of a firm intention to merge or to make an offer (whether or not amended or on
the terms originally announced) that leads to the Merger Event as determined by the Buyer.
As promptly as reasonably practicable after calculation of the Acceleration Value, the
Calculation Agent shall deliver to Seller and Buyer a notice (the Acceleration Amount Notice)
specifying the
12
Acceleration Amount of shares of Common Stock (or security entitlements in respect thereof)
required to be delivered by Seller.
ARTICLE 9 Section 9.01. Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted by any standard
forms of telecommunication. Notices to Buyer shall be directed to it care of Banc of America
Securities LLC, 9 West 57th Street, New York, New York 10019, Telecopy No. 212-583-8569, Attention:
Robert Dilworth; notices to Seller shall be directed to it at the address specified on the last
page of this Agreement.
Section 9.02. Governing Law; Severability; Submission to Jurisdiction; Waiver of
Jury Trial. (a) This Agreement shall be governed by and construed in accordance with the laws of
the State of New York (without reference to choice of law doctrine).
(b) To the extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) Seller and Buyer hereby irrevocably and unconditionally submit to the non-exclusive
jurisdiction of the Federal and state courts located in the Borough of Manhattan, in the City of
New York in any suit or proceeding arising out of or relating to this Agreement, each Transaction
Confirmation or the Pledge Agreement or the transactions contemplated hereby or thereby.
(d) Seller and Buyer hereby irrevocably and unconditionally waive any and all right to trial
by jury in any legal proceeding arising out of or related to this Agreement, each Transaction
Confirmation or the Pledge Agreement or the transactions contemplated hereby or thereby.
(e) Service of Process. Seller irrevocably appoints the party specified on the last page of
this Agreement, and Buyer appoints Banc of America Securities LLC, as process agent to receive for
it and on its behalf, service of process in any action, suit or other proceeding arising out of
this Agreement, each Transaction Confirmation or the Pledge Agreement or any transaction
contemplated hereby or thereby. If for any reason the party as specified on the last page hereof
is unable to act as such, Seller will promptly notify Buyer and within 30 days appoint a substitute
process agent acceptable to Buyer. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 9.01. Nothing in this Agreement will affect the right
of either party to serve process in any other manner permitted by law.
Section 9.03. Disclosure. Buyer and Seller hereby acknowledge and agree that (i)
Buyer and its affiliates have authorized Seller to disclose the structure set forth herein to any
and all persons, and there are no express or implied agreements, arrangements or understandings to
the contrary, and (ii) Buyer and its affiliates waive any and all claims to any proprietary rights
with respect to the structure set forth herein, and authorize Seller to use any information which
Seller receives or has received with respect to the structure set forth herein in any manner.
Section 9.04. Entire Agreement. Except as expressly set forth herein, in the Pledge
Agreement and in each Transaction Confirmation, this Agreement (as supplemented by each Transaction
Confirmation) and the Pledge Agreement constitute the entire agreement and understanding among the
parties with respect to the subject matter hereof and thereof and supersede all oral communications
and prior writings with respect thereto.
Section 9.05. Amendments, Waivers. Any provision of this Agreement or any
Transaction Confirmation may be amended or waived if, and only if, such amendment or waiver is in
writing and signed, in the case of an amendment, by Buyer and Seller or, in the case of a waiver,
by the party against whom the waiver is to be effective. No failure or delay by either party in
exercising any right, power or privilege hereunder or thereunder shall operate as a waiver thereof
nor shall any single or partial exercise thereof preclude any other or further exercise thereof or
the exercise of any other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.06. Netting and Set-off. (a) If on any date cash would otherwise be
payable or shares of Common Stock or other property would otherwise be deliverable (including, for
the avoidance of doubt, the replacement, as required by Section 5(i) of the Pledge Agreement, of
shares of Common Stock that have been
13
rehypothecated pursuant to such Section) pursuant to this Agreement or the Pledge Agreement by
Buyer to Seller and by Seller to Buyer and the type of property required to be paid or delivered by
each such party on such date is the same, then, on such date, each such partys obligation to make
such payment or delivery will be automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable or deliverable by one such party exceeds the
aggregate amount that would otherwise have been payable or deliverable by the other such party,
replaced by an obligation upon the party by whom the larger aggregate amount would have been
payable or deliverable to pay or deliver to the other party the excess of the larger aggregate
amount over the smaller aggregate amount.
(b) In addition to and without limiting any rights of set-off that a party hereto may have as
a matter of law, pursuant to contract or otherwise, upon the occurrence of a Termination Date to
which Section 7.04 applies or an Acceleration Date, Buyer shall have the right to terminate,
liquidate and otherwise close out the transactions contemplated by this Agreement, each Transaction
Confirmation and the Pledge Agreement pursuant to the terms hereof and thereof, and to set off any
obligation that Buyer or any affiliate of Buyer may have to Seller, including without limitation
any obligation to make any release, delivery or payment to Seller pursuant to the Pledge Agreement,
against any right Buyer or any of its affiliates may have against Seller, including without
limitation any right to receive a payment or delivery pursuant to any provision of this Agreement.
In the case of a set-off of any obligation to release, deliver or pay assets against any right to
receive assets of the same type, such obligation and right shall be set off in kind. In the case
of a set-off of any obligation to release, deliver or pay assets against any right to receive
assets of any other type, the value of each of such obligation and such right shall be determined
by the Calculation Agent and the result of such set-off shall be that the net obligor shall pay or
deliver to the other party an amount of cash or assets, at the net obligors option, with a value
(determined, in the case of a delivery of assets, by the Calculation Agent) equal to that of the
net obligation. In determining the value of any obligation to release or deliver Common Stock or
right to receive Common Stock, the value at any time of such obligation or right shall be
determined by reference to the market value of the Common Stock at such time. If an obligation or
right is unascertained at the time of any such set-off, the Calculation Agent may in good faith
estimate the amount or value of such obligation or right, in which case set-off will be effected in
respect of that estimate, and the relevant party shall account to the other party at the time such
obligation or right is ascertained.
Section 9.07. No Third Party Rights, Successors and Assigns. This Agreement (as
supplemented by each Transaction Confirmation) is not intended and shall not be construed to create
any rights in any person other than Seller, Buyer, an affiliate of Buyer designated hereunder to
receive Free Shares and their respective successors and assigns and no other person shall assert
any rights as third party beneficiary hereunder. Whenever any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such party. All the
covenants and agreements herein contained by or on behalf of the Seller and Buyer shall bind, and
inure to the benefit of, their respective successors and assigns whether so expressed or not, and
shall be enforceable by and inure to the benefit of Buyer and its successors and assigns.
Section 9.08. Certain Authorized Transfers. Buyer may transfer or assign its rights
and obligations in whole or in part to (i) any of its affiliates or (ii) any entities sponsored or
organized by, or on behalf of or for the benefit of, Buyer.
Section 9.09. Counterparts. This Agreement may be executed in any number of
counterparts, and all such counterparts taken together shall be deemed to constitute one and the
same agreement.
*************
Date of Agreement: September 13, 2002
Seller: Devotion Ltd., a corporation
Sellers Address for Notices: *************
14
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date and year first above
written.
SELLER:
DEVOTION LTD. SECURED PARTY:
BANK OF AMERICA, N.A. 11
Exhibit 5
Exhibit 5
Exhibit 5
Exhibit 5
Exhibit 5
1 On November 25, 2002, Aundyr Trust Company Limited changed its name to IFG International Trust Company Limited.
2 Pierson Heldring & Pierson (Isle of Man) Limited changed its name to MeesPierson (Isle of Man) Limited and then to MeesPierson
Intertrust.
3 Valmet (Isle of Man) Limited changed its name to Mutual Trust Management (Isle of Man) Limited.
4 Northern Bank Trust Company (IOM) Limited has been dissolved.
5 Current address.
Transaction
Price
Exercise
Where and How
Transaction
Options or
(per
Price (per
Transaction was
Date
Legal Owner
Code
Security Type4
Shares
Warrants
share)
share)
Effected
Subsidiary of Pitkin
Non-Grantor Trust
B
Options
162,500
n/a1
$
3.00
Private
Subsidiary of Pitkin
Non-Grantor Trust
B
Options
25,000
n/a1
$
3.00
Private
Subsidiary of Pitkin
Non-Grantor Trust
B
Options
162,500
n/a1
$
3.00
Private
Subsidiary of Pitkin
Non-Grantor Trust
B
Options
25,000
n/a1
$
3.00
Private
Charles J. Wyly, Jr.
S
Options
(375,000
)
n/a1
$
3.00
Private
Subsidiary of Pitkin
Non-Grantor Trust
E
Options
100,000
(100,000
)
$
3.00
Option exercise with Michaels
Subsidiary of Pitkin
Non-Grantor Trust
E
Options
25,000
(25,000
)
$
3.00
Option exercise with Michaels
Subsidiary of Pitkin
Non-Grantor Trust
E
Options
75,000
(75,000
)
$
3.00
Option exercise with Michaels
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(25,000
)
$
22.00
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(25,000
)
$
22.00
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(12,500
)
$
21.13
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(12,500
)
$
21.13
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(26,000
)
$
21.06
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(26,000
)
$
21.06
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(10,000
)
$
21.50
Transaction throughbroker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(10,000
)
$
21.50
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(13,000
)
$
20.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(13,000
)
$
20.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(5,000
)
$
20.00
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(5,000
)
$
20.00
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(1,250
)
$
20.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(7,250
)
$
20.88
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(1,250
)
$
20.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(7,250
)
$
20.88
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
E
Options
87,500
(87,500
)
$
3.00
Option exercise with Michaels
Subsidiary of Pitkin
Non-Grantor Trust
E
Options
87,500
(87,500
)
$
3.00
Option exercise with Michaels
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(6,500
)
$
21.25
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(6,500
)
$
21.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(8,500
)
$
21.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(10,000
)
$
21.75
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(8,500
)
$
21.50
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(6,500
)
$
21.38
Transaction through broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(6,500
)
$
21.25
Transaction through broker
Transaction
Price
Exercise
Where and How
Transaction
Options or
(per
Price (per
Transaction was
Date
Legal Owner
Code
Security Type4
Shares
Warrants
share)
share)
Effected
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(10,000
)
$
21.75
Transaction through
broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(5,000
)
$
20.63
Transaction through
broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(1,000
)
$
20.63
Transaction through
broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(1,000
)
$
20.63
Transaction through
broker
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(5,000
)
$
20.63
Transaction through
broker
Charles J. Wyly, Jr.
G
Options
300,000
$
20.63
Option grant by Michaels
Subsidiary of Pitkin
Non-Grantor Trust
S
Stock
(17,000
)
$
28.53
Transaction through
broker
Maroon Creek Trust
B
Options
300,000
n/a1
$
17.00
Private
Maroon Creek Trust
B
Options
50,000
n/a1
$
17.00
Private
Charles J. Wyly, Jr.
S
Options
(350,000
)
$
17.00
Private
Woody International Trust
B
Options
50,000
n/a1
$
17.00
Private
Woody International Trust
B
Options
50,000
n/a1
$
17.00
Private
Charles J. Wyly, Jr.
S
Options
(100,000
)
$
17.00
Private
Subsidiary of Castle
Creek International
Trust
C
Options
(350,000
)
$
17.00
Option cancellation by
Michaels
Subsidiary of Tyler Trust
C
Options
(100,000
)
$
17.00
Option cancellation by
Michaels
Subsidiary of Castle
Creek International
Trust
G
Options
350,000
$
12.50
Option grant by Michaels
Subsidiary of Tyler Trust
G
Options
100,000
$
12.50
Option grant by Michaels
Subsidiary of Castle
Creek International
Trust
B
Stock
666,667
$
12.50
Transaction with Michaels
Charles J. Wyly, Jr.
G
Options
367,417
$
14.38
Option grant by Michaels
Subsidiary of Red
Mountain Trust
B
Options
666,667
$
0.50
$
10.50
Transaction with Michaels
Subsidiary of Red
Mountain Trust
E
Options
666,667
(666,667
)
$
10.50
Option exercise with
Michaels
Subsidiary of Castle
Creek International
Trust
S
Stock
(100,000
)
$
20.94
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(100,000
)
$
21.25
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(100,000
)
$
21.63
Transaction through
broker
Charles J. Wyly, Jr.
E
Options
25,000
(25,000
)
$
14.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
S
Stock
(25,000
)
$
22.00
Transaction through
broker
Charles J. Wyly, Jr.
E
Options
67,042
(67,042
)
$
14.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
S
Stock
(67,042
)
$
21.40
Transaction through
broker
Charles J. Wyly, Jr.
E
Options
47,500
(47,500
)
$
14.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
S
Stock
(47,500
)
$
21.38
Transaction through
broker
Charles J. Wyly, Jr.
E
Stock
92,500
(92,500
)
$
14.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
S
Stock
(92,500
)
$
21.02
Transaction through
broker
Charles J. Wyly, Jr.
E
Options
135,375
(135,375
)
$
14.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
G
Options
581,920
$
21.38
Option grant by Michaels
Transaction
Price
Exercise
Where and How
Transaction
Options or
(per
Price (per
Transaction was
Date
Legal Owner
Code
Security Type4
Shares
Warrants
share)
share)
Effected
Charles J. Wyly, Jr.
G
Options
18,080
$
21.38
Option grant by Michaels
Brush Creek Ltd.
S
Stock
(155,000
)
$
20.88
Transaction through
broker
Charles J. Wyly, Jr.
S
Stock
(135,375
)
$
20.88
Transaction through
broker
MEF, Ltd.
S
Stock
(100,000
)
$
20.88
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(7,500
)
$
32.58
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(54,000
)
$
29.35
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(40,000
)
$
33.06
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(16,000
)
$
34.33
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(40,000
)
$
35.05
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(11,000
)
$
35.76
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(10,000
)
$
36.63
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(3,000
)
$
36.25
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(10,500
)
$
35.08
Transaction through
broker
Subsidiary of Red
Mountain Trust
S
Stock
(8,000
)
$
34.41
Transaction through
broker
Stargate, Ltd.
E
Options
37,500
(37,500
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(37,500
)
$
43.42
Transaction through
broker
Stargate, Ltd.
E
Options
40,000
(40,000
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(40,000
)
$
40.16
Transaction through
broker
Stargate, Ltd.
E
Options
72,500
(72,500
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(72,500
)
$
40.29
Transaction through
broker
Stargate, Ltd.
E
Options
50,000
(50,000
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(50,000
)
$
41.00
Transaction through
broker
Stargate, Ltd.
E
Options
70,000
(70,000
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(70,000
)
$
42.23
Transaction through
broker
Stargate, Ltd.
E
Options
37,500
(37,500
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
E
Options
70,000
(70,000
)
$
21.38
Option exercise with
Michaels
Charles J. Wyly, Jr.
S
Stock
(70,000
)
$
40.33
Transaction through
broker
Charles J. Wyly, Jr.
S
Stock
(37,500
)
$
40.64
Transaction through
broker
Stargate, Ltd.
E
Options
72,500
(72,500
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(72,500
)
$
40.67
Transaction through
broker
Stargate, Ltd.
E
Options
4,167
(4,167
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(4,167
)
$
40.00
Transaction through
broker
Stargate, Ltd.
E
Options
50,000
(50,000
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(50,000
)
$
40.34
Transaction through
broker
Transaction
Price
Exercise
Where and How
Transaction
Options or
(per
Price (per
Transaction was
Date
Legal Owner
Code
Security Type4
Shares
Warrants
share)
share)
Effected
Stargate, Ltd.
E
Options
46,667
(46,667
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
E
Options
12,500
(12,500
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(46,667
)
$
40.80
Transaction through
broker
Stargate, Ltd.
E
Options
36,666
(36,666
)
$
21.38
Option exercise with
Michaels
Stargate, Ltd.
S
Stock
(36,666
)
$
42.17
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
E
Options
350,000
(350,000
)
$
17.00
Option exercise with
Michaels
Subsidiary of Tyler Trust
E
Options
100,000
(100,000
)
$
17.00
Option exercise with
Michaels
Charles J. Wyly, Jr.
G
Options
50,000
$
35.00
Option grant by Michaels
Subsidiary of Castle
Creek International
Trust
S
Stock
(42,500
)
$
42.00
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(157,500
)
$
42.30
Transaction through
broker
Charles J. Wyly, Jr.
G
Options
17,500
$
42.00
Option grant by Michaels
Subsidiary of Castle
Creek International
Trust
S
Stock
(82,500
)
$
42.39
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(7,500
)
$
42.02
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(100,000
)
$
45.86
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(10,000
)
$
41.97
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(10,000
)
$
52.82
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(25,000
)
$
52.97
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(64,500
)
$
52.80
Transaction through
broker
Subsidiary of Castle
Creek International
Trust
S
Stock
(500
)
$
52.97
Transaction through
broker
Charles J. Wyly, Jr.
G
Options
100,000
$
34.10
Option grant by Michaels
1
For a description of the transaction terms for this transaction, see Preamble of this Amendment.
3
On the dates indicated, one of the Reporting Persons ceased reporting beneficial ownership of the shares held by a domestic trust for the benefit of a
child of such Reporting Person.
4
For the sake of simplicity, this table groups warrants held by the subsidiaries of the Foreign Trusts into the total number of options listed in each entry,
and does not differentiate between options and warrants.
1.
The terms of the particular Transaction to which this Confirmation relates are as follows:
Trade Date: September 24, 2002
Common Stock and Company: Michaels
Stores, Inc. (MIK)
Purchase Price: U.S. $25,045,589.50
Payment Date: September 27, 2002
Threshold Appreciation Price:
U.S. $83.0556
Downside Protection Threshold Price:
U.S. $38.5778
Maturity Date
Base Amount
266,667 shares
266,667 shares
266,666 shares
Settlement Ratio: For any Settlement Date, (i) if the Settlement
Price is less than the Threshold Appreciation Price but greater than
the Downside Protection Threshold Price, the Settlement Ratio shall
be a ratio equal to the Downside Protection Threshold Price divided
by the Settlement Price, (ii) if the Settlement Price is equal to or
greater than the Threshold Appreciation Price, the Settlement Ratio
shall be a ratio equal to one (1) minus a fraction the numerator of
which is the excess of the Threshold Appreciation Price over the
Downside Protection Threshold Price and the denominator of which is
the Settlement Price, and (iii) if the
Settlement Price is equal to or less than the Downside Protection
Threshold Price, the Settlement Ratio shall be one (1), and in each
calculation described in clause (i) or (ii) above, the Settlement
Ratio shall be rounded upward or downward to the nearest
1/10,000th or, if there is not a nearest
1/10,000th, to the next lower 1/10,000th.
Existing Transfer Restrictions: None.
Additional Cash Payment: Not applicable.
Ordinary Dividend: U.S. $0.00 per share.
Dividend Payment: If at any time from and excluding the Trade Date,
to and including the Maturity Date, an ex-dividend date for any
regular cash dividend in excess of the Ordinary Dividend occurs with
respect to the shares of Common Stock that are the subject of this
Transaction, such cash dividend shall be deemed to be an
Extraordinary Dividend (it being understood that because there is no
cash dividend currently paid on the Common Stock, all such dividends
shall be Extraordinary Dividends) and Seller shall pay to Buyer an
amount in cash equal to the amount of such dividend in excess of the
Ordinary Dividend times the Base Amount. Such payment shall be paid
on the day such dividend is paid by the Company. Any such payment
shall be without prejudice to Section 7.01(a) of the Master Stock
Purchase Agreement.
Other Provisions:
Name:
Title:
Name: Robert J. Dilworth
Title: Authorized Signatory
PLEDGE AGREEMENT
SPECIALIZED TERM APPRECIATION
RETENTION SALE (STARS)
EQUITY FINANCIAL PRODUCTS GROUP
The Security Interests
Definitions
Representations and Warranties of Pledgor
Certain Covenants of Pledgor
Administration of the Collateral and
Valuation of the Securities
Income and Voting Rights in Collateral
Remedies upon Events of Default
Netting and Set-off
Miscellaneous
Termination of Pledge Agreement
Prospect Chambers, Prospect
Hill Douglas, Isle of Man 1M1
1ET Telephone:
011-44-1624-626561 Facsimile:
011-44-1624-628580
/s/ Andrew P. Wallis
By:
/s/ Mark H. Byrne
Name:
Andrew P. Wallis
Name:
Mark H.Byrne
Title:
Director
Title:
Director
Title:
Title:
STARS Variable Share Prepaid Forward
Prospect Chambers
Prospect Hill
Douglas
Isle of Man
1M1 1ET
Bank of America
Devotion Limited
Common stock of M ichaels Stores, Inc. (Ticker: MIK)
800,000 shares of the Common Stock.
The weighted average price per share at which Bank of America, or an affiliate of Bank of
America, hedges its risk in the market by selling approximately 534,700 shares of the Common
Stock.
The date on which the Purchase Price is determined.
The product of the Initial Share Price times 68.98% times the Base Amount.
Three (3) business days after the Trade Date.
60 months from the Trade Date.
Closing Price, in respect of any Valuation Date (as defined in the Master Stock Purchase
Agreement) shall be equal to the closing price per share of the Common Stock as reported by
NYSE, provided no Market Disruption Event (as defined in the Master Stock Purchase
Agreement and as summarized below) exists on such Date.
Price:
$ per share (85.00% of the Initial Share Price).
$ per share (183.00% of the Initial Share Price).
Physical, with cash settlement option. Except as otherwise permitted by the Master Stock
Purchase Agreement, settlement shall be by physical delivery by Party B on the Settlement
Date of a number of unrestricted, freely transferable shares equal to the Base Amount times the
Settlement Ratio.
Three (3) Business Days after the Maturity Date.
Closing Price per share of the Common Stock on the Maturity Date.
As defined in, and subject to, adjustment and rounding pursuant to, the Master Stock Purchase
Agreement, but described generally as follows:
If Settlement Price < Threshold Appreciation Price, but > than Downside Threshold Protection
Price: Settlement Ratio = Downside Protection Threshold Price divided by Settlement Price.
If Settlement Price >= Threshold Appreciation price, then Settlement Ratio = 1 minus
((Threshold Appreciation Price minus Downside Protection Threshold Price) divided by
Settlement Price)).
If Settlement Price <= Downside Protection Threshold Price, Settlement Ratio = 1
The occurrence or existence at any time on any day of: the suspension of or limitation imposed
on trading in the Common Stock on the Exchange or any successor exchange or in listed options
on the Common Stock (by reason of movements in price exceeding limits permitted by the
Exchange or otherwise), if in the determination of the Calculation Agent such suspension or
limitation is material.
Party B has consulted appropriate outside advisors regarding any relevant tax, legal or
regulatory issues relating to this transaction, and is not relying on Bank of America for such
advice. Party B has taken independent tax advice with respect to this Transaction from the
independent tax advisor indicated in Party Bs Private Client Questionnaire.
Base documentation will be in the form of a Master Stock Purchase Agreement and a Pledge
Agreement securing Party Bs obligations under the Master Stock Purchase Agreement. If not
already in our possession, signed copies of these Agreements are due to Bank of
America within 10 business days of the date hereof. The Master Stock Purchase
Agreement shall be supplemented with respect to this Transaction by the Transaction
Confirmation described below.
Party B hereby agrees that if at any time from and excluding the Trade Date, to and including
the Maturity Date, an ex-dividend date for any regular cash dividend in excess of the Ordinary
Dividend occurs with respect to the shares of the Common Stock, Party B shall pay to Party A
an amount in cash equal to the amount of such dividend in excess of the Ordinary Dividend
times the Base Amount. Such payment shall be paid on the day such dividend is paid by the
Company.
$0.00 per share
Share-for-Share Merger Event: Party A may treat the New Shares given as consideration in
the Merger Event as being the Common Stock and the Base Amount as being the number of
such shares so given, provided, however, that the Calculation Agent will make corresponding
adjustments, if any, to one or more of the Base Amount, Settlement Ratio, Threshold
Appreciation Price, Downside Protection Threshold Price, any Closing Price and any other
variable related to the exercise, settlement and payment terms, and may further adjust such
terms to reflect the characteristics (including, without limitation, the volatility, dividend
practice and policy and liquidity) of the New Shares if necessary to preserve the theoretical
value of the Transaction after giving effect to the Merger Event.
Merger Events other than a Share-for-Share Merger Event: Party A may elect early
termination of the Transaction, in which case prepayment of a Termination Amount will be
due by Party B.
Extraordinary Events:
Nationalization, Insolvency, or De-Listing: Party A may elect early termination of the
Transaction, in which case prepayment of a Termination Amount will be due by Party B.
Any Hedging Disruption Event, which term shall mean with respect to BofA any inability of
Buyer, (which shall include an increase in costs) due to market illiquidity, illegality or lack of
availability of hedging transaction market participants or otherwise, to establish, re-establish or
maintain any hedging transaction or transactions necessary in the normal course of Buyers
business of hedging the price and market risk of entering into and performing under this
Agreement or any Transaction hereunder; provided, however, that , solely with respect to any
such increase in costs, no Event of Default shall be deemed to have occurred if Seller agrees to
such adjustments to the terms of the relevant Transaction as the Calculation Agent, in its sole
discretion, deems necessary to compensate Buyer for such increase in costs.
Bank of America
As security for all obligations of Party B to Party A or any of its affiliates, now or hereafter
existing, including but not limited to this Transaction, together with any and all amendments,
extensions and renewals thereof (the Obligations), Party B hereby grants Party A a perfected
first priority security interest in a number of shares of the Common Stock, including all
proceeds thereof (the Collateral), equal to the Base Amount held in an account for Bank of
America, N.A. at Banc of America Securities LLC. Party B warrants to Party A that it is the
lawful owner of the Collateral, it possesses full power and authority to pledge the Collateral to
Party A, and the Collateral is free of all claims and liens other than the lien created hereby.
Party B authorizes Banc of America Securities LLC to deposit the Collateral described herein to
a separate account in the name of Bank of America, N.A. Collateral Account of Party B.
Upon default in the payment when due of principal, interest or any other payment obligation
on any of the Obligations, or upon the occurrence of any event of default as defined in any
document(s) relating to any of the Obligations which is not cured within any time allowed
therein, Party A may, without further notice, exercise the rights of a secured lender under New
York law then in effect with respect to the Collateral including, without limitation, the right of
setoff. Party B hereby appoints Party A as its attorney-in-fact with full power to endorse,
transfer, convert, sell, surrender and deliver any instrument of Collateral described above.
Interest and/or dividends earned on the Collateral shall be paid to Party A or Party B in
accordance with the terms of the documents evidencing the Obligations. The security interest
created hereby shall be construed in accordance with the laws of the State of New York, shall
inure to the benefit of Party A, its successors and assigns, shall be binding upon Party B and its
heirs, personal representatives, successors and assigns and shall released upon our receipt from
Party B of an executed copy of the Transaction Confirmation.
c/o Banc of America Securities LLC
9 West 57th Street, 40th Floor
New York, NY 10019
MASTER STOCK PURCHASE
AGREEMENT
SPECIALIZED TERM APPRECIATION
RETENTION SALE (STARS)
DEFINITIONS
TRANSACTIONS
Section 2.02. Single Agreement
SALE AND PURCHASE
Section 3.02. Payment for and Delivery of Shares
Section 3.03. Cash Settlement Option
REPRESENTATIONS AND WARRANTIES OF
SELLER
CONDITIONS TO BUYERS OBLIGATIONS
COVENANTS
Section 6.02. Notices
Section 6.03. Further Assurances
Section 6.04. Securities Contract
Section 6.05. Indemnity
ADJUSTMENTS
Section 7.02. Merger Events
Section 7.03. Nationalization, Insolvency and De-Listing
Section 7.04. Termination and Payment
ACCELERATION
MISCELLANEOUS
Section 9.02. Governing Law; Severability; Submission to Jurisdiction; Waiver of Jury Trial
Section 9.03. Disclosure
Section 9.04. Entire Agreement
Section 9.05. Amendments, Waivers
Section 9.06. Netting and Set-off
Section 9.07. No Third Party Rights, Successors and Assigns
Section 9.08. Certain Authorized Transfers
Section 9.09. Counterparts
DEFINITIONS
Representations And Warranties Of Seller
Conditions To Buyers Obligations
Covenants
Adjustments
Acceleration
Miscellaneous
Prospect Chambers, Prospect Hill
Douglas, Isle of Man 1M1 1ET
Telephone: 011-44-1624-626561
Facsimile: 011-44-1624-628580
/s/ Andrew P. Wallis
By:
/s/ Mark H. Byrne
Name:
Andrew P. Wallis
Name:
Mark H.Byrne
Title:
Director
Title:
Director
Title:
Title:
Name of Trust
Name of Trustee
Trustee Start Date
Trustee End Date
Trustee Address5
Bessie Trust
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
2/2/1994
5/10/1998
Lorne House
Castletown
Isle of Man, British Isles
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
5/11/1998
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
Bulldog Non-Grantor Trust
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
3/11/1992
9/30/1996
Lorne House
Castletown
Isle of Man, British Isles
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
10/1/1996
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
Castle Creek International Trust
Pierson Heldring &
Pierson (Isle of Man)
Limited, a corporation
organized under the laws
of the Isle of
Man2
12/4/1992
7/22/1998
Clinchs House, Lord
Street
PO Box 227
Douglas, Isle of Man
Valmet (Isle of Man)
Limited, a corporation
organized under the laws
of the Isle of
Man3
7/23/1998
8/31/1999
Warwick House
Victoria Road
Douglas, Isle of Man
Northern Bank Trust
Company (IOM) Limited, a
corporation organized
under the laws of the
Isle of Man4
9/1/1999
12/20/2000
PO Box 113
Sixty Circular Road
Douglas, Isle of Man
Name of Trust
Name of Trustee
Trustee Start Date
Trustee End Date
Trustee Address5
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
12/21/2000
9/19/2004
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
Trident Trust Company
(I.O.M.) Limited, a
corporation organized
under the laws of the
Isle of Man
9/20/2004
12-14 Finch Road
P.O. Box 175
Douglas IM99 1TT
Isle of Man, British Isles
Delhi International Trust
Credit Suisse Trustees
(Isle of Man) Limited
12/4/1992
3/20/1995
38-40 Victoria Road
Douglas, Isle of Man
Wychwood Trust Limited,
a corporation organized
under the laws of the
Isle of Man
3/21/1995
8/15/1995
1 Castle Street
Castle Town, Isle of
Man,
IM9 1LF
Janak Basnet
8/16/1995
10/23/1995
unknown
MeesPierson (Isle of
Man) Limited, a
corporation organized
under the laws of the
Isle of Man2
10/24/1995
7/22/1998
Clinchs House, Lord
Street
PO Box 227
Douglas, Isle of Man
Valmet (Isle of Man)
Limited, a corporation
organized under the laws
of the Isle of
Man3
7/23/1998
8/31/1999
Warwick House
Victoria Road
Douglas, Isle of Man
Northern Bank Trust
Company (IOM) Limited, a
corporation organized
under the laws of the
Isle of Man4
9/1/1999
12/20/2000
PO Box 113
Sixty Circular Road
Douglas, Isle of Man
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
12/21/2000
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
La Fourche Trust
Name of Trust
Name of Trustee
Trustee Start Date
Trustee End Date
Trustee Address5
Wychwood Trust Limited,
a corporation organized
under the laws of the
Isle of Man
7/18/1995
2/29/1996
1 Castle Street
Castle Town, Isle of Man,
IM9 1LF
Trident Trust Company
(I.O.M.) Limited, a
corporation organized
under the laws of the
Isle of Man
3/1/1996
6/18/2001
12-14 Finch Road
P.O. Box 175
Douglas IM99 1TT
Isle of Man, British Isles
Inter-Continental
Management Limited, a
corporation organized
under the laws of the
Isle of Man
6/19/2001
Prospect Chambers
Prospect Hill
Douglas, Isle of Man
Lake Providence Trust
Pierson Heldring &
Pierson (Isle of Man)
Limited, a corporation
organized under the laws
of the Isle of
Man2
12/4/1992
7/22/1998
Clinchs House, Lord
Street
PO Box 227
Douglas, Isle of Man
Valmet (Isle of Man)
Limited, a corporation
organized under the laws
of the Isle of
Man3
7/23/1998
8/31/1999
Warwick House
Victoria Road
Douglas, Isle of Man
Northern Bank Trust
Company (IOM) Limited, a
corporation organized
under the laws of the
Isle of Man4
9/1/1999
12/20/2000
PO Box 113
Sixty Circular Road
Douglas, Isle of Man
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
12/21/2000
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
Maroon Creek Trust
MeesPierson (Isle of
Man) Limited, a
corporation organized
under the laws of the
Isle of Man2
12/28/1995
12/31/1996
Clinchs House, Lord
Street
PO Box 227
Douglas, Isle of Man
Pitkin Non-Grantor Trust
Name of Trust
Name of Trustee
Trustee Start Date
Trustee End Date
Trustee Address5
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
3/23/1992
3/31/1997
Lorne House
Castletown
Isle of Man, British Isles
IFG International Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man (formerly
known as Aundyr Trust
Company
Limited)1
4/1/1997
9/19/2004
International House
Castle Hill, Victoria Road
Douglas, Isle of Man
Trident Trust Company
(I.O.M.) Limited, a
corporation organized
under the laws of the
Isle of Man
9/20/2004
12-14 Finch Road
P.O. Box 175
Douglas IM99 1TT
Isle of Man, British Isles
Red Mountain Trust
Wychwood Trust Limited,
a corporation organized
under the laws of the
Isle of Man
7/18/1995
2/28/1996
1 Castle Street
Castle Town, Isle of
Man,
IM9 1LF
Trident Trust Company
(I.O.M.) Limited, a
corporation organized
under the laws of the
Isle of Man
3/1/1996
5/14/2002
12-14 Finch Road
P.O. Box 175
Douglas IM99 1TT
Isle of Man, British Isles
Close Trustees (Isle of
Man) Limited
5/15/2002
Close Trustees (Isle of
Man) Limited, P.O. Box
203, St. Georges Court,
Upper Church Street,
Douglas, Isle of Man
Tallulah International Trust
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
3/11/1992
12/31/1996
Lorne House
Castletown
Isle of Man, British Isles
Tyler Trust
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
2/2/1994
5/10/1998
Lorne House
Castletown
Isle of Man, British Isles
Name of Trust
Name of Trustee
Trustee Start Date
Trustee End Date
Trustee Address5
Trident Trust Company
(I.O.M.) Limited, a
corporation organized
under the laws of the
Isle of Man
5/11/1998
12-14 Finch Road
P.O. Box 175
Douglas IM99 1TT
Isle of Man, British Isles
Woody International Trust
Lorne House Trust
Company Limited, a
corporation organized
under the laws of the
Isle of Man
3/23/1992
12/31/1996
Lorne House
Castletown
Isle of Man, British Isles