-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SKA+1F0bf2Nhq7QRRzSjXsklGHYEAlqU3Zn6nJgxZxssFBlFcH5AeRhXSQ8bhKmj yZRVm/DBvCUp/fY8O8Berg== 0000899140-98-000086.txt : 19980128 0000899140-98-000086.hdr.sgml : 19980128 ACCESSION NUMBER: 0000899140-98-000086 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19980126 SROS: NASD GROUP MEMBERS: MARSHALL S. COGAN GROUP MEMBERS: TRACE FOAM SUB, INC. GROUP MEMBERS: TRACE INTERNATIONAL HOLDINGS INC SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: FOAMEX INTERNATIONAL INC CENTRAL INDEX KEY: 0000912908 STANDARD INDUSTRIAL CLASSIFICATION: PLASTICS FOAM PRODUCTS [3086] IRS NUMBER: 050473908 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: SEC FILE NUMBER: 005-48793 FILM NUMBER: 98513149 BUSINESS ADDRESS: STREET 1: 1000 COLUMBIA AVENUE CITY: LINWOOD STATE: PA ZIP: 19061 BUSINESS PHONE: 6108593000 MAIL ADDRESS: STREET 1: 1000 COLUMBIA AVE CITY: LINWOOD STATE: PA ZIP: 19061 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: TRACE INTERNATIONAL HOLDINGS INC CENTRAL INDEX KEY: 0001033338 STANDARD INDUSTRIAL CLASSIFICATION: [] FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: 375 PARK AVENUE 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10152 SC 13D/A 1 AMENDMENT NO. 5 TO SCHEDULE 13D UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. 5) FOAMEX INTERNATIONAL INC. (Name of Issuer) Common Stock, $0.01 Par Value (Title of Class of Securities) 344123-10-4 (CUSIP Number) Philip N. Smith, Jr., Esq. Trace International Holdings, Inc. 375 Park Avenue 11th Floor New York, New York 10152 (212) 230-0400 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) December 24, 1997 (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 which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box |_|. Note: Six copies of this statement, including all exhibits, should be filed with the Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent. Continued on following page(s) Page 1 of 19 Pages Exhibit Index: Page 11 SCHEDULE 13D CUSIP No. 344123-10-4 1 Name of Reporting Person I.R.S. Identification Nos. of Above Persons (entities only) Trace International Holdings, Inc. 58-1080969 2 Check the Appropriate Box If a Member of a Group a. |_| b. |X| 3 SEC Use Only 4 Source of Funds (See Instructions) BK, 00 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| 6 Citizenship or Place of Organization Delaware 7 Sole Voting Power Number of 4,474,553 Shares Beneficially 8 Shared Voting Power Owned By 7,050,247 Each Reporting 9 Sole Dispositive Power Person 4,474,553 With 10 Shared Dispositive Power 7,050,247 11 Aggregate Amount Beneficially Owned by Each Reporting Person 11,524,800 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| 13 Percent of Class Represented By Amount in Row (11) 46.2% 14 Type of Reporting Person (See Instructions) CO 2 SCHEDULE 13D CUSIP No. 344123-10-4 1 Name of Reporting Person I.R.S. Identification Nos. of Above Persons (entities only) Trace Foam Sub, Inc. 58-1080969 2 Check the Appropriate Box If a Member of a Group a. |_| b. |X| 3 SEC Use Only 4 Source of Funds (See Instructions) 00 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| 6 Citizenship or Place of Organization Delaware 7 Sole Voting Power Number of 0 Shares Beneficially 8 Shared Voting Power Owned By 7,000,247 Each Reporting 9 Sole Dispositive Power Person 0 With 10 Shared Dispositive Power 7,000,247 11 Aggregate Amount Beneficially Owned by Each Reporting Person 7,000,247 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) |_| 13 Percent of Class Represented By Amount in Row (11) 28.1% 14 Type of Reporting Person (See Instructions) CO 3 SCHEDULE 13D CUSIP No. 344123-10-4 1 Name of Reporting Person I.R.S. Identification Nos. of Above Persons (entities only) Marshall S. Cogan 2 Check the Appropriate Box If a Member of a Group* a. |_| b. |X| 3 SEC Use Only 4 Source of Funds (See Instructions) PF 5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) |_| 6 Citizenship or Place of Organization United States of America 7 Sole Voting Power Number of 649,167 Shares Beneficially 8 Shared Voting Power Owned By 0 Each Reporting 9 Sole Dispositive Power Person 649,167 With 10 Shared Dispositive Power 0 11 Aggregate Amount Beneficially Owned by Each Reporting Person 649,167 12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) [ ] 13 Percent of Class Represented By Amount in Row (11) 2.6% 14 Type of Reporting Person (See Instructions) IN 4 This Amendment No. 5 to Schedule 13D is filed on behalf of Trace International Holdings, Inc. ("Trace Holdings"), Trace Foam Company, Inc. ("Trace Foam"), Trace Foam Sub, Inc. ("Trace Foam Sub"), and Marshall S. Cogan, and amends and supplements the Schedule 13D, dated December 14, 1993 (as amended, the "Schedule 13D"), as amended by Amendment No. 1 thereto filed on December 23, 1994, Amendment No. 2 thereto filed on March 6, 1995, Amendment No. 3 thereto filed on April 28, 1995, and Amendment No. 4 thereto filed on August 28, 1997 relating to the common stock, par value $0.01 per share (the "Common Stock"), of Foamex International Inc. ("Foamex" or the "Issuer"), and is being filed pursuant to Rule 13d-2 of the General Rules and Regulations under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). This Amendment No. 5 is being filed: (i) to reflect certain transactions which occurred on December 24, 1997, (ii) to eliminate Trace Foam as a Reporting Person, and (iii) as required by Exchange Act Rule 13d-2(c), to restate information previously filed in paper format. The Schedule 13D is hereby amended and restated in its entirety as follows: Item 1. Security and Issuer. This statement relates to the Common Stock (the "Common Stock") of Foamex International Inc., a Delaware corporation (the "Issuer"). The address of the principal executive offices of the Issuer is 1000 Columbia Avenue, Linwood, Pennsylvania, 19061. Item 2. Identity and Background. (a), (b) and (c) This statement is filed by Trace International Holdings, Inc., a Delaware corporation ("Trace Holdings"), Trace Foam Sub, Inc., a Delaware corporation and wholly-owned subsidiary of Trace Holdings ("Trace Foam Sub"), and Marshall S. Cogan (together with Trace Holdings and Trace Foam Sub, the "Reporting Persons"). Trace Holdings' principal business is that of a holding company. The principal business of Trace Foam Sub is to hold shares of Common Stock. Marshall S. Cogan's principal occupation is the Chairman, Chief Executive Officer and President of United Auto Group, Inc. and the Chairman and Chief Executive Officer of Trace Holdings. The principal office of each Reporting Person is 375 Park Avenue, New York, New York 10152. Attached and incorporated herein by reference, are Schedules I and II, which set forth the names, principal business and principal business address of the directors and executive officers of Trace Holdings and Trace Foam Sub, respectively. (d) None of the Reporting Persons, nor to the best of their knowledge, any entity or person with respect to whom information is provided in response to this Item has, during the last five years, been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) None of the Reporting Persons, nor to the best of their knowledge, any entity or person with respect to whom information is provided in response to this Item has, during the last five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject 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. (f) Except as otherwise indicated on Schedule I, each individual with respect to whom information is provided in response to this Item is a citizen of the United States of America. 5 Item 3. Sources and Amounts of Funds or Other Consideration Trace Foam acquired 8,152,324 shares of Common Stock in exchange for a portion of the general partner interest it held in Foamex. Trace Holdings acquired 3,125,497 shares of Common Stock in exchange for the limited partner interest it held in Foamex and received 1,152,077 shares of Common Stock as a dividend from Trace Foam. Mr. Cogan received options to purchase 750,000 shares of Common Stock, pursuant to the Issuer's 1993 Stock Option Plan. The foregoing transactions occurred on December 14, 1993 in conjunction with a public offering by the Issuer of 10,712,000 shares of Common Stock of the Issuer. Trace Holdings acquired an aggregate of 10,000 and 30,000 shares of Common Stock on December 21 and 23, 1993, respectively, for consideration of $16.25 per share. From June 1994 to July 1996, Mr. Cogan acquired 400,000 shares of Common Stock for his own account with personal funds at prices ranging from $7.5521 to $12.125 per share. In 1995, Trace Foam transferred 7,000,247 shares of Common Stock to Trace Foam Sub, a wholly-owned subsidiary, as a capital contribution to facilitate certain borrowings from Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ"), as more fully described in Items 4 and 6 hereof. See Item 4 hereof for a description of the investment in the Issuer by the Trace Holdings Plan (defined in Item 4 hereof). On August 15, 1997, Trace Holdings entered into a Margin Loan Credit Agreement (the "Margin Loan Agreement") with The Bank of Nova Scotia (the "Bank"), the form of which is filed as Exhibit I hereto and is incorporated herein by reference. Pursuant to the terms of the Margin Loan Agreement, Trace Holdings was able to obtain term loans in an aggregate principal amount of $7,500,000 (the "Tranche A Loans") and term loans in an aggregate principal amount of $8,750,000 (the "Tranche B Loans," and together with the Tranche A Loans, the "Bank Loan"). Pursuant to the terms of the Margin Loan Agreement, Trace Holdings was permitted to borrow up to $15 million for the purpose of buying Common Stock and/or common stock of United Auto Group, Inc. (the "UAG Stock"), provided, however, that until the waiver of certain negative pledges on the UAG Stock held by Trace Holdings (the "UAG Pledge Event"), Trace Holdings was not permitted to use more than $10 million of the proceeds of the Bank Loan to purchase UAG Stock and no such purchase was permitted to be made after October 31, 1997. From August 1997 through December 1997, Trace Holdings used $2,107,721.18 of Bank Loan borrowings to purchase 174,900 shares of Common Stock at prices ranging from $9.74 to $13.0797. On December 24, 1997, Trace Holdings agreed not to make any future borrowings under the Bank Loan. Pursuant to the terms of a Pledge Agreement, the form of which is filed as Exhibit J hereto and incorporated herein by reference, the Tranche A Loans are secured by a first lien on all shares of UAG Stock acquired after the occurrence of the UAG Pledge Event and all shares of Common Stock (the "Pledged Shares") purchased with the proceeds of the Bank Loan and the Tranche B Loans are secured by a second lien on the Pledged Shares. Pursuant to the terms of a Security Agreement, the form of which is filed as Exhibit K hereto and incorporated herein by reference, the Tranche B Loans are secured by a first lien on the payments due (the "Management Fee") under the 21 Foam Management Agreement, dated as of October 13, 1992, as amended, between Foamex, L.P. and Trace Foam and the Tranche A Loans are secured by a second lien on the Management Fee. Item 4. Purpose of Transaction. Trace Holdings acquired 4,277,574 shares of Common Stock and Trace Foam acquired 7,000,247 shares of Common Stock as part of the formation and capitalization of the Issuer. See Item 3 above. Trace Foam contributed its shares of Common Stock to Trace Foam Sub in the first quarter of 1995. On December 24, 1997, Trace Foam distributed its stock in Trace Foam Sub to Trace Holdings and thus, 6 ceased to be the beneficial owner of any Common Stock as of such date. In addition, Trace Holdings and Mr. Cogan have purchased Common Stock on the open market. As a result of their ownership of an aggregate of approximately 48.9% of the Issuer's outstanding Common Stock, the Reporting Persons indirectly control the Issuer. Mr. Cogan and the officers and directors of the Reporting Persons (the "Officers and Directors") own the Common Stock for investment purposes. Trace Holdings and Trace Foam, among others, have exercised their right, contained in a registration rights agreement with Foamex, executed in connection with the capitalization of Foamex, to have their shares included in a registration statement for Common Stock of Foamex. This registration statement was declared effective by the Securities and Exchange Commission on December 13, 1994. Trace Holdings and Trace Foam Sub have pledged all of their shares of Common Stock to secure certain borrowings (See Item 6). Trace Holdings and Trace Foam Sub entered into these pledges to provide them with more flexibility in pursuing their investment strategy. Trace Holdings and Trace Foam Sub do not have any present plans to sell any shares of Common Stock. Pursuant to the terms of the Bank Loan, Trace Holdings is prohibited from acquiring additional shares of Common Stock. The Reporting Persons and the Officers and Directors intend continuously to review their investment in the Issuer. In reaching any decision with respect to such investment, the Reporting Persons and the Officers and Directors will take into consideration various factors, such as the Issuer's business and prospects, other developments concerning the Issuer, other investment opportunities available to the Reporting Persons and the Officers and Directors and general economic and market conditions. Depending upon the results of their review of such factors, the Reporting Persons and the Officers and Directors may decide to purchase (on such terms and at such times as they consider desirable) additional equity securities of the Issuer, or dispose of all or a portion of such securities (whether now or hereafter held). Executive officers of Trace currently have two seats on the Issuer's seven-person Board of Directors, and the Reporting Persons may in the future seek to have their designees fill additional seats on the Issuer's Board of Directors. The shares of Common Stock beneficially owned by Trace Holdings include 50,000 shares of Common Stock held in trust for the exclusive benefit of participants under the Trace International Holdings, Inc. Retirement Plan for Salaried Employees (the "Trace Holdings Plan") (see Item 5 hereof). The Trace Holdings Plan acquired all 50,000 shares during December 1993 in open market purchases at prices ranging from $16.25 to $16.50. The Trace Holdings Plan provides retirement benefits for the employees of Trace Holdings and its subsidiaries. All benefits under the Trace Holdings Plan, including any purchases of shares of Common Stock, are funded by Trace Holdings and its subsidiaries. Trace Holdings has appointed an investment manager to direct the investment and management of the Trace Holdings Plan's funds but retains the power to dismiss the manager and to terminate the plan. The Trace Holdings Plan, through the direction of the investment manager of Trace Holdings, will continuously review the investment in the Issuer. In reaching any decision with respect to such investment, the investment manager or Trace Holdings will take into consideration various factors, such as the Issuer's business and prospects, other developments concerning the Issuer, other investment opportunities available to the Plan and general economic and market conditions. Depending upon the results of their review of such factors, the investment manager or Trace Holdings may decide to purchase (on such terms and at such times as they consider desirable) additional equity securities of the Issuer, or such persons may decide to dispose of all or a portion of any such securities of the Issuer (whether now or hereafter held). 7 Although the foregoing describes activities and possibilities presently contemplated or under consideration by the Reporting Persons, the intentions of the Reporting Persons may change. Except as set forth above or in any item hereof, the Reporting Persons do not have any present plans or proposals that relate to or would result in any of the actions required to be described in Item 4 of Schedule 13D. Item 5. Interest in Securities of the Issuer. (a) and (b) The information in this Item 5(a) and (b) is given as of the date hereof, and is based on 24,919,680 shares of outstanding Common Stock.(1) (i) Trace Foam Sub has direct beneficial ownership of 7,000,247 shares of Common Stock, constituting 28.1% of the outstanding Common Stock. Except as set forth in the Prospectus Sale Borrower's Agreement and Customer Agreement which are filed as Exhibit F and Exhibit G, respectively to this Schedule 13D, Trace Foam Sub has the sole power to vote and dispose of the shares of Common Stock owned by it. (ii) On December 24, 1997, Trace Foam distributed all of its shares of Trace Foam Sub to Trace Holdings. Therefore, Trace Foam does not have beneficial ownership of any shares of Common Stock. (iii) Trace Holdings has direct beneficial ownership of 4,474,553 shares of Common Stock, constituting 18.0% of the outstanding Common Stock. With respect to 4,277,574 of shares of Common Stock, except as set forth in certain Pledge Agreements described in Item 6, and filed as Exhibits B and C to this Schedule 13D (the "1993 Pledge Agreements"), Trace Holdings has the sole power to vote and dispose of such shares of Common Stock. With respect to the remaining shares of Common Stock directly beneficially owned by Trace Holdings, except for certain restrictions following an event of default under the Bank Loan and Pledge Agreement described in Item 6 and filed as Exhibit I and J to this Schedule 13D, Trace Holdings has the sole power to vote and dispose of such shares of Common Stock. By virtue of its ownership of all of the outstanding capital stock of Trace Foam Sub, Trace Holdings is deemed to be the beneficial owner (as such term is defined in Rule 13d-3) of all of the Common Stock owned by Trace Foam Sub. By virtue of Trace Holdings' ability to administer, and/or terminate the Trace Holdings Plan, Trace Holdings may be deemed to own beneficially (as such term is defined in Rule 13d-3) the 50,000 shares of Common Stock held by the Trace Holdings Plan. As a result of the foregoing, Trace Holdings may be deemed to own beneficially (as such term is defined in Rule 13d-3) a total of 11,524,800 shares of Common Stock, which represents approximately 46.2% of the outstanding Common Stock. (iv) As of January 8, 1998, Mr. Cogan had acquired 400,000 shares of Common Stock and had vested options for 249,167 shares of Common Stock with an exercise price of $6.875. By virtue of Rule 13d-3, Mr. Cogan may be deemed to be the beneficial owner of 649,167 shares as a result of the 400,000 shares that have been purchased as well as the shares issuable upon exercise of the options that have vested and the options that will vest in the next sixty days. Mr. Cogan's beneficial ownership comprises 2.6% of the outstanding Common Stock of the Issuer. ____________________ 1 Pursuant to the Issuer's quarterly report on Form 10-Q for the fiscal quarter ended September 28, 1997. 8 Mr. Cogan is the Chairman of the Board and President of Trace Foam Sub and the Chairman of the Board and Chief Executive Officer of Trace Holdings and owns or has voting control over capital stock of Trace Holdings representing greater than a 50% voting interest. Mr. Cogan, by virtue of his control positions at Trace Foam Sub and Trace Holdings, may be deemed to own beneficially (as that term is defined in Rule 13d-3) the 11,524,800 shares of Common Stock beneficially owned, directly or indirectly, by Trace Foam Sub and Trace Holdings. Mr. Cogan expressly disclaims beneficial ownership of any of the shares of Common Stock owned by Trace Foam Sub and Trace Holdings. (v) Other Officers and Directors of Trace Holdings and Trace Foam Sub beneficially own Common Stock in the amounts listed in the following table. Shares beneficially owned include shares issuable upon exercise of vested options, or options which will vest in the next sixty days, with an exercise price of $6.875. Officer or Director Number of Shares Owned* ------------------------------ ---------------------------------- Andrea Farace** 32,546 Frederick Marcus 29,402 Robert H. Nelson 9,737 Saul S. Sherman 0 Philip N. Smith, Jr. 17,662.8 Karl H. Winters 3,638 Barry Zimmerman 19,819 * Includes shares issuable upon exercise of options as follows: Mr. Farace, 13,546 shares; Mr. Marcus, 19,402 shares; Mr. Nelson, 9,737 shares; Mr. Smith, 5,968 shares; Mr. Winters, 3,638 shares; and Mr. Zimmerman, 14,819 shares. ** Mr. Farace resigned as a director and executive officer of Trace Holdings on December 27, 1997. (c) Attached hereto as Schedule 5(c) is a schedule of transactions in the Common Stock within the past 60 days by the persons named in Item 5(a) above. (d) Pursuant to the terms of the 1993 Pledge Agreements described in Item 6, Generale Bank, New York Branch and Recticel Foam Corporation are entitled to certain rights with respect to voting, dividends and sale proceeds upon an event of default under the 1993 Pledge Agreements. Pursuant to the terms of the Pledge Agreement described in Item 6, The Bank of Nova Scotia is entitled to certain rights with respect to voting, dividends and sale proceeds upon an event of default under the Pledge Agreement. Participants under the Trace Holdings Plan may have the right to receive dividends from, or proceeds from the sale of, the Common Stock held by the Trace Holdings Plan. In addition, the investment manager under the Trace Holdings Plan or Trace Holdings, by virtue of its ability to administer the plan, may have the power to direct the receipt of dividends from, or proceeds from the sale of, the Common Stock held by the Trace Holdings Plan. 9 See Item 6 for a discussion of the Asset Appreciation Agreement. (e) On December 24, 1997, Trace Foam Company, Inc. ceased to be the beneficial owner of any shares of Common Stock. Item 6. Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer. Pursuant to the terms of a pledge agreement, dated December 14, 1993, between Trace Holdings and Generale Bank, acting through its branch in New York, New York ("GBNY"), Trace Holdings pledged 1,592,671 shares of Common Stock, representing approximately 6.4% of the Common Stock outstanding, to GBNY to secure certain obligations of Trace Holdings to GBNY. Pursuant to the terms of a pledge agreement, dated December 14, 1993, between Trace Holdings and Recticel Foam Corporation, Trace Holdings pledged 2,684,903 shares of Common Stock, representing approximately 10.8% of the Common Stock outstanding, to Recticel Foam Corporation to secure certain obligations of Trace Holdings to Recticel Foam Corporation. The two pledge agreements are referred to herein together as the "1993 Pledge Agreements." The 1993 Pledge Agreements provide that so long as there is no event of default with regard to the obligations of Trace Holdings to GBNY or Recticel Foam Corporation, as the case may be, under the 1993 Pledge Agreements, Trace Holdings is generally entitled to exercise all voting rights allocated to the pledged shares of Common Stock, provided that such action will not have a material adverse effect on the value of such shares of Common Stock. The 1993 Pledge Agreements further provide that so long as there is no such event of default, Trace Holdings is generally entitled to receive all dividends paid in respect to the pledged shares of Common Stock, subject to certain exceptions including (i) dividends paid in other than cash, (ii) dividends paid in connection with a liquidation, dissolution or reduction of capital, and (iii) cash paid in respect of principal of, or in redemption of or in exchange for, the pledged shares. Any such payments become pledged under the 1993 Pledge Agreements. The preceding summary of the 1993 Pledge Agreements is qualified in its entirety by reference to such agreements, copies of which are filed as Exhibits B and C hereto. Pursuant to a Prospectus Sale Borrower's Agreement, dated February 21, 1995 (effective March 1, 1995 with respect to 5,400,000 shares of Common Stock), between Trace Foam Sub and DLJ (the "Borrower's Agreement"), Trace Foam Sub pledged the 7,000,247 shares (the "Pledged Shares") of Common Stock to DLJ to secure any margin credit extended to it by DLJ. The Borrower's Agreement will remain in effect until (i) terminated by DLJ or (ii) terminated by Trace Foam Sub with the consent of DLJ. During the term of the Agreement, Trace Foam Sub may not sell, transfer, pledge or otherwise encumber the Pledged Shares without the prior written consent of DLJ; provided, however, such requirement will not apply to sales of the Pledged Shares through DLJ. In the event that, at any time while a margin loan remains outstanding, should the Registration Statement covering the Pledged Shares cease to be effective, DLJ will have the right to immediately demand payment in full of all amounts outstanding under the margin loan. The terms of the Borrowers Agreement are in addition to all the terms and conditions of the Customer Agreement, dated February 21, 1995 (the "Customer Agreement"), between Trace Foam Sub and DLJ. Copies of the Borrowers Agreement and the Customer Agreement are filed as Exhibits F and G hereto and are incorporated herein by reference. 10 Pursuant to the terms of the Pledge Agreement, dated August 15, 1997, between Trace Holdings and the Bank, Trace Holdings pledged to the Bank all shares of Common Stock and UAG Stock, following the occurrence of the UAG Pledge Event, to be purchased with the proceeds of the Bank Loan. The Pledge Agreement provides that so long as there is no event of default with regard to the obligations of Trace Holdings to the Bank, Trace Holdings is generally entitled to exercise all voting rights allocated to the Pledged Shares, provided that no such exercise of voting rights shall impair the value of the Pledged Shares or violate any provision of the Margin Loan Agreement or accompanying loan documents. The Pledge Agreement further provides that so long as there is no such event of default or potential event of default relating to voluntary bankruptcy, involuntary bankruptcy or the appointment of a receiver, Trace Holdings is generally entitled to receive all dividends paid in respect of the Pledged Shares, subject to certain exceptions including (i) dividends paid in other than cash and (ii) dividends paid in connection with a liquidation. Any such payments become pledged under the Pledge Agreement. The preceding summary of the Pledge Agreement is qualified in its entirety by reference to such agreement, which is filed as Exhibit J hereto. Trace Holdings has entered into an Asset Appreciation Agreement (the "Asset Agreement"), dated August 15, 1997, with the Bank in order to provide the Bank with additional interest in connection with certain loans to Trace Holdings. The Asset Agreement provides that on June 30, 2004, Trace Holdings shall make an additional interest payment to the Bank in an amount equal to 28% of the appreciation of certain assets, including any Common Stock and UAG Stock held by Trace and its subsidiaries, over certain agreed upon base prices. The base price for the shares of Common Stock and UAG Stock owned as of the date of the Asset Agreement is $11.875 and $15.00, respectively, and the base price for subsequently acquired shares of Common Stock and UAG Stock is the acquisition cost. Upon a sale of Common Stock or UAG Stock prior to June 30, 2004, Trace Holdings is required make an additional interest payment equal to the lesser of (i) 28% of the appreciation of the assets subject to the Asset Agreement, or (ii) 28% of the appreciation of the Common Stock or UAG Stock sold. Trace Holdings is also obligated to make payments in connection with voluntary prepayments of the underlying loan from the Bank, based on the appreciation of the Common Stock and UAG Stock, and upon the receipt of extraordinary distributions of cash or assets, equal to 28% of such distributions. Item 7. Material to be Filed as Exhibits. EXHIBIT A Agreement to file Joint Statement on Schedule 13D (filed as Exhibit A to the initial filing of the Schedule 13D and incorporated herein by reference). EXHIBIT B Pledge Agreement, dated as of December 14, 1993, made by '21' International Holdings, Inc. to Generale Bank, acting through its branch office located in New York, New York (filed as Exhibit B to the initial filing of the Schedule 13D and incorporated herein by reference). EXHIBIT C Pledge Agreement, dated as of December 14, 1993, made by '21' International Holdings, Inc. to Recticel Foam Corporation (filed as Exhibit C to the initial filing of the Schedule 13D and incorporated herein by reference). EXHIBIT D Intentionally omitted. EXHIBIT E Amended Agreement to file Joint Statement on Schedule 13D, dated as of March 6, 1995 (filed as Exhibit E to Amendment No. 2 to the Schedule 13D and incorporated herein by reference). EXHIBIT F Prospectus Sale Borrower's Agreement, dated as of February 21, 1995, between '21' Foam Sub, Inc. and Donaldson, Lufkin & Jenrette Securities Corporation (filed as Exhibit F to Amendment No. 2 to the Schedule 13D and incorporated herein by reference). 11 EXHIBIT G Customer Agreement, dated as of February 21, 1995, executed by '21' Foam Sub, Inc. (filed as Exhibit G to Amendment No. 2 to the Schedule 13D and incorporated herein by reference). EXHIBIT H Intentionally omitted. EXHIBIT I Margin Loan Credit Agreement, dated as of August 15, 1997 by and between Trace International Holdings,Inc. and the Bank (filed as Exhibit I to Amendment No. 4 to the Schedule 13D and incorporated herein by reference). EXHIBIT J Pledge Agreement, dated as of August 15, 1997 by and between Trace International Holdings, Inc. and the Bank (filed as Exhibit J to Amendment No. 4 to the Schedule 13D and incorporated herein by reference). EXHIBIT K Security Agreement, dated as of August 15, 1997 by and between Trace Foam Company, Inc. and the Bank (filed as Exhibit K to Amendment No. 4 to the Schedule 13D and incorporated herein by reference). 12 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. TRACE INTERNATIONAL HOLDINGS, INC. By: /s/ Philip N. Smith, Jr. Name: Philip N. Smith, Jr. Title: Senior Vice President and General Counsel Date: January 26, 1998 13 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. TRACE FOAM COMPANY, INC. By: /s/ Philip N. Smith, Jr. Name: Philip N. Smith, Jr. Title: Vice President Date: January 26, 1998 14 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. TRACE FOAM SUB, INC. By: /s/ Philip N. Smith, Jr. Name: Philip N. Smith, Jr. Title: Vice President Date: January 26, 1998 15 SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. /s/ Marshall S. Cogan Marshall S. Cogan Date: January 26, 1998 16 SCHEDULE 5(c) SCHEDULE OF TRANSACTIONS IN COMMON STOCK IN THE PAST 60 DAYS TRACE INTERNATIONAL HOLDINGS, INC. - ---------------------------------- Date Number of Shares Purchased Price - ---- -------------------------- ----- 10/9/97 60,000 $13.0797 10/13/97 500 $12.75 10/17/97 2,300 $12.75 10/22/97 9,500 $12.6842 TRACE FOAM SUB, INC. - -------------------- None. OFFICERS AND DIRECTORS - ---------------------- Name Date Number of Shares Purchased Price - ---- ---- -------------------------- ----- Andrea Farace* 12/30/97 8,000 $11.25 12/30/97 5,000 $11.00 12/30/97 2,000 $11.25 - ------------- * Mr. Farace resigned as a director and executive officer of Trace International Holdings, Inc. on December 27, 1997. 17 SCHEDULE I Executive Officers and Directors of Trace International Holdings, Inc. ---------------------------------------------------------------------- Unless otherwise indicated, the business address of each individual listed below is 375 Park Avenue, 11th Floor, New York, New York 10152. All of the following persons are U.S. citizens except Mr. Farace, who is a citizen of Italy. Directors Class of Director Principal Employment and Employer - --------- ----------------- --------------------------------- Saul S. Sherman Class A Unitcrane & Shovel Corp. Unitcrane & Shovel Corp. 676 N. Michigan Avenue Suite 2920 Chicago, IL 60611 Marshall S. Cogan Class B Trace International Holdings, Inc. and United Auto Group, Inc. Robert H. Nelson Class B Trace International Holdings, Inc. and United Auto Group, Inc. Andrea Farace* Class B Foamex International Inc. and Foamex International Inc. Trace International Holdings, 1000 Columbia Avenue Inc. Linwood, PA 19061 Frederick Marcus Class B Trace International Holdings, Inc.
Executive Officers Office Held at Trace International Holdings, Inc. Principal Employment and Employer - ------------------ ------------------------------------------------- --------------------------------- Marshall S. Cogan Chairman of the Board and Chief Executive Officer Trace International Holdings, Inc. and United Auto Group, Inc. Saul S. Sherman Vice Chairman of the Board Unitcrane & Shovel Corp. Frederick Marcus Vice Chairman and Senior Managing Director Trace International Holdings, Inc. Andrea Farace* President and Senior Managing Director Trace International Holdings, Inc. and Foamex International Inc. Robert H. Nelson Senior Vice President, Chief Operating Officer and Trace International Holdings, Inc. and Chief Financial Officer United Auto Group, Inc. Barry Zimmerman Senior Vice President and Managing Director Foamex International Inc. Philip N. Smith, Jr. Senior Vice President and General Counsel United Auto Group, Inc. and Foamex International Inc. Karl H. Winters Vice President-Finance and Controller Trace International Holdings, Inc. and United Auto Group, Inc.
- ------------- * Mr. Farace resigned as a director and executive officer of Trace International Holdings, Inc. on December 27, 1997. 18 SCHEDULE II Executive Officers and Directors of Trace Foam Sub, Inc. Unless otherwise indicated, the business address of each individual listed below is 375 Park Avenue, 11th Floor, New York, New York 10152. All of the following persons are U.S. citizens. Directors Principal Employment and Employer - --------- --------------------------------- Marshall S. Cogan Trace International Holdings, Inc. and United Auto Group, Inc. Robert H. Nelson Trace International Holdings, Inc. and United Auto Group, Inc.
Executive Officers Office Held at Trace Foam Sub, Inc. Principal Employment and Employer - ------------------ ----------------------------------- --------------------------------- Marshall S. Cogan Chairman of the Board and President Trace International Holdings, Inc. and United Auto Group, Inc. Robert H. Nelson Vice President and Treasurer Trace International Holdings, Inc. and United Auto Group, Inc. Philip N. Smith, Jr. Vice President Foamex International Inc. and United Auto Group, Inc.
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