-----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, KYn5GHkg7OfICC4TCAVKOm/7KlBBugbdIMT62HPmqPOu6VR+G+LwqhyrTKitHul8 PapqIPRjsoee1j+2QeOoIw== 0000930661-02-001779.txt : 20020516 0000930661-02-001779.hdr.sgml : 20020516 20020515210933 ACCESSION NUMBER: 0000930661-02-001779 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020502 ITEM INFORMATION: Bankruptcy or receivership ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020516 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PILLOWTEX CORP CENTRAL INDEX KEY: 0000896265 STANDARD INDUSTRIAL CLASSIFICATION: MISCELLANEOUS FABRICATED TEXTILE PRODUCTS [2390] IRS NUMBER: 752147728 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11756 FILM NUMBER: 02654166 BUSINESS ADDRESS: STREET 1: ONE LAKE CIRCLE DRIVE CITY: KANNAPOLIS STATE: NC ZIP: 28081 BUSINESS PHONE: 704-939-4619 MAIL ADDRESS: STREET 1: ONE LAKE CIRCLE DRIVE CITY: KANNAPOLIS STATE: NC ZIP: 28081 8-K 1 d8k.txt FORM 8-K ================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): May 2, 2002 ----------- Pillowtex Corporation (Exact Name of Registrant as Specified in Charter) Texas 1-11756 75-2147728 ------------- ------------------------ ------------- (State or Other Jurisdiction (Commission File Number) (I.R.S. Employer of Incorporation ) Identification No.) One Lake Circle Drive Kannapolis, North Carolina 28081 -------------------------- ------- (Address of Principal Executive Offices) (Zip Code) Registrant's telephone number, including area code: 704-939-2000 ------------ ------------------------------------------------------------------ (Former Name or Former Address, if Changed Since Last Report) ================================================================================ Item 3. Bankruptcy or Receivership. As previously reported, on March 1, 2002, Pillowtex Corporation (the "Company"), together with certain of its subsidiaries (collectively with the Company, the "Debtors"), filed with the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"): (a) a Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 1, 2002 and (b) a related Disclosure Statement, dated March 1, 2002, which the Bankruptcy Court approved as containing "adequate information" for creditors of the Debtors in accordance with Section 1125 of the United States Bankruptcy Code (the "Bankruptcy Code") on February 28, 2002. On March 11, 2002, the Company filed with the Bankruptcy Court: (a) a revised Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 6, 2002 and (b) a revised Disclosure Statement relating thereto, dated March 6, 2002 (as so revised, the "Disclosure Statement"), in each case incorporating certain nonmaterial clarifications and modifications to reflect, among other things, events occurring after March 1, 2002. On or about March 11, 2002, the Debtors commenced delivery of copies of the Disclosure Statement to parties in interest, as required pursuant to the Bankruptcy Code. On May 2, 2002, the Bankruptcy Court entered an order (the "Confirmation Order") confirming the Debtors' Second Amended Joint Plan of Reorganization, with certain modifications (as so modified, the "Plan"). A copy of a press release announcing confirmation of the Plan is attached as Exhibit 99.1 to this Form 8-K. The primary objectives of the Plan are to: (a) alter the Debtors' debt and equity structures to permit the Debtors to emerge from the reorganization proceedings with viable capital structures; (b) maximize the value of the ultimate recoveries to all creditor groups on a fair and equitable basis; and (c) settle, compromise, or otherwise dispose of certain claims and interests on terms that the Debtors believe to be fair and reasonable and in the best interests of their respective estates, creditors, and equity holders. The Plan provides for, among other things: o the cancellation of certain indebtedness in exchange for cash, common stock, par value $0.01 per share, in Reorganized Pillowtex (as defined below) (the "New Common Stock"), and/or warrants to purchase shares of New Common Stock (the "New Warrants"); o the cancellation of designated post-petition loans having an aggregate principal amount of $150 million in exchange for the issuance by Reorganized Pillowtex of $150 million aggregate principal amount of notes under a new secured term loan (the "Exit Term Loan"); o the cancellation without consideration of the Company's common stock and preferred stock that was issued and outstanding immediately prior to November 14, 2000; o the assumption, assumption and assignment, or rejection of executory contracts or unexpired leases to which any Debtor is a party; o the reinstatement of approximately $11.4 million principal amount of industrial revenue bonds; 2 o the selection of boards of directors and officers of the reorganized Debtors; o the merger of the Company with and into a new Delaware corporation, with the new Delaware corporation as the surviving corporation ("Reorganized Pillowtex"); and o the simplification of the overall corporate structure through the restructuring of certain of the Company's subsidiaries. The Debtors currently anticipate that the Plan will become effective prior to June 30, 2002. However, under the terms of the Plan, there are significant conditions precedent to the effectiveness of the Plan. Conditions to the effectiveness of the Plan include, among others, the execution and delivery of the documentation effectuating a revolving credit facility and the execution and delivery of the documentation effectuating the Exit Term Loan. There can be no assurance that these conditions will be satisfied, and accordingly, there can be no assurance as to when or if the Plan will become effective. The foregoing summary of the Plan is qualified in its entirety by reference to the full text of the Second Amended Joint Plan of Reorganization and the modification thereto, copies of which are filed as Exhibits 2.1 and 2.2, respectively, to this Form 8-K and incorporated herein by this reference. As of May 1, 2002, there were 14,250,892 shares of Common Stock of the Company and 81,411 shares of Series A Redeemable Convertible Preferred Stock, par value $0.01 per share, of the Company outstanding, all of which will be cancelled without consideration on the effective date of the Plan (the "Effective Date"). On the Effective Date, (a) 18,600,000 shares of New Common Stock will be issued for distribution in respect of claims, (b) 3,529,412 shares of New Common Stock will be reserved for issuance upon the exercise of the New Warrants, (c) 1,400,000 shares of New Common Stock will be reserved for issuance in satisfaction of awards to employees of the Company pursuant to an equity incentive plan, including awards of 409,360 shares of New Common Stock and options to purchase 617,240 shares of New Common Stock being made to key employees in connection with the Effective Date, and (d) no other shares of capital stock of Reorganized Pillowtex will be reserved for issuance in respect of claims or interests under the Plan. Information as to the assets and liabilities of the Company as of March 30, 2002 is filed as Exhibit 99.2 hereto and incorporated herein by this reference. Such information has been extracted from the unaudited consolidated financial statements included in the Company's Quarterly Report on Form 10-Q for the quarterly period ended March 30, 2002 as filed with the Securities and Exchange Commission (the "2002 First Quarter Form 10-Q") and should be read in conjunction with such financial statements, including the notes thereof, and the additional financial information set forth in Part 1, Item 2. "Management's Discussion and Analysis of Financial Condition and Results of Operations" of the 2002 First Quarter Form 10-Q. In accordance with American Institute of Certified Public Accountants Statement of Position 90-7, "Financial Reporting by Entities in Reorganization Under the Bankruptcy Code," on or about the Effective Date, the Company will implement "fresh start accounting," which will require Reorganized Pillowtex to restate all its assets and liabilities at their fair value. The impact of fresh start accounting is not reflected in the selected financial information referenced above. The effects of fresh start accounting are discussed in the Disclosure Statement under "Reorganized Pillowtex -- Projected Financial Information" and "Risk Factors -- Historical Financial Information Will Not Be Comparable," a copy of which is filed as Exhibit 99.3 to this Form 8-K. 3 Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (a) Financial Statements of Businesses Acquired: Not Applicable. (b) Pro Forma Financial Information: Not Applicable. (c) Exhibits: Exhibit No. Description ----------- ----------- 2.1 Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 6, 2002 (incorporated by reference to Exhibit 99.1 to Pillowtex Corporation's Current Report on Form 8-K, SEC File No. 001-11756, dated March 12, 2002). 2.2 Amended and Restated Modification to the Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries. 99.1 Pillowtex Corporation Press Release, dated May 2, 2002. 99.2 Consolidated Balance Sheet of Pillowtex Corporation as of March 30, 2002. 99.3 Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code for the Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 6, 2002 (incorporated by reference to Exhibit 99.2 to Pillowtex Corporation's Current Report on Form 8-K, SEC File No. 001-11756, dated March 12, 2002). 4 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. PILLOWTEX CORPORATION By: /s/ JOHN F. STERLING ---------------------------------------------- Name: John F. Sterling Title: Vice President and General Counsel Date: May 14, 2002 5 EXHIBIT INDEX Exhibit No. Description - ----------- ----------- 2.1 Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 6, 2002 (incorporated by reference to Exhibit 99.1 to Pillowtex Corporation's Current Report on Form 8-K, SEC File No. 001-11756, dated March 12, 2002). 2.2 Amended and Restated Modification to the Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries. 99.1 Pillowtex Corporation Press Release, dated May 2, 2002. 99.2 Consolidated Balance Sheet of Pillowtex Corporation as of March 30, 2002. 99.3 Disclosure Statement pursuant to Section 1125 of the Bankruptcy Code for the Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries, dated March 6, 2002 (incorporated by reference to Exhibit 99.2 to Pillowtex Corporation's Current Report on Form 8-K, SEC File No. 001-11756, dated March 12, 2002). 6 EX-2.2 3 dex22.txt AMENDED AND RESTATED PLAN OF REORGANIZATION EXHIBIT 2.2 UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE IN RE: : Jointly Administered PILLOWTEX, INC., a Delaware : Case No. 00-4211 (SLR) corporation, et al., : Chapter 11 Debtors. : Jointly Administered : - ------------------------------------- : : AMENDED AND RESTATED MODIFICATION TO THE SECOND AMENDED JOINT PLAN OF REORGANIZATION OF PILLOWTEX CORPORATION AND ITS DEBTOR SUBSIDIARIES ------------------------------------------------------------------- WILLIAM H. SUDELL, JR. (DE 463) ERIC D. SCHWARTZ (DE 3134) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street P.O. Box 1347 Wilmington, Delaware 19899-1347 (302) 658-9200 - and - DAVID G. HEIMAN (OH 0038271) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 GREGORY M. GORDON (TX 08435300) HENRY L. GOMPF (TX 08116400) SHARON A. ALEXANDER (TX 00998580) DANIEL P. WINIKKA (TX 00794873) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 May 1, 2002 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION Subject to approval by the Bankruptcy Court and pursuant to this Amended and Restated Modification to the Second Amended Joint Plan of Reorganization of Pillowtex Corporation and Its Debtor Subsidiaries dated March 6, 2002 (the "Plan"), the Debtors effect the following changes to the Plan: Modifications to the Plan Section II.A.3 of the Plan is hereby amended in its entirety to read as follows: "3. Class 4, Divisions 4A, 4B, 4C, 4D, 4E, 4F, 4G and 4H (Other Secured Claims): Secured Claims against any Debtor that are not otherwise classified in this Article II are included in Class 4, which is divided into eight separate Divisions, each of which is unimpaired. The eight Divisions are: (a) Division 4A, consisting of Secured Claims against any Debtor pertaining to any mechanics' lien asserted by R. Phillips Construction; (b) Division 4B, consisting of Secured Claims against any Debtor pertaining to any mechanics' lien asserted by Smith Gray Electric; (c) Division 4C, consisting of Secured Claims against any Debtor pertaining to any mechanics' lien asserted by Southern Mechanical Services; (d) Division 4D, consisting of Secured Claims against any Debtor pertaining to any mechanics' lien asserted by Adams Electric; (e) Division 4E, consisting of Secured Claims against any Debtor pertaining to any mechanics' lien asserted by Sander Brothers; (f) Division 4F, consisting of Secured Claims against any Debtor arising under or evidenced by Debtor Opelika Industries, Inc.'s Promissory Note, dated December 29, 1995, payable to General Electric Capital Corporation; (g) Division 4G, consisting of Secured Claims, if any, against any Debtor arising under the MESA; and (h) Division 4H, consisting of other Secured Claims not otherwise classified in this Article II, including in Divisions 4A through 4G." * * * * * Section II.B.2 of the Plan is hereby deleted in its entirety. * * * * * Section III.B.3 of the Plan is hereby amended in its entirety to read as follows: "3. Class 4, Division 4A, 4B, 4C, 4D, 4E, 4F, 4G and 4H Claims (Other Secured Claims) are Unimpaired. Except as may be otherwise agreed by the respective holder and Debtor, on the Effective Date, (a) each holder of an Allowed Claim in Divisions 4A, 4B, 4C, 4D, 4E and 4H will receive cash in an amount equal to the amount of the Allowed Claim and (b) each holder of an Allowed Claim in Division 4F will receive, in full satisfaction of the Allowed Claim, the treatment provided for in the Stipulation and Agreed Order Regarding Secured Claim of General Electric Capital Corporation signed by the Bankruptcy Court on November 16, 2001. If the Bankruptcy Court rules that (i) the MESA is a financing arrangement, then on the later of the Effective Date or the date that the Bankruptcy Court rules, unless otherwise agreed by a Claim holder and each applicable Debtor, each holder of an Allowed Claim in Division 4G will receive, in full satisfaction of its Allowed Claim, cash equal to the value of the collateral securing the Allowed Claim (but only to the extent the holder has a valid, enforceable lien on such collateral) and an Unsecured Claim (to be included in Class 6) for the remainder of the Allowed Claim amount or (ii) the MESA is a true lease, there will be no Secured Claim with respect to the MESA and the MESA will be treated as an Unexpired Lease pursuant to Article V." * * * * * Section III.C.2 of the Plan is hereby deleted in its entirety. * * * * * Section IV.B.3 of the Plan is hereby amended to add the following to the end thereof: "Prior to the merger of Pillowtex with and into New Pillowtex as contemplated by this Section IV.B.3, at the option of Pillowtex, (A) there may be formed a new Delaware corporation, (B) the stockholder or stockholders of such corporation may be a person or persons other than Pillowtex Entities, (C) the director or directors and stockholder or stockholders of such corporation will take such actions as are necessary to form such corporation, to adopt the Equity Incentive Plan and to effect the transaction contemplated by this Section IV.B.3 but will not permit such corporation to transact any other business, (D) following the taking of such actions, such corporation will merge with and into New Pillowtex, with New Pillowtex being the surviving corporation in the merger, and (E) New Pillowtex will thereupon assume by operation of law the Equity Incentive Plan." * * * * * Section IV.B of the Plan is hereby amended to add the following to the end thereof: "4. Subsidiary Restructuring Transactions On or before the Effective Date, the following Restructuring Transactions involving Pillowtex Subsidiary Debtors will be consummated: a. the merger of Bangor Investment Company and Moore's Falls Corporation with and into Downeast Securities Corporation, with Downeast Securities Corporation being the surviving corporation; b. the subsequent merger of Crestfield Cotton Company, Amoskeag Management Corporation and Downeast Securities Corporation with and into Fieldcrest Cannon, Inc., with Fieldcrest Cannon, Inc. being the surviving corporation; c. the merger of Leshner of California, Inc. and The Leshner Leasing Corporation (a non-Debtor Subsidiary) with and into The Leshner Corporation, with The Leshner Corporation being the surviving corporation; d. the merger of Fieldcrest Cannon Transportation, Inc. with and into Fieldcrest Cannon SF, Inc., with Fieldcrest Cannon SF, Inc. being the surviving corporation and changing the surviving corporation's name to Fieldcrest Cannon Transportation, Inc.; and e. Manetta Home Fashions, Inc. will change its name to FC Online, Inc." * * * * * Each of Section IV.E.2.d and XI.B.2 of the Plan is hereby amended to add the following to the end thereof: "To the extent any release is limited to those voting in favor of the Plan, any injunction relating to such release shall be similarly limited to those voting in favor of the Plan." * * * * * Section VI.B of the Plan is hereby amended to add the following proviso to the end of the penultimate sentence thereof: "; provided, however, that Bank of America and Reorganized Pillowtex may agree that Bank of America will not so act as Disbursing Agent, in which case Bank of America will deliver to a Third-Party Disbursing Agent identified by Reorganized Pillowtex all data files maintained by Bank of America (or copies thereof) as may be necessary to permit such Third-Party Disbursing Agent to make distributions to holders of Class 5 Claims and will otherwise cooperate with Reorganized Pillowtex and such Third-Party Disbursing Agent to the extent necessary to efficiently effect such distributions." * * * * * 3 Section VI.B of the Plan is hereby amended to add the following proviso to the end of the last sentence thereof: "; provided, however, that, with respect to any such series of indebtedness, the applicable Indenture Trustee and Reorganized Pillowtex may agree that such Indenture Trustee will not so act as Disbursing Agent, in which case such Indenture Trustee will deliver to a Third-Party Disbursing Agent identified by Reorganized Pillowtex all data files maintained by such Indenture Trustee (or copies thereof) as may be necessary to permit such Third-Party Disbursing Agent to make distributions to holders of Claims in respect of such indebtedness and will otherwise cooperate with Reorganized Pillowtex and such Third-Party Disbursing Agent to the extent necessary to efficiently effect such distributions." * * * * * Exhibit IV.C.2 to the Plan (Initial Board of Directors and Officers of Reorganized Pillowtex Debtors) is hereby amended in its entirety to read as attached hereto as Exhibit A. --------- * * * * * Exhibit IV.C.3 to the Plan (Equity Incentive Plan, Employment Agreements and Other Employee Benefit Plans) is hereby amended in its entirety to read as attached hereto as Exhibit B. --------- 4 Dated: May 1, 2002 Respectfully submitted, PILLOWTEX CORPORATION (for itself and on behalf of the Subsidiary Debtors) By: /s/ ANTHONY T. WILLIAMS ------------------------------------- Anthony T. Williams, President and Chief Operating Officer COUNSEL: WILLIAM H. SUDELL, JR. (DE 463) ERIC D. SCHWARTZ (DE 3134) MORRIS, NICHOLS, ARSHT & TUNNELL 1201 North Market Street P.O. Box 1347 Wilmington, Delaware 19899 (302) 658-9200 DAVID G. HEIMAN (OH 0038271) JONES, DAY, REAVIS & POGUE North Point 901 Lakeside Avenue Cleveland, Ohio 44114 (216) 586-3939 - and - GREGORY M. GORDON (TX 08435300) HENRY L. GOMPF (TX 08116400) SHARON A. ALEXANDER (TX 00998580) DANIEL P. WINIKKA (TX 00794873) JONES, DAY, REAVIS & POGUE 2727 North Harwood Street Dallas, Texas 75201 (214) 220-3939 ATTORNEYS FOR DEBTORS AND DEBTORS IN POSSESSION 5 EXHIBIT A Exhibit IV.C.2* --------------- INITIAL BOARD OF DIRECTORS AND OFFICERS OF REORGANIZED PILLOWTEX DEBTORS The Debtors have engaged the services of the executive search firm of Russell Reynolds Associates to identify potential directors and a chief executive officer for Reorganized Pillowtex, as described in "Operations During the Reorganization Cases -- Case Administration and Related Activities -- Retention of Financial Advisors and Other Consultants" in the Disclosure Statement. As described in "Reorganized Pillowtex -- Management -- Reorganized Pillowtex Board of Directors" in the Disclosure Statement, one of the directors will be an officer of Reorganized Pillowtex and a process has been established for selecting the remaining directors for Reorganized Pillowtex. Two individuals have been selected to serve as directors in Class I pursuant to this process. The chief executive officer, when hired, will be the officer of Reorganized Pillowtex designated to serve on the board of directors. No individual has yet been selected to serve as chief executive officer. Accordingly, the search for four directors and a chief executive officer for Reorganized Pillowtex is continuing. The executive officers of Pillowtex are identified below and are presently expected to serve as executive officers of Reorganized Pillowtex on the Effective Date: - ---------------------- * All capitalized terms in this Exhibit not otherwise defined herein have the same meanings given in the Plan. Name ge Anticipated Position with Reorganized Pillowtex - ---- -- ----------------------------------------------- Anthony T. Williams 55 President and Chief Operating Officer Michael R. Harmon 54 Executive Vice President and Chief Financial Officer Scott E. Shimizu 48 Executive Vice President - Sales & Marketing A. Allen Oakley 48 Executive Vice President - Manufacturing Richard A. Grissinger 58 Senior Vice President - Marketing Richard L. Dennard 53 Senior Vice President - Purchasing and Logistics Deborah G. Poole 47 Vice President and Chief Information Officer Donald Mallo 52 Vice President - Human Resources John F. Sterling 38 Vice President, General Counsel and Secretary Henry T. Pollock 61 Vice President and Treasurer Thomas D. D'Orazio 43 Vice President and Corporate Controller John Wahoski 49 Vice President Financial and Operational Analysis A-2 The following individuals are presently expected to serve as directors of Reorganized Pillowtex on the Effective Date: Class Name Business History - ----- ---- ---------------- I Bradley I. Dietz Bradley I. Dietz has served as Managing Director and Partner of Peter J. Solomon Company, Ltd., an investment banking company, since 2001. From 1991 until 2001, Mr. Dietz served as managing director of the Institutional Recovery Management Group of Citibank, N.A. ("Citibank"), and from 1987 until 1990, he served as Vice President of the Mergers and Acquisitions Group of Citibank. Prior to joining Citibank, Mr. Dietz served as Vice President-Corporate Finance Department of Bankers Trust Company from 1984 until 1987. I Jeffrey J. Keenan J. Keenan has served as Chairman of the Board of IESI Corporation, a multi-regional solid waste company, since 1995. Since 2000, Mr. Keenan served as Chairman of Board of Atipa Corporation, a network and systems management provider, and from April 2000 until May 2001, he served as Interim Executive Officer. From 1985 until 1994, Mr. Keenan served as a director for various private equity funds, including UBS Capital LLC, WSW Fund L.P., Acadia Partners, L.P. and AEA Investors Inc. Mr. Keenan is also a director of Drugtest, Inc., Primary Service Group, Inc. and Choctaw Maid Farms, Inc. I Kenneth Liang Kenneth Liang has served as Managing Director-Distressed Debt of Oaktree since June 2001, and from 1995 until June 2001, he served as General Counsel of Oaktree. From 1992 until 1995, Mr. Liang served as Senior Vice President-Special Credit Funds of TCW. Prior to joining TCW, Mr. Liang served as Senior Corporate Counsel for Dole Food Company, Inc. ("Dole"), the largest producer and marketer of fresh food products, and prior to serving with Dole, he was an associate with the law firm of O'Melveny & Myers. II Chief Executive If hired by Pillowtex prior to the Effective Date, the Officer of chief executive officer will begin serving his or her Reorganized term as a director on the Effective Date. If a chief Pillowtex executive officer has not been hired prior to the Effective Date, Ralph La Rovere, the current Chairman of the Board of Pillowtex, will serve as a director on an interim basis until a chief executive officer is hired, at which time Mr. La Rovere will resign and the vacancy thereby created will be filled by the remaining directors with the chief executive officer. II Bruce A. Karsh Bruce A. Karsh is a co-founder and currently President of Oaktree Capital Management, LLC, a private investment fund ("Oaktree"), and he has been the Portfolio Manager of the distressed debt fund of Oaktree since 1987. Prior to joining Oaktree, Mr. Karsh served as Managing Director of the Trust Company of the West and its affiliate, TCW Asset Management Company ("TCW"). Prior to joining TCW, Mr. Karsh served as Assistant to the Chairman of Sun Life Insurance and SunAmerica, and he was an associate with the law firm of O'Melveny and Myers. A-3 III Mariusz J. Mazurek Mariusz J. Mazurek, CFA, has served as Senior Vice President of Oaktree since 1995. From 1992 until 1995, Mr. Mazurek served as Assistant Vice President-Special Credit Funds of TCW. Prior to joining TCW, Mr. Mazurek was an investment analyst for Fred Alger Management, Columbia Savings and Loan and Zenith Insurance Company. III James P. Seery, Jr. James P. Seery, Jr. has served as Senior Vice President, High-Yield Group of Lehman Brothers, Inc., an investment banking company, since 1999. From 1995 until 1999, Mr. Seery was an attorney with the law firm of Phillips Nizer Benjamin Krim & Ballon, practicing in the field of restructuring transactions. From 1989 to 1995, Mr. Seery was an attorney with the law firm of Cadwalader, Wickersham & Taft, practicing in the field of restructuring transactions. Each of Messrs. Karsh, Liang, Seery and Mazurek will serve on an interim basis pending selection of directors pursuant to the process described above. Upon the selection of each director pursuant to such process, one of the directors serving on an interim basis will resign and the vacancy thereby created will be filled by action of the remaining directors with the selected individual. Except as otherwise set forth for certain Debtor Subsidiaries set forth below, the officers and directors of each Debtor Subsidiary that is a corporation are identified below and are presently expected to serve as officers and directors of each Reorganized Debtor Subsidiary that is a corporation on the Effective Date: Directors --------- Anthony T. Williams John F. Sterling Officers -------- Anthony T. Williams President and Chief Operating Officer Michael R. Harmon Executive Vice President and Chief Financial Officer Henry T. Pollock Vice President and Treasurer John F. Sterling Vice President, General Counsel and Secretary Eric J. Blough Assistant Secretary In addition to the above mentioned officers, the following individuals serve as officers for Encee, Inc. and are presently expected to serve as officers on the Effective Date: A-4 Officers -------- Sherry B. Dendy Controller and Assistant Secretary Donald Mallo Vice President - Human Resources In addition to the above mentioned officers, the following individuals serve as officers for Fieldcrest Cannon, Inc. and are presently expected to serve as officers on the Effective Date: Officers -------- Donald Mallo Vice President - Human Resources Scott E. Shimizu Executive Vice President - Sales & Marketing A. Allen Oakley Executive Vice President - Manufacturing Richard A. Grissinger Senior Vice President - Marketing Deborah G. Poole Vice President and Chief Information Officer Richard L. Dennard Senior Vice President - Purchasing and Logistics In addition to the above mentioned officers, the following individuals serve as officers for The Leshner Corporation and are presently expected to serve as officers on the Effective Date: Officers -------- A. Allen Oakley Executive Vice President - Manufacturing Richard L. Dennard Senior Vice President - Purchasing The following individuals serve as officers and directors for PTEX Holding Company and are presently expected to serve as officers and directors on the Effective Date: Directors --------- Darrell L. Jones Stephen D. Chanslor Norman J. Shuman Officers -------- Dan J. Protokowitz President Darrell L. Jones Vice President and Treasurer Stephen D. Chanslor Vice President and Secretary A-5 The following individuals serve as officers and directors for Fieldcrest Cannon Financing, Inc. and are presently expected to serve as officers and directors on the Effective Date: Directors --------- Darrell L. Jones Stephen D. Chanslor Norman J. Shuman Officers -------- Dan J. Protokowitz President Darrell L. Jones Vice President and Treasurer Stephen D. Chanslor Vice President and Secretary The following individuals serve as officers and managers of FCI Corporate LLC and are presently expected to serve as officers and managers of Reorganized FCI Corporate LLC on the Effective Date: Managers -------- Anthony T. Williams John F. Sterling Officers -------- Anthony T. Williams President and Chief Operating Officer Michael R. Harmon Executive Vice President and Chief Financial Officer Henry T. Pollock Vice President and Treasurer John F. Sterling Vice President, General Counsel and Secretary Eric J. Blough Assistant Secretary The following individuals serve as officers and managers of FCI Operations LLC and are presently expected to serve as officers and managers of Reorganized FCI Corporate LLC on the Effective Date: A-6 Managers -------- Anthony T. Williams John F. Sterling Officers -------- Anthony T. Williams President and Chief Operating Officer Scott E. Shimizu Executive Vice President-- Sales & Marketing A. Allen Oakley Executive Vice President-- Manufacturing Michael R. Harmon Executive Vice President and Chief Financial Officer Richard A. Grissinger Senior Vice President-- Marketing Richard L. Dennard Senior Vice President-- Purchasing and Logistics Deborah G. Poole Vice President and Chief Information Officer Henry T. Pollock Vice President and Treasurer John F. Sterling Vice President, General Counsel and Secretary Donald Mallo Vice President-- Human Resources Eric J. Blough Assistant Secretary A-7 The following individuals and entity serve as officers, resident trustee and managing trustees of Pillowtex Management Services Company and are presently expected to serve as officers, resident trustee and managing trustees of Reorganized Pillowtex Management Services Company on the Effective Date: Managing Trustees ----------------- Anthony T. Williams John F. Sterling Resident Trustee ---------------- PNC Bank, Delaware Officers -------- Anthony T. Williams President and Chief Operating Officer Michael R. Harmon Executive Vice President and Chief Financial Officer Scott E. Shimizu Executive Vice President-- Sales & Marketing Richard L. Dennard Senior Vice President-- Purchasing John F. Sterling Vice President, General Counsel and Secretary Henry T. Pollock Vice President and Treasurer Donald Mallo Vice President-- Human Resources Eric J. Blough Assistant Secretary A-8 EXHIBIT B Exhibit IV.C.3* --------------- EQUITY INCENTIVE PLAN, EMPLOYMENT AGREEMENTS AND OTHER EMPLOYEE BENEFIT PLANS A. List of Benefit Plans, Programs and Agreements To Be in Effect on the Effective Date Existing Benefit Plans, Programs and Agreements1 401(k) Retirement Plans Retiree Benefits Health and Welfare Benefits Executive Medical Expense Reimbursement Plan Deferred Compensation Supplemental Executive Retirement Plan Key Employee Retention Plan Employment Agreements with: Anthony T. Williams, Michael R. Harmon, Scott E. Shimizu, A. Allen Oakley, Richard Grissinger and certain other key employees New Benefit Plans, Programs and Agreements Equity Incentive Plan Employment/Severance Arrangements with Anthony T. Williams, Michael R. Harmon, Scott E. Shimizu, A. Allen Oakely/2/ Director Compensation/3/ - --------------------- /1/ A description of each of the benefit plans, programs and agreements listed herein is set forth in the Disclosure Statement and incorporated herein by reference. /2/ The terms of the employment and severance arrangements to be entered into with each of Messrs. Williams, Harmon, Shimizu and Oakley are not yet determined. If new arrangements are not entered prior to the Effective Date, the current employment agreements with each of Messrs. Williams, Harmon, Shimizu and Oakley will remain in effect until otherwise terminated, modified or amended and any modifications or amendments thereto, or new arrangements, will be made in accordance with the compensation policies and procedures of New Pillowtex or Reorganized Pillowtex, as appropriate. /3/ Compensation arrangements with members of the Board of Directors have not been determined and any determinations to be made with respect to compensation of the Board of Directors will be made in accordance with the compensation policies and procedures of New Pillowtex or Reorganized Pillowtex, as appropriate. * All capitalized terms in this Exhibit not otherwise defined herein have the same meanings given them in the Plan. B. Initial Grants Under Equity Incentive Plan The initial grants of restricted stock and options under the Equity Incentive Plan are presently expected to include grants as follows: No. of Shares of No. of Shares New Common Stock Recipient of Restricted Stock Underlying Option Grant --------- ------------------- ----------------------- Anthony T. Williams 80,000 123,200 Scott E. Shimizu 60,000 90,000 Michael R. Harmon 60,000 90,000 A. Allen Oakley 60,000 90,000 The initial grants are also expected to include grants of 149,360 shares of restricted stock in the aggregate to certain key employees and options to key employees exercisable to purchase 224,040 shares of New Common Stock in the aggregate. These grants will be made in accordance with the compensation policies and procedures of New Pillowtex or Reorganized Pillowtex, as appropriate. B-2 EX-99.1 4 dex991.txt PRESS RELEASE DATED MAY 2, 2002 EXHIBIT 99.1 [PILLOWTEX LOGO] FOR IMMEDIATE RELEASE May 2, 2002 Contact: Karen Cobb, Communications Manager (704) 939 - 2775 Pillowtex Corporation Receives Confirmation ------------------------------------------- of Its Plan of Reorganization by the Bankruptcy Court ----------------------------------------------------- KANNAPOLIS, N.C. - (May 2, 2002) - Pillowtex Corporation and its domestic subsidiaries announced today that the United States Bankruptcy Court for the District of Delaware on Wednesday confirmed the Company's Second Amended Plan of Reorganization (the "Plan") filed with the Court on March 11, 2002. Confirmation by the Court clears the way for Pillowtex to emerge from bankruptcy by June 30, 2002. "The decision by the Court paves the way for us to emerge from bankruptcy by June 30," said Tony Williams, president and chief operating officer. "Though we will soon close the last chapter of the bankruptcy process, we will continue to implement new initiatives to deliver on the promise inherent in our Plan of Reorganization. Our pledge is to continually offer the consumer new programs that are fashionable, distinctive and exciting. This marks the beginning of a new chapter in this company's history." Under the terms of the Plan, all shares of Pillowtex existing Common Stock and Preferred Stock will be cancelled and the reorganized Company will issue new Common Stock to its secured creditors and a combination of new Common Stock and Warrants to its unsecured creditors in accordance with the distribution procedures provided in the Plan. The Company will emerge from bankruptcy significantly stronger, having reduced its debt by approximately $700 million. -- more -- About Pillowtex Corporation - --------------------------- Pillowtex Corporation, with corporate offices in Kannapolis, N.C., is one of America's leading producers and marketers of household textiles including towels, sheets, rugs, blankets, pillows, mattress pads, feather beds, comforters and decorative bedroom and bath accessories. The Company's brands include Cannon, Fieldcrest, Royal Velvet, Charisma and private labels. The Company filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code on November 14, 2000. Pillowtex currently employs approximately 8,300 people in its network of manufacturing and distribution facilities in the United States and Canada. Cautionary Statement Regarding Forward-Looking Statements - --------------------------------------------------------- Certain statements contained in this press release, including, but not limited to, information regarding the future economic performance and financial condition of the Company, the status and progress of the Company's reorganization, the plans and objectives of the Company's management and the Company's assumptions regarding such performance and plans, are forward-looking in nature. Factors that could cause actual results to differ from the forward-looking information contained in this release include, but are not limited to, uncertainty regarding arrangements relating to the Company's reorganization, the resolution of issues relating to certain indebtedness of the Company and other issues presented by the reorganization, uncertainty related to the Company's ability to satisfy the conditions to the effective date set forth in the Plan, general economic conditions, the Company's ability to implement its business plan and the Company's future competitive position. ## 30 ## 2 EX-99.2 5 dex992.txt CONSOLIDATED BALANCE SHEETS EXHIBIT 99.2 PILLOWTEX CORPORATION (DEBTORS-IN-POSSESSION) CONSOLIDATED BALANCE SHEETS (Dollars in thousands, except for par value)
ASSETS March 30, March 31, December 29, 2002 2001 2001 ----------- ----------- ------------ (unaudited) (unaudited) (audited) Current assets: Cash and cash equivalents (including restricted cash of $4,724 as of March 30, 2002 and $3,861 as of December 29, 2001) $ 28,400 34,645 40,388 Receivables: Trade, less allowances of $8,329 as of March 30, 2002, $25,534 as of March 31, 2001 and $9,276 as of December 29, 2001 146,057 177,663 144,727 Other 9,504 5,996 4,478 Inventories 189,888 248,427 200,578 Assets held for sale 5,121 6,064 6,075 Prepaid expenses 4,474 4,982 3,604 Net assets of discontinued operations 395 41,736 1,358 ----------- ----------- ------------ Total current assets 383,839 519,513 401,208 Property, plant and equipment, less accumulated depreciation of $172,410 as of March 30, 2002, $165,147 as of March 31, 2001 and $172,938 as of December 29, 2001 418,587 515,072 453,440 Intangible assets, at cost less accumulated amortization of $41,495 as of March 30, 2002, $29,533 as of March 31, 2001 and $40,899 as of December 29, 2001 221,318 230,332 221,729 Other assets 11,046 29,341 11,250 ----------- ----------- ------------ Total assets $ 1,034,790 1,294,258 1,087,627 =========== =========== ============ LIABILITIES AND SHAREHOLDERS' DEFICIT Liabilities not subject to compromise: Current liabilities: Accounts payable $ 34,190 38,775 35,119 Accrued expenses 55,048 66,735 59,837 Current portion of long-term debt 843 - 356 Current portion of long-term debt in default 660,191 679,591 660,893 Long-term debt in default 10,920 13,405 10,920 ----------- ----------- ------------ Total current liabilities 761,192 798,506 767,125 Long-term debt, less current portion 3,049 - 645 Noncurrent liabilities 49,847 39,777 48,950 ----------- ----------- ------------ Total liabilities not subject to compromise 814,088 838,283 816,720 Liabilities subject to compromise 499,812 484,989 500,840 ----------- ----------- ------------ Total liabilities 1,313,900 1,323,272 1,317,560 Series A redeemable convertible preferred stock, $.01 par value; 81,411 shares issued and outstanding for March 30, 2002, March 31, 2001 and December 29, 2001 103,760 86,526 99,185 Shareholders' deficit: Preferred stock, $.01 par value; authorized 20,000,000 shares; only Series A issued - - - Common stock, $.01 par value; authorized 55,000,000 shares; 14,250,892 shares issued and outstanding as of March 30, 2002, March 31, 2001 and December 29, 2001 143 143 143 Additional paid-in capital 160,120 160,120 160,120 Accumulated deficit (514,915) (273,993) (461,186) Accumulated other comprehensive loss (28,218) (1,810) (28,195) ----------- ----------- ------------ Total shareholders' deficit (382,870) (115,540) (329,118) Commitments and contingencies ----------- ----------- ------------ Total liabilities and shareholders' deficit $ 1,034,790 1,294,258 1,087,627 =========== =========== ============
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