Sunbeam 2005 Annual Report Download - page 74

Jarden Corporation
Notes to Consolidated Financial Statements (cont’d)
December 31, 2005
Company issued $350 million of equity securities pursuant to a purchase agreement (“Equity Purchase
Agreement”). The securities issued were as follows:
‰1,071,429 shares of the Company’s common stock (“Common Stock”) for approximately $21.4
million at a price of $20 per share;
‰128,571 shares or $128.6 million of a new class of the Company’s preferred stock, Series B
Convertible Participating Preferred Stock (“Series B Preferred Stock”) with a paid-in-kind
dividend rate of 3.5% per annum; these securities were fully converted into common stock in the
third quarter of 2005 (see discussion below);
‰200,000 shares or $200 million of a new class of the Company’s preferred stock, Series C
Mandatory Convertible Participating Preferred Stock (“Series C Preferred Stock”) with a
paid-in-kind dividend rate of 3.5% per annum; these securities were fully converted into common
stock and Series B Preferred Stock in the second quarter of 2005 (see discussion below).
In accordance with the Equity Purchase Agreement and a related Assignment and Joinder Agreement,
approximately $300 million of the Company’s equity securities were issued to Warburg Pincus Private
Equity VIII, LP and its affiliates and approximately $50 million were issued to Catterton Partners V, LP
and its affiliates, both private equity investors (collectively “Private Equity Investors”). The cash raised in
connection with the Equity Purchase Agreement was used to fund a portion of the cash purchase price of
AHI.
A beneficial conversion charge of $16.5 million was recorded upon the issuance of the Series B
Preferred Stock and Common Stock issued on January 24, 2005 and an additional beneficial conversion
charge of $22.4 million was recorded upon the conversion of the Series C Preferred Stock into Series B
Preferred Stock and Common Stock (see discussion below). Such charges reflect the difference between
the respective conversion prices of the Series B Preferred Stock and C Preferred Stock and the closing
market price of the Company’s common stock on September 17, 2004, the last business day before the
execution of the transaction documents (“Execution Date”). However, the terms of the preferred and
common stock issuances to the Private Equity Investors were negotiated during the two months leading up
to the Execution Date when the average market price of the Company’s common stock was, in fact, less
than the conversion price.
On June 9, 2005, following requisite stockholder approval, all outstanding shares of Series C Preferred
Stock were converted into approximately 175,492 shares of Series B Preferred Stock and approximately
1,462,454 shares of Company’s common stock.
The Certificates of Designation for the Series B Preferred Stock prohibited the Company from taking
certain actions, including the payment of dividends under certain circumstances.
On August 14, 2005, the Company converted all outstanding shares of Series B Preferred Stock and
accrued paid-in kind dividends thereon into 14,487,601 shares of Company common stock, in accordance
with the terms of the Company’s Certificate of Designations of Powers, Preferences and Rights of the
Series B Preferred Stock.
The Company announced its intention to buy back up to one million shares of Company common
stock in 2005 in accordance with a stock repurchase plan approved by the Board of Directors during the
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