Sunbeam 2007 Annual Report Download - page 103

annum; these securities were fully converted into common stock in the third quarter of 2005 (see
discussion below);
• 200,000 shares or $200 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 of the Company’s equity securities were issued to Warburg Pincus Private Equity VIII, LP
and its affiliates and approximately $50 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 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 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 175,000 shares of Series B Preferred Stock and approximately
1.5 million shares of Company’s common stock.
On August 14, 2005, the Company converted all outstanding shares of Series B Preferred Stock and accrued
paid-in kind dividends thereon into 14.5 million 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.
In connection with a 2005 share repurchase program approved by the board of directors, during 2005, the
Company had repurchased 558,900 shares in the open market and through a privately negotiated transaction for
an average price per share of $34.55. Additionally, the Company received approximately 460,000 shares (at an
average price of $34.50 per share) in return for payment of the statutory minimum of withholding taxes relating
to lapsing of certain shares of the Executive Award.
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