Phoenix Footwear Group and its wholly-owned subsidiary, Altama Delta Corporation, entered into an agreement with W. Whitlow Wyatt, former chairman and CEO of Altama, which modified the terms of the Stock Purchase Agreement dated June 15, 2004 through which Phoenix acquired Altama. As a result of the agreement, the total price paid by Phoenix for Altama has been reduced by approximately $4.25 million.
This reduction was funded by approximately $1.6 million in cash previously due Wyatt held by Phoenix, 196,967 in Phoenix shares held in escrow, and the termination of all future obligations under the stock purchase agreement, including a contingent earn-out covenant, and Wyatt's consulting and non-competition agreements, which totaled approximately $1.6 million.
The announcement is not especially surprising as Altama sales have been down 8.7%, 71.5%, and 43.2%, respectively, for the past the three quarters. The division has yet to have a positive quarter for Phoenix, and as a result, any performance-based pay-outs would be negated. The company did see the most recent quarter as a bit of a relief as Altama was down only 8.7%, and had promising signs for the future, opening up two of the top four targeted retail accounts for its EXO-Speed tactical line of public safety boots designed for police work and shipping its first safety boot.
