Central Sprinkler Company
As you may be aware, Central Sprinkler Company has been negotiating with the Consumer Product Safety Commission, and separately with representatives in class action litigation in an effort to resolve the Omega sprinkler situation. We expect that there will be public announcements later this week on the settlements we have reached with these groups.
In an effort to provide you with timely information so that you can be prepared for questions you may receive from your customers, Im writing to share some of the highlights of the proposed program of remediation.
Under the terms of the proposed settlement, Central Sprinkler and the CPSC will jointly announce a recall of all Omega brand fire sprinklers. At the same time, we have reached a settlement agreement with the plaintiffs in a nationwide class action suit that we believe should receive preliminary approval from the Court next week, as well.
We have taken these steps because we believe they are in the best interests of public safety and of our customers. Further, for Central to continue to defend the Omega sprinkler was becoming increasingly costly and time-consuming. More importantly, it was distracting us from the business of developing innovative fire protection solutions and servicing our customers. We have pursued this settlement because it allows us to do the right thing for our customers, puts this issue behind us once and for all, and permits us to return to our focus on fire protection.
As part of the proposed recall effort, we will provide a free replacement Quick Response or residential GB sprinkler with a Belleville type seal for every existing Omega sprinkler head. There will be no cost to building owners for the replacement sprinkler and escutcheon. An extensive Notice program, advertising campaign and news coverage will help inform building and homeowners about the steps they should take to participate in the replacement program. This advance letter is part of the effort to "spread the word" and help prepare you for questions you may receive.
Central will also establish a separate Trust to help compensate building and homeowners for costs associated with removing and replacing the sprinkler heads. The
ultimate compensation figure will depend on how many sprinkler owners participate in the program, how successful we are in pursuing insurance claims and other factors.
The funds set aside to resolve this issue will not undermine our overall, long-term financial future. In fact, our lenders have extended their financial commitment to us.
In addition, we have returned our focus to Research and Development. Were eager to put this matter behind us and get back to the business of fire safety technology.
Your support during this period has been deeply appreciated. Many of you have called to ask how you can help. Some of you have offered to handle the reinstallation of sprinklers at a very nominal cost. We have been gratified by this show of support, which we believe ultimately benefits all of us committed to saving lives through the use of sprinklers.
We believe you like us will be relieved to have the "Omega issue" behind us as soon as possible. We realize that the resolution may result in some inconvenience to you and your customers. Please know that we are doing everything in our power to make this process as convenient as possible.
Central Sprinkler would not be what it is today without your valuable partnership over the years. We look forward to continuing to serve you. On behalf of the many dedicated employees at Central Sprinkler, thank you for your support during this challenging period. Weve enclosed a Question and Answer sheet that we hope you will find useful.
Building owners and consumers should call 1-800-896-5685 to participate in or receive additional information about the recall and to request a Proof of Claim and other forms.
Our special web site (www.omegarecall.com is also available to answer your questions and concerns.
Executive Vice President, Sales
QUESTIONS AND ANSWERS
Q. What exactly does this recall mean?
A. Central Sprinkler Company and the United States Consumer Product Safety Commission have announced a joint recall of all Omega brand fire sprinklers. The company will replace all Omega sprinkler heads with a free Quick Response or residential GB sprinkler. In addition, the Company has set up a Trust to help reimburse Omega owners for the cost of installing the new sprinkler heads.
Q. Why is Central recalling Omega sprinklers?
A. The U.S. Consumer Product Safety Commission believes that these sprinklers are defective and may fail to activate in a fire. Because we believe so strongly in public safety and the fact that building and homeowners should feel confident their sprinklers will work in a fire, we have agreed to recall all Omega brand fire sprinklers.
Q. Does the recall extend to all Omega sprinklers?
A. Yes. All Omega brand fire sprinklers are included in this recall. It includes Omega sprinklers containing EPDM or silicone 0-rings.
Q. Do these sprinklers need to be tested in order to be replaced?
A. No. This recall does not require Omega sprinklers to be tested in order to qualify for replacement sprinklers.
Q. How can building and homeowners participate in the recall?
A. Building and homeowners who have Omegas installed should call 1-800-896-5685 to request a Proof of Claim Form and other forms, including product identification information that will help sprinkler owners determine if their sprinklers are Omegas. Omega owners should complete the Proof of Claim Form and Waiver and Release of Claims Form and return them, along with a photograph of each different Omega model, to Central Sprinkler. In order to request any reimbursement to help offset installation costs, Omega owners must return these forms postmarked by August 1, 1999. After owners receive their new, replacement sprinklers, they will need to complete and return a Verification Form in order to receive their reimbursement.
Q. I-low much will each building or homeowner receive in reimbursement for installation costs?
A. It is dependent, in part, on how many Omega owners participate in the recall.
Q. Is there anything I should do as pan of this recall effort?
A. Yes. We urge you to help spread the word to your customers about this recall. This is a national safety issue, and we want our industry to be responsible and responsive in this effort.
Q. What if I or any of my customers have questions?
A. Visit our special web site (www.omegarecall.com) for more information. Sprinkler owners who are unsure if they have Omegas and/or want to participate in the recall should call 1-800-896-5685 to request a Proof of Claim form and additional information.
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