Commission File Number 0-22745
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
JANUS AMERICAN GROUP, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
DELAWARE 13-2572712
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2300 Corporate Blvd., N.W.
Suite 232
Boca Raton, Florida 33431-8596
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (561) 994-4800
Janus Industries, Inc.
(Former name)
Check whether issues (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes _X_ No ___
Number of shares of Common Stock outstanding as of November 13, 1997:
8,691,735.181
Transitional Small Business Disclosure Format (Check One): Yes |_| No |X|
<PAGE>
JANUS AMERICAN GROUP, INC.
FORM 10-QSB
FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
Part I. Financial Information Page No.
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 18
Part II. Other Information 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 6. Exhibits and Reports on Form 8-K 24
Signature Page 25
Index to Exhibits 26
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
INDEX TO UNAUDITED CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
PAGE
----
HISTORICAL FINANCIAL STATEMENTS:
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996 4
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 5
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 6
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997 7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996 8
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS 9-12
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS:
INTRODUCTION TO THE UNAUDITED PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS 13
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 14
PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996 15
NOTES TO PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS 16-17
* * *
3
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1997 AND DECEMBER 31, 1996
September December
ASSETS 30, 1997 31, 1996
----------- ---------
(Unaudited)
Current assets:
Cash and cash equivalents $12,788,468 $ 6,580,836
Cash restricted for payments to redeem pre-
ferred stock of subsidiary 673,200
Accounts receivable 460,226 83,100
Current portion of mortgage notes receivable 120,488
Other current assets 913,610 184,734
----------- -----------
Total current assets 14,282,792 7,521,870
Property and equipment, net of accumulated de-
preciation and amortization 34,799,804 582,693
Mortgage notes receivable, net of current
portion 5,590,477
Goodwill, net of accumulated amortization 6,474,049 860,966
Deferred costs of proposed acquisition 74,692
Other assets 1,790,230 7,096
----------- -----------
Totals $62,937,352 $ 9,047,317
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Payable for redemption of preferred stock
of subsidiary $ 673,200
Current portion of long-term debt $ 574,953
Accounts payable 911,840 149,020
Accrued expenses 851,409 159,655
Dividends payable 341,476
----------- -----------
Total current liabilities 2,679,678 981,875
Long-term debt, net of current portion 19,535,475
Deferred tax liabilities 382,000
----------- -----------
Total liabilities 22,597,153 981,875
----------- -----------
Minority interest 1,798,732 43,837
----------- -----------
Commitments and contingencies
Stockholders' equity:
Preferred stock:
Series A; par value $.01 per share;
5,000,000 shares authorized; none issued
Series B; par value $.01 per share;
12,000,000 shares authorized; 10,451.88
shares issued and outstanding 105
Common stock, par value $.01 per share;
15,000,000 shares authorized; 11,880,867
and 8,080,868 shares issued 118,809 80,809
Additional paid-in capital 43,134,932 13,061,256
Accumulated deficit (3,396,080) (4,245,730)
Treasury stock - 3,189,132 and 2,849,850
shares, at cost (1,316,299) (874,730)
----------- -----------
Total stockholders' equity 38,541,467 8,021,605
----------- -----------
Totals $62,937,352 $ 9,047,317
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
---------- ----------
Revenues:
Hotel revenues:
Room and related services $6,089,861
Food and beverage 913,181
Management fees 447,369
Other 223,203
----------
Total hotel revenues 7,673,614
Sales 1,050,081 $ 175,021
---------- -----------
Total revenues 8,723,695 175,021
---------- -----------
Costs and expenses:
Direct hotel operating expenses:
Room and related services 1,280,648
Food and beverage 787,866
Selling and general expenses 222,154
----------
Total direct hotel operating expenses 2,290,668
Occupancy and other operating expenses 1,608,370 169,373
Selling, general and administrative expenses 2,460,089 985,600
Depreciation of property and equipment 587,863 36,991
Amortization of intangible assets 109,207 24,054
---------- -----------
Total costs and expenses 7,056,197 1,216,018
---------- -----------
Operating income (loss) 1,667,498 (1,040,997)
Other income (expense):
Interest income 430,929 125,334
Other income 25,317 3,544
Interest expense (801,728) (873)
---------- -----------
Income (loss) before state income taxes and
minority interest 1,322,016 (912,992)
Provision for state income taxes 3,473
---------- -----------
Income (loss) before minority interest 1,318,543 (912,992)
Minority interest 127,417 37,868
---------- -----------
Net income (loss) 1,191,126 (950,860)
Less preferred dividend requirements 341,476 19,800
---------- -----------
Net income (loss) applicable to common stock $ 849,650 $ (970,660)
========== ===========
Net income (loss) per common share $.12 $(.19)
==== =====
Weighted average common shares outstanding 7,144,180 5,075,418
========= =========
See Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
---------- -----------
Revenues:
Hotel revenues:
Room and related services $3,892,101
Food and beverage 590,219
Management fees 245,322
Other 165,940
----------
Total hotel revenues 4,893,582
Sales 318,852 $ 175,021
---------- ----------
Total revenues 5,212,434 175,021
---------- ----------
Costs and expenses:
Direct hotel operating expenses:
Room and related services 829,100
Food and beverage 529,531
Selling and general expenses 142,176
----------
Total direct hotel operating expenses 1,500,807
Occupancy and other operating expenses 765,114 169,373
Selling, general and administrative expenses 1,440,124 432,372
Depreciation of property and equipment 313,854 28,452
Amortization of intangible assets 55,633 24,054
---------- ----------
Total costs and expenses 4,075,532 654,251
---------- ----------
Operating income (loss) 1,136,902 (479,230)
Other income (expense):
Interest income 256,314 49,378
Other income 5,677 3,544
Interest expense (479,058) (873)
---------- ----------
Income (loss) before state income taxes and
minority interest 919,835 (427,181)
Provision for state income taxes 79,730
---------- ----------
Income (loss) before minority interest 840,105 (427,181)
Minority interest 95,570 12,623
---------- ----------
Net income (loss) 744,535 (439,804)
Less preferred dividend requirements 210,827 6,600
---------- ----------
Net income (loss) applicable to common stock $ 533,708 $ (446,404)
========== ==========
Net income (loss) per common share $.06 $(.09)
==== =====
Weighted average common shares outstanding 8,691,735 5,224,612
========= =========
See Notes to Condensed Consolidated Financial Statements.
6
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Treasury Stock
--------------- ---------------- -----------------
Number Number Additional Number
of of Paid-in Accumulated of
Shares Amount Shares Amount Capital Deficit Shares Amount Total
------ ------ ------ ------ ------- ------- ------ ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January
1, 1997 8,080,868 $ 80,809 $13,061,256 $(4,245,730) 2,849,850 $ (874,730) $ 8,021,605
Net income 1,191,126 1,191,126
Contributions to
capital from
United States
Lines, Inc. and
United States
Lines (S.A.),
Inc. Reorganiza-
tion Trust 7,412,542 7,412,542
Shares issued to
acquire hospi-
tality business 10,451.88 $105 3,799,999 38,000 22,763,772 22,801,877
Repurchase of com-
mon stock 339,282 (441,569) (441,569)
Repurchase of
276,400 warrants (102,638) (102,638)
Preferred stock
dividends (341,476) (341,476)
--------- ---- ---------- -------- ----------- ----------- --------- ----------- -----------
Balance, September
30, 1997 10,451.88 $105 11,880,867 $118,809 $43,134,932 $(3,396,080) 3,189,132 $(1,316,299) $38,541,467
========= ==== ========== ======== =========== =========== ========= =========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements.
7
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Unaudited)
1997 1996
----------- -----------
Operating activities:
Net income (loss) $ 1,191,126 $ (950,860)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 587,863 36,991
Amortization of intangible assets 109,207 24,054
Minority interest 127,417 37,868
Deferred income taxes (30,000)
Other 489
Changes in operating assets and liabilities:
Accounts receivable (147,115) (5,969)
Other current assets (477,734) (3,350)
Other assets (456,430) 1,250
Accounts payable and accrued expenses 246,238 (125,290)
----------- -----------
Net cash provided by (used in)
operating activities 1,151,061 (985,306)
----------- -----------
Investing activities:
Acquisitions of businesses, net of noncash
consideration and cash acquired (1,325,129) (701,631)
Purchases of property and equipment (409,494) (59,465)
Proceeds from sale of property and equipment 13,000
Collections of notes receivable 47,317
----------- -----------
Net cash used in investing activities (1,674,306) (761,096)
----------- -----------
Financing activities:
Decrease in restricted cash 631,830
Repurchase of common stock (441,569)
Repurchase of warrants (102,638)
Reduction of payable for redemption of pre-
ferred stock of subsidiary (631,830)
Contributions to capital from United States
Lines, Inc. and United States Lines (S.A.),
Inc. Reorganization Trust, including
$78,478 and $6,427 attributable to minority
interest 7,491,020 6,321,962
Proceeds from long-term borrowings 26,136
Repayments of long-term borrowings (242,072)
----------- -----------
Net cash provided by financing
activities 6,730,877 6,321,962
----------- -----------
Increase in cash and cash equivalents 6,207,632 4,575,560
Cash and cash equivalents, beginning of period 6,580,836 2,053,437
----------- -----------
Cash and cash equivalents, end of period $12,788,468 $ 6,628,997
=========== ===========
Supplemental disclosure of cash flow data:
Interest paid $ 790,979 $ 873
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
8
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Unaudited interim financial statements:
In the opinion of management, the accompanying unaudited condensed
consolidated financial statements reflect all adjustments, consisting
of normal recurring accruals, necessary to present fairly the
financial position of Janus American Group, Inc. (formerly Janus
Industries, Inc.) and Subsidiaries (the "Company") as of September
30, 1997, its results of operations and cash flows for the nine and
three months ended September 30, 1997 and 1996 and its changes in
stockholders' equity for the nine months ended September 30, 1997.
Certain terms used herein are defined in the audited consolidated
financial statements of the Company as of December 31, 1996 and 1995
and for the years then ended (the "Audited Janus Financial
Statements") included in the Company's Form 10-SB previously filed
with the Securities and Exchange Commission. Accordingly, these
unaudited condensed consolidated financial statements should be read
in conjunction with the Audited Janus Financial Statements and the
other financial statements included in the Form 10-SB.
The results of operations for the nine and three months ended
September 30, 1997 are not necessarily indicative of the results of
operations for the full year ending December 31, 1997.
Note 2 - Acquisitions:
On April 24, 1997, the Company entered the hospitality business by
acquiring the following from affiliates of Louis S. Beck and Harry
Yeaggy (the "Sellers"): (i) seven hotels (of which six are
wholly-owned and one is 85%-owned), (ii) a hotel management company
and substantially all of the assets thereof other than seven
management contracts and (iii) financial participations in the form
of mortgages on one additional hotel and a campground. The hotels,
the management company and the mortgages are referred to herein as
the "Beck-Yeaggy Group."
The consideration exchanged by the Company (which is further
described in Note 9 of the notes to the Audited Janus Financial
Statements in the Form 10-SB) for the assets and liabilities of the
Beck-Yeaggy Group and the other direct acquisition costs were
comprised as follows:
Issuance of:
10,451.88 shares of Series B preferred stock
with a liquidating and estimated fair value
of $1,000 per share $10,451,880
3,799,999 shares of common stock with an
estimated fair value of $3.25 per share 12,349,997
-----------
Total value of shares issued 22,801,877
Cash paid to the Sellers to repay short-term
loans 793,803
Legal, accounting and other costs related to
the purchase 637,170
-----------
Total purchase price to be allocated $24,232,850
===========
9
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 - Acquisitions (continued):
The acquisition was accounted for as a purchase and, accordingly, the
results of operations of the Beck-Yeaggy Group have been included in
the accompanying consolidated statements of operations subsequent to
April 30, 1997 (the effective date of the acquisition for accounting
purposes). In addition, total acquisition costs were allocated to the
assets acquired and liabilities assumed based on their estimated fair
values on the date of acquisition, with the excess of cost over such
fair values allocated to goodwill, as shown below:
Cash $ 31,152
Accounts receivable 230,011
Other current assets 209,772
Property and equipment 34,400,000
Mortgage notes receivable 5,758,282
Goodwill 5,726,959
Other assets 1,331,004
Accounts payable (561,530)
Other current liabilities (605,436)
Long-term debt (20,326,364)
Deferred tax liabilities (412,000)
Minority interest in the 85%-owned hotel (1,549,000)
-----------
Total purchase price allocated $24,232,850
===========
On July 15, 1996, the Company acquired the oil and gas services
business and certain assets of Pre-Tek Wireline Service Company, Inc.
("Pre-Tek") and assumed certain of its liabilities. The acquisition
was accounted for as a purchase and, accordingly, the results of
Pre-Tek's operations have been included in the accompanying
consolidated statements of operations subsequent to July 15, 1996,
the effective date of the acquisition. Information as to the
consideration exchanged by the Company and the allocation of total
acquisition costs to the assets acquired and liabilities assumed is
set forth in Note 3 of the notes to the Audited Janus Financial
Statements in the Form 10-SB.
The following unaudited pro forma information shows the results of
operations for the nine months ended September 30, 1997 and 1996 as
though the Beck-Yeaggy Group and Pre-Tek had been acquired as of
January 1, 1996:
1997 1996
----------- -----------
Total revenues $12,310,000 $11,661,000
Net income (loss) 881,000 (202,000)
Net income (loss) applicable
to common stock 295,000 (808,000)
Net income (loss) per common
share .03 (.09)
Weighted average number of
common shares outstanding 8,814,509 9,031,017
10
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 2 - Acquisitions (concluded):
In addition to combining the historical results of operations of the
Company and the historical pre-acquisition results of operations of
the Beck-Yeaggy Group and Pre-Tek, the pro forma results of
operations include adjustments that, among other things, reflect: the
elimination of the net revenues derived from management contracts of
the Beck-Yeaggy Group that were not acquired by the Company;
depreciation and amortization of property and equipment based on the
fair values of assets acquired; the amortization of goodwill; the net
effects of changes to compensation and related expenses based on
revised employment and lease agreements; and the issuance of shares
of preferred and common stock (net of shares returned) as part of the
consideration for the acquisitions.
The Company recognizes revenues from room and related services,
management fees and engineering and wireline logging services on an
accrual basis as earned. Food and beverage revenues are recognized
when goods are sold.
Note 3 - Long-term debt:
Long-term debt at September 30, 1997 consisted of the following:
Fixed rate mortgage notes payable in monthly
installments, including interest at rates
ranging from 8.875% to 10%; the mortgage
notes mature from August 2000 through
January 2016 $10,738,995
Variable rate mortgage notes payable
in monthly installments, including interest
at rates varying with the prime commercial lending
rate, rates on U.S. Treasury securities and other
defined indexes (the effective rates at June 30,
1997 ranged from 8.73% to 9.5%); the mortgage notes
mature from March 1998 through April 2006 9,195,376
Equipment notes with various maturities
through June 2001 and interest at rates
ranging from 7% to 15% 176,057
-----------
Total long-term debt 20,110,428
Less current portion 574,953
-----------
Long-term debt, net of current portion $19,535,475
===========
Long-term debt is secured by the mortgage notes receivable held by
the Company and substantially all of its property and equipment.
11
<PAGE>
JANUS AMERICAN GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4 - Capital contribution:
During the nine months ended September 30, 1997, the Reorganization
Trust transferred cash in excess of its projected liabilities and
administrative requirements totaling $7,491,020 to the Company, of
which $6,741,918 (90%) was deemed a capital contribution to Janus and
$749,102 (10%) was deemed a capital contribution to JIS (including
$78,478 attributable to the minority interest in the JIS common
stock).
Note 5 - Income taxes:
As further described in Note 5 of the notes to the Audited Janus
Financial Statements in the Form 10-SB, management believes that as
of December 31, 1996, Janus had estimated available adjusted net
operating loss carryforwards for Federal income tax and alternative
minimum tax purposes of at least $500,000,000, subject to review and
possible adjustment by the Internal Revenue Service. These loss
carryforwards, which expire primarily during 1999 through 2001, may
be used to offset future taxable income, if any, of Janus as well as
the Reorganization Trust, subject to certain limitations.
All of the tax loss attributes referred to above have been fully
reserved, for financial statement purposes, through a valuation
allowance rather than reflected as deferred tax assets at September
30, 1997 and 1996 due to the lack of a sustained historical taxable
income stream and the other uncertainties referred to above.
Accordingly, no provision or credit for Federal income taxes was
recorded in the nine and three month periods ended September 30, 1997
and 1996.
The provision for state income taxes for the nine months ended
September 30, 1997 was reduced by a credit for prior year income tax
refunds of $76,257.
* * *
12
<PAGE>
JANUS AMERICAN GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
On April 24, 1997, Janus American Group, Inc. ("Janus") consummated the
acquisition of a 100% equity interest in six hotels and an 85% equity interest
in a seventh hotel (the "Hotels"), a 100% equity interest in a hotel management
company (the "Management Company") and substantially all of the assets thereof
other than seven management contracts and 100% interests in mortgages (the
"Mortgages") on one additional hotel and a campground, all of which were owned
by corporations and partnerships that were, effectively, wholly-owned or
controlled by Louis S. Beck and Harry Yeaggy (the "Sellers") during the year
ended December 31, 1996 and the period from January 1, 1997 through the date of
acquisition. The Hotels, the Management Company and the Mortgages are referred
to herein as the "Beck-Yeaggy Group." On July 15, 1996, the Company acquired the
oil and gas industry services business of Pre-Tek Wireline Service Company, Inc.
and its wholly-owned subsidiary ("Pre-Tek"). Janus has accounted for the
acquisitions of the Beck-Yeaggy Group and Pre-Tek pursuant to the purchase
method of accounting in its historical financial statements based on effective
acquisition dates of April 30, 1997 and July 15, 1996, respectively.
The accompanying unaudited pro forma condensed statement of operations for the
nine months ended September 30, 1997 combines the historical consolidated
statement of operations of Janus and its subsidiaries for the nine months ended
September 30, 1997 (including the Beck-Yeaggy Group for the period from May 1,
1997 to September 30, 1997 and Pre-Tek for the entire period) and the historical
combined statement of operations of the Beck-Yeaggy Group for the period from
January 1, 1997 to April 30, 1997 as if the acquisitions had been consummated as
of January 1, 1996. The accompanying unaudited pro forma condensed statement of
operations for the nine months ended September 30, 1996 combines the historical
consolidated statement of operations of Janus and its subsidiaries for the nine
months ended September 30, 1996 (including Pre-Tek for the period from July 16,
1996 to September 30, 1996), the historical consolidated statement of operations
of Pre-Tek for the period from January 1, 1996 to July 15, 1996 and the
historical combined statement of operations of the Beck-Yeaggy Group for the
nine months ended September 30, 1996 as if the acquisitions of Pre-Tek and the
Beck-Yeaggy Group had been consummated as of January 1, 1996.
The accompanying unaudited pro forma condensed combined financial statements are
based on the assumptions and adjustments described in the accompanying notes
which management believes are reasonable. The unaudited pro forma condensed
combined financial statements do not purport to represent what the combined
results of operations actually would have been if the acquisitions referred to
above had occurred as of January 1, 1996 instead of the actual dates of
consummation or what the financial position and results of operations would be
for any future periods. The unaudited pro forma condensed combined financial
statements and the accompanying notes should be read in conjunction with the
audited and unaudited historical financial statements of Janus and its
subsidiaries, the Beck-Yeaggy Group and Pre-Tek included elsewhere herein and in
the Form 10-SB.
13
<PAGE>
JANUS AMERICAN GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997
<TABLE>
<CAPTION>
Historical
-----------------------------
Janus and The
Subsid- Beck-Yeaggy
iaries Group
(1/1/97 to (1/1/97 to Pro Forma Pro Forma
9/30/97) 4/30/97) Adjustments Combined
-------- -------- ----------- --------
<S> <C> <C> <C> <C>
Revenues:
Hotel revenues $7,003,042 $3,183,155 $10,186,197
Management fees 447,369 497,153 $(142,760)(B) 801,762
Other hotel related revenues 223,203 49,009 272,212
Sales 1,050,081 1,050,081
---------- ---------- --------- -----------
Total revenues 8,723,695 3,729,317 (142,760) 12,310,252
---------- ---------- --------- -----------
Costs and expenses:
Direct hotel operating expenses 2,290,668 1,276,024 13,073 (C) 3,579,765
Occupancy and other operating
expenses 1,608,370 551,474 23,217 (D) 2,183,061
Selling, general and administrative
expenses 2,460,089 1,092,923 97,034 (D) 3,650,046
Depreciation and amortization 587,863 286,436 107,786 (E) 982,085
Amortization of intangible assets 109,207 47,725 (F) 156,932
---------- ---------- --------- -----------
Total costs and expenses 7,056,197 3,206,857 288,835 10,551,889
---------- ---------- --------- -----------
Operating income 1,667,498 522,460 (431,595) 1,758,363
Other income (expense):
Interest and other income 456,246 149,640 605,886
Interest expense (801,728) (612,750) (1,414,478)
---------- ---------- --------- -----------
Income before income taxes and
minority interest 1,322,016 59,350 (431,595) 949,771
Provision (credit) for income taxes 3,473 (21,000)(G) (17,527)
---------- ---------- --------- -----------
Income before minority interest 1,318,543 59,350 (410,595) 967,298
Minority interest 127,417 (40,994)(H) 86,423
---------- ---------- --------- -----------
Net income 1,191,126 59,350 (369,601) 880,875
Less preferred dividend requirements 341,476 244,832 (I) 586,308
---------- ---------- --------- -----------
Net income applicable to common stock $ 849,650 $ 59,350 $(614,433) $ 294,567
========== ========== ========= ===========
Net income per common share $.12 $.03
==== ====
Weighted average number of shares
outstanding 7,144,180 8,814,509
========= =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
14
<PAGE>
JANUS AMERICAN GROUP, INC.
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
Historical
---------------------------
Pre-Tek
and The Beck-
Subsidiary Janus Yeaggy
Janus and (1/1/96 to Pro Forma Pro Forma Group Pro Forma Pro Forma
Subsidiaries 7/15/96) Adjustments Combined Historical Adjustments Combined
------------ -------- ----------- -------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Hotel revenues $10,037,524 $10,037,524
Management fees 1,234,083 $ (456,676)(B) 777,407
Other hotel related
revenues 124,587 124,587
Sales $ 175,021 $ 546,741 $ 721,762 721,762
----------- --------- ----------- ----------- ----------- -----------
Total revenues 175,021 546,741 721,762 11,396,194 (456,676) 11,661,280
----------- --------- ----------- ----------- ----------- -----------
Costs and expenses:
Direct hotel operating
expenses 3,462,407 30,074 (C) 3,492,481
Occupancy and other oper-
ating expenses 169,373 349,759 519,132 1,409,518 (41,475)(D) 1,887,175
Selling, general and ad-
ministrative expenses 985,600 410,725 1,396,325 2,551,245 208,528 (D) 4,156,098
Depreciation and amorti-
zation 36,991 151,952 $(88,211)(A) 100,732 655,353 231,647 (E) 987,732
Amortization of intang-
ible assets 24,054 82,947 (52,571)(A) 54,430 107,381 (F) 161,811
----------- --------- -------- ----------- ----------- ----------- -----------
Total costs and ex-
penses 1,216,018 995,383 (140,782) 2,070,619 8,078,523 536,155 10,685,297
----------- --------- -------- ----------- ----------- ----------- -----------
Operating income (loss) (1,040,997) (448,642) 140,782 (1,348,857) 3,317,671 (992,831) 975,983
Other income (expense):
Interest and other income 128,878 128,878 364,462 493,340
Interest expense (873) (85,411) (86,284) (1,451,875) (1,538,159)
Other expense (38,086) (38,086) (38,086)
----------- --------- -------- ----------- ----------- ----------- -----------
Income (loss) before minor-
ity interest (912,992) (572,139) 140,782 (1,344,349) 2,230,258 (992,831) (106,922)
Minority interest 37,868 37,868 56,968 (H) 94,836
----------- --------- -------- ----------- ----------- ----------- -----------
Net income (loss) (950,860) (572,139) 140,782 (1,382,217) 2,230,258 (1,049,799) (201,758)
Less preferred dividend
requirements 19,800 19,800 586,308 (I) 606,108
----------- --------- -------- ----------- ----------- ----------- -----------
Net income (loss) applic-
able to common stock $ (970,660) $(572,139) $140,782 $(1,402,017) $ 2,230,258 $(1,636,107) $ (807,866)
=========== ========= ======== =========== =========== =========== ===========
Net loss per common share $(.19) $(.27) $(.09)
===== ===== =====
Weighted average number
of shares outstanding 5,075,418 5,231,018 9,031,017
========= ========= =========
</TABLE>
See Notes to Unaudited Pro Forma Condensed Combined Financial Statements.
15
<PAGE>
JANUS AMERICAN GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
Purchases of the Beck-Yeaggy Group and Pre-Tek:
Information with respect to the cost incurred by Janus to purchase the
Beck-Yeaggy Group on April 30, 1997 (the effective date of the acquisition used
for accounting purposes) and the allocation of such costs in accordance with the
purchase method of accounting is set forth in Note 2 of the notes to the
unaudited condensed consolidated financial statements of Janus included
elsewhere herein.
Information with respect to the cost incurred by Janus to purchase Pre-Tek on
July 15, 1996 and the allocation of such costs in accordance with the purchase
method of accounting is set forth in Note 3 of the notes to the Audited Janus
Financial Statements in the Form 10-SB.
Information with respect to pro forma adjustments for the effects of the assumed
acquisitions of the Beck-Yeaggy Group and Pre-Tek as of January 1, 1996
(including the effects of certain agreements related to such acquisitions) on
the results of operations of Janus and its subsidiaries for the nine months
ended September 30, 1997 and 1996 is set forth below.
Pro Forma Adjustments to the Unaudited Condensed Combined Statements of
Operations for the nine months ended September 30, 1997 and 1996:
(A) To record the effects arising from the allocation of the purchase
price for the acquisition of Pre-Tek on historical depreciation and
amortization of property and equipment based on the fair values and
estimated useful lives of the assets acquired and on historical
amortization of goodwill based on an estimated benefit period for
goodwill arising from the acquisition of Pre-Tek of 15 years.
(B) To eliminate the net revenues derived from management contracts of the
Beck-Yeaggy Group that were not acquired by Janus.
(C) To record the additional cost to be incurred as a result of the
revisions to the agreement with Hospitality Employee Leasing Program,
Inc. that became effective upon the consummation of the acquisition of
the Beck-Yeaggy Group.
(D) To record the net effects of changes to compensation and related
expenses based on revised employment and lease agreements that became
effective upon the consummation of the acquisition of the Beck-Yeaggy
Group and the elimination of the costs of consultants who will no
longer be employed and certain other nonrecurring costs.
(E) To record the effects arising from the allocation of the purchase
price for the acquisition of the Beck-Yeaggy Group on historical
depreciation and amortization of property and equipment based on the
fair values and estimated useful lives of the assets required.
16
<PAGE>
JANUS AMERICAN GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS
(F) To record the effects arising from the allocation of the purchase
price for the acquisition of the Beck-Yeaggy Group on historical
amortization of goodwill based on a minimum estimated benefit period
for goodwill arising from the acquisition of the Beck-Yeaggy Group of
40 years.
(G) To adjust state income tax provisions and credits based on the pro
forma income or loss before income taxes and related carryforwards
applicable to each state. No provisions or credits for Federal income
taxes have been recorded on the pro forma net income or loss before
income taxes based on the availability of net operating loss
carryforwards due to the uncertainties related to their future use
(see Note 5 of the notes to the condensed consolidated financial
statements herein).
(H) To record the minority interest in the net income (loss) of the
85%-owned hotel.
(I) To record the dividends attributable to the shares of Series B
preferred stock issued as part of the consideration paid to the
Sellers.
17
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The following discussion of the Company's historical results of operations,
changes in liquidity and capital resources and liquidity and capital resources
as of September 30, 1997 and for nine months ended September 30, 1997 and 1996
should be read in conjunction with the unaudited consolidated financial
statements of the Company and the notes thereto and the Unaudited Pro Forma
Condensed Combined Financial Statements of Janus American Group, Inc. and
Subsidiaries and the notes thereto included elsewhere herein. The term "Company"
means Janus American Group, Inc. ("Janus") collectively with its subsidiaries JI
Subsidiary, Inc. ("JI Subsidiary"), Pre-Tek Wireline Service Company, Inc.
('Wireline") and KFE Wireline, Inc. ("KFE"). References to the operations of
"Pre-Tek" in this discussion are to the combined operations of Wireline and
Wireline's subsidiary, KFE.
Janus and JI Subsidiary are the successors to United States Lines, Inc.
("U.S. Lines") and United States Lines (S.A.), Inc. ("U.S. Lines (S.A)"), which
emerged from a Chapter 11 bankruptcy in 1990. The Plan of Reorganization which
was approved by the creditors of U.S. Lines and U.S. Lines (S.A.) and the United
States Bankruptcy Court for the Southern District of New York, contemplated that
Janus and JI Subsidiary would seek out acquisition opportunities for each of the
reorganized companies in order to utilize their respective anticipated available
net operating loss carryforwards ("NOLs") for Federal income tax purposes.
The Company acquired the business of Pre-Tek, an oil and gas engineering
services and wireline logging company based in Bakersfield, California, in July
1996. On April 24, 1997, the Company acquired, from affiliates of Louis S. Beck
("Beck") and Harry Yeaggy ("Yeaggy"), certain assets relating to the hospitality
business comprised of (i) six hotels and an 85% partnership interest in a
partnership which owns a hotel (collectively, the "Owned Hotels"), (ii) a hotel
management company, with 21 hotels under management inclusive of the Owned
Hotels (hereinafter the hotels which are managed, but not owned by the Company,
are referred to as the "Managed Hotels" and the Owned Hotels and the Managed
Hotels are collectively referred to as the "Hotels"), (iii) a management fee
sharing arrangement with Summit Hotel Management Company and (iv) two loans, one
of which is secured by a first mortgage on a hotel and the other of which is
secured by a first mortgage on a campground and both of which are personally
guaranteed by Messrs. Beck and Yeaggy (the acquired businesses and assets are
collectively the "Beck-Yeaggy Group"). Management is diligently pursuing a
program for additional acquisitions through the use of a combination of cash,
capital stock and, when necessary, borrowing.
18
<PAGE>
Nine Months Ended September 30, 1997 Compared With Nine Months Ended
September 30, 1996
Historical and Pro Forma Results of Operations
The acquisitions of the Beck-Yeaggy Group and Pre-Tek were accounted for as
purchases and, accordingly, the Company's historical results of operations for
the nine months ended September 30, 1997 and 1996 include the results of
operations of the Beck-Yeaggy Group subsequent to April 30, 1997 and Pre-Tek
subsequent to July 15, 1996 (the respective effective dates of acquisition for
accounting purposes). Accordingly, the Company's historical results of
operations for the nine months ended September 30, 1997 are not directly
comparable to those of 1996.
To present more comparable information, unaudited pro forma combined
results of operations for the nine months ended September 30, 1997 and 1996 are
set forth below. In addition to combining the historical results of operations
of the Company and the historical pre-acquisition results of operations of the
Beck-Yeaggy Group for the periods from January 1, 1997 to April 30, 1997 and
January 1, 1996 to September 30, 1996 and the historical pre-acquisition results
of operations of Pre-Tek for the period from January 1, 1996 to July 15, 1996 as
if the acquisitions had been consummated on January 1, 1996 , the pro forma
results of operations include adjustments that, among other things, reflect: the
elimination of the net revenues derived from management contracts of the
Beck-Yeaggy Group that were not acquired by the Company; depreciation and
amortization of property and equipment based on the fair values of assets
acquired; the amortization of goodwill; the net effects of changes to
compensation and related expenses based on revised employment and lease
agreements; and the issuance of shares of preferred and common stock (net of
shares returned) as part of the consideration for the acquisitions.
The pro forma combined net income of the Company was $880,875 for the nine
months ended September 30, 1997 as compared to a net loss of $201,758 during the
same period of 1996. The increase in net income was primarily the result of
decreases in compensation expense and professional fees, an increase in hotel
revenues, Pre-Tek sales, interest and other income and state tax refunds from
prior years which were received in 1997.
Room revenue increased $133,312 to $8,844,403 in 1997. The 1.5% increase
was attributable primarily to an increase in room rates from Owned Hotels. The
average rate increased from $47.93 in 1996 to $49.82 for 1997 as the occupancy
percentage decreased 1.7% in 1997 to 66.7% from 68.4% in 1996.
Food and beverage revenues are principally a function of the number of
guests who stay at each Owned Hotel, local walk-in business and catering sales.
The $15,361 increase in food
19
<PAGE>
and beverage sales from $1,326,433 for the nine month period ended September 30,
1996 to $1,341,794 for the comparable period in 1997 is related to an increase
in the menu prices at the Owned Hotel, Best Western Kings Quarters.
Management fee income increased from $777,407 in 1996 to $801,762 in 1997
as room revenues increased at Managed Hotels where the management fees are
calculated as a percentage of room revenues.
Other hotel related revenues increased in 1997 from $124,587 in 1996 to
$272,212 for 1997. The increase was directly related to the co-marketing of
Kings Island and Kings Dominion amusement park tickets with room rentals which
generate $.50 to $3.00 per ticket in additional income.
Sales generated by Pre-Tek increased from $721,762 in 1996 to $1,050,081 in
1997 primarily as a result of increases in well perforation and bond logging
revenues.
Direct hotel operating expenses increased by $87,284 from $3,492,481 in
1996 to $3,579,765 in 1997. Direct room and related services costs increased as
room revenue increased. Food and beverage costs increased as food and beverage
sales increased. However, restaurant and lounge departmental profitability
decreased as a result of increases in labor costs.
Occupancy and other operating expenses increased to $2,183,061 in 1997 from
$1,887,175 in 1996. Operating expenses at Owned Hotels decreased by
approximately $19,119 as repairs and maintenance expense and utility expenses
decreased. Operating expenses for Pre-Tek increased $315,005 from $519,132 in
1996 to $834,137 in 1997 and is primarily attributable to the direct costs
associated with generating additional sales.
Selling, general and administrative expenses decreased by $506,052 to
$3,650,046 in 1997 from $4,156,098 in 1996 as a result of a reduction in
compensation expenses and professional fees.
Interest and other income increased $112,546 to $605,886 in 1997 from
$493,340 in 1996 as the amount of funds invested increased in 1997.
Interest expense decreased from $1,538,159 in 1996 to $1,414,478. The
decrease was related to a decrease in the amount of long-term debt secured by
the Owned Hotels.
The charges to operations for minority interest remained stable from 1996
to 1997.
The decline in preferred stock dividends from $606,108 for 1996 to $586,308
for 1997 resulted from the effects of the redemption of the Company's Series A
Preferred Stock during 1996.
20
<PAGE>
Historical Changes in Liquidity and Capital Resources
Total assets increased from $9,047,317 at December 31, 1996 to $62,937,352
at September 30, 1997. The increase in total assets was the result of the
acquisition of the Beck-Yeaggy Group.
Property, plant and equipment, goodwill, notes receivable, long-term debt,
paid-in-capital, preferred stock and common stock all fluctuated as a result of
the acquisition. The increase in cash and cash equivalents of $6,207,632 is
predominantly attributable to contributions from the United States Lines, Inc.
and United States Lines (S.A.), Inc. Reorganization Trust (the "Reorganization
Trust").
Liquidity and Capital Resources at September 30, 1997
The following discussion reflects the liquidity and capital resources of
the Company after the acquisition of the Beck-Yeaggy Group by the Company. The
Company's principal sources of liquidity are cash on hand (including escrow
deposits and replacement reserve), cash from operations, earnings on invested
cash and, when required, principally in connection with acquisitions, borrowings
(consisting primarily of loans secured by mortgages on real property owned or to
be acquired by the Company). The Company's continuing operations are funded
through cash generated from its hotel operations. Acquisitions of hotels are
expected to be financed through a combination of cash on hand, internally
generated cash, issuance of equity securities of Janus and borrowings, some of
which is likely to be secured by assets of the Company. The Company has no
committed lines of credit and there can be no assurance that credit will be
available to the Company or if available that such credit will be available on
terms and in amounts satisfactory to the Company. The ability of the Company to
issue its common or preferred stock is materially restricted by the requirements
of the Code if the Company wishes to preserve its NOLs.
At September 30, 1997, the Company had $12,788,468 in cash and cash
equivalents.
During the nine months ended September 30, 1997, the Company invested
$409,494 in capital improvements in connection with the Owned Hotels. The
Company plans to spend an additional $550,000 on such capital improvements over
the three month period ending December 31, 1997.
Capital for improvements to Owned Hotels has been and is expected to be
provided by a combination of internally generated cash and, if necessary and
available, borrowings. The Company expects to spend annually approximately 4% to
5% of revenues from Owned Hotels for ongoing capital expenditures in each year.
The Company believes, based on its operating experience, that these types of
capital investments will enhance the competitive position of the Owned Hotels
and thereby enhance the Company's competitive position. Changes in the
competitive environment for a specific Owned Hotel may dictate higher or lower
capital expenditures.
21
<PAGE>
The Company maintains a number of commercial banking relationships but does
not currently have committed lines of credit. It is in active negotiations with
lending institutions which might extend credit facilities to the Company for
capital purposes including capital that might be required for the acquisition of
additional hotels or management contracts. There can be no assurance such
negotiations will be successful.
The Company anticipates that it will be able to secure the capital required
to pursue its acquisition program through a combination of borrowing, internally
generated cash and utilization of its common and/or preferred stock to the
extent such utilization does not jeopardize the Company's NOLs. There can be no
assurance however that the Company will be able to negotiate sufficient
borrowings to accomplish its acquisition program on terms and conditions
acceptable to the Company, or at all. Further, any such borrowings may contain
covenants that impose limitations on the Company which could constrain or
prohibit the Company from making additional acquisitions as well as its ability
to pay dividends or to make other distributions, incur additional indebtedness
or obligations or to enter into other transactions which the Company may deem
beneficial. Additionally, factors outside of the Company's control could affect
its ability to secure additional funds on terms acceptable to the Company. Those
factors include, without limitation, any increase in the rate of inflation
and/or interest rates, localized or general economic dislocations, an economic
down-turn and regulatory changes constricting the availability of credit.
The Company has benefited and continues to benefit as the recipient of
moneys disbursed by the Reorganization Trust as the Reorganization Trust
accumulates moneys in excess of its reasonably required reserves and projected
operating expenses. On April 25, 1997 and August 19, 1997, the Company received
contributions from the Reorganization Trust aggregating $7,491,020. While there
is no objective formula to determine the extent to which Reorganization Trust
assets exceed projected liabilities and administrative requirements thereby
making additional cash available for contribution to the Company, management of
the Company believes that there will be future contributions. This belief is
based upon the decrease of the Reorganization Trust's administrative expenses
through reductions in personnel and office space, which is related to the
decreasing volume of unsettled claims of former unsecured creditors of U.S.
Lines and U.S. Lines (S.A.). The amount of excess cash available for
contribution to the Company will be dependent upon the remaining duration of
Reorganization Trust activity necessary to resolve outstanding claims,
particularly the asbestos and other late-manifesting personal injury claims, and
the amount of professional fees associated with this activity. Accordingly, no
assurance can be given as to the amount or timing of additional contributions
from the Reorganization Trust, if in fact there are any additional
contributions.
The Company's long-term debt at September 30, 1997 totals $20,110,428.
Mortgage debt totals $19,934,371, which consists of $10,738,995 in fixed rate,
fully self-amortizing mortgage loans and $9,195,376 in adjustable rate (3-5 year
adjustment period) mortgage loans. Such adjustable rate loans have maturity
dates range from March 1998 to April 2006. Interest rates on mortgage debt range
from 8.875% to 10.00% with a weighted average interest rate of 9.3% effective at
October 1, 1997. The approximate scheduled repayments of principal on the
22
<PAGE>
long-term debt of the Company are: from October 1, 1997 through December 31,
1997 -- $145,000; 1998 -- $2,115,000; 1999 -- $591,000; 2000 -- $627,000.
Management of the Company currently believes that the cash flow from the
Company's hotel operations will be sufficient to make the required amortization
payments. Balloon payments required to be made at the maturity of the
non-self-amortizing loans are expected to be made from cash on hand at the time
or from the proceeds of refinancing. There can be no assurance that the Company
will be able to obtain financing, or financing on terms satisfactory to it.
Seasonality. Demand at many of the hotels is affected by seasonal patterns.
Demand for hotel rooms in the industry generally tends to be lower during the
first and fourth quarters and higher in the second and third quarters.
Accordingly, the Company's revenues reflect this seasonality.
Forward Looking Statements
When used in this and in future filings by the Company with the Securities
and Exchange Commission, in the Company's press releases and in oral statements
made with the approval of an authorized executive officer of the Company, the
words or phrases "will likely result," "expects," "plans," "will continue," "is
anticipated," "estimated," "project" or "outlook" or similar expressions
(including confirmations by an authorized executive officer of the Company of
any such expressions made by a third party with respect to the Company) are
intended to identify forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. The Company wishes to caution
readers not to place undue reliance on any such forward-looking statements, each
of which speak only as of the date made. Such statements are subject to certain
risks and uncertainties that could cause actual results to differ materially
from historical earnings and those presently anticipated or projected. The
Company has no obligation to publicly release the result of any revisions which
may be made to any forward-looking statements to reflect anticipated or
unanticipated events or circumstances occurring after the date of such
statements.
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.
On September 29, 1997, the Company held an annual meeting of shareholders.
At the meeting, the following matters were approved by the shareholders by the
following votes:
1. Election of Directors
Name For Withheld
---- --- --------
Louis S. Beck 6,392,228 0
Richard P. Lerner 6,392,228 0
C. Scott Bartlett, Jr. 6,392,228 0
Lucille Hart-Brown 6,392,228 0
23
<PAGE>
2. Ratification of the appointment of J.H. Cohn LLP as independent public
accountants:
For Against Abstain
--- ------- -------
6,005,588 0 386,640
3. Approval of the grant of stock appreciation rights to non-officer
directors.
For Against Abstain
--- ------- -------
6,005,588 0 386,640
4. Approval of amendment to the Company's Restated Certificate of
Incorporation, as amended to change the Company's name to Janus American Group,
Inc.
For Against Abstain
--- ------- -------
6,005,588 0 386,640
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit Number Description
-------------- -----------
3.1 Restated Certificate of
Incorporation, as amended
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed by the Company during the
quarter ended September 30, 1997.
24
<PAGE>
SIGNATURE
In accordance with the requirements f the Securities Exchange Act of 1934,
as amended, the Registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: November 14, 1997 JANUS AMERICAN GROUP, INC.
By:/s/ James E. Bishop
---------------------------
James E. Bishop, President
Dated: November 14, 1997
/s/ Richard A.Tonges
---------------------------
Richard A.Tonges, Treasurer
and Vice President of
Finance (Principal
Financial and Accounting
Officer)
25
<PAGE>
Index to Exhibits
Exhibit Number Description
3.1 Restated Certificate of Incorporation, as amended
26
State of Delaware
PAGE 1
Office of the Secretary of State
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE RESTATED CERTIFICATE OF
"UNITED STATES LINES, INC.", CHANGING ITS NAME FROM "UNITED STATES LINES, INC."
TO "JANUS INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE TWENTY-THIRD DAY OF
FEBRUARY, A.D. 1990, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
[SEAL] ------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8419545
DATE: 04-14-97
0642316 8100
971119933
<PAGE>
FILED
FEB 23 1990
9 A.M.
/s/ [ILLEGIBLE]
SECRETARY OF STATE
RESTATED CERTIFICATE OF INCORPORATION
OF
UNITED STATES LINES, INC.
The undersigned, a corporation organized and existing under and by
virtue of the General corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY AS FOLLOWS:
1. The Certificate of Incorporation of the Corporation was filed in
the Office of the Secretary of State of the State of Delaware on June 10, 1966.
2. In the manner prescribed by ss.303 of the General Corporation Law
of the State of Delaware, this Restated Certificate of Incorporation was duly
authorized and adopted pursuant to
(i) the First Amended and Restated Joint Plan of Reorganization of
the Corporation and certain affiliated debtors; (such plan of
reorganization as subsequently modified being herein referred to as the
"Plan") under Chapter 11 of the United States Bankruptcy code of 1978, as
amended (the "Bankruptcy Code"), and
(ii) the order dated May 16, 1989 entered on that date by the United
States Bankruptcy Court for the Southern District of New York (Case Nos.
86 B 12238 through 86 B 12241 (HCB), inclusive), which order confirmed the
Plan under chapter 11 of the Bankruptcy Code; and the order issued
February 6, 1990 by the United States Bankruptcy Court for the Southern
District of New York, which order confirmed certain modifications to the
Plan.
3. The text of the Certificate of Incorporation of the Corporation,
as heretofore amended and as amended, supplemented and restated hereby, is
amended and restated in its entirety as follows to read as hereinafter set forth
in full:
* * *
First: The name of the corporation (which is hereinafter referred to
as the "Corporation") is
Janus Industries, Inc.
SECOND: The registered office of the Corporation is to be located at
1209 Orange Street, City of Wilmington, County of New Castle, State of Delaware.
The name of its registered agent at that address is The Corporation Trust
Company.
<PAGE>
2
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: (1) The total number of shares of all classes of stock which
the Corporation is authorized to issue is 20 Million (20,000,000) shares,
consisting of
(i) 15 Million (15,000,000) shares of Common Stock, par value one
cent ($0.0l) per share, and
(ii) 5 Million (5,000,000) shares of Preferred Stock, par value one
cent ($0.01) per share.
The amount of the authorized capital stock or the Corporation of any class or
classes may be increased or decreased by the affirmative vote of the holders of
a majority of the capital stock of the Corporation entitled to vote.
(2) The holders of the Common Stock shall be entitled to receive, to
the extent permitted by law, such dividends as may be declared from time to time
by the Board of Directors of the Corporation and shall participate in any and
all dividend distributions on an equal per share basis. Upon any voluntary or
involuntary liquidation, dissolution or winding up of the Corporation or any
reduction of the capital stock of the Corporation resulting in the distribution
of any of its assets to its stockholders, the holders of the Common Stock shall
be entitled to receive the net assets of the Corporation, after the Corporation
shall have satisfied or made provision for its debts and obligations and for the
payment to the holders of shares of the Preferred Stock any preferential rights
to receive distributions of the net assets of the Corporation, and shall
participate in any and all the distributions on an equal per share basis.
(3) Except as may be expressly provided in resolutions adopted by
the Board of Directors of the Corporation pursuant to paragraph (4) of this
Article FOURTH with respect to the Preferred Stock, the holders or the Common
Stock shall have the exclusive right to vote for (or to consent with respect to)
the election of directors and, except as otherwise may be required by law, on
all other matters requiring action by the stockholders or submitted to the
stockholders for action. Each holder of a share of the Common Stock shall be
entitled to one vote for each share of the Common stock standing in his name on
the books of the Corporation.
<PAGE>
3
(4) The Preferred Stock may be issued from time to time in classes
or series and shall have such designations, preferences and relative,
participating, optional or other special rights, and qualifications, limitations
or restrictions thereof, as shall be stated and expressed in the resolutions of
the Board or Directors providing for the issuance of such stock. The holders of
the Preferred Stock shall have no voting rights except as required by law or as
expressed in the resolutions of the Board of Directors providing for the
issuance of such shares.
(5) The Corporation shall not issue any non-voting equity
securities; provided, however, that this provision, included in this Restated
Certificate of Incorporation in compliance with ss.1123(a)(6) of the United
States Bankruptcy Code of 1978, as amended, shall have no force and effect
beyond that required by such ss.1123(a)(6) and shall be effective only for so
long as such ss.ll23(a)(6) is in effect and applicable to the Corporation.
* * *
DIVISION A
Designations. Preferences and Rights
of Preferred Stock, Series A
(1) Designations of Series. The series of Preferred Stock, par value
$0.01 per share, shall be designated and known as the "Preferred Stock, par
value $0.01 per share, Series A" (hereinafter referred to as the "Series A").
The Series A shall be deemed designated pursuant to the provisions of Paragraph
(4) of Article IV hereof, and any amendment of the terms of the Series A shall
be effective without the necessity of any vote of the stockholders of the
Corporation of any class or series other than the Series A.
(2) Number or Shares. The number of shares in the Series A shall be
4,000 shares. Shares of the Series A redeemed, purchased or otherwise acquired
by the Corporation shall be canceled and shall revert to authorized but unissued
Preferred Stock, par value $0.01 per share undesignated as to series and subject
to reissuance by the Corporation as shares of the Preferred Stock, par value
$0.01 per share, of any one or more series. The Corporation shall be authorized
to issue certificates for fractional shares.
(3) Dividends. (a) Each holder of a share of the Series A shall be
entitled to receive out of the assets of the Corporation legally available for
the payment of dividends, as and when declared by the Board of Directors of the
Corporation, cash dividends at an annual rate (the "Dividend Rate") equal to 12%
of the Redemption Price (as defined in and adjusted pursuant
<PAGE>
4
to Paragraph (5) of this Division A) of the Series A share, and no more, during
the period from and including the date such share is issued (or is deemed to
have been issued) and payable, in arrears (calculated on the basis of a 360 day
year), on the last day of each June and December (or the next following business
day if such day is a Saturday, Sunday or legal holiday on which banks are
authorized by law to close in the State of New York) (each such date being
herein referred to as a "Dividend Payment Date", and all such dates being herein
referred to as the "Dividend Payment Dates") in each year to holders of record
on the June 15 and December 15 immediately preceding the Dividend Payment date;
the first such Dividend Payment Date to be June 30, l990. Dividends shall
cumulate on a daily basis during the periods ending with each Dividend Payment
Date and whether or not declared.
(b) If at any time the Corporation shall pay less than the total
amount of dividends then payable on the shares or the Series A, the aggregate
payment to all holders of shares of the Series A shall be distributed among such
holders so that an equal amount shall be paid with respect to each outstanding
share of the Series A.
(4) Voting Rights. The holders of shares of the Series A shall have
no voting rights with respect to any matter presented to or voted upon by the
stockholders of the Corporation (including without limitation any election or
removal of directors of the Corporation), except as otherwise may be required by
law. However, if accrued and unpaid dividends on the Series A have accumulated
in an amount equal to the sum of six semi-annual dividends on the Series A (a
"Series A Voting Event"), then the holders of the Series A shall be entitled to
0.01 of a vote for each whole share of the Series A upon all matters presented
to the stockholders; and, except as otherwise may be required by law entitling
the holders of the Series A to vote as a class, the holders of the Common Stock
and the holders of Series A (together with the holders of any other shares of
the Preferred Stock of any class designated by the Board of Directors of the
corporation, or designated by the express terms of such Preferred Stock, to vote
together as one class with the holders of the Common stock) shall vote together
as one class on all matters. Upon the occurrence of a Series A Voting Event, the
special voting rights provided in the preceding sentence shall continue unless
and until such accumulated and unpaid dividends on the Series A are paid or
declared so that accrued and unpaid dividends in arrears on the Series A are in
an amount less than an amount equal to the sum of six semi-annual dividends on
the Series A, from and after which time (a "Series A Voting Termination Event")
the holders of the Series A shall be divested of the special voting rights
provided in this Paragraph (4).
<PAGE>
5
(5) Redemption Payments. (a) The "Redemption Price" per share of the
Series A shall be $100.00 (subject to reduction as hereinafter provided).
(b) After December 31, 1994, the Corporation may, from time to time
in whole or in part, redeem shares of the Series A by making payments in respect
of the Redemption Price. Redemption payments shall be accompanied by the payment
of all accumulated and unpaid dividends on the amount being paid.
(c) Upon payment to any holder of a Series A share of the remaining
Redemption Price with respect to any Series A share, together with all
accumulated and unpaid dividends thereon, such Series A share shall be deemed to
have been redeemed and shall automatically be canceled. The Corporation may, at
its option, upon notice to the holders of Series A shares, impose as a condition
of their entitlement to the final payment of the retaining Redemption Price of
their shares the requirement that they surrender their certificates representing
their Series A shares to the Corporation; however, the payment to the holder of
any Series A share of the full Redemption Price with respect to a Series A
share, together with all accumulated and unpaid dividends thereon, shall, as
provided by the immediately preceding sentence, automatically effect the
redemption and cancellation of the share regardless of whether the Corporation
shall have required the surrender of the certificate therefor in order for the
holder of the share to receive payment of the remaining Redemption Price.
(d) In the event that the Corporation shall effect any payment in
respect of the Redemption Price of the Series A shares, the amount to be paid on
account of each whole Series A share shall be determined by dividing the amount
of such payment by 4,000 shares. Simultaneously with the delivery to the paying
agent (designated by the Corporation for the purpose of effecting any payment in
respect of the Redemption Price) of the amount to be paid in respect of the
Redemption Price of the Series A shares, the Corporation shall deliver to the
paying agent a list, as of the close of business on the record date for
determining holders of the Series A entitled to receive redemption payments, of
the holders of record of the Series A shares for use by the paying agent in
making payments on account of the Redemption Price of shares, and the
Corporation shall mail notice thereof to the holders of the Series A shares at
their last addresses as they appear on the records of the Corporation. Such
notice shall specify the amount per whole share to be paid to holders of the
Series A shares, the amount of accumulated and unpaid dividends being paid
therewith, and the remaining unpaid Redemption Price of such shares after
reflecting such payments. The Corporation shall maintain a record of the
redemption and dividend payments made with respect to each Series A share and
the remaining unpaid Redemption Price of each Series A share, and each
transferee of
<PAGE>
6
the Series A share shall be deemed to have notice of, and shall take such share
subject to, the payment of such amounts.
(e) Any and all payments to the holders of shares of the Series A in
respect thereof shall be applied as follows:
(i) first, to the payment of all dividends that have accumulated and
remain unpaid; and
(ii) second, to the payment of the Redemption Price of such shares.
(6) Liquidation, Dissolution and Winding-Up. (a) Upon any voluntary
or involuntary liquidation, dissolution or winding up of the Corporation
resulting in the distribution of any of its assets to its stockholders, or of
any reduction of its capital stock resulting in the distribution of any of its
assets to its stockholders, each holder of a share of the Series A shall be
entitled, before any distribution or payment is made upon any Junior Security,
to be paid out of the assets of the Corporation available for distribution to
its stockholders an amount in cash equal to the remaining Redemption Price with
respect to such share of the Series A, plus an amount equal to any accumulated
and unpaid dividends thereon to the date of distribution. After payment to a
holder of a Series A share of the amount as aforesaid, such holder of a Series A
share as such shall have no right or claim to any of the remaining assets of the
Corporation.
(b) The merger or consolidation of the Corporation into or with any
other corporation or the merger of any other corporation into the Corporation,
or the lease or conveyance of all or substantially all of the property or
business of the Corporation, shall not be deemed to be a dissolution,
liquidation or a winding-up of the Corporation.
(7) The Series A shares are issued pursuant to the First Amended and
Restated Joint Plan or Reorganization, as modified, of McLean Industries, Inc.,
First Colony Farms, Inc., the Corporation and JI Subsidiary, Inc. (formerly
known as United States Lines (S.A.) Inc.) confirmed on May 16, 1989 and February
6, 1990 by the United States Bankruptcy Court for the Southern District of New
York under Chapter 11 of the United States Bankruptcy Code of 1978, as amended.
Accordingly, the shares of the Series A and the holders thereof shall be subject
to the provisions and restrictions contained in Article Ninth (as well as the
other provisions) of the Restated Certificate of Incorporation of the
Corporation (as the Restated Certificate of Incorporation may be amended from
time to time).
(8) Restrictions on Dividends, Distributions and Redemptions. So
long as any shares of the Series A shall be outstanding, and without the prior
written consent or approval of
<PAGE>
7
the holders of more than two-thirds (2/3rds) of the then outstanding shares of
the Series A, no dividends or other distributions (other than dividends or
distributions payable exclusively in shares of the Common Stock or any Junior
Security or in rights, options or warrants to acquire shares of the Common Stock
or any Junior Security), whether in cash or property, shall be paid or declared
on the Common Stock or on any Junior Security, nor shall any shares of the
Common Stock or any Junior Security be redeemed, purchased or otherwise acquired
for value by the Corporation or any Subsidiary.
(9) Additional Preferred Stock. The Corporation may authorize,
create or issue from time to time additional shares of the Preferred Stock of
any class or series to the full extent permitted by Article FOURTH of the
Restated Certificate of Incorporation of the Corporation (as the Restated
Certificate of Incorporation may be further amended from time to time), and such
shares shall not be deemed to rank junior to the Series A shares with respect to
any rights, powers or preferences, including without limitation as to dividends,
redemption and distributions upon liquidation, dissolution or winding up of the
Corporation, unless the express terms of such other shares of the Preferred
Stock shall expressly state that such shares shall rank junior to the Series A
shares. Unless any such additional Preferred Stock shall by its terms be made
junior to the series A shares, the Series A shares shall rank junior to such
additional Preferred Stock with respect to all rights, powers and preferences,
including without limitation as to dividends, redemption and distributions upon
liquidation, dissolution or winding up of the Corporation.
(10) Definitions. For purposes hereof, the following terms shall
have the following meanings:
(a) "Common Stock" shall mean the authorized Common Stock of the
Corporation on the date of issuance of the shares of the Series A.
(b) "Junior Security" shall mean the Common Stock and any other
equity security which by its terms states that it is a Junior Security for
purposes of the terms of the Series A.
(c) "Subsidiary" shall mean any corporation of which more than 50%
of the outstanding stock having ordinary voting power to elect a majority
of the board of directors of such corporation, irrespective of whether at
the time stock of any other class or classes of stock of such corporation
shall have or might have voting power by reason of the happening of any
contingency, is, at the time as of which any determination is made, owned
directly or indirectly by the Corporation.
<PAGE>
8
* * *
FIFTH: (1) The Board of Directors of the Corporation shall consist
of nine directors.
(2) The Board of Directors shall consist of three classes: Class A,
Class B and Class C. The number of directors in each class (each of which
classes shall have not less than three directors) shall be the whole number
contained in the quotient arrived at by dividing the authorized number of
directors by three, and if a fraction is also contained in such quotient, then
if such fraction is one-third, the extra director shall be a member of Class C,
and if such fraction is two-thirds, one of the extra directors shall be a member
of Class C and the other shall be a member of Class B.
(3) Each director shall serve for a term ending on the date of the
third annual meeting of stockholders following the annual meeting of
stockholders at which such director was elected; provided, however, that the
directors first elected to Class A shall serve for a text ending on the date of
the annual meeting of stockholders next following the end of calendar year 1990,
the directors first elected to Class B shall serve for a term ending on the date
of the annual meeting of stockholders next following the end of calendar year
1991, and the directors first elected to Class C shall serve for a term ending
on the date of the annual meeting of stockholders next following the end of
calendar year 1992. Notwithstanding the foregoing, in the event that, as a
result of any change in the authorized number of directors, the number of
directors in any class would differ from the number allocated to that class
pursuant to Paragraph (2) of this Article FIFTH immediately prior to such
change, the following rules shall apply:
(i) Each director shall nevertheless continue as a director of the
class of which he is a member until the earlier of the expiration of his
current text or his earlier death, resignation or removal;
(ii) At each subsequent election of directors, if the number of
directors in the class whose term of office then expires is less than the
number then allowed to that class, the number of directors then elected
for membership in that class shall not be greater than the number of
directors in that class whose term of office then expires, unless and to
the extent that the aggregate number of directors then elected plus the
number of directors in all classes then duly continuing in office does not
exceed the then authorized number of directors of the Corporation;
<PAGE>
9
(iii) At each subsequent election of directors, if the number of
directors in the class whose term of office then expires exceeds the
number then allocated to that class, the Board of Directors shall
designate one or more of the directorships then being elected as
directorships of another class or classes in which the number of directors
than serving is less than the number then allocated to such other class or
classes;
(iv) In the event or the death, resignation or removal of any
director who is a member of a class in which the number or directors
serving immediately preceding the creation of such vacancy exceeds the
number then allocated to that class, the Board or Directors shall
designate the vacancy thus created as a vacancy in another class in which
the number of directors then serving is less than the number then
allocated to such other class;
(v) In the event of any increase in the authorized number of
directors, the new directorships resulting from such increase shall be
apportioned by the Board of Directors to such class or classes as shall,
so far as possible, bring the composition of each of the classes into
conformity with the provisions of Paragraph (2) of this Article FIFTH, as
such provisions apply to the number of directors authorized immediately
following such increase; and
(vi) Designations of directorships or vacancies into other classes
and apportionments of newly created directorships to classes by the Board
of Directors under clauses (iii), (iv) and (v) of this Paragraph (3)
shall, so far as possible, be effected so that the class whose term of
office is due to expire next following such designation or apportionment
shall contain the full number of directors then allocated to such class.
(4) Notwithstanding the provisions of this Article FIFTH, each
director shall serve until his successor is elected and qualified or until his
death, resignation or removal. No director may be removed at any time prior to
his death or resignation or the expiration of his term of office without the
affirmative vote of the holders of two-thirds (2/3rds) of the outstanding shares
of the Common Stock of the Corporation entitled to vote and voting separately as
a class.
(5) Elections of directors need not be by ballot unless the by-laws
of the Corporation so provide.
SIXTH: No action shall be taken by the stockholders of the
Corporation except at an annual or special meeting of stockholders.
<PAGE>
10
SEVENTH: The affirmative vote of the holders of two-thirds (2/3rds)
of the outstanding shares of the Common Stock of the Corporation entitled to
vote and voting separately as a class shall be required to approve
(i) the issuance during any 24-month period of shares of the capital
stock or other securities of the Corporation (other than securities
issuable pursuant to or as contemplated by the Plan (as defined in Article
NINTH hereof) or securities convertible into or exchangeable for shares of
its capital stock, or the grant of rights or options to subscribe for or
to purchase shares of its capital stock or convertible or exchangeable
securities, which shares would entitle the holders thereof to exercise
five percent (5%) or more of the voting power of the Corporation in the
election of directors immediately after the issuance at such shares,
(ii) any merger, consolidation or other reorganization of the
Corporation (whether for cash, securities or other property),
(iii) any dissolution, liquidation or winding up of the Corporation,
or
(iv) any sale or disposition of any substantial portion of the
assets of the Corporation;
provided, however, that the foregoing provisions shall not apply to
(x) any such transaction which is approved by resolution of the
Board of Directors by a vote of two-thirds (2/3rds) of the directors then
in office, or
(y) any such transaction between the Corporation and any of the
following: The Dyson-Kissner-Moran Corporation, a Delaware corporation;
DKM, Ltd., a Delaware corporation; DKM-MLP Limited Partnership, a Delaware
limited partnership; any corporation, partnership or other entity or any
person or persons (or group of persons) controlling, controlled by or
under common control with The Dyson-Kissner-Moran Corporation, DKM, Ltd.
or DKM-MLP Limited Partnership; or any corporation, partnership or other
entity the stockholders, partners or beneficial owners owning a majority
in interest of which are persons who are then stockholders, directors,
officers or employees of The Dyson-Kissner-Moran corporation, DKM, Ltd.,
DKM-MLP Limited Partnership or any such other corporation, partnership or
other entity.
<PAGE>
11
The stockholder vote, if any, required for any transaction of the type described
in clauses (x) and (y) of the preceding sentence or any transaction not of the
type described in this Article SEVENTH shall be such as may be required by
applicable law. For purposes of this Restated Certificate of Incorporation,
"control" with respect to any person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting securities, by
contract or otherwise.
EIGHTH: In furtherance and not in limitation of the powers conferred
by the laws of the State of Delaware, the Board of Directors is expressly
authorized and empowered, without the assent or vote of the stockholders, to
make, alter, amend and repeal the by-laws of the Corporation, in any manner not
inconsistent with the laws of the State of Delaware or this Restated Certificate
of Incorporation.
NINTH: (1) Except for any person or entity which originally received
shares of the capital stock or securities of the Corporation (provided that any
such person or entity does not purchase or acquire, or contract or agree to
purchase or acquire, in any manner whatsoever whether voluntarily or
involuntarily, by operation of law or otherwise, any additional capital stock or
securities) issued pursuant to
(i) the First Amended and Restated Joint Plan of Reorganization, as
modified, of the Corporation and certain affiliated debtors (the "Plan")
under Chapter 11 of the United States Bankruptcy Code of 1978, as amended
(the "Bankruptcy Code"), and
(ii) the order dated May 16, 1999 entered on such date by the United
States Bankruptcy Court for the Southern District of New York (Case Nos.
86 B 12238 through 86 B 12241 (HCB), inclusive), which order confirmed the
Plan under Chapter 11 of the Bankruptcy Code; and the order issued
February 6, 1990 by the United States Bankruptcy Court for the Southern
District of New York, which order confirmed certain modifications to the
Plan,
no person or entity may purchase or acquire, or contract or agree to purchase or
acquire, in any manner whatsoever whether voluntarily or involuntarily, by
operation of law or otherwise, record or beneficial ownership of, or any
beneficial or other interest in, any shares of the capital stock or securities
of the Corporation if, at the date of such acquisition, such person or entity
is, or would be after giving effect to any such proposed purchase or
acquisition, directly, indirectly or by attribution, a holder of five percent
(5%) or more of the issued and outstanding capital stock of the Corporation,
determined based on the fair market value of the capital stock of the
Corporation or
<PAGE>
12
the votes represented by the shares of the capital stock of the Corporation
entitled to vote for the election or directors. The Corporation is authorized to
give to the stock transfer agent of the capital stock and other securities of
the Corporation instructions prohibiting the transfer of such capital stock and
securities in violation of this Paragraph (1) and to place on all certificates
for the capital stock and other securities of the Corporation the following
legend:
"The Restated Certificate of Incorporation of the Corporation
prohibits, the purchase or acquisition of record or beneficial ownership
of, or any beneficial or other interest in, any shares of the capital
stock or securities of the Corporation if, at the date of such purchase or
acquisition, such person or entity is, or would be after giving effect to
any such proposed purchase or acquisition, directly, indirectly or by
attribution, a holder of five percent (5%) or more of the issued and
outstanding capital stock of the Corporation, determined based on the fair
market value of the capital stock of the Corporation or the votes
represented by the shares of the capital stock of the Corporation entitled
to vote for the election of directors. A copy of the Restated Certificate
of Incorporation of the Corporation is available for inspection and
copying at the principal offices of the Corporation, and a copy of the
provisions of the Restated Certificate of Incorporation of the Corporation
setting forth such restrictions will be furnished to the record holder of
this certificate without charge upon written request to the Corporation."
The provisions of this Paragraph (1) shall not prohibit, and shall not be
construed to prohibit, the acquisition of shares of the capital stock of the
Corporation by any person pursuant to warrants granted or issued pursuant to the
Plan or any transfer of any of such warrants.
(2) Until March 1, 1993, no person or entity receiving pursuant to
the Plan shares of the capital stock of the Corporation representing as of
February 23, 1990 five percent (5%) or more of the issued and outstanding
capital stock of the Corporation, determined based on the fair market value of
the capital stock of the Corporation or the votes represented by the shares of
the capital stock of the Corporation entitled to vote for the election of
directors, shall be permitted to sell or contract to sell, exchange, assign,
bequeath, pledge, mortgage, alienate, grant an option to purchase, hypothecate
or otherwise in any manner whatsoever (voluntarily or involuntarily, by
operation of law or otherwise) transfer or encumber (any such disposition being
hereinafter referred to as a "transfer") record or beneficial ownership of any
shares of the capital stock of the Corporation received by such person or
entity. The Corporation is authorized to give to the stock transfer agent of the
capital
<PAGE>
13
stock and other securities of the Corporation instructions prohibiting the
transfer of such capital stock and securities in violation of this Paragraph (2)
and to place on any and all certificates for the capital stock and other
securities of the Corporation which are subject to the provisions of this
Paragraph (2) the following legend:
"The securities represented by this certificate have been issued
pursuant to the First Amended and Restated Joint Plan of Reorganization,
as modified, of the Corporation and certain affiliated debtors (the
"Plan") under Chapter 11 of the United States Bankruptcy Code of 1978, as
amended, as confirmed by the United States Bankruptcy Court for the
Southern District of New York on May 16, 1989 and February 6, 1990. The
Plan and the Restated Certificate of Incorporation of the Corporation
prohibit, until March 1, 1993, the transferability of the securities
represented by this certificate except in accordance with the provisions
of the Restated Certificate of Incorporation of the Corporation. A copy of
the Plan and the Restated Certificate of Incorporation of the Corporation
are available for inspection and copying at the principal offices of the
Corporation, and a copy of the Plan and the provisions of the Restated
Certificate of Incorporation of the Corporation setting forth such
restrictions will be furnished to the record holder of this certificate
without charge upon written request to the Corporation."
The provisions of this Paragraph (2) shall not prohibit, and shall not be
construed to prohibit, the acquisition of shares of the capital stock of the
Corporation by any person pursuant to warrants granted or issued pursuant to the
Plan or any transfer of any of such warrants.
(3) No shares (or any beneficial interest therein) of the Common
Stock of the Corporation originally issued to the trustee of the trust
established pursuant to the United States Lines, Inc. and United States Lines
(S.A), Inc. Reorganization Trust Agreement dated as of February 23, 1990, as
such trust agreement may be amended from time to time, may be transferred or
issued to any person who does not, with respect to the claim against the
Corporation held by such person, satisfy the requirements of ss.382(l)(5) of the
Internal Revenue Code of 1986, as amended, and the rules and regulations
promulgated thereunder, as such statute, rules and regulations shall have been
in effect as of May 16, 1989 and February 23, 1990 or shall be in effect from
time to time and as construed and enforced by the United States Department of
the Treasury or the United States Internal Revenue Service, unless and until
persons who do meet such requirements of ss.382(l)(5), in the sole judgment of
the Board of Directors of the Corporation, have received such number of shares
of the Common Stock of the Corporation as may be necessary to
<PAGE>
14
satisfy the requirements of ss.382(l)(5). The Corporation is authorized to give
to the stock transfer agent of the Common Stock of the Corporation instructions
prohibiting the transfer of such Common Stock in violation of this Paragraph
(3).
(4) For purposes of this Article NINTH, the term "capital stock" of
the Corporation shall include, without limitation, shares of stock, options to
purchase or acquire stock, warrants, rights to purchase or acquire stock and
rights to convert other instruments into capital stock of the Corporation.
(5) The restrictions contained in this Article NINTH are for the
purpose of reducing the risk that any change in the stock ownership of the
Corporation may result in the disallowance or limitation of the Corporation's
Federal income tax attributes. In connection therewith, and to provide for the
effective policing of these provisions, unless otherwise directed by the Board
of Directors of the Corporation, the Corporation's transfer agent shall be
required, prior to registering any transfer on the books and records of the
Corporation, to receive from the prospective transferor and transferee, or only
the transferee if the stock or security is being purchased or acquired from the
Corporation, a certificate stating the number of shares of stock or securities
of the Corporation owned either directly or indirectly or by attribution by the
transferor and transferee both before and after the transfer. In the absence of
the receipt of such certification, the Corporation's transfer agent shall not be
authorized to enter the transfer upon the stock records of the Corporation and
such transfer shall not be effective as to the Corporation. Moreover, any
transfer or acquisition of stock or securities of the Corporation which has been
effected in violation of the restrictions set forth in this Article NINTH shall
be null and void and shall have no force and effect, and the transferee thereof
shall have no rights as a stockholder of the Corporation. Any holder of the
capital stock or securities of the Corporation shall upon demand by an officer
of the Corporation disclose to the Corporation in writing such information with
respect to direct and indirect legal and beneficial ownership of such shares as
the Corporation, through such officer, deems necessary or appropriate.
(6) The Board of Directors is expressly empowered to adopt such
procedures with respect to and to impose such further limitations on the
transferability of the capital stock and securities of the Corporation as the
Board of Directors in good faith shall deem desirable to preserve and maintain
the Federal income tax attributes of the Corporation.
<PAGE>
15
(7) The provisions, or portions thereof, of this Article NINTH shall
terminate upon the adoption by the Board of Directors, at any time on or after
March 1, 1993, of a resolution authorizing the termination of the effectiveness
of such provisions of this Article NINTH as the Board of Directors shall, in its
sole discretion, determine. The Board of Directors may (but shall not be
obligated to) at any tine and from time to time prior to the adoption of any
such resolution suspend or waive the application of the provisions of this
Article NINTH to one or more acquisitions or transfers of capital stock or
securities of the Corporation, provided the Board or Directors determines in
good faith in each such instance that such acquisition(s) would not be adverse
to the best interests of the Corporation and its stockholders. In making such
determination, the Board of Directors shall consider, among such other factors
as it deems relevant, the likely effect of such transaction upon the Federal
income tax attributes of the Corporation.
(8) For purposes of this Article NINTH, "beneficial ownership" of or
with respect to any share of the capital stock or other security of the
Corporation shall mean
(x) the power to vote or to direct the voting of such capital stock
or security, or investment power with respect to (including the power to
dispose or to direct the disposition of) such capital stock or security,
within the meaning of ss.13(d) of the Securities Exchange Act or 1934, as
amended, and the rules and regulations promulgated thereunder, as such
statute, rules and regulations shall be in effect from time to time and as
construed and enforced by the United States Securities and Exchange
Commission,
(y) the right to purchase or acquire, including without limitation
the right to purchase or acquire pursuant to any warrant, option or
conversion privilege, regardless of any condition or restriction (which
restrictions and conditions shall be disregarded) on the exercise of any
such right, warrant, option or conversion privilege, or
(z) the right to receive, or any interest in, the economic benefits
of ownership of such capital stock or security, regardless of any
condition or restriction (which restrictions and conditions shall be
disregarded) on the right to receive, purchase or acquire any such
interest.
In addition, any person or entity shall be deemed to be the beneficial owner of
a share of the capital stock or security whether such share is registered in
such person's or entity's name or is held by any bank, broker, dealer or nominee
for the account of such person, or would otherwise be deemed owned by such
person pursuant to the attribution rules sat forth in ss.382 of the Internal
Revenue Code of 1986, as amended, and the rules
<PAGE>
16
and regulations promulgated thereunder, as such statute, rules and regulations
shall have been in effect as of May 16, 1989 and February 23, 1990 or shall be
in effect from time to time and as construed and enforced by the United States
Department of the Treasury or the United States Internal Revenue Service.
TENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of ss.291 of Title 8 of the Delaware Code or on the application
of trustees in dissolution or of any receiver or receivers appointed for this
Corporation under the provisions of ss.279 of Title 8 of the Delaware Code,
order a meeting of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the case may be,
to be summoned in such manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any reorganization of
this Corporation as a consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders of this Corporation, as the case may be, and also on this
Corporation.
ELEVENTH: From time to time any of the provisions of this Restated
Certificate or Incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at that time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the Corporation by
this Restated Certificate of Incorporation are granted subject to the provisions
of said laws; however, the provisions of Articles FIFTH, SIXTH, SEVENTH and
NINTH (but, in the case of Article NINTH, subject to the authority granted to
the Board of Directors pursuant to Paragraphs (3), (5), (6) and (7) of Article
NINTH), and the provisions of this Article ELEVENTH may not be amended, altered
or repealed without the affirmative vote of the holders of record of two-thirds
(2/3rds) of the outstanding Common Stock of the Corporation entitled to vote and
voting separately as a class.
TWELFTH: The Corporation shall, to the full extent permitted by the
General Corporation Law of the State of Delaware, as amended from time to time,
indemnify all persons
<PAGE>
17
whom it has the power to indemnify pursuant thereto.
THIRTEENTH: No director of the Corporation shall have personal
liability to the Corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director; provided, however, that the foregoing shall not
eliminate or limit the liability of any director
(1) for any breach of such director's duty of loyalty to the
Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law,
(iii) under ss.174 of the General Corporation Law of the State of
Delaware, or
(iv) for any transaction from which such director derived an
improper personal benefit.
* * *
IN WITNESS WHEREOF, the Corporation has caused its corporate seal to
be hereunto affixed and this Restated Certificate of Incorporation to be signed
by its officers thereunto duly authorized as of the 22nd day of February, 1990.
UNITED STATES LINES, INC.
By: /s/ Hobart G. Truesdell II
------------------------------
Hobart G. Truesdell II
President
Attest:
/s/ Daniel M. Conaton
- ---------------------------
Daniel M. Conaton
Secretary
<PAGE>
State of Delaware
Office of the Secretary of State PAGE 1
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
RETIREMENT OF "JANUS INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE TWENTY-THIRD
DAY OF MAY, A.D. 1995, AT 12:20 O'CLOCK P.M.
[SECRETARY OF STATE OF DELAWARE SEAL] /s/ Edward J. Freel
-------------------
Edward J. Freel, Secretary of State
0642316 8100 AUTHENTICATION: 8419546
971119933 DATE: 04-14-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:20 PM O5/23/1995
950113826 - 642316
CERTIFICATE OF RETIREMENT
JANUS INDUSTRIES, INC.
JANUS INDUSTRIES, INC., a corporation organized and existing under
The General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Janus
Industries, Inc. a resolution was duly adopted which identified shares of the
capital stock of said corporation, which, to the extent hereinafter set forth,
had the status of retired shares, and which retired shares had capital applied
in connection with their acquisition.
SECOND: The shares of capital stock of the corporation, which are
retired, are identified as being 1,800 shares of Preferred Stock, par value
$0.01 per share, Series A.
THIRD: That the Restated Certificate of Incorporation of the
corporation prohibits the reissue of the shares of Preferred Stock, Series A
when so retired and provides that such shares shall revert to authorized but
unissued Preferred Stock, par value $0.01 per share undesignated as to series
and subject to reissuance as shares of any one or more series; and pursuant to
the provisions of Section 243 of the General Corporation Law of the State of
Delaware, upon the effective date of the filing of this certificate as therein
provided the Restated Certificate of Incorporation of said corporation shall be
amended so as to effect a reduction in the authorized number of shares of the
Preferred Stock, Series A to the extent of 1,800 shares, being the total number
of shares retired.
IN WITNESS WHEREOF, said Janus Industries, Inc. has caused this
certificate to be signed by Vincent W. Hatala, Jr., its President and attested
by Anthony J. Pacchia, its Secretary, this 15 day of May, 1995.
JANUS INDUSTRIES, INC.
ATTEST: By: /s/ Vincent W. Hatala, Jr.
--------------------------
President
/s/ Anthony J. Pacchia
------------------
Secretary
<PAGE>
State of Delaware
Office of the Secretary of State PAGE 1
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "JANUS INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE TWENTY-FIRST DAY OF
JULY, A.D. 1995, AT 12:30 O'CLOCK P.M.
[SECRETARY OF STATE OF DELAWARE SEAL] /s/ Edward J. Freel
-------------------
Edward J. Freel, Secretary of State
0642316 8100 AUTHENTICATION: 8419547
971119933 DATE: 04-14-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:30 PM O7/21/1995
950163768 - 642316
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
JANUS INDUSTRIES, INC.
Janus Industries, Inc., a corporation organized and existing under
and by virtue of Section 242 of the General Corporation Law of the State of
Delaware (the "Corporation"), DOES HEREBY CERTIFY:
1. On June 22, 1995, resolutions were duly adopted by the Board of
Directors of the Corporation setting forth proposed amendments of the Restated
Certificate of Incorporation of the Corporation filed on February 23, 1990 with
the Delaware Department of State (the "Restated Certificate"), declaring said
amendments to be advisable and calling a meeting of the stockholders of the
Corporation for consideration thereof pursuant to Section 222 of the General
Corporation Law of the State of Delaware.
2. At a special meeting of the stockholders of the Corporation held
on July 12, 1995, resolutions to amend the Restated Certificate were proposed
and duly adopted by a sufficient number of shares entitled to vote as required
by Delaware law. The resolutions setting forth the proposed amendments are as
follows:
"RESOLVED, that the Corporation's Restated Certificate of
Incorporation shall be amended as follows:
(i) Article FOURTH, paragraph (3), is amended and restated in its
entirety as follows:
"(3) Except as may be expressly provided in resolutions
adopted by the Board of Directors of the Corporation pursuant
to Paragraph (4) of this Article FOURTH with respect to the
Preferred Stock, the holders of the Common Stock shall have
the exclusive right to vote for the election of directors and,
except as otherwise may be required by law, on all other
matters requiring action by the stockholders or law, on all
other matters requiring action by the stockholders or
submitted to the stockholders for action. Each holder of a
share of the Common Stock shall be entitled to one vote for
each share of the Common Stock standing in his name on the
books of the Corporation."
<PAGE>
(ii) Article FOURTH, Division A, Designations, Preferences and
Rights of Preferred Stock Series, paragraph (5)(d) is amended so that the first
sentence thereof provides as follows:
"(d) In the event that the Corporation shall effect any
payment in respect of the Redemption Price of the Series A
shares, the amount to be paid on account of each whole Series
A share shall be determined by dividing the amount of such
payment by the number of outstanding Series A shares".
(iii) Article FIFTH is amended and restated in its entirety as
follows:
"FIFTH: (1) The Board of Directors of the Corporation shall
consist of such number of directors as is determined pursuant
to the by-laws of the corporation fixed from time to time by a
vote of the majority of the directors then in office (such
number is hereafter, "the authorized number").
"(2) The Board of Directors shall consist of three classes:
Class A, Class B and Class C. The number of directors in each
class (each of which classes shall have not less than one
director) shall consist as nearly as may be possible, of
one-third of the authorized number of directors.
"(3) At the first annual meeting of stockholders following the
adoption of this Article FIFTH as amended, Class A directors
shall be elected for a one-year term, Class B directors for a
two-year term and Class C directors for a three-year term. At
each succeeding annual meeting of stockholders, successors to
the class of Directors whose term expires at that annual
meeting shall be elected for a three-year term.
Notwithstanding the foregoing, in the event that, as a result
of any change in the authorized number of directors, the
number of directors in any class would differ from the number
allocated to that class pursuant to Paragraph (2) of this
Article FIFTH immediately prior to such change, the following
rules shall apply:
<PAGE>
"(i) Each director shall nevertheless continue as a director
of the class of which he is a member until the earlier of the
expiration of his current term or his earlier death,
resignation or removal;
"(ii) At each subsequent election of directors, if the number
of directors in the class whose term of office then expires is
less than the number then allowed to that class, the number of
directors then elected for membership in that class shall not
be greater than the number of directors in that class whose
term of office then expires, unless and to the extent that the
aggregate number of directors then elected plus the number of
directors in all classes then duly continuing in office does
not exceed the then authorized number of directors of the
Corporation;
"(iii) At each subsequent election of directors, if the number
of directors in the class whose term of office then expires
exceeds the number then allocated to that class, the Board of
Directors shall designate one or more of the directorships
then being elected as directorships of another class or
classes in which the number of directors then serving is less
than the number then allocated to such other class or classes;
"(iv) In the event of the death, resignation or removal of any
director who is a member of a class in which the number of
directors serving immediately preceding the creation of such
vacancy exceeds the number then allocated to that class, the
Board of Directors shall designate the vacancy thus created as
a vacancy in another class in which the number of directors
then serving is less than the number then allocated to such
other class;
(v) In the event of any increase in the authorized number of
directors, the new directorships resulting from such increase
shall be apportioned by the Board of Directors to such class
or classes as shall, so far as possible, bring the composition
of each of the classes into conformity with the
<PAGE>
provisions of Paragraph (2) of this Article FIFTH, as such
provisions apply to the number of directors authorized
immediately following such increase; and
(vi) Designations of directorships or vacancies into other
classes and apportionments of newly created directorships to
classes by the Board of Directors under clauses (iii), (iv)
and (v) of this Paragraph (3) shall, so far as possible, be
effected so that the class whose term of office is due to
expire next following such designation or apportionment shall
contain the full number of directors then allocated to such
class.
"(4) Notwithstanding the provisions of this Article FIFTH,
each director shall serve until his successor is elected and
qualified or until his death, resignation or removal. No
director may be removed at any time prior to his death or
resignation or the expiration of his term of office without
the affirmative vote of the holders of two-thirds (2/3rds) of
the outstanding shares of the Common Stock of the Corporation
entitled to vote and voting separately as a class.
"(5) Elections of directors need not be by ballot unless the
by-laws of the Corporation so provide."
(iv) Article SIXTH is amended and restated in its entirety as
follows:
"SIXTH: No action shall be taken by the stockholder of the
Corporation except at an annual or special meeting of
stockholders; provided that the stockholders may act by
written consent when express provision is made therefor in
this Restated Certificate of Incorporation."
3. The following votes were cast in connection with each of the
aforementioned amendments:
(i) 4,730,212.233 votes in favor
2,520.362 votes against
1,048.016 votes abstained
<PAGE>
(ii) 2,198.505 votes in favor
0 votes against
0 votes abstained
(iii) 4,730,212.233 votes in favor
3,466.197 votes against
1,022.024 votes abstained
(iv) 4,730,212.233 votes in favor
1,348.521 votes against
1,023.653 votes abstained
4. The amendments were duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to
be signed by Vincent W. Hatala, Jr., its President this 20 day of July, 1995.
JANUS INDUSTRIES, INC.
/s/ Vincent W. Hatala, Jr.
----------------------
Vincent W. Hatala, Jr.,
President
<PAGE>
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF RETIREMENT
OF "JANUS INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE TWENTY-FOURTH DAY OF
DECEMBER, A.D. 1996, AT 9 O'CLOCK A.M.
/s/ Edward J. Freel
[SEAL] --------------------------------------
Edward J. Freel, Secretary of State
0642316 8100 AUTHENTICATION: 8419548
971119933 DATE: 04-14-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 12/24/1996
960383709 - 0642316
CERTIFICATE OF RETIREMENT
JANUS INDUSTRIES, INC.
JANUS INDUSTRIES, INC., a corporation organized and existing under The
General Corporation Law of the State of Delaware.
DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Janus Industries,
Inc., a resolution was duly adopted which identified shares of the capital stock
of said corporation, which, to the extent hereinafter set forth, had the status
of retired shares, and which retired shares had capital applied in connection
with their acquisition.
SECOND: The shares of capital stock of the corporation, which are retired,
are identified as being 2,200 shares of Preferred Stock, par value $0.01 per
share, Series A.
THIRD: That the Restated Certificate of Incorporation of the corporation
prohibits the reissue of the shares of Preferred Stock, Series A when so retired
and provides that such shares shall revert to authorized but unissued Preferred
Stock, par value $0.01 per share undesignated as to series and subject to
reissuance as shares of any one or more series; and pursuant to the provisions
of Section 243 of the General Corporation Law of the State of Delaware, upon the
effective date of the filing of this certificate as therein provided the
Restated Certificate of Incorporation of said corporation shall be amended so as
to effect a reduction in the authorized number of shares of the Preferred Stock,
Series A to the extent of 2,200 shares, being the total remaining authorized
number of shares of the Preferred Stock, Series A. Accordingly, all references
in the Restated Certificate of Incorporation to the Preferred Stock, Series A
shall be deemed eliminated.
IN WITNESS WHEREOF, said Janus Industries, Inc. has caused this
certificate to be signed by James E. Bishop its President and Chief Executive
Officer and attested by Vincent W. Hatala, Jr., its Assistant Secretary, this 16
day of December, 1996.
JANUS INDUSTRIES, INC.
By: /s/ James E. Bishop
---------------------------------------------
Name: James E. Bishop
Title: President and Chief Executive Officer
ATTEST:
/s/ Vincent W. Hatala, Jr.
- --------------------------
Vincent W. Hatala, Jr.
Assistant Secretary
<PAGE>
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
DESIGNATION OF "JANUS INDUSTRIES, INC.", FILED IN THIS OFFICE ON THE FOURTEENTH
DAY OF APRIL, A.D. 1997, AT 9 O'CLOCK A.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
[SEAL] --------------------------------------
Edward J. Freel, Secretary of State
0642316 8100 AUTHENTICATION: 8418873
971119742 DATE: 04-14-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 4/14/1997
971119742 - 0642316
CERTIFICATE OF DESIGNATIONS, PREFERENCES AND RIGHTS
OF THE SERIES B PREFERRED STOCK
OF
JANUS INDUSTRIES, INC.
Pursuant to Section 151 of the General Corporation Law of the State of
Delaware,
Janus Industries, Inc., a Delaware corporation (the "Corporation")
certifies that, pursuant to the authority contained in paragraph (4) of Article
FOURTH of its Restated Certificate of Incorporation, as amended, and in
accordance with the provisions of Section 151 of the General Corporation Law of
the State of Delaware, its Board of Directors has adopted the following
resolution creating a series of its Preferred Stock, par value $.01 per share,
designated as the "Preferred Stock, par value $0.01 per share, Series B":
RESOLVED, that in accordance with the provisions of paragraph
(4) of Article FOURTH of the Corporation's Restated Certificate of
Incorporation, as amended, the Board of Directors of the Corporation
hereby provides for the issuance of a series of Preferred Stock of
the Corporation, known as Series B, having the following
designations, preferences and rights:
Designations, Preferences and Rights
of Preferred Stock, Series B
(1) Designation of Series. The series of Preferred Stock, par
value $0.01 per share, shall be designated and known as the
"Preferred Stock, par value $0.01 per share, Series B" (hereinafter
referred to as the "Series B"). The Series B is designated pursuant
to the provisions of Paragraph (4) of Article FOURTH of the Restated
Certificate of Incorporation of the Corporation, as amended, and any
amendment of the terms of the Series B shall be effective without
the necessity of any vote of the stockholders of the Corporation of
any class or series other than the Series B.
(2) Number of Shares. The number of shares in the Series B
shall be 12,000 shares. Shares of the Series B redeemed, purchased
or otherwise acquired by the Corporation shall be canceled and shall
revert to authorized but unissued Preferred Stock, par value $0.01
per share undesignated as to series and subject to reissuance by the
Corporation as shares of the Preferred Stock, par value $0.01 per
share, of any one or more series. The Corporation shall be
authorized to issue certificates for fractional shares.
<PAGE>
(3) Dividends. (a) Each holder of a share of the Series B
shall be entitled to receive out of the assets of the Corporation
legally available for the payment of dividends, as and when declared
by the Board of Directors of the Corporation, cash dividends at an
annual rate (the "Dividend Rate") equal to 7.5% of the Redemption
Price (as defined in and adjusted pursuant to Paragraph (5)(d)) of a
Series B share, and no more, during the period from and including
the date such share is issued (or is deemed to have been issued) and
payable, in arrears (calculated on the basis of a 360 day year), on
the last day of each March, June, September and December (or the
next following business day if such day is a Saturday, Sunday or
legal holiday on which banks are authorized by law to close in the
state of the Corporation's executive office) (each such date being
herein referred to as a "Dividend Payment Date") in each year to
holders of record on the March 15, June 15, September 15 or December
15 immediately preceding the Dividend Payment Date; the first such
Dividend Payment Date to be June 30, 1997. Dividends shall cumulate
on a daily basis during the periods ending with each Dividend
Payment Date and whether or not declared.
(b) If at any time the Corporation shall pay less than
the total amount of dividends then payable on the shares of the
Series B, the aggregate payment to all holders of shares of the
Series B shall be distributed among such holders so that an equal
amount shall be paid with respect to each outstanding share of the
Series B.
(4) Voting Rights. The holders of shares of the Series B shall
have no voting rights with respect to any matter presented to or
voted upon by the stockholders of the Corporation (including without
limitation any election or removal of directors of the Corporation),
except as otherwise may be required by law. However, if accrued and
unpaid dividends on the Series B have accumulated in an amount equal
to the sum of four quarterly dividends on the Series B (a "Series B
Voting Event"), then the holders of the Series B shall be entitled
to 0.01 of a vote for each whole share of the Series B upon all
matters presented to the stockholders; and, except as otherwise may
be required by law entitling the holders of the Series B to vote as
a class, the holders of the Common Stock and the holders of Series B
(together with the holders of any other shares of the Preferred
Stock of any class designated by the Board of Directors of the
Corporation, or designated by the express terms of such Preferred
Stock, to vote together as one class with the holders of the Common
Stock) shall vote together as one class on all matters. Upon the
occurrence of a Series B Voting Event, the special voting rights
provided in the preceding sentence shall continue unless and until
such accumulated and unpaid dividends on the Series B are paid or
declared so that accrued and unpaid dividends in arrears on the
Series B are in an amount less than an amount equal to the sum of
four quarterly dividends on the Series B, from and after which time
(a "Series B Voting Termination Event") the holders of the Series B
shall be divested of the special voting rights provided in this
Paragraph (4).
2
<PAGE>
(5) Redemption Payments. (a) The "Redemption Price" per share
of the Series B shall be $1000.00 (subject to reduction as
hereinafter provided).
(b) After December 31, 1998, the Corporation may, from
time to time in whole or in part, redeem shares of the Series B by
making payments in respect of the Redemption Price. Redemption
payments shall be accompanied by the payment of all accumulated and
unpaid dividends on the amount being paid.
(c) Upon payment to any holder of a Series B share of
the remaining Redemption Price with respect to any Series B share,
such Series B share shall be deemed to have been redeemed and shall
automatically be canceled. The Corporation may, at its option, upon
notice to the holders of Series B shares, impose as a condition of
their entitlement to the final payment of the remaining Redemption
Price of their shares the requirement that they surrender their
certificates representing their Series B shares to the Corporation;
however, the payment to the holder of any Series B share of the full
Redemption Price with respect to a Series B share, shall, as
provided by the immediately preceding sentence, automatically effect
the redemption and cancellation of the share regardless of whether
the Corporation shall have required the surrender of the certificate
therefor in order for the holder of the share to receive payment of
the remaining Redemption Price.
(d) In the event that the Corporation shall make a
partial redemption of the Series B, the payments shall be
distributed pro rata to the holders of the Series B shares based
upon the number of shares held by each such holder. Simultaneously
with the delivery to a paying agent (if one is designated by the
Corporation for the purpose of affecting any payment in respect of
the Redemption Price) of the amount to be paid in respect of the
Redemption Price of the Series B shares, the Corporation shall
deliver to such paying agent a list, as of the close of business on
the record date for determining holders of the Series B entitled to
receive redemption payments, of the holders of record of the Series
B shares for use by such paying agent in making payments on account
of the Redemption Price of shares, and the Corporation shall mail
notice thereof to the holder of the Series B shares at their last
addresses as they appear on the records of the Corporation. Such
notice shall specify the amount per whole share to be paid to
holders of the Series B shares, and the remaining unpaid Redemption
Price of such shares after reflecting such payments. The Corporation
shall maintain a record of the redemption made with respect to each
Series B share and the remaining unpaid Redemption Price of each
Series B share, and each transferee of the Series B share shall be
deemed to have notice of, and shall take such share subject to, the
payment of such amounts.
3
<PAGE>
(6) Liquidation, Dissolution and Winding-Up. (a) Upon any
voluntary or involuntary liquidation, dissolution or winding up of
the Corporation resulting in the distribution of any of its assets
to its stockholders, or of any reduction of its capital stock
resulting in the distribution of any of its assets to its
stockholders, each holder of a share of the Series B shall be
entitled, before any distribution or payment is made upon any Junior
Security, to be paid out of the assets of the Corporation available
for distribution to its stockholders an amount in cash equal to the
remaining Redemption Price with respect to such share of the Series
B plus any accumulated and unpaid dividends. After payment to a
holder of a Series B share of the amount as aforesaid, such holder
of a Series B share as such shall have no right or claim to any of
the remaining assets of the Corporation.
(b) The merger or consolidation of the Corporation into
or with any other corporation or the merger of any other corporation
into the Corporation, or the lease or conveyance of all or
substantially all of the property or business of the Corporation,
shall not be deemed to be a dissolution, liquidation or a winding-up
of the Corporation.
(7) Restrictions on Dividends, Distributions and Redemptions.
So long as any shares of the Series B shall be outstanding, and
without the prior written consent or approval of the holders of more
than two-thirds (2/3rds) of the then outstanding shares of the
Series B, no dividends or other distributions (other than dividends
or distributions payable exclusively in shares of the Common Stock
or any Junior Security or in rights, options or warrants to acquire
shares of the Common Stock or any Junior Security), whether in cash
or property, shall be paid or declared on the Common Stock or on any
Junior Security, nor shall any shares of the Common Stock or any
Junior Security be redeemed, purchased or otherwise acquired for
value by the Corporation or any Subsidiary; provided, however, the
Corporation may pay cash dividends on the Common Stock or any other
Junior Security without the written consent or approval of the
holders of the then outstanding shares of the Series B if the
dividends thereon provided for under Paragraph (3) are current and
not in arrears.
(8) Additional Preferred Stock. The Corporation may authorize,
create or issue from time to time additional shares of the Preferred
Stock of any class or series to the full extent permitted by Article
FOURTH of the Restated Certificate of Incorporation of the
Corporation, as amended (as the Restated Certificate of
Incorporation may be further amended from time to time), provided,
however, such shares shall not be deemed to rank senior or pari
passu to the Series B shares with respect to any rights, powers or
preferences, including without limitation as to dividends,
redemption and distributions upon liquidation, dissolution or
winding up of the Corporation, without the prior written consent or
approval of the holders of more than two-thirds (2/3rds) of the then
outstanding shares of the Series B.
4
<PAGE>
(9) Definitions. For purposes hereof, the following terms
shall have the following meanings:
(a) "Common Stock" shall mean the authorized Common
Stock of the Corporation on the date of issuance of the shares of
the Series B.
(b) "Junior Security" shall mean the Common Stock and
any other equity security of the Corporation, unless the holders of
more than two-thirds (2/3rds) of the then outstanding shares of the
Series B have consented in writing to or otherwise approved, the
designation of such equity security as senior or pari passu to the
Series B.
(c) "Subsidiary" shall mean any corporation of which
more than 50% of the outstanding stock have ordinary voting power to
elect a majority of the board of directors of such corporation,
irrespective of whether at the time stock of any other class or
classes of stock of such corporation shall have or might have voting
power by reason of the happening of any contingency, is, at the time
as of which any determination is made, owned directly or indirectly
by the Corporation.
and it is further
RESOLVED, the proper officers of the Corporation are hereby
authorized, empowered and directed to take all such further action
and to execute, deliver, certify and file all instruments and
documents in the name of and on behalf of this Corporation as such
officers executing same shall approve as necessary or advisable to
effectuate and accomplish the purpose of the foregoing resolution
and the transactions contemplated thereby, the taking of such action
and the execution, delivery, certification and filing of such
documents to be conclusive evidence of such approval.
IN WITNESS WHEREOF, said Janus Industries, Inc. has caused this
Certificate to be duly executed by its President and Chief Executive Officer and
attested to by its Assistant Secretary this 8th day of April, 1997.
Attest: JANUS INDUSTRIES, INC.
By: /s/ Vincent W. Hatala, Jr. By: /s/ James E. Bishop
---------------------------- ----------------------------
Name: Vincent W. Hatala, Jr. Name: James E. Bishop
Title: Assistant Secretary Title: President and Chief Executive
Officer
5
<PAGE>
State of Delaware
PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER,
WHICH MERGES:
"ENVOY INNS OF AMERICA, INC.", A DELAWARE CORPORATION,
WITH AND INTO "JANUS INDUSTRIES, INC." UNDER THE NAME OF "JANUS
INDUSTRIES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-FOURTH DAY OF
APRIL, A.D. 1997, AT 12:10 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
[SEAL] --------------------------------------
Edward J. Freel, Secretary of State
0642316 8100M AUTHENTICATION: 8435065
971132897 DATE: 04-24-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:10 PM 4/24/1997
971132897 - 0642316
CERTIFICATE OF MERGER
OF
ENVOY INNS OF AMERICA, INC.
a Delaware corporation
INTO
JANUS INDUSTRIES, INC.
a Delaware corporation
- --------------------------------------------------------------------------------
Under Section 251 of the
Delaware General Corporation Law
- --------------------------------------------------------------------------------
Pursuant to the provisions of Section 251 of the Delaware General
Corporation Law, the undersigned does hereby certify:
FIRST: The name and state of incorporation of each of the constituent
corporations is ENVOY INNS OF AMERICA, INC. ("Envoy"), a Delaware corporation
and JANUS INDUSTRIES, INC. ("Janus"), a Delaware corporation.
SECOND: Pursuant to an Agreement and Plan of Merger dated as of April 23,
1997 (the "Merger Agreement"), Envoy shall be merged with and into Janus (the
"Merger").
THIRD: The Merger Agreement has been adopted, approved, certified,
executed and acknowledged by Envoy and Janus in accordance with Section 251 of
the Delaware General Corporation Law.
FOURTH: Envoy shall be merged into Janus and Janus shall be the "Surviving
Corporation."
FIFTH: The name of the Surviving Corporation shall be "JANUS INDUSTRIES,
INC." and the certificate of incorporation of Janus shall be the certificate of
incorporation of the Surviving Corporation.
SIXTH: The Merger Agreement is on file at the principal place of business
of Janus which is located at 2300 Corporate Boulevard, N.W., Boca Raton, Florida
33431.
FIFTH: A copy of the Merger Agreement will be furnished by Janus on
request and without cost to any stockholder of any constituent corporation.
EIGHTH: The merger shall be effective as of the date of filing this
Certificate of Merger.
<PAGE>
IN WITNESS WHEREOF, each of the corporations hereto has caused this
Certificate of Merger to be executed on its behalf this 23rd day of April, 1997.
ENVOY INNS OF AMERICA, INC.
an Delaware corporation
By: /s/ Louis S. Beck
------------------------
Name: Louis S. Beck
Title: President
JANUS INDUSTRIES, INC.
a Delaware corporation
By: /s/ James E. Bishop
------------------------
Name: James E. Bishop
Title: President and Chief Executive Officer
2
<PAGE>
PAGE 1
State of Delaware
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF MERGER,
WHICH MERGES:
"BECK GROUP MANAGEMENT CORP.", A OHIO CORPORATION,
WITH AND INTO "JANUS INDUSTRIES, INC." UNDER THE NAME OF "JANUS
INDUSTRIES, INC.", A CORPORATION ORGANIZED AND EXISTING UNDER THE LAWS OF THE
STATE OF DELAWARE, AS RECEIVED AND FILED IN THIS OFFICE THE TWENTY-FOURTH DAY OF
APRIL, A.D. 1997, AT 12:12 O'CLOCK P.M.
A CERTIFIED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS FOR RECORDING.
/s/ Edward J. Freel
[SEAL] --------------------------------------
Edward J. Freel, Secretary of State
0642316 8100M AUTHENTICATION: 8435075
971132918 DATE: 04-24-97
<PAGE>
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 12:12 PM 4/24/1997
971132918 - 0642316
CERTIFICATE OF MERGER
OF
BECK GROUP MANAGEMENT CORP.
an Ohio corporation
INTO
JANUS INDUSTRIES, INC.
a Delaware corporation
- --------------------------------------------------------------------------------
Under Section 252 of the
Delaware General Corporation Law
- --------------------------------------------------------------------------------
Pursuant to the provisions of Section 252 of the Delaware General
Corporation Law, the undersigned does hereby certify:
FIRST: The name and state of incorporation of each of the constituent
corporations is BECK GROUP MANAGEMENT CORP. ("Beck Group"), an Ohio corporation
and JANUS INDUSTRIES, INC. ("Janus"), a Delaware corporation.
SECOND: Pursuant to an Agreement and Plan of Merger dated as of April 23,
1997 (the "Merger Agreement"), Beck Group shall be merged with and into Janus
(the "Merger").
THIRD: The Merger Agreement has been adopted, approved, certified,
executed and acknowledged by Beck Group and Janus in accordance with Section
252(c) of the Delaware General Corporation Law and sets forth that:
(A) Beck Group shall be merged into Janus and Janus shall be the
"Surviving Corporation."
(B) The name of the Surviving Corporation shall be "JANUS
INDUSTRIES, INC." and the certificate of incorporation of Janus shall be the
certificate of incorporation of the Surviving Corporation.
(C) Janus shall assume all assets and liabilities of Beck Group.
(D) As of the date of the filing of this Certificate of Merger (the
"Effective Date"), by virtue of the Merger and without any action on the part of
Janus or Beck Group, all Beck Group common stock shall be canceled and shall
cease to be outstanding.
2
<PAGE>
FOURTH: The Merger Agreement is on file at the principal place of business
of Janus which is located at 2300 Corporate Boulevard, N.W., Boca Raton, Florida
33431.
FIFTH: A copy of the Merger Agreement will be furnished by Janus on
request and without cost to any stockholder of any constituent corporation.
SIXTH: The authorized capital stock of Beck Group consists of one series
of common stock totaling 200 shares without par value. The designation and
number of issued and outstanding shares or stock of Beck Group are:
Number of Shares Issued
and Outstanding Designation of Shares
--------------- ---------------------
200 Common Stock
The number of shares of Beck Group entitled to vote on the plan of merger
is 200 shares of Common Stock and all of such shares were voted in favor of the
Merger.
SEVENTH: The authorized capital stock of Janus is twenty million
(20,000,000) shares, divided into two classes consisting of fifteen million
(15,000,000) shares of Common Stock, $.O1 par value per share, and five million
(5,000,000) shares of Preferred Stock, $.0l par value per share. By virtue of
the applicability of Section 251(f) of the Delaware General Corporation Law and
the satisfaction of all the conditions of the first sentence of Section 251(f),
including but not limited to (a) the certificate of incorporation of Janus does
not require the vote of the stockholders of Janus to authorize a merger, (b) the
Merger Agreement does not amend the certificate of incorporation of Janus, (c)
each share of stock of Janus outstanding immediately prior to the Effective Date
will be an identical outstanding share of Janus after the Effective Date, and
(d) the authorized unissued shares or the treasury shares of common stock of
Janus to be issued or delivered under the Merger Agreement plus those initially
issuable upon conversion of any other shares, securities or obligations to be
issued under the Merger Agreement do not exceed 20% of the shares of common
stock of Janus outstanding immediately prior to the effective date of the
Merger, no vote of the stockholders of Janus is necessary to authorize the
Merger pursuant to this Certificate of Merger.
EIGHTH: The Merger shall be effective as of the date of filing this
Certificate of Merger.
2
<PAGE>
IN WITNESS WHEREOF, each of the corporations hereto has caused this
Certificate of Merger to be executed on its behalf this 23rd day of April, 1997.
BECK GROUP MANAGEMENT CORP.
an Ohio corporation
By: /s/ Louis S. Beck
------------------------
Name: Louis S. Beck
Title: President
JANUS INDUSTRIES, INC.
a Delaware corporation
By: /s/ James E. Bishop
------------------------
Name: James E. Bishop
Title: President and Chief Executive Officer
3
<PAGE>
State of Delaware
Office of the Secretary of State Page 1
---------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF AMENDMENT
OF "JANUS INDUSTRIES, INC.", CHANGING ITS NAME FROM "JANUS INDUSTRIES, INC." TO
"JANUS AMERICAN GROUP, INC.", FILED IN THIS OFFICE ON THE TWENTY-NINTH DAY OF
SEPTEMBER, A.D. 1997, AT 9 O'CLOCK A.M.
[SEAL] /s/ Edward J. Freel, Secretary of State
------------------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 8688286
DATE: 10-06-97
<PAGE>
- ----------------------------------------------
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 09/29/1997
971330848 -- 0642316
CERTIFICATE OF AMENDMENT
TO
RESTATED CERTIFICATE OF INCORPORATION
OF
JANUS INDUSTRIES, INC.
Janus Industries, Inc. a corporation organized and existing under and by
virtue of Section 242 of the General Corporation Law of the State of Delaware
(the "Corporation"), DOES HEREBY CERTIFY:
1. On July 29, 1997, a resolution was duly adopted by the Board of
Directors of the Corporation setting forth a proposed amendment of the Restated
Certificate of Incorporation of the Corporation filed February 23, 1990 with
the Delaware Department of State, as amended (the "Restated Certificate"),
declaring said amendment to be advisable and providing that the proposed
amendment be presented to the stockholders of the Corporation for consideration
at the next annual meeting of stockholders pursuant to Section 222 of the
General Corporation Law of the State of Delaware.
2. At the annual meeting of the stockholders of the Corporation held on
September 29, 1997, a resolution to amend the Restated Certificate was proposed
and duly adopted by a sufficient number of shares entitled to vote as required
by Delaware law. The resolution setting forth the proposed amendment is as
follows:
"RESOLVED, that Article FIRST the Corporation's Restated Certificate of
Incorporation, as amended to date, is hereby amended to read as follows:
FIRST: The name of the Corporation (which is hereinafter referred to
as the "Corporation") is Janus American Group, Inc."
3. The following votes wee cast in connection with each of the
aforementioned amendment:
6,005,588 votes in favor
0 votes against
386,640 votes abstained
4. The amendment was duly adopted in accordance with the provisions of
Section 242 of the General Corporation Law of the State of Delaware.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by James E. Bishop, its President this 29th day of September, 1997.
JANUS INDUSTRIES, INC.
/s/ James E. Bishop
--------------------------------
James E. Bishop
President
Attest:
/s/ Frank E. Lawatsch, Jr.
- --------------------------------
Frank E. Lawatsch, Jr.
Secretary
