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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
Commission File Number: 333-10611
UNIFRAX CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 34-1535916
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
2351 Whirlpool Street, Niagara Falls, NY 14305-2413
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (716) 278-3800
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 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
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UNIFRAX CORPORATION
FORM 10-Q
INDEX
Page No.
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PART I. FINANCIAL INFORMATION
Item 1. Condensed Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets at
September 30, 1997 and December 31, 1996......................................1
Condensed Consolidated Statements of Income for the
Three-month and nine-month periods ended September 30, 1997 and 1996..........2
Condensed Consolidated Statements of Cash Flow for the
Nine-months ended September 30, 1997 and 1996.................................3
Notes to Condensed Consolidated Financial Statements...............................4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......................................8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.................................................................12
Item 2. Changes in Securities.............................................................12
Item 3. Defaults on Senior Securities.....................................................12
Item 4. Submission of Matters to a Vote of Security Holders ..............................12
Item 5. Other Information.................................................................12
Item 6. Exhibits and Report on Form 8-K...................................................12
Signatures..................................................................................15
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<TABLE>
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNIFRAX CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED - IN THOUSANDS, EXCEPT SHARE DATA)
December 31 September 30
1996 1997
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ASSETS
Current assets:
Cash $ 898 $ 3
Accounts receivable, less allowances of $1,202
and $1,128, respectively 13,856 13,202
Inventories 10,091 8,336
Deferred income taxes 5,395 5,395
Prepaid expenses and other current assets 294 525
-------- --------
Total current assets 30,534 27,461
Property, plant and equipment, at cost 64,113 69,809
Less accumulated depreciation and amortization (30,174) (32,623)
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33,939 37,186
Deferred income taxes 23,576 21,253
Organization costs, net of accumulated amortization
of $129 and $688, respectively 4,792 4,217
Other assets 550 413
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$ 93,391 $ 90,530
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,831 $ 3,283
Accrued expenses 8,431 10,949
Amounts due affiliates 2,250 --
Short term debt -- 300
-------- --------
Total current liabilities 16,512 14,532
Long term debt 120,750 113,750
Note payable--affiliate 7,000 7,000
Accrued postretirement benefit cost 2,957 3,146
Other long-term obligations 236 578
-------- --------
Total liabilities 147,455 139,006
STOCKHOLDERS' DEFICIT
Common stock--$.01 par value; shares authorized--(40,000 - September 30, 1997,
50,000 - December 31, 1996) shares issued and outstanding--20,000 -- --
Cumulative preferred stock--$.01 par value; shares authorized--10,000,
shares issued and outstanding--1,500 -- --
Additional paid-in capital 40,020 42,270
Accumulated deficit (93,971) (90,469)
Cumulative translation adjustment (113) (277)
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Total stockholders' deficit (54,064) (48,476)
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$ 93,391 $ 90,530
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
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UNIFRAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED - IN THOUSANDS)
THREE MONTHS ENDED SEPTEMBER 30 NINE MONTHS ENDED SEPTEMBER 30
-------------------------------- ------------------------------
1996 1997 1996 1997
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Net Sales $22,769 $20,533 $67,961 $65,234
Cost of goods sold 11,496 10,112 34,075 33,135
------- ------- ------- ------
Gross profit 11,273 10,421 33,886 32,099
Selling and distribution expenses 3,244 3,108 9,662 9,515
Administration expenses 1,616 1,392 5,045 5,310
Allocated corporate charges -- -- 356 --
Research and development expenses 597 606 1,718 1,955
------- ------- ------- ------
Operating income 5,816 5,315 17,105 15,319
Interest expense -- (3,118) -- (9,462)
Other income (expense), net 17 (10) 60 67
------- ------- ------- ------
Income before income taxes 5,833 2,187 17,165 5,924
Provision for income taxes 2,437 892 7,134 2,421
------- ------- ------- ------
NET INCOME $ 3,396 $ 1,295 $10,031 $3,503
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</TABLE>
See accompanying notes to condensed consolidated financial statements.
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<CAPTION>
UNIFRAX CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED - IN THOUSANDS)
NINE MONTHS ENDED SEPTEMBER 30
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1996 1997
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OPERATING ACTIVITIES
Net income $10,031 $ 3,503
Depreciation and amortization 2,935 3,838
Other adjustments and changes in operating assets and liabilities (953) 5,398
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Cash provided by operating activities 12,013 12,739
INVESTING ACTIVITIES
Capital expenditures (5,148) (7,063)
Deferred software and other costs (322) 14
Proceeds from sales of property, plant and equipment 65 115
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Cash used in investing activities (5,405) (6,934)
FINANCING ACTIVITIES
Cash transfers from parent company, net (5,686) --
Borrowings under revolving loan agreement -- 300
Repayment of term loan -- (7,000)
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Cash used in financing activities (5,686) (6,700)
Net decrease in cash 922 (895)
Cash--beginning of period 37 898
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CASH--END OF PERIOD $ 959 $ 3
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See accompanying notes to condensed consolidated financial statements.
</TABLE>
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UNIFRAX CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1997
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of
Unifrax Corporation ("The Company" or "Unifrax") have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Article 10 of Regulation
S-X. Accordingly, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) considered necessary for a fair presentation of the
results for the interim period ended September 30, 1997, have been included.
Operating results for the three- and nine-month periods ended September 30,
1997, are not necessarily indicative of the results that may be expected for the
year ending December 31, 1997. For further information, refer to the
consolidated financial statements and the notes to consolidated financial
statements included in the Company's annual report on Form 10-K for the year
ended December 31, 1996, as filed with the Securities and Exchange Commission,
which are incorporated herein by reference. All capitalized terms used in these
notes to condensed consolidated financial statements that are not defined herein
have the meanings given to them in such consolidated financial statements and
notes to consolidated financial statements.
NOTE B - INVENTORIES
The components of inventory consist of the following (in thousands):
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December 31 September 30
1996 1997
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Raw materials and supplies $1,722 $1,324
Work in process 1,758 2,012
Finished products 6,041 4,731
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9,521 8,067
Adjustment to LIFO Cost 570 269
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$10,091 $8,336
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</TABLE>
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NOTE C - CONTINGENCIES
CERAMIC FIBERS
Regulatory agencies and others, including the Company, are currently conducting
scientific research to determine the potential health impact resulting from the
inhalation of airborne ceramic fibers. To date, the results of this research
have been inconclusive as to whether or not ceramic fiber exposure presents an
unreasonable risk to humans.
Various legal proceedings and claims have been made against manufacturers of
ceramic fibers, including the Company, alleging death or personal injury as a
result of exposure in the manufacture and handling of ceramic fiber and other
products. The amount of any liability that might ultimately exist with respect
to these claims is presently not determinable.
Consistent with customary practice among manufacturers of ceramic fiber
products, the Company has entered into agreements with distributors of its
product whereby the Company has agreed to indemnify the distributors against
losses resulting from ceramic fiber claims and the costs to defend against such
claims. The amount of any liability that might ultimately exist with respect to
these indemnities is presently not determinable.
Pursuant to the Unifrax Corporation Recapitalization Agreement
("Recapitalization Agreement"), BP America Inc. and certain of its affiliates
(collectively "BPA"), has agreed to indemnify the Company against liabilities
for personal injury and wrongful death attributable to exposure prior to the
Closing to refractory ceramic fibers manufactured by the Company. BPA has agreed
to indemnify the Company against all liabilities arising from exposure claims
pending at the time of the Closing. For all other claims arising from alleged
exposure occurring solely prior to Closing, BPA has agreed to indemnify the
Company against 80% of all losses, until the total loss which the Company incurs
reaches $3.0 million, after which time BPA has agreed to indemnify the Company
against 100% of such losses. BPA has agreed to indemnify the Company against all
punitive damages attributable to the conduct of the Company prior to Closing.
Where losses arise from alleged exposure both before and after Closing, the
losses will be allocated between BPA and the Company, pro rata, based on the
length of exposure or pursuant to arbitration if initiated by the Company.
The Company cannot avail itself of this indemnity for losses attributable to the
Company's failure to maintain a Product Stewardship Program consistent with the
program maintained by the Company prior to Closing, as modified in a
commercially reasonable manner in accordance with changing regulatory,
scientific and technical factors. BP shall not indemnify the Company with
respect to any liabilities for wrongful death or personal injury to the extent
caused by the failure of the Company to maintain a Product Stewardship Program
consistent with that maintained by the Company prior to the Closing.
ENVIRONMENTAL MATTERS
The Company is subject to loss contingencies pursuant to various federal, state
and local environmental laws and regulations. These include possible obligations
to remove or mitigate the effects on the environment of the placement, storage,
disposal or release of certain chemical or petroleum substances by the Company
or by other parties.
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Under the terms of the Recapitalization Agreement, BPA assumed liability, and
the rights to recovery from third parties, for environmental remediation and
other similar required actions with respect to certain environmental obligations
of Unifrax existing as of the Closing Date.
The Company may, in the future, be involved in further environmental assessments
or clean-ups. While the ultimate requirement for any such remediation, and its
cost, is presently not known, and while the amount of any future costs could be
material to the results of operations in the period in which they are
recognized, the Company does not expect these costs, based upon currently known
information and existing requirements, to have a material adverse effect on its
financial position.
The Company owned a site in Sanborn, NY, at which extensive remediation activity
is currently being undertaken. The site has been used by a number of former
Carborundum operations other than the Company, as a result of which, certain
contamination is present in the soil. Neither past nor current operations of the
Company are believed to have contributed to, or to be contributing to, the
existence of the contamination. BPA has assumed responsibility for implementing
remedial activities specified by the State of New York which required removal of
the contamination, chiefly by means of soil vapor extraction. Under the terms of
an agreement, BPA has taken title to and assumed liability for the remediation
of this property as of October 30, 1996. Unifrax leases a portion of the present
manufacturing facilities on this site.
LEGAL PROCEEDINGS
The Company is involved in litigation relating to claims arising out of its
operations in the normal course of business, including product liability claims.
From time to time the Company has been named as a defendant in lawsuits
involving alleged injury suffered from exposure to ceramic fiber. The Company
believes that it is not presently a party to any litigation the outcome of which
would have a material adverse effect on its financial condition or results of
operations. Pursuant to the Recapitalization Agreement, BPA agreed to indemnify
the Company, subject to certain limitations, against all currently known
lawsuits and certain future lawsuits alleging exposure to ceramic fiber
(reference is made to the information appearing under the heading "Relationship
with BP and its Subsidiaries" in Item 13 of the report on Form 10-K for the
Unifrax Corporation for the year 1996 which is hereby incorporated herein by
reference).
Various other legal proceedings and claims have been made against the Company in
the ordinary course of business. While the amounts could be material to the
results of operations in the period recognized, in the opinion of management of
the Company, the ultimate liability, if any, resulting from such matters will
not have a material adverse effect on the Company's financial position.
NOTE D - COMMON STOCK
Effective April 21, 1997, the shareholders of Unifrax Corporation authorized an
amendment to the Certificate of Incorporation of Unifrax Corporation reducing
the number of authorized common shares from 50,000 shares to 40,000 shares.
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NOTE E - CUMULATIVE PREFERRED STOCK
Effective April 21, 1997, the shareholders of Unifrax Corporation authorized an
amendment to the Certificate of Incorporation of Unifrax Corporation creating
10,000 shares of cumulative preferred stock with a 6% annual dividend.
Effective September 30, 1997, Unifrax Corporation issued and sold 1,500 shares
of 6% cumulative preferred stock of the Company to Unifrax Holding Co. in
satisfaction of an advance of $2.25 million made by Unifrax Holding Co. to the
Company on December 20, 1996. The advance was then canceled effective September
30, 1997. The preferred stock thereby acquired by Unifrax Holding Co. is
cumulative with an annual dividend of 6% with dividend payments subject to
various covenants in the Company's loan agreements.
Unifrax Corporation also agreed to sell BP Exploration (Alaska) Inc. 166.67
shares of 6% cumulative preferred stock at $1,500 per share, as satisfaction in
part for interest owed through October 30, 1997, on the Note Payable-affiliate.
NOTE F - EFFECTS OF NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statement No. 130,
"Reporting Comprehensive Income", which is effective for fiscal years beginning
after December 15, 1997. The Company has not yet determined the impact Statement
No. 130 will have on its financial statements.
In June 1997, the Financial Accounting Standards Board issued Statement No. 131,
"Disclosure about Segments of an Enterprise and Related Information", which is
effective for fiscal years beginning after December 15, 1997. The Company does
not expect that Statement No. 131 will have any material effect on its financial
statements.
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PART I. FINANCIAL INFORMATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Management's Discussion and Analysis of Financial Condition and
Results of Operations contained in the Company's Form 10-K annual
report for the year ended December 31, 1996 and Form 10-Qs for the
three months ended March 31, 1997, and June 30, 1997, as filed with
the Securities and Exchange Commission (the "MDA") are hereby
incorporated by reference. All capitalized terms used in this Item 2
that are not defined herein have the meanings given to them in the
MDA.
Three Months Ended September 30, 1997 Compared With Three Months
----------------------------------------------------------------
Ended September 30, 1996
------------------------
Prior to February 29, 1996, Unifrax Corporation ("The Company" or
"Unifrax") was known as The Carborundum Company ("Carborundum") and
included a number of divisions and subsidiaries engaged in various
manufacturing businesses. On February 29, 1996, all of the
Carborundum businesses except for Unifrax were sold to Societe
Europeenne des Produits Refractaires and various other units of
Companie de Saint Gobain. Concurrent with the Saint Gobain sale,
Carborundum was renamed Unifrax, which was comprised of the North
American Fibers Division of Carborundum. Prior to February 29, 1996,
Unifrax sold its XPE products to Carborundum operations in Europe and
Brazil, who then sold to the end market. Subsequent to the Saint
Gobain Sale, Unifrax sold these products through indirect wholly
owned subsidiaries of BP in Europe (XPE Vertriebs GmbH) and South
America (NAF Brasil Ltda). In connection with the Recapitalization,
these subsidiaries became subsidiaries of Unifrax.
The results for the third quarter of 1997 also reflect the
Recapitalization of Unifrax on October 30, 1996, and the resulting
revised structure of the company. For further information regarding
the Recapitalization, refer to the consolidated financial statements
and footnotes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1996.
Net sales for the third quarter of 1997 decreased by $2.3 million or
10.0% from $22.8 million in 1996 to $20.5 million in 1997. Strong
demand for bulk fibers to the automotive, metals, and specialties
sectors and growth in specialty products for fire protection were
offset by lower sales in some traditional blanket applications and in
porosity-controlled products due to continuing end user program
design changes and modifications.
Gross profit declined by $0.9 million, or 8.0%, from $11.3 million in
1996 to $10.4 million in 1997. Gross profit as a percentage of net
sales increased from 49.5% in 1996 to 50.8% in 1997. The gross profit
decline was due to the lower sales volume and downward pressure on
prices in the automotive market. As a percentage of sales, gross
profit increased due to fewer outside purchases and resales of
ceramic fiber.
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Selling and distribution expenses decreased by $0.1 million, or 3.1%,
from $3.2 million in 1996 to $3.1 million in 1997 as a result of the
lower sales volume. Selling and distribution expense as a percentage
of net sales increased slightly from 14.3% in 1996 to 15.1% in 1997.
Administration expenses decreased by $0.2 million, or 12.5%, from
$1.6 million in 1996 to $1.4 million in 1997. The lower
administration costs were offset in part by the amortization of
organization and financing costs associated with the
Recapitalization. Administrative expenses as a percentage of net
sales were 7.1 % in 1996 and 6.8% in 1997.
Research and development expenses remained constant in 1996 and 1997,
increasing as a percentage of net sales from 2.6% in 1996 to 3.0% in
1997, due to the lower sales in 1997.
Operating income decreased by $0.5 million, or 8.6%, from $5.8
million in 1996 to $5.3 million in 1997. Operating income as a
percentage of net sales increased from 25.5% in 1996 to 25.9% in
1997, as a result of the factors previously indicated.
Interest expense was $3.1 million in 1997, compared to zero in 1996
as a result of borrowings in connection with the Recapitalization.
Interest expense as a percentage of net sales was 15.2% in 1997.
Provision for income taxes decreased $1.5 million, or 62.5%, from
$2.4 million in 1996 to $0.9 million in 1997. The effective income
tax rate decreased from 41.8% in 1996 to 40.8% in 1997, primarily as
a result of lower losses in the foreign subsidiaries, with no
increase in tax liability.
Net income decreased by $2.1 million, or 61.8%, from $3.4 million in
1996 to $1.3 million in 1997, as a result of factors previously
indicated. Net income as a percentage of net sales decreased from
14.9% in 1996 to 6.3% in 1997.
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NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH NINE MONTHS ENDED
--------------------------------------------------------------------
SEPTEMBER 30, 1996
------------------
Net sales for the first nine months of 1997 decreased by $2.8 million
or 4.1% from $68.0 million in 1996 to $65.2 million in 1997. Strong
demand for bulk fibers to the automotive, metals, and specialties
sectors and growth in specialty products for fire protection were
offset by lower sales in some traditional blanket applications and in
porosity-controlled products due to continuing end user program
design changes and modifications.
Gross profit declined by $1.8 million, or 5.3%, from $33.9 million in
1996 to $32.1 million in 1997. Gross profit as a percentage of net
sales decreased from 49.9% in 1996 to 49.2% in 1997. The decline was
due to the lower sales volume and downward pressure on prices in the
automotive market.
Selling and distribution expenses decreased by $0.2 million or 2.1%,
from $9.7 million in 1996 to $9.5 million in 1997 as a result of
lower sales volume. Selling and distribution expense as a percentage
of net sales were 14.2% in 1996 and 14.6% in 1997.
Administration expenses and allocated corporate charges decreased by
$0.1 million or 1.9% from $5.4 in 1996 to $5.3 million in 1997.
Administration expenses as a percentage of net sales were 8.0% in
1996 and 8.1% in 1997.
Research and development expenses increased by $0.3 million or 17.7%
from $1.7 million in 1996 to $2.0 million in 1997. The higher expense
was due to a planned increase in testing and development expenditures
for automotive products, and for the development of new fibers.
Research and development expenses as a percentage of net sales were
2.5% in 1996 and 3.0% in 1997.
Operating income decreased by $1.8 million, or 10.5%, from $17.1
million in 1996 to $15.3 million in 1997. Operating income as a
percentage of net sales decreased from 25.2% in 1996 to 23.5% in
1997, as a result of the factors previously indicated.
Interest expense was $9.5 million in 1997, compared to zero in 1996
as a result of borrowings in connection with the Recapitalization.
Interest expense as a percentage of net sales was 14.5% in 1997.
Provision for income taxes decreased $4.7 million, or 66.2%, from
$7.1 million in 1996 to $2.4 million in 1997. The effective income
tax rate decreased from 41.5% in 1996 to 40.9% in 1997, primarily as
a result of lower losses in the foreign subsidiaries, with no
increase in tax liability.
Net income decreased by $6.5 million, or 65.0%, from $10.0 million in
1996 to $3.5 million in 1997, as a result of factors previously
indicated. Net income as a percentage of net sales decreased from
14.8% in 1996 to 5.4% in 1997.
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Liquidity and Capital Resources
-------------------------------
During the nine-month period ended September 30, 1997, the Company's
cash flows from operating activities increased by $0.7 million or
5.8%, from $12.0 million in 1996 to $12.7 million in 1997. This
increase was the result of reductions in the levels of working
capital and higher depreciation and amortization expense offset in
part by lower net income resulting from interest expense in the
period, lower sales volumes and other factors discussed previously.
Cash outflows from investing activities increased by $1.5 million, or
28.3%, from $5.4 million in 1996 to $6.9 million in 1997. This
decrease was due to higher capital spending on the expansion project
at the New Carlisle, Indiana, facility offset somewhat by lower
capital spending at other facilities and reduced software
expenditures.
Cash outflows from financing activities increased by $1.0 million
from $5.7 million in 1996 to $6.7 million in 1997. During 1997 the
Company made a voluntary prepayment of principal of $7.0 million on
its Term Loan and borrowed $0.3 million against its $20 million
revolving credit facility. The $0.3 million borrowing was repaid in
full during the first week of October, 1997.
Management believes that cash flows from operations and the available
credit facility will be sufficient to fund operating and capital
expenditure needs for 1997.
Effects of New Accounting Pronouncements
----------------------------------------
In June 1997, the Financial Accounting Standards issued Statement No.
130, "Reporting Comprehensive Income", which is effective for fiscal
years beginning after December 15, 1997. The Company has not yet
determined the impact Statement No. 130 will have on its financial
statements.
In June 1997, the Financial Accounting Standards Board issued
Statement No. 131, "Disclosure about Segments of an Enterprise and
Related Information", which is effective for fiscal years beginning
after December 15, 1997. The Company does not expect that Statement
No. 131 will have any material effect on its financial statements.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None.
ITEM 2. CHANGES IN SECURITIES
Note E of notes to the condensed consolidated financial statements
included in this report is incorporated herein by reference.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
2.1* Unifrax Corporation Recapitalization Agreement
3.1* Certificate of Incorporation of the Registrant
3.1a Consent of Stockholders for Amendment of Certificate
of Incorporation
3.1b Certificate of Amendment to Certificate of
Incorporation
3.2* By-laws of the Registrant
4.1* Form of Indenture (including form of Note)
10.1* Form of Loan and Security Agreement among Unifrax
Corporation, Bank of America Illinois and the lenders
party thereto (Credit Agreement)
10.1a** First Amendment to Loan and Security Agreement
10.2* 1996 Stock Option Plan
10.2a** Unifrax Corporation Noncompetition Agreement
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10.3* Lease relating to Tonawanda plant
10.4* Lease relating to Amherst plant
10.5* Sanborn Lease
10.6* Covenant Not to Compete between The British Petroleum
Company p.l.c., its affiliates, and the Unifrax
Corporation and Societe Europeenne des Produits
Refractaires, and its affiliates (portions of this
Exhibit have been omitted and have been filed
separately with the Commission pursuant to a request
for confidential treatment)
10.7* Product Distribution Agreement between the Unifrax
Corporation and Societe Europeenne des Produits
Refractaires (portions of this Exhibit have been
omitted and have been filed separately with the
Commission pursuant to a request for confidential
treatment)
10.8* Distributed Product License Agreement between the
Unifrax Corporation and Societe Europeenne des
Produits Refractaires (portions of this Exhibit have
been omitted and have been filed separately with the
Commission pursuant to a request for confidential
treatment)
10.9* License Agreement between the Unifrax Corporation and
Societe Europeenne des Produits Refractaires (portions
of this Exhibit have been omitted and have been filed
separately with the Commission pursuant to a request
for confidential treatment)
10.10* Trademark License and Consent Agreement between the
Unifrax Corporation and Societe Europeenne des
Produits Refractaires
10.11* Conversion Agreement between the Unifrax Corporation
and Societe Europeenne des Produits Refractaires
(portions of this Exhibit have been omitted and will
be filed separately with the Commission pursuant to a
request for confidential treatment)
10.12* XPE(TM) License Agreement between the Unifrax
Corporation and Societe Europeenne des Produits
Refractaires
10.13* Form of Covenant Not to Compete between Holding and BP
10.14* Form of Stockholders Agreement among the Company, BPX
and Holding
10.14a Amendment to Stockholders Agreement dated September
30, 1997, among the Company, BP Exploration (Alaska),
Inc. and Holding
10.14b Stock Purchase Agreement dated September 30, 1997,
between the Company and Holding
10.14c Stock Purchase Agreement dated September 30, 1997,
between the Company and BP Exploration (Alaska), Inc.
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10.15* Tax Sharing Agreement between the Company and Holding
10.16* Advisory Services Agreement between the Company and
Kirtland Capital Corporation
10.17* Form of BP Note
21.1** Subsidiaries of the Registrant
27.1 Financial Data Schedule
* Incorporated by reference to the exhibits filed with the
Registration Statement on Form S-1 of Unifrax Investment
Corp. for 1996 for Unifrax Corporation (Registration No.
333-10611)
** Incorporated by reference to the exhibits filed with Form
10-K for 1996 for Unifrax Corporation (Registration No.
333-10611).
(b) No reports on Form 8-K have been filed during the period covered by
this report.
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF
1934, THE REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY
THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED.
UNIFRAX CORPORATION
By: /s/ William P. Kelly
---------------------------
William P. Kelly, President and
Chief Executive Officer
By: /s/ Mark D. Roos
------------------------------
Mark D. Roos, Vice President
and Chief Financial Officer
15
<PAGE> 1
Exhibit 3.1a
UNIFRAX CORPORATION
CONSENT OF STOCKHOLDERS
-----------------------
The undersigned, being the holders of all of the issued and outstanding
stock of UNIFRAX CORPORATION (the "Corporation"), (1) consent that a meeting of
the stockholders of the Corporation be dispensed with for the purpose of
adopting the following resolutions and (2) adopt such resolutions by written
consent pursuant to Section 228 of the General Corporation Law of the State of
Delaware:
RESOLVED, that the Corporation amend its Certificate of
Incorporation to create a class of preferred stock having
rights and preferences superior to the common stock (the
"Preferred Stock"), all as set forth in the Certificate of
Amendment of Certificate of Incorporation attached to this
Consent (the "Certificate Amendment"); and be it further
RESOLVED, that, in connection with such amendment, the
president and secretary of the Corporation be, and they hereby
are, authorized and directed, for and on behalf of the
Corporation, to (1) execute and file with the Department of
State of the State of Delaware the Certificate Amendment and
(2) take all other action as they shall deem appropriate for
the purposes of creating, and authorizing the Corporation to
issue, the Preferred Stock; and be it further
RESOLVED, that the Corporation issue 1,500 shares of Preferred
Stock to Unifrax Holding Co. for a price of $1,500 per share
and 166.67 shares of Preferred Stock to BP Exploration
(Alaska) Inc. for a price of $1,500 per share; and be it
further
RESOLVED, that the president or vice president and treasurer
or secretary of the Corporation be, and they hereby are,
authorized and directed to issue, in the name and on behalf of
the Corporation and under its corporate seal, certificates for
the shares of the Preferred Stock to be issued pursuant to the
immediately preceding resolution upon receipt of the purchase
price therefor; and be it further
<PAGE> 2
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RESOLVED, that each agreement, certificate, instrument and
other writing previously executed by a person who at the time
of such execution was an officer or director of the
Corporation, and each act previously taken by any such person,
in connection with the transactions contemplated by these
resolutions, is hereby in all respects ratified and confirmed.
Dated: April 21, 1997
UNIFRAX HOLDING COMPANY
By /s/John Nestor
----------------------------
Name: John G. Nestor
Title: President
BP EXPLORATION (ALASKA) INC.
By /s/P. D. Wilbur
----------------------------
Name: Peter D. Wilbur
Title: Secretary
<PAGE> 1
Exhibit 3.1b
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
UNIFRAX CORPORATION
------------------------
Under Section 242 of the General
Corporation Law of the State of Delaware
UNIFRAX CORPORATION, a corporation organized and existing under and by
virtue of the General Corporation Law of the State of Delaware (the "Company"),
DOES HEREBY CERTIFY:
1. The Certificate of Incorporation of the Company shall be amended to
create a class of preferred stock having rights and preferences superior to the
rights and preferences of the common stock. To effect such amendment, Article
FOURTH of the Certificate of Incorporation shall be deleted in its entirety and
the following inserted in lieu thereof:
FOURTH: The total number of shares of all classes of stock that the
Company shall have authority to issue is 50,000, of which 40,000
shares of the par value of $.01 each shall be common stock and 10,000
shares of the par value of $.01 each shall be preferred stock. The
relative rights, preferences and limitations of the shares of each
class are as follows:
(a) VOTING. Except as otherwise provided by applicable law,
the voting power for the election of directors and for all
other purposes shall be vested in the holders of the common
stock and the holders of the preferred stock. The holders of
the common
<PAGE> 2
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stock and the preferred stock shall each have one vote per
share. There shall be no cumulative voting.
(b) Dividends.
----------
(i) Each holder of the preferred stock shall be
entitled to receive, when and as declared by the board of
directors and from the assets of the Company available for
the payment of dividends under applicable law, a semi-annual
cumulative dividend (collectively "Preferred Dividends") at
the rate of 6% per annum on the amount of $1,500 (the
"Preferred Liquidation Value") for each share of the
preferred stock held by such holder. The Preferred Dividends,
to the extent so declared by the board of directors, shall be
payable in cash on June 30 of each year with respect to the
six-month period ending on June 30 of such year and on
December 31 of each year with respect to the six-month period
ending on December 31 of such year (individually a "Six-Month
Period" and collectively "Six-Month Periods") to holders of
record of the shares of the preferred stock on the first day
of June and December, respectively. The Preferred Dividends
shall accrue on each share of the preferred stock from and
including the date of the original issuance of such share
(without regard to any transfer of such share on the stock
records of the Company) to and including the date on which
(A) such share is redeemed by the Company, whether pursuant
to paragraph (c) of this Article or otherwise, (B) such share
is converted to common stock pursuant to paragraph (e) of
this Article or (C) a distribution is made with respect to
such share pursuant to paragraph (d) of this Article.
(ii) Subject to subparagraph (b)(iii) of this
Article, the Company shall incur no liability to any holder
of the preferred stock in connection with the failure of the
Company to declare or pay any Preferred Dividends.
(iii) If the Preferred Dividends shall have been
paid with respect to all prior Six-Month Periods, the board
of directors may, but shall not be required to, declare and
pay dividends on the common stock, such dividends to be
payable in an equal amount per share of common stock from the
assets of the Company available for the payment of dividends
under applicable law; provided, however, that no such
dividends shall be declared and paid on the common stock of
the Company unless all Preferred
<PAGE> 3
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Dividends shall have been paid on each share of the preferred
stock with respect to all prior Six-Month Periods.
(c) Redemption.
----------
(i) The Company may, at its option and at any time
and from time to time after the issuance of any shares of the
preferred stock, redeem all, but not less than all, of the
outstanding shares of preferred stock. Notice of any
redemption by the Company of preferred stock specifying the
time and place of redemption, the redemption price and any
conditions to be satisfied prior to such redemption shall be
mailed by certified mail, return receipt requested, to each
holder of record of shares of the preferred stock, at the
address for such holder shown on the Company's records, not
more than sixty, and not less than seven, days prior to the
date on which such redemption is to be effective. Upon
mailing any such notice of redemption, the Company shall,
subject to the satisfaction of all conditions set forth in
such notice, become obligated to redeem at the time of
redemption specified in such notice all outstanding shares of
preferred stock.
(ii) The redemption price for each share of
preferred stock to be redeemed pursuant to this Article shall
be equal to the Preferred Liquidation Value of such share,
plus an amount equal to all Preferred Dividends that are
unpaid on such share with respect to any prior Six-Month
Period.
(iii) On or before the date set for the redemption
of the preferred stock pursuant to this Article, each holder
of shares of the preferred stock shall surrender all
certificates for such shares to the Company at the then
principal place of business of the Company and, upon doing
so, shall be entitled to receive payment of the redemption
price. All certificates surrendered for redemption shall be
duly endorsed, or shall be accompanied by separate stock
transfer powers duly endorsed, for transfer to the Company.
(d) Liquidation, Dissolution or Winding Up.
----------------------------------------
(i) In the event of any liquidation, dissolution or
winding up of the Company or any similar distribution of its
assets to its stockholders, whether voluntary or involuntary,
the holders of the preferred stock shall be entitled, before
any payment or other
<PAGE> 4
- 4 -
distribution is made to the holders of the common stock of
the Company in connection with such liquidation, dissolution
or winding up, to be paid from the assets of the Company
legally available therefor, an amount in cash equal to the
Preferred Liquidation Value for each share of the preferred
stock, plus an amount equal to all Preferred Dividends that
are unpaid on such share with respect to any prior Six-Month
Period as of the date of such payment.
(ii) To the extent the assets of the Company legally
available for distribution in the event of a liquidation,
dissolution or winding up of the Company are insufficient to
pay in full the Preferred Liquidation Value, plus an amount
equal to all Preferred Dividends that are unpaid with respect
to any prior Six-Month Period as of the date of such payment,
for all shares of the preferred stock, the Company shall pay
to the holders of the preferred stock a pro rata amount of
(A) the Preferred Liquidation Value plus (B) such Preferred
Dividends.
(iii) After the payment to the holders of the
preferred stock of the Preferred Liquidation Value, plus an
amount equal to all Preferred Dividends that are unpaid with
respect to any prior Six- Month Period as of the date of such
payment, the holders of the common stock shall be entitled,
to the exclusion of the holders of the preferred stock, to
receive, equally on a share for share basis, all of the
remaining assets of the Company available for distribution to
its stockholders.
(iv) The sale or other transfer of all or
substantially all of the assets of the Company to, or the
merger or consolidation of the Company into or with, any
other entity shall not be deemed a liquidation, dissolution
or winding up of the Company for the purposes of this
paragraph (d).
(e) Conversion Rights.
------------------
(i) Subject to subparagraph (e)(iii) of this
Article, shares of the preferred stock shall be convertible
into fully paid and non-assessable shares of the common stock
at the rate of one share of the common stock for each share
of the preferred stock. A holder of any shares of the
preferred stock may convert such shares to shares of the
common stock upon (A) giving notice in writing to the board
of directors of the election to so convert and (B)
<PAGE> 5
- 5 -
surrendering all certificates for such shares to the board of
directors duly endorsed, or accompanied by separate stock
powers duly endorsed, for transfer to the Company. If the
Company redeems any shares of the preferred stock, whether
pursuant to this Article or otherwise, such right of
conversion shall terminate, as to the shares so redeemed,
upon payment of the redemption price. In the event of the
liquidation, dissolution or winding up of the Company, such
right of conversion shall terminate at the close of business
on the tenth business day prior to the date set for the first
distribution to the holders of the preferred stock.
(ii) Upon any conversion of shares of the preferred
stock into shares of the common stock pursuant to this
Article, a holder of the preferred stock shall continue to be
entitled to receive, when and as declared by the board of
directors and from the assets of the Company available for
the payment of dividends under applicable law, all Preferred
Dividends that are unpaid as of the date of such conversion
with respect to any prior Six-Month Period on the shares of
the preferred stock so converted; provided, however, that no
other payment shall be made in connection with such
conversion.
(iii) The number of shares of the common stock into
which each share of the preferred stock is convertible
pursuant to subparagraph (e)(i) of this Article shall be
subject to adjustment from time to time as follows:
(A) If the Company shall (1) declare a dividend on
the common stock payable in shares of the common stock, (2)
subdivide the outstanding shares of the common stock, (3)
combine the outstanding shares of the common stock into a
smaller number of shares, or (4) issue by reclassification of
the common stock any shares of the Company, each holder of
the preferred stock shall thereafter be entitled upon a
conversion pursuant to this paragraph (e) to receive for each
share of the preferred stock the number of shares of the
common stock of the Company the he, she or it would have
owned or been entitled to receive after the occurrence of any
event described in clauses (1), (2), (3) and (4) of this
sentence had such share been converted immediately prior to
the occurrence of such event. Such adjustment shall become
effective immediately after the close of business on the
record date for such dividend or the date upon which any
subdivision, combination or reclassification shall become
effective.
<PAGE> 6
- 6 -
(B) If the Company shall (1) consolidate or merge
into or with another entity or (2) sell or otherwise transfer
all or substantially all of its assets, each share of the
preferred stock then outstanding shall thereafter be
convertible pursuant to this paragraph (e) into the kind and
amount of securities, cash and other assets received by a
holder of the number of shares of common stock into which
such share could have been converted immediately prior to the
occurrence of any event described in clauses (1) and (2) of
this sentence, and shall have no other conversion rights.
(C) Whenever any adjustment is required in the
shares of common stock into which each share of the preferred
stock is convertible pursuant to subparagraphs (e)(iii)(A)
and (e)(iii)(B) of this Article, the Company shall maintain,
at its principal place of business, a statement describing in
reasonable detail such adjustment and the method of
calculation used in calculating such adjustment.
(D) The Company shall at all times reserve and keep
available out of the authorized but unissued shares of the
common stock the full number of shares of the common stock
into which all shares of the preferred stock from time to
time outstanding are convertible pursuant to this paragraph
(e). Notwithstanding the immediately preceding sentence,
shares of the common stock held in the treasury of the
Company may, in the discretion of the Company, be reissued in
connection with any such conversion of shares of the
preferred stock pursuant to this paragraph (e).
(E) Shares of the preferred stock converted into
common stock shall have the status of authorized but unissued
shares of preferred stock and such shares may be reissued by
the Company as shares of preferred stock.
2. The Board of Directors of the Company duly adopted a
resolution setting forth the amendment to the Certificate of Incorporation of
the Company being adopted in this Certificate, declaring its advisability and
calling a special meeting of the stockholders of the Company entitled to vote in
respect thereof for the consideration of such amendment. Such
<PAGE> 7
- 7 -
amendment has been duly adopted by the unanimous written consent of the
stockholders of the Company in accordance with Sections 228 and 242(b) of the
General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, the Company has caused this Certificate to
be signed by William P. Kelly, its president, and Mark D. Roos, its secretary,
on the 21st day of April, 1997.
UNIFRAX CORPORATION
By /s/William P. Kelly
---------------------------------
William P. Kelly, President
ATTEST:
By /s/Mark D. Roos
-------------------------
Mark D. Roos, Secretary
<PAGE> 1
Exhibit 10.14a
AMENDMENT TO STOCKHOLDERS AGREEMENT
-----------------------------------
This Amendment is made as of September 30, 1997 by and among Unifrax
Corporation, a Delaware corporation, (the "Company"), BP Exploration (Alaska)
Inc., a Delaware corporation, ("BP") and Unifrax Holding Co., a Delaware
corporation, (the "Buyer").
WHEREAS, the Company, BP and the Buyer are parties to the Stockholders
Agreement dated as of October 30, 1996 (the "Agreement"); and
WHEREAS, the Company, BP and the Buyer desire to amend the Agreement
as set forth in this Amendment due to the Company's recent authorization of
preferred stock and proposal to issue shares of such preferred stock to BP and
the Buyer.
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Amendment, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Amendment
hereby agree as follows:
1. The definition of "BP Shares" as set forth in Section 1 of the
Agreement is amended to read, in its entirety, as follows:
"BP Shares" means, collectively, all shares of Common Stock and
Preferred Stock owned by BP or its Affiliates.
2. The definition of "Effective Percentage" as set forth in Section 1
of the Agreement is amended to read, in its entirety, as follows:
"Effective Percentage" means the number of shares of Common Stock
and Underlying Common Stock owned by BP divided by the total
number of outstanding shares of Common Stock and Underlying
Common Stock on a fully-diluted basis.
3. The definition of "Other Equity" as set forth in Section 1 of the
Agreement is amended to read, in its entirety, as follows:
"Other Equity" means equity securities of the Company (other than
Common Stock and Preferred Stock) and any options, warrants or
other rights to acquire, or convertible into or exchangeable for,
Common Stock, Preferred Stock or other equity securities of the
Company.
4. The following definition is added to Section 1 of the Agreement:
<PAGE> 2
- 2 -
"Preferred Stock" means, collectively, the preferred stock of
the Company having a par value of $.01 per share, the
relative rights, preferences and limitations of which are set
forth in the Certificate of Amendment of Certificate of
Incorporation of the Company, dated April 21, 1997.
5. The definition of "Public Offering" as set forth in Section 1 of
the Agreement is amended to read, in its entirety, as follows:
"Public Offering" means any sale of Common Stock or Preferred
Stock to the public pursuant to any offering registered under
the Securities Act.
6. The definition of "Underlying Common Stock" as set forth
in Section 1 of the Agreement is amended to read, in its entirety, as follows:
"Underlying Common Stock" means the Common Stock issued or
issuable pursuant to the Preferred Stock or other securities
containing granted options, conversion rights or other rights
to acquire any shares of Common Stock.
7. The first sentence of Section 3(a) of the Agreement is amended
to read, in its entirety, as follows:
Except for (i) the issuance of shares of Common Stock
representing, on a fully diluted basis, not more than seven
percent (7%) of the Company's total Common Stock, pursuant to
a Company Management Option Plan, or (ii) in connection with
a Public Offering, or (iii) the issuance of Common Stock in
connection with the acquisition of, or a merger with, another
corporation or business, or (iv) the issuance of shares of
Common Stock as a dividend on the outstanding Common Stock
that would not, after giving effect to the issuance of such
shares, affect the Effective Percentage, or (v) the original
issuance of not more than 166.67 shares of Preferred Stock to
BP prior to November 10, 1997, or (vi) the original issuance
of not more than 1,500 shares of Preferred Stock to Buyer
prior to November 10, 1997, or (vii) the issuance of shares
of Common Stock in connection with a conversion of shares of
Preferred Stock into shares of Common Stock, if the Company
desires to sell or otherwise issue any shares of Common
Stock, any shares of Preferred Stock or any securities
containing options or rights to acquire any shares of
<PAGE> 3
- 3 -
Common Stock or Preferred Stock, the Company shall first offer
to sell to BP a portion of such stock or securities equal to
the Effective Percentage.
8. Section 4(b) of the Agreement is amended to read, in its
entirety, as follows:
Within thirty (30) days after its receipt of a Registration
Notice, BP may by written notice to Company elect to include in
the Public Offering all of the Common Stock and Preferred Stock
owned by BP to the extent any Common Stock or Preferred Stock
is covered in the Public Offering proposed by the Company. If
BP elects to include any of the Common Stock or Preferred Stock
owned by it in such Public Offering, it must elect to include
all of such Common Stock or Preferred Stock, as applicable.
9. Section 5(g) of the Agreement is amended to read, in its
entirety, as follows:
If BP sells less than all of the Common Stock owned by it in a
Public Offering, then the Target Value shall be reduced by
multiplying it by a fraction, the numerator of which is the
number of shares of the Common Stock owned by BP and sold in
such Public Offering and the denominator of which is the number
of shares of the Common Stock owned by BP as of the date of
this Agreement, plus the number of shares of Common Stock
received by BP after the date of this Agreement in connection
with the conversion of shares of Preferred Stock (all of such
shares included in such denominator to be adjusted for any
stock splits, reverse stock splits, stock dividends or similar
events occurring after they are issued to BP).
10. Section 6 of the Agreement is amended to read, in its entirety,
as follows:
The Company will not authorize or issue Common Stock, Preferred
Stock or Other Equity, unless the price for, and terms of, such
Common Stock, Preferred Stock or Other Equity are reasonable
and established on a good faith basis.
11. Clause (ii) of the first sentence of Section 7(b) of the
Agreement is amended to read, in its entirety, as follows:
substantially all such cash, cash equivalents or
publicly-traded securities, or the cash received from the sale
or collection thereof, net
<PAGE> 4
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of expenses and debt repayment, is to the extent feasible and
as soon as practicable distributed ratably to the holders of
Common Stock (subject to the rights of the holders of Preferred
Stock).
12. Clause (ii) of the first sentence of Section 8(a) of the
Agreement is amended to read, in its entirety, as follows:
Common Stock, Preferred Stock or Other Equity or debt sold to
Buyer or its Affiliates for cash consideration at fair market
value determined reasonably and good faith and subject, where
applicable, to BP's preemption rights under Section 3 above;
13. Clause (vi) is added at the end of the first sentence of Section
8(a) of the Agreement as follows:
or (vi) the original issuance of not more than 1,500 shares of
Preferred Stock to Buyer prior to November 10, 1997
14. The last sentence of Section 8(a) is amended to read, in its
entirety, as follows:
For the avoidance of doubt, dividends declared and paid ratably
from time to time to all holders of Common Stock, cash
dividends declared and paid ratably from time to time to all
holders of Preferred Stock, the redemption of all Preferred
Stock and the conversion of any outstanding shares of Preferred
Stock into shares of Common Stock are not considered to be
Related Party Transactions.
15. Section 9 of the Agreement is amended to read, in its entirety,
as follows:
The Company shall not, without the prior written consent of BP,
redeem any Common Stock, Preferred Stock or Other Equity unless
such redemption:
(i) applies only to Common Stock, and ratably to the
shares of Common Stock owned by BP as a percentage of
all outstanding shares of Common Stock; or
(ii) is of Common Stock, Preferred Stock or Other
Equity held directly or indirectly by individuals
within the management group; or
<PAGE> 5
- 5 -
(iii) applies only to all outstanding shares of
Preferred Stock.
16. Section 10 of the Agreement is amended to read, in its entirety,
as follows:
After June 30, 1997, each certificate evidencing Common Stock
or Preferred Stock, and each certificate issued in exchange for
or upon the transfer of any Common Stock or Preferred Stock,
shall be stamped or otherwise imprinted with a legend in
substantially the following form:
The securities represented by this certificate are
subject to a Stockholders Agreement dated as of October
30, 1996, as amended, among the issuer of such
securities (the "Company") and all of the Company's
stockholders. A copy of such Stockholders Agreement
will be furnished without charge by the Company to the
holder hereof upon written request.
17. Section 12 of the Agreement is amended to read, in its entirety,
as follows:
Prior to transferring any Common Stock or Preferred Stock
(other than, in either case, in a Public Offering) to any
Person, the transferring Stockholder shall cause the
prospective transferee to execute and deliver to the Company
and the other Stockholders a counterpart of this Agreement.
18. Paragraph (a) of Section 14 of the Agreement is amended to read,
in its entirety, as follows:
In the event of a proposed Transfer of Common Stock or
Preferred Stock (other than to Buyer or an Affiliate of Buyer)
by Buyer or any Affiliate of Buyer (the "Transferring
Stockholder"), the Transferring Stockholder shall deliver a
written notice (the "Sale Notice") to BP, specifying in
reasonable detail the identity of the proposed transferee(s)
and the terms and conditions of such Transfer. BP may elect to
participate in the contemplated Transfer by delivering written
notice to the Transferring Stockholder within 15 days after
receipt by BP of the Sale Notice. If BP elects to participate
in such Transfer, BP will be entitled to sell in the
contemplated Transfer, at the same price and on the same terms
as the Transferring Stockholder, a percentage of the Common
Stock and Preferred Stock, as applicable, to be sold,
<PAGE> 6
- 6 -
assigned or otherwise transferred in the contemplated Transfer
equal to the percentage of Common Stock and Preferred Stock, as
applicable, then outstanding that are BP Shares. Buyer shall
use its best efforts to obtain the agreement of the prospective
transferee(s) to the participation in any contemplated
Transfer, to the extent BP elects to participate in the manner
set forth above, and Buyer and its Affiliates shall not
Transfer any shares of Common Stock or Preferred Stock to the
prospective transferee(s) if the prospective transferee(s)
declines to allow such participation of BP.
19. The reference to "Common Stock" in the first sentence of Section
14(b)(i) of the Agreement is changed to "Common Stock or Preferred Stock".
20. The last sentence of Section 14(b)(i) of the Agreement is
amended to read, in its entirety, as follows:
BP Shares shall be included in such sale in an amount equal to
the product of (1) the number of shares of Common Stock or
Preferred stock, as applicable, held by BP times (2) the ratio
of the shares of Common Stock or Preferred Stock, as
applicable, proposed to be sold by Buyer and its Affiliates to
the total shares of Common Stock or Preferred Stock, as
applicable, owned by Buyer and its Affiliates.
21. The reference to "Common Stock" in Section 14(b)(ii) is changed
to "Common Stock or Preferred Stock, as applicable,".
22. The first sentence of Section 15 of the Agreement is amended to
read, in its entirety, as follows:
Any actual or attempted sale, transfer, assignment, pledge or
other encumbrance or disposition of any shares of Common Stock
or Preferred Stock in violation of any provision of this
Agreement shall be void, and the Company shall not record such
transfer on its books or treat any purported transferee of such
shares as the owner of such shares for any purpose.
23. The first sentence of Section 20 of the Agreement is amended to
read, in its entirety, as follows:
Except as otherwise provided herein, this Agreement shall bind
and inure to the benefit of, and be enforceable by, (a) the
Company and its
<PAGE> 7
- 7 -
successors and assignees and (b) the Stockholders and any
subsequent holders of Common Stock or Preferred Stock and the
respective successors and assigns of each of them, so long as
they hold Common Stock or Preferred Stock, as applicable.
24. Except as specifically set forth in this Amendment, the
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, intending to be legally bound, the Company, BP
and the Buyer has executed this Amendment on the day and year first above
written.
UNIFRAX CORPORATION
By /s/William P. Kelly
-------------------------
Name: William P. Kelly
Title: President
BP EXPLORATION (ALASKA) INC.
By /s/P. D. Wilbur
-------------------------
Name: Peter D. Wilbur
Title: Secretary
UNIFRAX HOLDING CO.
By /s/John Nestor
-------------------------
Name: John G. Nestor
Title: President
<PAGE> 1
Exhibit 10.14b
STOCK PURCHASE AGREEMENT
------------------------
This Agreement, dated as of September 30, 1997, is by and between
UNIFRAX CORPORATION, a Delaware corporation, ("Seller") and UNIFRAX HOLDING
CO., a Delaware corporation, ("Purchaser").
WHEREAS, Seller is a Delaware corporation authorized to issue
preferred stock as set forth in the Certificate of Incorporation of Seller, as
amended by a Certificate of Amendment dated April 21, 1997; and
WHEREAS, Purchaser is currently the holder of 18,000 shares of the
common stock of Seller; and
WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, 1,500 shares of the preferred stock of Seller,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller and Purchaser
agree as follows:
ARTICLE
PURCHASE AND SALE OF SHARES
---------------------------
0.1 Transfer of Shares. Subject to the terms and conditions
contained in this Agreement, Seller hereby sells, transfers, assigns, conveys
and delivers to Purchaser, and Purchaser hereby purchases from Seller, One
Thousand Five Hundred (1,500) shares of the preferred stock of Seller
(collectively the "Shares").
0.2 Purchase Price. Purchaser shall pay to Seller for the sale,
transfer, assignment, conveyance and delivery of the Shares an amount equal to
$2,250,000 (the "Purchase Price"). As payment of the Purchase Price, Purchaser
shall cancel the loan made by Purchaser to Seller on December 20, 1996 in the
principal amount of $2,250,000.
ARTICLE 1
CLOSING
2.1 Effective Date. The transfer referred to in Section 1.1 of this
Agreement shall be effective as of the date of this Agreement.
2.2 Certificates. Seller shall issue to Purchaser a certificate
evidencing Purchaser's ownership of the Shares. Such certificate shall be in
form and substance, and shall be executed and delivered, in a manner reasonably
satisfactory to Purchaser.
<PAGE> 2
2
2.3 Payment. Purchaser shall pay the Purchase Price on the date of
this Agreement. Seller shall mark as "paid" any promissory note or other
instrument relating to the indebtedness to be cancelled by Seller in payment of
the Purchase Price and otherwise adjust its records to reflect the cancellation
of such indebtedness; provided, however, that Seller shall remain liable to
Purchaser for all interest accrued but unpaid on the outstanding principal
amount of such indebtedness. Seller shall also execute and deliver to Purchaser
a receipt or other documentation requested by Purchaser in connection with such
cancellation.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Purchaser as follows:
2.1 Title. Seller is transferring to Purchaser pursuant to this
Agreement good and marketable title to the Shares, free and clear of any lien,
security interest or encumbrance of any kind.
2.2 Authorization. Seller has all necessary power and authority,
and has taken all action necessary, to (a) execute and deliver this Agreement,
(b) consummate the transaction contemplated by this Agreement and (c) perform
its obligations pursuant to this Agreement.
2.3 Enforceability. This Agreement has been duly executed and
delivered by Seller and is a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except that the
validity, binding effect or enforceability of this Agreement may be limited or
otherwise affected by (a) any bankruptcy, insolvency or other similar law
affecting the enforcement of creditors' rights and remedies generally or (b)
principles of equity.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to Seller as follows:
3.1 Authorization. Purchaser has all necessary power and authority,
and has taken all action necessary, to (a) execute and deliver this Agreement,
(b) consummate the transaction contemplated by this Agreement and (c) perform
its obligations pursuant to this Agreement.
3.2 Enforceability. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
that the validity, binding effect or enforceability of this
<PAGE> 3
3
Agreement may be limited or otherwise affected by (a) any bankruptcy,
insolvency or other similar law affecting the enforcement of creditors' rights
and remedies generally or (b) principles of equity.
ARTICLE 5
INDEMNIFICATIONS
----------------
5.1 Seller. Seller shall indemnify and hold harmless Purchaser from
and against each claim, damage, expense, liability or loss incurred by
Purchaser (including, but not limited to, any fees and expenses of counsel to
Purchaser) to the extent such claim, damage, expense, liability or loss results
from any warranty or representation made by Seller being untrue or misleading
in any respect.
5.2 Purchaser. Purchaser shall indemnify and hold harmless Seller
from and against each claim, damage, expense, liability or loss incurred by
Seller (including, but not limited to, any fees and expenses of counsel to
Seller) to the extent such claim, damage, expense, liability or loss results
from any warranty or representation made by Purchaser being untrue or
misleading in any respect.
ARTICLE 6
MISCELLANEOUS
-------------
6.1 Applicable Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Delaware, without regard to principles of conflicts of law.
6.2 Headings. The headings of the articles and sections of this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or interpretation of this Agreement.
6.3 Waiver. No failure of Seller or Purchaser to require, and no
delay by Seller or Purchaser in requiring, the other to comply with any
provision of this Agreement shall constitute a waiver of the right to require
such compliance. No failure of Seller or Purchaser to exercise, and no delay by
Seller or Purchaser in exercising, any right or remedy under this Agreement
shall constitute a waiver of such right or remedy. No waiver by Seller or
Purchaser of any right or remedy under this Agreement shall be effective unless
made in writing. Any waiver by Seller or Purchaser of any right or remedy under
this Agreement shall be limited to the specific instance and shall not
constitute a waiver of such right or remedy in the future.
6.4 Binding. This Agreement shall be binding upon Seller and
Purchaser and upon each successor and assignee of Seller and Purchaser and
shall inure to the benefit of, and be enforceable by, Seller and Purchaser and
each successor and assignee of Seller and Purchaser;
<PAGE> 4
4
provided, however, that neither Seller nor Purchaser shall assign any right or
obligation arising pursuant to this Agreement without first obtaining the
written consent of the other party.
6.5 Entire Agreement. This Agreement contains the entire agreement
between Seller and Purchaser with respect to the subject of this Agreement, and
supersedes each course of conduct previously pursued, accepted or acquiesced
in, and each oral agreement and representation previously made, by Seller or
Purchaser with respect thereto, whether or not relied or acted upon.
6.6 Modification. No course of performance or other conduct
hereafter pursued, accepted or acquiesced in, and no oral agreement or
representation made in the future, by Seller or Purchaser, whether or not
relied or acted upon, and no usage of trade, whether or not relied or acted
upon, shall modify or terminate this Agreement, impair or otherwise affect any
obligation of Seller or Purchaser pursuant to this Agreement or otherwise or
operate as a waiver of any such right or remedy. No modification of this
Agreement or waiver of any such right or remedy shall be effective unless made
in a writing duly executed by Seller and Purchaser.
6.7 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. However, if any provision of this Agreement shall be
prohibited by or invalid under such law, it shall be deemed modified to conform
to the minimum requirements of such law, or, if for any reason it is not deemed
so modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Agreement on the day and year indicated at the beginning of this Agreement.
UNIFRAX CORPORATION
BY /s/John Nestor
-----------------------------
NAME: John G. Nestor
TITLE: Chairman
UNIFRAX HOLDING CO.
BY /s/Thomas N. Littman
-----------------------------
NAME: Thomas N. Littman
TITLE: Treasurer
<PAGE> 1
Exhibit 10.14c
STOCK PURCHASE AGREEMENT
------------------------
This Agreement, dated as of September 30, 1997, is by and between
UNIFRAX CORPORATION, a Delaware corporation, ("Seller") and BP EXPLORATION
(ALASKA) INC., a Delaware corporation, ("Purchaser").
WHEREAS, Seller is a Delaware corporation authorized to issue
preferred stock as set forth in the Certificate of Incorporation of Seller,
amended by a Certificate of Amendment dated April 21, 1997; and
WHEREAS, Purchaser is currently the holder of 2,000 shares of the
common stock of Seller; and
WHEREAS, Purchaser desires to purchase from Seller, and Seller
desires to sell to Purchaser, 166.67 shares of the preferred stock of Seller,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, Seller and Purchaser
agree as follows:
ARTICLE
PURCHASE AND SALE OF SHARES
---------------------------
0.1 Transfer of Shares. Subject to the terms and conditions
contained in this Agreement, Seller shall sell, transfer, assign, convey and
deliver to Purchaser, and Purchaser shall purchase from Seller, One Hundred
Sixty-Six and 67/100 (166.67) shares of the preferred stock of Seller (the
"Shares").
0.2 Purchase Price. Purchaser shall pay to Seller for the sale,
transfer, assignment, conveyance and delivery of the Shares an amount equal to
$250,000 (the "Purchase Price"). As payment of the Purchase Price, Purchaser
shall, at its option, (a) pay to Seller $250,000 in cash or (b) issue to Seller
a credit in the amount of $250,000 against interest payable pursuant to the
Subordinated Promissory Note of Seller, dated October 30, 1996, in the original
principal amount of $7,000,000 (the "Note").
0.3 Pre-Emptive Rights. Purchaser acknowledges that the right to
purchase the Shares pursuant to this Agreement satisfies any right it may have
to purchase any shares of the preferred stock of the Seller in connection with
Seller's sale of 1,500 shares of such preferred stock to Unifrax Holding Co.,
whether pursuant to the Stockholders Agreement, dated as of October 30, 1996,
among Seller, Purchaser and Unifrax Holding Co. (the "Stockholders Agreement"),
applicable law or otherwise.
<PAGE> 2
2
ARTICLE 1
CLOSING
-------
2.1 Effective Date. The transfer referred to in Section 1.1 of this
Agreement shall be effective (the "Closing Date") as of the earlier of (a)
Purchaser's tendering to Seller $250,000 in cash or (b) October 30, 1997 (or,
if any reason the first interest payment to be made by Seller to Purchaser
under the Note is not made on or prior to October 30, 1997, November 9, 1997).
2.2 Certificate. Seller shall issue to Purchaser on the Closing
Date a certificate evidencing Purchaser's ownership of the Shares. Such
certificate shall be in form and substance, and shall be executed and delivered
in a manner, reasonably satisfactory to Purchaser.
2.3 Payment. Purchaser shall pay the Purchase Price on the Closing
Date. If Purchaser decides to pay the Purchase Price by issuing to Seller a
credit in the amount of $250,000 against interest payable pursuant to the Note,
Purchaser shall execute and deliver to Seller a receipt or other documentation
requested by Seller in connection with such credit.
2.4 Termination. If for any reason the Purchase Price is not
received by Seller on or before the Closing Date, Seller shall so notify
Purchaser and Purchaser shall have two business days after such notification to
pay the Purchase Price. If the Purchase Price is not received by Seller prior
to the expiration of those two business days, this Agreement shall
automatically terminate and Purchaser shall not have any right to purchase the
Shares, whether pursuant to this Agreement, the Stockholders Agreement,
applicable law or otherwise. Notwithstanding the termination of this Agreement
pursuant to this Section, Seller reserves all rights and remedies it may have
against Purchaser in connection with the failure to pay the Purchase Price
pursuant to this Agreement.
2.5 Time is of the Essence. Time is of the essence under this
Agreement.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
----------------------------------------
Seller hereby represents and warrants to Purchaser as follows:
2.1 Title. Seller is transferring to Purchaser on the Closing Date
good and marketable title to the Shares pursuant to this Agreement, free and
clear of any lien, security interest or encumbrance of any kind.
2.2 Authorization. Seller has all necessary power and authority,
and has taken all action necessary, to (a) execute and deliver this Agreement,
(b) consummate on the Closing
<PAGE> 3
3
Date the transaction contemplated by this Agreement and (c) perform its
obligations pursuant to this Agreement.
2.3 Enforceability. This Agreement has been duly executed and
delivered by Seller and is a legal, valid and binding obligation of Seller,
enforceable against Seller in accordance with its terms, except that the
validity, binding effect or enforceability of this Agreement may be limited or
otherwise affected by (a) any bankruptcy, insolvency or other similar law
affecting the enforcement of creditors' rights and remedies generally or (b)
principles of equity.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF PURCHASER
-------------------------------------------
Purchaser hereby represents and warrants to Seller as follows:
3.1 Authorization. Purchaser has all necessary power and authority,
and has taken all action necessary, to (a) execute and deliver this Agreement,
(b) consummate on the Closing Date the transaction contemplated by this
Agreement and (c) perform its obligations pursuant to this Agreement.
3.2 Enforceability. This Agreement has been duly executed and
delivered by Purchaser and is a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except
that the validity, binding effect or enforceability of this Agreement may be
limited or otherwise affected by (a) any bankruptcy, insolvency or other
similar law affecting the enforcement of creditors' rights and remedies
generally or (b) principles of equity.
ARTICLE 5
INDEMNIFICATIONS
----------------
5.1 Seller. Seller shall indemnify and hold harmless Purchaser from
and against each claim, damage, expense, liability or loss incurred by
Purchaser (including, but not limited to, any fees and expenses of counsel to
Purchaser) to the extent such claim, damage, expense, liability or loss results
from any warranty or representation made by Seller being untrue or misleading
in any respect.
5.2 Purchaser. Purchaser shall indemnify and hold harmless Seller
from and against each claim, damage, expense, liability or loss incurred by
Seller (including, but not limited to, any fees and expenses of counsel to
Seller) to the extent such claim, damage, expense, liability or loss results
from any warranty or representation made by Purchaser being untrue or
misleading in any respect.
<PAGE> 4
4
ARTICLE 6
MISCELLANEOUS
-------------
6.1 Applicable Law. This Agreement shall be construed, interpreted
and the rights of the parties determined in accordance with the laws of the
State of Delaware, without regard to principles of conflicts of law.
6.2 Headings. The headings of the articles and sections of this
Agreement are inserted for convenience of reference only and shall not affect
the meaning or interpretation of this Agreement.
6.3 Waiver. No failure of Seller or Purchaser to require, and no
delay by Seller or Purchaser in requiring, the other to comply with any
provision of this Agreement shall constitute a waiver of the right to require
such compliance. No failure of Seller or Purchaser to exercise, and no delay by
Seller or Purchaser in exercising, any right or remedy under this Agreement
shall constitute a waiver of such right or remedy. No waiver by Seller or
Purchaser of any right or remedy under this Agreement shall be effective unless
made in writing. Any waiver by Seller or Purchaser of any right or remedy under
this Agreement shall be limited to the specific instance and shall not
constitute a waiver of such right or remedy in the future.
6.4 Binding. This Agreement shall be binding upon Seller and
Purchaser and upon each successor and assignee of Seller and Purchaser and
shall inure to the benefit of, and be enforceable by, Seller and Purchaser and
each successor and assignee of Seller and Purchaser; provided, however, that
neither Seller nor Purchaser shall assign any right or obligation arising
pursuant to this Agreement without first obtaining the written consent of the
other party.
6.5 Entire Agreement. This Agreement contains the entire agreement
between Seller and Purchaser with respect to the subject of this Agreement, and
supersedes each course of conduct previously pursued, accepted or acquiesced
in, and each oral agreement and representation previously made, by Seller or
Purchaser with respect thereto, whether or not relied or acted upon.
6.6 Modification. No course of performance or other conduct
hereafter pursued, accepted or acquiesced in, and no oral agreement or
representation made in the future, by Seller or Purchaser, whether or not
relied or acted upon, and no usage of trade, whether or not relied or acted
upon, shall modify or terminate this Agreement, impair or otherwise affect any
obligation of Seller or Purchaser pursuant to this Agreement or otherwise or
operate as a waiver of any such right or remedy. No modification of this
Agreement or waiver of any such right or remedy shall be effective unless made
in a writing duly executed by Seller and Purchaser.
<PAGE> 5
5
6.7 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law. However, if any provision of this Agreement shall be
prohibited by or invalid under such law, it shall be deemed modified to conform
to the minimum requirements of such law, or, if for any reason it is not deemed
so modified, it shall be prohibited or invalid only to the extent of such
prohibition or invalidity without the remainder thereof or any other such
provision being prohibited or invalid.
IN WITNESS WHEREOF, Seller and Purchaser have executed this
Agreement on the day and year indicated at the beginning of this Agreement.
UNIFRAX CORPORATION
BY /S/WILLIAM P. KELLY
-----------------------------
NAME: WILLIAM P. KELLY
TITLE: PRESIDENT
BP EXPLORATION (ALASKA) INC.
BY /S/P. D. WILBUR
-----------------------------
NAME: PETER D. WILBUR
TITLE: SECRETARY
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM THE UNIFRAX
CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEET AS OF
SEPTEMBER 30, 1997, AND THEIR CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR
THE PERIOD ENDED SEPTEMBER 30, 1997.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 3
<SECURITIES> 0
<RECEIVABLES> 14,330
<ALLOWANCES> (1,128)
<INVENTORY> 8,336
<CURRENT-ASSETS> 27,461
<PP&E> 69,809
<DEPRECIATION> (32,623)
<TOTAL-ASSETS> 90,530
<CURRENT-LIABILITIES> 14,532
<BONDS> 120,750
0
0
<COMMON> 0
<OTHER-SE> (48,476)
<TOTAL-LIABILITY-AND-EQUITY> 90,530
<SALES> 65,234
<TOTAL-REVENUES> 65,234
<CGS> 33,135
<TOTAL-COSTS> 33,135
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,462
<INCOME-PRETAX> 5,924
<INCOME-TAX> 2,421
<INCOME-CONTINUING> 3,503
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,503
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
