<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For quarter ended June 30, 1995 Commission file number 1-5951
CMI CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Oklahoma 73-0519810
---------------------- ------------------------------------
State of Incorporation (I.R.S. Employer Identification No.)
I-40 & Morgan Road, P.O. Box 1985
Oklahoma City, Oklahoma 73101
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (405) 787-6020
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
--- ---
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Voting Class A Common Stock Par Value $.10 and
Voting Common Stock Par Value $.10 20,357,004
---------------------------------------------- ------------------------------
(Title of each class) (Outstanding at July 31, 1995)
-1 of 12-
<PAGE>
CMI CORPORATION
Index
Page
----
PART I. Financial Information
Condensed Consolidated Balance Sheets -
June 30, 1995 and December 31, 1994 and
June 30, 1994 3
Condensed Consolidated Statements of Operations -
Three Months and Six Months Ended June 30, 1995
and 1994 4
Condensed Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1995 and 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. Other Information
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities 10
Item 4. Submission of Matters to a Vote of 10
Security Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
-2 of 12-
<PAGE>
PART I - FINANCIAL INFORMATION
CMI CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
June 30 December 31 June 30
1995 1994 1994
----------- ----------- -----------
(Unaudited) * (Unaudited)
<S> <C> <C> <C>
Current assets:
Cash & cash equivalents $ 1,509 1,423 1,386
Cash equivalents - restricted 825 903 903
Receivables, net 17,154 17,226 22,520
Inventories
Finished equipment 22,842 20,278 11,708
Work-in-process 7,957 7,942 7,907
Raw materials & parts 22,988 19,344 19,925
------ ------ ------
Total inventories 53,787 47,564 39,540
Deferred tax asset 9,000 9,200 3,600
Other current assets 352 121 42
------ ------ ------
Total current assets 82,627 76,437 67,991
Property, plant & equipment 45,523 44,361 43,425
Less accumulated depreciation 34,091 33,208 32,491
------ ------ ------
Net property, plant & equipment 11,432 11,153 10,934
Other assets 672 703 856
Long-term receivables 643 651 812
Deferred tax asset 9,800 800 6,400
------- ------ ------
$105,174 89,744 86,993
======= ====== ======
Current liabilities:
Current portion of long-term debt $ 5,311 4,222 $ 2,529
Accounts payable 12,209 8,132 9,150
Accrued liabilities 6,548 7,658 7,483
------ ------ ------
Total current liabilities 24,068 20,012 19,162
Long-term debt 17,040 21,691 21,695
Redeemable preferred stock 4,903 5,908 5,893
Common shares & other capital:
Voting Class A common stock &
common stock 2,036 2,035 2,035
Other capital 57,127 40,098 38,208
------ ------ ------
Total common shares & other capital 59,163 42,133 40,243
------- ------ ------
$105,174 89,744 86,993
======= ====== ======
</TABLE>
* Condensed from audited financial statements
See notes to condensed consolidated financial statements
-3 of 12-
<PAGE>
CMI CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $43,604 48,165 76,275 76,028
------ ------ ------ ------
Costs and expenses
Cost of revenues 30,439 32,389 53,238 51,647
Marketing and
administrativ e 4,818 5,103 10,107 9,416
Engineering and
product development 1,592 1,504 3,032 3,017
Interest expense 715 705 1,461 1,404
Interest income (120) (118) (182) (191)
Other income, net (110) (106) (114) (266)
------ ------ ------ ------
37,334 39,477 67,542 65,027
------ ------ ------ ------
Earnings before income taxes 6,270 8,688 8,733 11,001
Income tax benefit (Note 4) (8,534) (9,649) (8,443) (9,554)
------ ------ ------ ------
Net earnings $14,804 18,337 17,176 20,555
====== ====== ====== ======
Net earnings per common share (Note 3) $ .71 .87 .81 .98
====== ====== ====== ======
Average outstanding shares 20,928 20,953 20,919 21,004
====== ====== ====== ======
</TABLE>
See notes to condensed consolidated financial statements
-4 of 12-
<PAGE>
CMI CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
June 30
----------------
1995 1994
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings $17,176 20,555
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation 891 724
Amortization 35 103
Gain on sale of assets (114) (267)
Change in assets and liabilities:
Decrease (increase) in accounts receivable 72 (13,055)
Decrease (increase) in inventory (6,223) 3,468
Decrease (increase) in other current assets (153) 2
Increase (decrease) in accounts payable 4,077 (413)
Increase (decrease) in accrued liabilities (1,110) 1,005
Increase in deferred tax asset (8,800) (10,000)
Decrease (increase) in long-term receivables 8 (812)
Decrease (increase) in other, non-current assets (4) 68
------ ------
Net cash provided by operating activities 5,855 1,378
------ ------
INVESTING ACTIVITIES
Proceeds from sale of assets 184 304
Capital expenditures (1,240) (926)
------ ------
Net cash used in investing activities (1,056) (622)
------ ------
FINANCING ACTIVITIES
Payments on long-term debt (373) (639)
Net borrowings (payments) on revolving credit note (4,751) 567
Net borrowings on fleet financing agreement 1,562 556
Payments of dividends on preferred stock (417) -
Payments for redemption of preferred stock (750) -
Stock options exercised 16 -
------ ------
Net cash provided by (used in) financing activities (4,713) 484
------ ------
Increase in cash and cash equivalents 86 1,240
Cash and cash equivalents at beginning of year 1,423 146
------ ------
Cash and cash equivalents at end of period $ 1,509 1,386
====== ======
</TABLE>
See notes to condensed consolidated financial statements
-5 of 12-
<PAGE>
CMI CORPORATION AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
(Unaudited)
(1)The interim condensed consolidated financial information has been
prepared in conformity with generally accepted accounting principles
applied, in all material respects, on a basis consistent with the
consolidated financial statements included in the annual report filed
with the Securities and Exchange Commission for the preceding fiscal
year. The financial information as of June 30, 1995 and for the
interim periods ended June 30, 1995 and 1994 included herein is
unaudited; however, such information reflects all adjustments,
consisting of only normal recurring adjustments, which are, in the
opinion of management, necessary to a fair presentation of the
results for the interim periods.
(2)The results of operations for the six months ended June 30, 1995 are
not necessarily indicative of the results to be expected for the full
year. The Company is in a very seasonal business, whereas normally
at least 60 percent of the Company's revenues occur in the first six
months of each calendar year.
(3)Earnings per share amounts are computed by dividing the net earnings
less redeemable preferred stock dividends and accretion of the
difference between the ultimate redemption value and the initial
carrying value for the period, by the weighted average number of
common shares and common share equivalents outstanding during the
period. Common share equivalents are not considered in the
computation of per share amounts if their effect is anti-dilutive.
(4)The provisions of Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" (Statement 109), requires the
benefit of tax deductions and credits not utilized by the Company in
the past to be reflected as an asset to the extent the Company
assesses that future operations will "more likely than not" be
sufficient to realize such benefits.
The Company has assessed its past earnings history and trends, sales
backlog, budgeted sales, and expiration dates of carryforwards of
future tax benefits and has determined that it is "more likely than
not" that the $18,800,000 of deferred tax assets will be utilized.
The ultimate realization of the deferred tax asset will require
aggregate taxable income of approximately $45 million to $50 million
in future years.
At June 30, 1995, the tax effects that give rise to significant
portions of the deferred tax assets are as follows (in thousands):
Current Non-Current
------- -----------
Tax operating loss & other carryforwards $4,620 4,828
Waste to energy facility - 7,700
Other temporary differences 4,380 (1,728)
----- ------
Deferred tax assets 9,000 10,800
Less valuation allowance - 1,000
------ ------
Net deferred tax asset $ 9,000 9,800
====== ======
Income tax expense varies from the federal statutory income tax rate
of 35% principally due to the reduction in the valuation allowance
held against the Company's deferred tax assets.
-6 of 12-
<PAGE>
(5)Certain reclassifications have been made to the prior interim period
to conform to the 1995 presentations.
(6)There have been no material changes in related party transactions
since the annual report filed for the preceding fiscal year.
-7 of 12-
<PAGE>
CMI CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
---------------------
The Company reported net earnings of $14,804,000, or $.71 per share for
the three months ended June 30, 1995 compared to net earnings of
$18,337,000, or $.87 per share, for the comparable three months ended in
1994. Earnings for the June 1995 and 1994 quarters included $8,800,000,
or $.42 per share, and $10,000,000, or $.47 per share, respectively, for
previously unrecognized tax benefits related to Statement of Financial
Accounting Standards No. 109.
Revenues for the quarter totaled $43,604,000, down from $48,165,000 for
the second quarter of 1994.
For the first six months of 1995, net earnings totaled $17,176,000, or
$.81 per share, down from $20,555,000, or $.98 per share, for the first
six months of 1994. Revenues for the six months of $76,275,000 are
comparable to $76,028,000 for the same period last year.
Under provisions of Statement of Financial Accounting Standards No. 109,
the Company is required to reflect, as an asset, the tax value of past
net operating loss carryforwards and other tax credits when future
operations are expected to produce sufficient income to utilize these
tax benefits. The current period increase of $8,800,000 was based upon
expectations for continuing profitability (see Note 4).
The Company maintained consistent revenue levels for the first half of
1995 as compared to the same period in 1994. This was achieved through
increased domestic shipments in most all of the Company's primary
product lines. The Company's reclaimer/stabilizer product line
recognized the greatest increase, with an increase of approximately $4
million over the same period in 1994. This increase was largely due to
the introduction of the RS-650 Stabilizer in January 1995. However,
international shipments decreased approximately $6 million compared to
the same period in 1994 primarily due to the decreased sales in Mexico
of approximately $4 million.
Gross margin, as a percentage of net revenues, decreased to 30% for the
three months ended June 30, 1995 from 33% for the same period in 1994,
and decreased to 30% from 32% for the six months period ended June 30,
1995 and 1994. The reduction in gross margin is primarily the result of
increases in labor and material costs. The Company continues to
evaluate and adjust its product prices, where possible, to recover the
increase in manufacturing costs.
Marketing and administrative expenses decreased $285,000 for the three
month period ended June 30, 1995, compared to the same period in 1994,
and increased $691,000 for the six month period ended June 30, 1995,
compared to the same period in 1994.
As a percentage of net revenues, marketing and administrative expenses
were 11% for the three months ended June 30, 1995 and 1994. For the six
months ended June 30, marketing and administrative expenses, as a
percentage of net revenues, increased to 13% in 1995 from 12% in 1994.
This increase is due to the Company's continued aggressive marketing
strategy which included customer demonstrations for new and existing
products, continued participants in industry trade shows, and an
increased domestic and international sales force.
-8 of 12-
<PAGE>
Engineering and product development expenses increased $88,000 for the
three months ended June 30, 1995 and $15,000 for the six months ended
June 30, 1995, compared to the same periods in 1994. Engineering and
product development expenses, as a percentage of net revenues, increased
to 4% from 3% for the three months ended June 30, 1995 and 1994,
respectively. As a percentage of net revenues, engineering and product
development expenses were 4% for the six months ended June 30, 1995 and
1994 as the Company continues to be committed to product development.
The most recent example is the RS-650 Stabilizer added in January 1995.
Interest expense increased to $715,000 from $705,000 for the three
months ended June 30, 1995 and 1994, and to $1,461,000 from $1,404,000
for the six months ended June 30, 1995 and 1994 due primarily to an
increase in interest rates.
Liquidity and Capital Resources
-------------------------------
The Company's liquidity remained strong in 1995. At June 30, 1995
working capital was $58,559,000, compared to $48,829,000 at June 30,
1994. The current ratio at June 1995 was 3.43-to-1 compared to 3.55-to-
1 at the same time last year.
Cash provided by operating activities of $5,855,000 for the six months
ended June 30, 1995 is an increase of $4,477,000 over the same period in
1994. This additional cash has been used to reduce outstanding debt and
fund current year capital expenditures.
Capital expenditures totaled $1,240,000 for the six-month period of
1995, an increase of $314,000 from the prior year. Capital expenditures
are budgeted at $3 million for 1995. Capital expenditures are used to
continue improving the Company's manufacturing and product support
efficiencies.
The Company's revolving credit loan agreement has been in place since
1991 and matures in December 1997. The current line of credit is
$30,000,000. The amount outstanding at June 30, 1995 was $7,731,000
with $804,000 reflected as current portion of long-term debt with the
remainder reflected as long-term debt. Other term debt has maturity
dates ranging from July 1995 to September 2010 and is expected to be
paid or refinanced when due.
As previously reported, on March 31, 1995, the Company and Yargo, Inc.
entered into a Stock Purchase Agreement (the "Agreement"), whereby the
Company agreed to purchase the 4,500 outstanding shares of the Company's
Series B Preferred Stock in a series of installments, with all shares to
be purchased by December 31, 1996. On June 30, 1995, in accordance with
the terms of the Agreement, the Company purchased 750 shares of the
Series B Preferred Stock for an aggregate purchase price of $1,010,313
including accrued dividends. In addition, on July 15, 1995, the Company
made a dividend payment of $131,250 on the Series B Preferred Stock.
See additional discussion of the Agreement in "Item 1. Legal
Proceedings."
Income Taxes
------------
Under the provisions of Statement 109, the benefits of future tax
deductions and credits not utilized by the Company in the past is
reflected as an asset to the extent that the Company assesses that
future operations will "more likely than not" be sufficient to realize
such benefits. During the three months ended June 30, 1995, the Company
recorded previously unrecognized deferred tax assets in the amount of
$8,800,000, primarily from the result of the Company's assessment that
it is "more likely than not" that future taxable income will be
sufficient to realize such tax benefits. The Company's current
assessment is based on historical performance and expectations for
continuing profitability.
-9 of 12-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
--------------------------
On November 8, 1994, Yargo, Inc. ("Yargo") filed a complaint against the
Company which sought payment of $1,417,500 of dividends accrued on 4,500
shares of the Company's 7% Series B Preferred Stock, par value $1.00 per
share, and any dividends accruing after
the date of the lawsuit on such shares. In addition, Yargo sought
redemption of 4,250 shares of the 4,500 shares outstanding in the amount
of $4,250,000. On March 31, 1995, the Company entered into a Stock
Purchase Agreement (the "Agreement") with Yargo. In accordance with
terms of the Agreement, on April 12, 1995, Yargo dismissed the complaint
without prejudice. See attached discussion in Paragraph "Liquidity and
Capital Resources."
As was also previously reported, litigation is currently pending in the
United States District Court for the Western District of Oklahoma
between the Company and certain of its insurance carriers. This lawsuit
arose in 1992 when the Company sued five of its insurance carriers
seeking, among other things, coverage against patent infringement claims
asserted against the Company by Astec Industries, Inc., Cedarapids, Inc.
and Gencor Corporation. Each of the Company's insurance carriers
asserted counterclaim alleging lack of liability to the Company and, in
addition, the Company's primary insurance carrier asserted a
counterclaim seeking recovery from the Company of approximately $3.2
million that the insurance carrier paid to Cedarapids, Inc. to satisfy a
judgment entered against the Company.
Recently, the Company agreed to settle this lawsuit on terms that
management believes are favorable to the Company. Under the terms of
the settlement, the Company and the insurance carriers will, among other
things, dismiss with prejudice all claims asserted against each other.
Item 2. Changes in Securities.
------------------------------
None.
Item 3. Defaults Upon Senior Securities.
----------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders.
------------------------------------------------------------
On May 5, 1995, the annual meeting of shareholders of the Company was
held at the Company's corporate offices in Oklahoma City, Oklahoma. The
items of business considered at the annual meeting were as follows:
1. The election of Larry D. Hartzog and Thomas P. Stafford to serve
as directors of the Company each for a term of three years.
At the annual meeting, 18,823,289 votes were cast by the shareholders
FOR the election of Larry D. Hartzog and 235,208 votes were WITHHELD;
18,926,591 votes were cast by the shareholders FOR the election of
Thomas P. Stafford and 131,906 votes were WITHHELD.
2. Amend the Company's Amended and Restated Certificate of
Incorporation by amending Section D of Article Sixth thereof.
The proposed amendment was required before the Company's Voting
Class A Common Stock could be listed on the New York Stock
Exchange.
-10 of 12-
<PAGE>
At the annual meeting, 15,668,177 votes were cast by the shareholders
FOR the proposed amendment to Section (D) of Article Sixth, 43,150 votes
were cast AGAINST and 97,589 votes were WITHHELD. See Exhibit 3(i)
Certificate of Incorporation of the Company as amended.
Item 5. Other Information.
--------------------------
The Company's Voting Class A Common Stock began trading on the New York
Stock Exchange on May 24, 1995.
Item 6. Exhibits and Reports on Form 8-K.
-----------------------------------------
(a) Exhibits required by Item 601 of Regulation S-K are as follows:
Exhibit No.
-----------
3(i) Certificate of Incorporation as amended
11 Statements re Computaton Per Share Earnings
27 Financial Data Schedule
(b) The Company did not file any report on a Form 8-K during the
fiscal quarter ended June 30, 1995.
-11 of 12-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
Date: August 14, 1995 /s/Jim D. Holland
---------------------- -----------------------------------
Jim D. Holland
Sr. Vice President, Treasurer and
Chief Financial Officer
-12 of 12-
<PAGE>
OLD
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
C M I CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA:
The undersigned corporation (the "Corporation"), an Oklahoma
corporation, for the purpose of adopting an Amended and Restated
Certificate of Incorporation pursuant to Section 1080 of the
Oklahoma General Corporation Act (the "Act"), hereby certifies:
1. The name of this Corporation is "C M I Corporation."
2. The name under which the Corporation was originally
incorporated was Wylie Bros., Inc.
3. The original Articles of Incorporation of the
Corporation were filed with the Oklahoma Secretary of State on
March 8, 1926.
4. This Amended and Restated Certificate of Incorporation
was duly adopted in accordance with Section 1080 of the Act,
after being proposed by the Directors and adopted by the
shareholders in the manner and by the vote prescribed in Section
1077 of the Act, and restates, integrates and further amends the
Certificate of Incorporation. Furthermore, the shareholders of
the Corporation have duly adopted this Amended and Restated
Certificate of Incorporation for the purpose of definitively
providing that all provisions of the Act will apply to the
Corporation and its shareholders to the fullest extent, and that
from and after the filing of this Certificate with the Oklahoma
Secretary of State the provisions of the Oklahoma Business
Corporation Act and any and all rights, privileges or immunities
thereunder shall be of no further force or effect with regard to
the Corporation and its shareholders.
5. The Certificate of Incorporation of C M I Corporation
is hereby restated, as further amended by this Certificate, to
read in full, as follows:
CERTIFICATE OF INCORPORATION OF C M I CORPORATION
FIRST: The name of this Corporation is CMI Corporation (the
"Corporation").
SECOND: The address of its registered agent in the State of
Oklahoma and the name of its agent at such address shall
hereafter be I-40 and Morgan Road, Oklahoma City, Oklahoma
73101, Attn: Thane Swisher.
THIRD: The term of this Corporation shall be perpetual.
1
<PAGE>
FOURTH: The purpose for which the Corporation is organized
is to engage in any lawful act or activity for which corporations
may be organized under the Oklahoma General Corporation Act.
FIFTH: The aggregate number of shares which the Corporation
shall have authority to issue is as follows:
CLASS NUMBER OF SHARES PAR VALUE
----- ---------------- ---------
Voting Common Stock 20,000 $0.10
Voting Class A Common Stock 45,000,000 $0.10
Preferred Stock 4,000,000 $1.00
Effective immediately upon the filing of this Amended and
Restated Certificate of Incorporation, each outstanding share of
previously existing Voting Common Stock shall be and hereby is
converted into and reclassified as 1/2000th of a share of Voting
Common Stock; provided, however, that fractional shares of Voting
Common Stock will not be issued and each holder of a fractional
share of Voting Common Stock shall receive in lieu thereof that
number of shares of Voting Class A Common Stock equal to the
product of 2000 multiplied by such fraction.
Certificates representing reclassified shares are hereby
cancelled and upon presentation of the cancelled certificates to
the Corporation the holders thereof shall be entitled to receive
certificate(s) representing the new shares into which such
cancelled shares have been converted.
SIXTH: The preferences, qualifications, limitations,
restrictions, and other special or relative attributes of the
classes of shares of stock of this Corporation are as follows:
(1) Each share of Voting Common Stock and Voting Class A
Common Stock shall be entitled to one vote per share on all
matters to be submitted to the shareholders of the Corporation.
The shareholders of Voting Common Stock and Voting Class A Common
Stock shall vote together as a single class.
(2) The Preferred Stock may be issued from time-to-time in
one or more series, each of said series to have such
designations, preferences and relative, participating, optional,
voting or other special rights and qualifications, and
limitations or restrictions thereof as are stated and expressed
in a resolution or resolutions providing for the issue of such
series adopted by the Board of Directors as hereinafter provided.
2
<PAGE>
(3) Authority is hereby expressly granted to the Board of
Directors, subject to the provisions of this Article Sixth, to
authorize one or more series of Preferred Stock and, with respect
to each series, to fix by resolution or resolutions providing for
the issue of such series:
(a) The number of shares to constitute such series and the
distinctive designation thereof;
(b) The dividend rate of such series, if any;
(c) Whether or not dividends on the shares of such series
shall be cumulative and, if cumulative, the date or dates from
which dividends shall accumulate;
(d) Whether or not the shares of such series shall be
redeemable and, if redeemable, the premium, if any, over and
above the par value thereof and any dividends accrued thereon
which the shares of such series shall be entitled to receive upon
the redemption thereof;
(e) Whether or not the shares of such series will be
subject to the creation of retirement or sinking funds to be
applied to the purchase or redemption of such shares for
retirement and, if such retirement or sinking fund or funds be
established, the annual amount thereof and the terms and
provisions relative to the operation thereof;
(f) Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other class
or classes or of any other series of the same or any other class
or classes of the stock of the Corporation and the conversion
price or prices or the rate or rates on which such exchange may
be made, with such adjustments, if any, as shall be stated,
expressed or provided in such resolution or resolutions;
(g) The amount of premium, if any, over and above the par
value thereof and any dividends accrued thereon, which the shares
of such series shall be entitled to receive upon the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation;
(h) The voting power, if any, of the shares of such series;
3
<PAGE>
(i) The rights of the shares of such series in the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation; and
(j) Such other special rights, qualifications, limitations
or restrictions as shall be stated, expressed or provided in such
resolution or resolutions.
(4) Shares of Voting Common Stock and Voting Class A Common
Stock shall be identical in all respects and, subject to the
prior rights, if any, of any holders of Preferred Stock that may
be outstanding from time to time, shall share equally on a per
share basis in any dividends declared and paid by the Corporation
or in the proceeds of any liquidation, dissolution or winding up
of the Corporation, except that no share of Voting Class A Common
Stock shall be transferable or assignable in any respect, either
of record or beneficially, unless such transfer or assignment is
permitted under the following provisions:
(a) Until the earliest of January 1, 2006, such date as the
Corporation shall no longer have any unutilized federal income
tax net operating loss carryovers or capital loss carryovers,
whether or not such carryovers are currently in existence (the
"Carryforwards") or such date after which Section 382 of the
Internal Revenue Code of 1986, as amended (the "Code"), is
repealed or so substantially modified such that, in the opinion
of counsel to the Corporation, the restrictions on transfer
described herein are no longer necessary to accomplish their
intended purpose: (1) any attempted sale, transfer, assignment
or other disposition (including the granting of any option
(within the meaning of section 382 of the Code and the Income Tax
Regulations as now in effect or hereafter promulgated pursuant
thereto (the "Regulations")) (any such option being referred to
hereinafter as an "Option") or entering into of any agreement for
the sale, transfer or other disposition), whether voluntary or
involuntary, whether of record or beneficially and whether by
operation of law or otherwise (a "Transfer"), of any share or
shares of the Voting Class A Common Stock of the Corporation or
of any Option to acquire such stock, to any person or entity or
group of persons or entities acting in concert (a "Transferee")
who or which owns or owned, directly, indirectly or by
application of the constructive ownership rules set forth in
Sections 382 and 318 of the Code and the Regulations, or in any
other manner representing "ownership" under any circumstances for
purposes of section 382 of the Code and the Regulations
(collectively, "Owns" or "Owned"), at any time during the 3-year
period ending on the day of the Transfer, an aggregate number of
shares of the Corporation's stock (taking into account for this
purpose all interests in the Corporation that are treated as
stock for purposes of Section 382(g)(1) of the Code and no other
interests in the Corporation (any interest that is so treated
4
<PAGE>
being referred to hereinafter as "Stock")) having a fair market
value equal to or greater than 4.75 percent of the fair market
value of the Corporation's then outstanding Stock shall be void
ab initio insofar as it purports to transfer ownership to such
Transferee of any shares of Voting Class A Common Stock or any
Option to acquire Voting Class A Common Stock and (2) any
attempted Transfer of any share or shares of the Voting Class A
Common Stock of the Corporation or of any Option to acquire
Voting Class A Common Stock to any Transferee not described in
clause (1) hereof who or which would Own, as a result of the
Transfer or as a result of a subsequent Transfer of any share or
shares of the Corporation's Stock or of any Option to acquire the
Corporation's Stock, an aggregate number of shares of the
Corporation's Stock, having a fair market value equal to or
greater than 4.75 percent of the aggregate fair market value of
all of the Corporation's Stock then outstanding, shall, as to the
number of shares representing such excess over 4.75 percent, be
void ab initio insofar as it purports to transfer ownership to
such Transferee of any shares of Voting Class A Common Stock or
any Option to acquire Voting Class A Common Stock.
(b) The restrictions contained in paragraph (a) of this
Section D of this Article Sixth have been included herein for the
purpose of reducing the risk of occurrence of an "ownership
change" within the meaning of Section 382(g) of the Code and the
Regulations that would result in the disallowance or limitation
of the Corporation's utilization of the Carryforwards and to
maintain the tax advantage of the Corporation associated with the
Carryforwards.
(c) Neither clause (1) nor clause (2) of paragraph (a) of
this Section D of this Article Sixth shall restrict any Transfer
of Voting Class A Common Stock of the Corporation if (1) the
prior written approval of the Board of Directors of the
Corporation (based on a majority vote of the Board of Directors)
shall have been obtained with respect to such Transfer and (2) if
so requested by the Board of Directors, counsel to the
Corporation shall have delivered its opinion that such Transfer
would not result in an "ownership change" within the meaning of
Section 382(g) of the Code and the Regulations that would result
in the elimination or limitation of the Corporation's utilization
of the Carryforwards. The Board of Directors shall have the
authority, in its sole discretion, to adopt procedures for the
orderly and effective administration and implementation of this
Section D and, in deciding whether to approve any proposed
Transfer of Voting Class A Common Stock of the Corporation, the
Corporation acting through any officer may request all relevant
information, as well as an opinion of counsel in form and
substance reasonably satisfactory to the Board of Directors. No
employee or agent of the Corporation shall be permitted to record
any attempted or purported Transfer of Voting Class A Common
Stock of the Corporation made in violation of this Article Sixth
and no Transferee of Voting Class A Common Stock of the
Corporation effected in violation of this Article Sixth shall be
deemed to have acquired ownership of Voting Class A Common Stock
for any purpose. Such intended Transferee shall not be entitled
to any rights as a shareholder of the Corporation with respect to
such Voting Class A Common Stock including, but not limited to,
5
<PAGE>
the right to vote such Voting Class A Common Stock or to receive
any distributions in respect thereof, whether as dividends or in
liquidation.
(d) If the procedures adopted by the Board of Directors so
require, the Corporation's transfer agent shall not issue any
certificates transferring, assigning or disposing of or
purporting to transfer, assign or otherwise dispose of legal
ownership of any shares of Voting Class A Common Stock unless the
transfer agent receives from the proposed Transferee, in addition
to any other information requested by it, a certificate signed
under penalty of perjury attesting to the fact that the
Transferee does not, and will not become as a result of the
proposed Transfer, assignment or other disposition, Own an
aggregate number of shares of the Corporation's outstanding Stock
having a fair market value equal to or greater than 4.75 percent
of the aggregate fair market value of all of the Corporation's
outstanding Stock. If at any time the Corporation's transfer
agent receives a request to make a change in record ownership of
shares of Voting Class A Common Stock of the Corporation which,
if effected, would appear to the transfer agent on the basis of
information in its possession to constitute a violation of this
Article Sixth, then, prior to registering such change in
ownership on the books of the Corporation, the transfer agent
shall notify the Corporation. If the Board of Directors or an
officer of the Corporation designated by the Board of Directors
determines that the proposed change in ownership would violate
this Article Sixth, then the Corporation shall so advise the
transfer agent and the transfer agent shall not make such change
in ownership on the books of the Corporation and shall return the
stock certificates representing such shares to the holder of
record thereof.
(e) Unless approval of the Board of Directors is obtained
as provided in Paragraph (c) above, any attempted Transfer of
shares of Voting Class A Common Stock of the Corporation or any
Option to acquire shares of Voting Class A Common Stock of the
Corporation in excess of the shares that could be Transferred to
the Transferee without restriction under paragraph (a) above
shall not be effective to Transfer ownership of such excess
shares or Options (the "Prohibited Shares") to the purported
acquiror thereof (the "Purported Acquiror"), who shall not be
entitled to any rights as a shareholder of the Corporation with
respect to the Prohibited Shares (including, without limitation,
the right to vote or to receive dividends with respect thereto).
All rights with respect to the Prohibited Shares shall remain the
property of the person who initially purported to Transfer the
Prohibited Shares to the Purported Acquiror (the "Initial
Transferor") until such time as the Prohibited Shares are resold
as set forth in subparagraph (1) or subparagraph (2) below. The
Purported Acquiror, by acquiring ownership of shares of Voting
Class A Common Stock of the Corporation that are not Prohibited
Shares, shall be deemed to have consented to all of the
provisions of this Section (D) and to have agreed to act as
provided in the following subparagraph (1).
6
<PAGE>
(1) Upon demand by the Corporation, the
Purported Acquiror shall transfer any certificate, or
other evidence of purported ownership of the Prohibited
Shares within the Purported Acquiror's possession or
control, along with any dividends or other
distributions paid by the Corporation with respect to
the Prohibited Shares that were received by the
Purported Acquiror (the "Prohibited Distributions"), to
an agent designated by the Corporation (the "Agent").
If the Purported Acquiror has sold the Prohibited
Shares to an unrelated party in any arm's-length
transaction after purportedly acquiring them, the
Purported Acquiror shall be deemed to have sold the
Prohibited Shares as agent for the Initial Transferor,
and in lieu of transferring the Prohibited Shares and
Prohibited Distributions to the Agent shall transfer to
the Agent the Prohibited Distributions and the proceeds
of such sale (the "Resale Proceeds") except to the
extent that the Agent grants written permission to the
Purported Acquiror to retain a portion of the Resale
Proceeds not exceeding the amount that would have been
payable by the Agent to the Purported Acquiror pursuant
to the following subparagraph (2) if the Prohibited
Shares had been sold by the Agent rather than by the
Purported Acquiror. Any purported transfer of the
Prohibited Shares by the Purported Acquiror other than
a transfer described in one of the two preceding
sentences shall not be effective to transfer any
ownership of the Prohibited Shares.
(2) The Agent shall sell in an arm's-length
transaction (through the stock exchange, if any, on
which the Voting Class A Common Stock is traded, if
possible) any Prohibited Shares transferred to the
Agent by the Purported Acquiror, and the proceeds of
such sale (the "Sales Proceeds"), or the Resale
Proceeds, if applicable, shall be allocated to the
Purported Acquiror up to the following amount: (i)
where applicable, the purported purchase price paid or
value of consideration surrendered by the Purported
Acquiror for the Prohibited Shares, and (ii) where the
purported Transfer of the Prohibited Shares to the
Purported Acquiror was by gift, inheritance, or any
similar purported transfer, the fair market value of
the Prohibited Shares at the time of such purported
Transfer. Subject to the succeeding provisions of this
subparagraph, any Resale Proceeds or Sales Proceeds in
excess of the amount allocable to the Purported
Acquiror pursuant to the preceding sentence, together
with any Prohibited Distributions, shall be the
property of the Initial Transferor. If the identity of
the Initial Transferor cannot be determined by the
Agent through inquiry made to the Purported Acquiror
and the Corporation, the Agent shall publish
appropriate notice (in The Wall Street Journal, if
possible) for seven consecutive business days in an
attempt to identify the Initial Transferor in order to
transmit any Resale Proceeds or Sales Proceeds or
Prohibited Distributions due to the Initial Transferor
7
<PAGE>
pursuant to this subparagraph. The Agent may also
take, but is not required to take, other reasonable
actions to attempt to identify the Initial Transferor.
If after 90 days following the final publication of
such notice the Initial Transferor has not been
identified, any amounts due to the Initial Transferor
pursuant to this subparagraph may be paid over to a
court or governmental agency, if applicable law
permits, or otherwise shall be transferred to any
entity designated by the Corporation that is described
in Section 501(c)(3) of the Code. In no event shall
any such amount due to the Initial Transferor inure to
the benefit of the Corporation or the Agent, but said
amounts may be used to cover expenses (including but
not limited to the expenses of publication) incurred by
the Agent in attempting to identify the Initial
Transferor.
(3) Within thirty (30) business days of
learning of a purported Transfer of Prohibited Shares
to a Purported Acquiror, the Corporation through its
Secretary shall demand that the Purported Acquiror
surrender to the Agent the certificates representing
the Prohibited Shares, or any Resale Proceeds, and any
Prohibited Distributions, and if such surrender is not
made by the Purported Acquiror within thirty (30)
business days from the date of such demand, the
Corporation shall institute legal proceedings to compel
such transfer; provided, however, that nothing in this
paragraph shall preclude the Corporation in its
discretion from immediately bringing legal proceedings
without a prior demand, and also provided that failure
of the Corporation to act within the time periods set
out in this paragraph shall not constitute a waiver of
any right of the Corporation to compel any transfer
required by this paragraph.
(4) Upon a determination by the Board of
Directors that there has been or is threatened a
purported Transfer of Prohibited Shares to a Purported
Acquiror, the Board of Directors may take such action
in addition to any action required by the preceding
subparagraph as it deems advisable to give effect to
the provisions of this Section (D), including, without
limitation, refusing to give effect on the books of the
Corporation to such purported Transfer or instituting
proceedings to enjoin such purported Transfer.
(f) Until the earliest of January 1, 2006, such date as the
Corporation shall no longer have any unutilized Carryforwards or
such date after which Section 382 of the Code is repealed or so
substantially modified such that, in the opinion of counsel to
the Corporation, the restrictions on transfer described in this
Section (D) of this Article Sixth are no longer necessary to
accomplish their intended purpose, all certificates representing
shares of Voting Class A Common Stock shall conspicuously bear
the following legend:
8
<PAGE>
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET
FORTH IN ARTICLE SIXTH OF THE CORPORATION'S AMENDED AND
RESTATED CERTIFICATE OF INCORPORATION, THE TEXT OF
WHICH IS SUMMARIZED ON THE REVERSE SIDE OF THIS
CERTIFICATE. ANY ATTEMPT TO ACQUIRE VOTING CLASS A
COMMON STOCK OF THE CORPORATION IN VIOLATION OF SUCH
RESTRICTIONS SHALL BE NULL AND VOID AND MAY RESULT IN
FINANCIAL LOSS TO THE PERSON OR ENTITY ATTEMPTING SUCH
ACQUISITION."
(E) Pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation, the Board of
Directors has created a series of Preferred Stock of the
Corporation to consist of 4,800 shares and hereby restates the
voting powers, designations, rights, preferences, privileges and
restrictions of the shares of such series as follows:
(g) DESIGNATION.
The designation of the series of
Preferred Stock created by this Resolution shall
be "7% Preferred Stock, Series B ($1.00 Par
Value)" (hereinafter called the "Series B
Preferred Stock").
(h) DIVIDENDS.
(i) Accrual. Dividends shall
accrue on each share of Series B Preferred Stock
at the rate of $70.00 per share per annum from the
date of issuance of such share (whether or not
they have been declared and whether or not there
are earnings or funds of the Corporation available
for the payment of such dividends).
(ii) Cumulation. Dividends upon
each share of Series B Preferred Stock shall be
cumulative. Each January 15th and July 15th which
shall occur after the date of issuance of each
share shall be deemed a "Cumulation Date". Each
semi-annual period on a Cumulation Date shall be
deemed a "Dividend Period".
(iii) Full Cumulative Dividends.
The term "Full Cumulative Dividends" shall mean
(whether or not they have been declared and
whether or not there are earnings or funds of the
Corporation available for the payment of such
dividends) that amount which is equal to dividends
at the full rate fixed for each share of Series B
Preferred Stock provided in this Paragraph (b) for
9
<PAGE>
the period of time elapsed from the date of
issuance of such share to the date as to which
Full Cumulative Dividends are being computed
(including an amount for any fraction of a
Dividend Period equal to the product derived by
multiplying the dividend for the full period by
the fraction of the period elapsed to the time as
of which the computation shall be made).
(iv) Payments. The holders of
shares of the Series B Preferred Stock shall be
entitled to receive in cash the dividends (on a
pro rata basis if for less than a Dividend Period)
accruing on the Series B Preferred Stock each
January 15th and July 15th that any shares of
Series B Preferred Stock shall be outstanding.
(v) Unpaid Accrued Dividends. The
term "Unpaid Accrued Dividends" shall mean Full
Cumulative Dividends to the date as of which
Unpaid Accrued Dividends are to be computed upon
the relevant shares of Series B Preferred Stock.
Unpaid Accrued Dividends shall not bear interest.
(vi) Dividend/Redemption
Limitations. Prior to the first Cumulation Date,
no dividend shall be paid nor shall any other
distribution, purchase or redemption be made of or
upon any stock ranking as to dividends or upon
liquidation junior to the Series B Preferred
Stock. If on the first Cumulation Date Full
Cumulative Dividends upon the Series B Preferred
Stock to such Cumulation Date shall not have been
paid, or declared and a sum sufficient for payment
thereof set apart, or if at any time after the
first Cumulation Date Full Cumulative Dividends on
Series B Preferred Stock to the last Cumulation
Date shall not have been paid, or declared and a
sum sufficient for payment thereof set apart, the
amount of the deficiency of such dividends shall
be fully paid, but without interest, before any
dividend shall be declared or paid or any other
distribution ordered or made upon, or any other
purchase or redemption made of, any stock ranking
as to dividends or upon liquidation junior to the
Series B Preferred Stock. All dividends declared
upon the shares of the Series B Preferred Stock
shall be declared pro rata.
10
<PAGE>
(i) REDEMPTION.
The shares of the Series B
Preferred Stock shall be subject to redemption as
follows:
(i) Optional Redemption. Subject
to the succeeding provisions of this Paragraph
(c)(i), the shares of the Series B Preferred Stock
may be redeemed at the option of the Corporation,
in whole or in part, at any time or from time to
time, upon not less than 30 days' prior notice to
the holders of record of shares of the Series B
Preferred Stock to be so redeemed, sent by first
class mail, postage prepaid, to each registered
holder of shares of the Series B Preferred Stock
at such holder's address appearing on the Series B
Preferred Stock register maintained by the
Corporation, at the redemption price per share of
$1,000.00, plus in each case an amount equal to
Unpaid Accrued Dividends to and including the date
fixed for redemption of such shares (hereinafter
called an "Optional Redemption Date"). If less
than all shares of the Series B Preferred Stock
are to be redeemed pursuant to this Paragraph
(c)(i), the shares to be redeemed shall be
selected pro rata so that there shall be redeemed
from each registered holder of such shares that
number of whole shares, equal to or rounded, from
that number of shares which bears the same ratio
to the total number of shares of such Series B
Preferred Stock held by such holder as the total
number of shares to be redeemed bears to the total
number of shares of the Series B Preferred Stock
at the time outstanding.
(ii) Scheduled Redemption. The
Corporation will redeem out of funds legally
available for such purpose, on each December 31st
of each year commencing December 31, 1988, for
each of which is hereinafter called a "Scheduled
Redemption Date", the following number of shares:
300 December 31, 1988
500 December 31, 1989
750 December 31, 1990
750 December 31, 1991
750 December 31, 1992
750 December 31, 1993
750 December 31, 1994
250 December 31, 1995
11
<PAGE>
All shares shall be redeemed at the
redemption price per share of $1,000.00, plus an
amount per share equal to Unpaid Accrued Dividends
to and including each such Scheduled Redemption
Date. If any shares of the Series B Preferred
Stock remain unredeemed on December 31, 1995, or
on any Scheduled Redemption Date thereafter, all
such shares of Series B Preferred Stock shall be
redeemed on such date or on any later date when
and as there exists legally available funds
therefor.
(iii) Effect of Non-redemption. If
the Corporation shall fail to make any scheduled
redemption required by Paragraph (c)(ii) above
then until such scheduled redemption is made, the
Corporation shall not declare or pay any dividend,
or make any other distribution upon, or purchase
or redeem, any capital stock of the Corporation
ranking junior as to dividends, redemption or upon
liquidation to the Series B Preferred Stock.
(iv) Effect of Redemption. Unless
default be made in the payment in full of the
redemption price and any Unpaid Accrued Dividends,
dividends on the shares of Series B Preferred
Stock called for redemption shall cease to accrue
on the Optional Redemption Date or Scheduled
Redemption Date on which such shares are to be
redeemed; all rights of the holders of such shares
as stockholders of the Corporation by reason of
the ownership of such shares shall cease on such
Optional Redemption Date or Scheduled Redemption
Date, except the right to receive the amount
payable upon redemption of such shares on
presentation and surrender of the respective
certificates representing such shares; and after
such Optional Redemption Date or Scheduled
Redemption Date, such shares shall have the status
of authorized but unissued shares. The
Corporation will send written notice of its intent
to redeem shares of Series B Preferred Stock,
indicating the number of shares to be redeemed and
directions for proper tender of such shares by the
holder thereof.
(v) Receipt of Redemption Price.
At any time on or after an Optional Redemption
Date or Scheduled Redemption Date, the respective
holders of record of shares of Series B Preferred
Stock to be redeemed on such Optional Redemption
Date or Scheduled Redemption Date shall be
entitled, provided there exists legally available
funds for such purpose, to receive the redemption
price upon actual delivery to the Corporation of
certificates for the shares to be redeemed, such
certificates, if required by the Corporation, to
12
<PAGE>
be properly stamped for transfer and duly endorsed
in blank or accompanied by proper instruments of
assignment and transfer duly executed in blank.
(j) RIGHTS ON LIQUIDATION, DISSOLUTION, WINDING UP.
(i) Liquidation Payment. In the
event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the
holders of shares of the Series B Preferred Stock
then outstanding shall be subordinate to all
claims of the Corporation's creditors but
otherwise entitled to be paid out of the assets of
the Corporation available for distribution to its
stockholders, before any payment is made to the
holders of any class of capital stock of the
Corporation ranking junior upon liquidation to the
Series B Preferred Stock, an amount per share
equal to $1,000.00 plus all Unpaid Accrued
Dividends thereon to and including the date of
payment.
(ii) Proportionate Distribution.
In the event the assets of the Corporation
available for distribution to the holders of
shares of Series B Preferred Stock upon any
voluntary or involuntary liquidation, dissolution
or winding up of the Corporation are insufficient
to pay in full all amounts to which such holders
are entitled pursuant to Paragraph (d)(i),
proportionate distributive amounts shall be paid
on account of the shares of Series B Preferred
Stock, ratably, in proportion to the full
distributive amounts to which the holders of all
such shares are respectively entitled upon such
liquidation, dissolution or winding up.
(iii) Effect of Reorganization.
Neither the consolidation or merger of the
Corporation with or into any other company or
corporation or the lease or sale of all or
substantially all of the assets of the Corporation
nor the dissolution and liquidation of the
Corporation following a sale of all the assets of
the Corporation pursuant to a plan of liquidation
adopted under Section 337 of the Internal Revenue
Code of 1986, as such Section may be amended,
shall be deemed to be a liquidation, dissolution
or winding up of the affairs of the Corporation,
whether voluntary or otherwise within the meaning
of this Section.
(k) VOTING.
(i) Voting Rights. The shares of
the Series B Preferred Stock shall have all the
voting rights of the Voting Common Stock and
Voting Class A Common Stock of the Corporation,
13
<PAGE>
shall vote together as a class with the Voting
Common Stock and Voting Class A Common Stock of
the Corporation and shall have such other voting
rights as may be required by applicable law. Such
stock shall not have the right to vote as a class,
except as otherwise provided by law or herein.
Each share of Series B Preferred Stock shall be
entitled to one vote.
(ii) Default in Dividends or
Redemption. Whenever (A) Unpaid Accrued Dividends
equal or exceed the amount of dividends which
accrue in respect of two (2) Dividend Periods for
all Series B Preferred Stock then outstanding or
(B) the Corporation fails to make redemptions
under Paragraph (c)(ii) hereof for two (2)
consecutive redemption periods for all Series B
Preferred Stock then outstanding, then the number
of directors constituting the Board of Directors
of the Corporation shall be increased by one (1)
and the holders of the Series B Preferred Stock
shall have, in addition to any other voting
rights, the exclusive and special right, voting
separately as a class, to elect a person to fill
such newly created directorship. Whenever such
right of holders of the Series B Preferred Stock
shall have vested, it may be exercised initially
either at a special meeting of such holders called
as provided below, or at any annual meeting of
stockholders, and thereafter at annual meetings of
stockholders. The right of holders of shares of
the Series B Preferred Stock voting separately as
a class to elect one (1) member of the Board of
Directors as aforesaid shall continue until the
Corporation has paid the full amount of all Unpaid
Accrued Dividends or become current in making
redemptions under said Paragraph (c)(ii), as
applicable, at which time, the special right of
the holders of shares of the Series B Preferred
Stock so to vote separately as a class for the
election of one (1) director shall terminate,
subject to revesting in the event of each and
every subsequent occasion upon which either of
events (e)(ii)(A) or (e)(ii)(B) above shall occur.
At any time when special voting
powers shall have been vested in the holders of
the Series B Preferred Stock as provided in this
Paragraph (e)(ii), a proper officer of the
Corporation shall, upon the written request of the
holders of record of at least ten percent (10%) of
the number of shares of the Series B Preferred
Stock at the time outstanding and entitled to
vote, addressed to the Secretary of the
Corporation, call a special meeting of the holders
of shares of the Series B Preferred Stock for the
purpose of electing a director hereunder. Such
meeting shall be held at the earliest practicable
date at the principal office of the Corporation.
14
<PAGE>
If such meeting shall not be called by a proper
officer of the Corporation within twenty (20) days
after period service of said written request upon
the Secretary of the Corporation, then the holders
of record of at least ten percent (10%) of the
number of shares of the Series B Preferred Stock
at the time outstanding and entitled to vote,
regardless of series, may designate in writing one
of their numbers to call such meeting at the
expense of the Corporation, and such meeting may
be called by such person so designated upon the
notice required for annual meeting of stockholders
and shall be held at said principal office.
At any meeting held for the purpose
of electing directors at which the holders of
shares of the Series B Preferred Stock shall have
the special right, voting separately as a class,
to elect one (1) director as provided in this
Paragraph (e)(ii), the presence, in person or by
proxy, of the holders of fifty-one percent (51%)
of the number of shares of the Series B Preferred
Stock at the time outstanding and entitled to vote
shall be required to constitute quorum of such
class for the election of any director by the
holders of the Series B Preferred Stock as a
class, each share of Series B Preferred Stock
outstanding and entitled to vote for purposes only
of determining the presence of such quorum, as one
(1) share of Series B Preferred Stock.
During any period the holders of
Series B Preferred Stock have the right to vote as
a class for one (1) director as provided in this
Paragraph (e)(ii), the director so elected by the
holders and the Series B Preferred Stock shall
continue in office until termination of the right
of the holders of the Series B Preferred Stock to
vote as a class for one (1) director and such
director may not otherwise be removed by the Board
of Directors except for cause. If the holders of
Series B Preferred Stock elect a director pursuant
hereto, they may remove such director at any time
upon the same method.
(l) RANK OF SERIES B PREFERRED STOCK.
The shares of the Series B
Preferred Stock shall rank prior as to dividends,
redemption and upon liquidation to the shares of
Voting Common Stock, Voting Class A Common Stock,
any other shares of Series B Preferred Stock
issued after the date of the Statement of
Resolution dated October 1, 1985 or any other
shares of any other series or issue of Preferred
or Common Stock or any other form of equity
securities of the Corporation.
15
<PAGE>
(m) FRACTIONAL SHARES.
The Series B Preferred Stock may be
issued in fractions of a share equal to one-tenth
(1/10) share or any integral multiple thereof.
Each fractional share of Series B Preferred Stock
issued shall have a corresponding fraction of the
voting powers, preferences and relative,
participating, optional or other special rights,
and the qualifications, limitations or
restrictions thereof, attributable to a full share
of Series B Preferred Stock.
(n) RETIREMENT OF REDEEMED SHARES.
Shares of the Series B Preferred
Stock which have been redeemed shall have the
status of authorized and unissued Preferred Stock
of the Corporation.
SEVENTH: The number of directors of this Corporation shall
be specified in the Bylaws, and such number may from time to time
be increased or decreased under the Bylaws or any amendment, or
change thereof, provided the number of directors of the
Corporation shall not be less than three. Directors and officers
need not be shareholders. If the office of any director or
directors becomes vacant by reason of death, resignation,
retirement, disqualification, removal from office or otherwise,
the remaining directors, though less than a quorum, shall choose
a successor or successors who shall hold office until the
expiration of the term of the director or directors so replaced
and until a successor or successors have been duly elected.
EIGHTH: In furtherance and not in limitation of the powers
conferred by the laws of the State of Oklahoma, the Board of
Directors of this Corporation is expressly authorized:
To make, alter, amend, add to, revise, or repeal the Bylaws
in any manner not contrary to the laws of the State of Oklahoma;
To authorize and cause its officers to execute mortgages and
liens upon the property, both real and personal, and upon the
franchise of this Corporation;
To designate, by resolution passed by a majority of the
whole Board, one or more committees, each to consist of one or
more directors, which committees, to the extent provided in such
resolution or in the Bylaws of the Corporation, shall have and
may exercise any or all of the powers of the Board of Directors
in the management of the business and affairs of this Corporation
and shall have power to authorize the seal of this Corporation to
be affixed by its officers to all papers which may require it;
16
<PAGE>
To grant rights to convert any of the securities issued by
this Corporation into shares of any class or classes of stock and
options to purchase or subscribe for shares of any class or
classes upon such terms and conditions as may be determined by
the Board of Directors;
To provide and establish a plan for the subscription and
issuance of any of its authorized and unissued shares, or sale of
any treasury shares held by it, to the employees of the
Corporation or to the employees of any subsidiary corporation, or
to a trustee upon their behalf, upon such terms and conditions as
may be determined by the Board of Directors.
A majority of the stock issued and outstanding of this
Corporation having voting power may in the Bylaws confer power
additional to the foregoing upon the directors, in addition to
the powers and authorities expressly conferred upon them by law.
NINTH: A director of this Corporation shall not be
personally liable to this Corporation or its shareholders for
monetary damages for breach of fiduciary duty as a director of
this Corporation, except for liability (A) for any breach of the
director's duty of loyalty to this Corporation or its
shareholders, (B) for acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of
law, (C) for matters covered by Section 1053 of the Oklahoma
General Corporation Act or (D) for any transaction from which the
director derived an improper personal benefit. If the Oklahoma
General Corporation Act hereafter is amended to authorize the
further elimination or limitation of the liability of directors,
then the liability of a director of this Corporation, in addition
to the limitation of personal liability provided herein, shall be
limited to the fullest extent permitted by the amended Oklahoma
General Corporation Act. Any repeal or modification of this
paragraph by the shareholders of this Corporation shall be
prospective only, and shall not adversely affect any limitation
on the personal liability of a director of this Corporation
existing at the time of such repeal or modification."
TENTH: The shareholders of the Corporation have duly
adopted this Amended and Restated Certificate of Incorporation,
among other things, for the purpose of definitively providing
that the provisions of the Oklahoma General Corporation Act will
apply to the Corporation and its shareholders to the fullest
extent, and that from and after the date of filing of this
Amended and Restated Certificate of Incorporation, the provisions
of the Oklahoma Business Corporation Act and any and all rights,
privileges and immunities thereunder shall be of no further force
and effect with regard to the Corporation or its shareholders.
ELEVENTH: Whenever a compromise or arrangement is proposed
between the Corporation and its creditors or any class of them
and/or between the Corporation and its shareholders or any class
of them, any court of equitable jurisdiction within the State of
Oklahoma, on the application in a summary way of the Corporation
17
<PAGE>
or any creditor or shareholder thereof or on the application of
any receiver or receivers appointed for the Corporation under the
provisions of Section 1106 of the Oklahoma General Corporation
Act or on the application of trustees in dissolution or of any
receiver or receivers appointed for the Corporation under the
provisions of Section 1100 of the Oklahoma General Corporation
Act, may order a meeting of the creditors or class of creditors,
and/or of the shareholders or class of shareholders of the
Corporation, as the case may be, to be summoned in such manner as
the court directs. If a majority in number representing three-
fourths (3/4) in value of the creditors or class of creditors,
and/or of the shareholders or class of shareholders of the
Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a
consequence of such compromise or arrangement, the compromise or
arrangement and the reorganization, if sanctioned by the court to
which the application has been made, shall be binding on all the
creditors or class of creditors, and/or on all the shareholders
or class of shareholders, of the Corporation, as the case may be,
and also on the Corporation.
TWELFTH: The Corporation shall indemnify to the full extent
authorized by law any person made or threatened to be made a
party to an action, suit or proceeding, whether criminal, civil,
administrative or investigative, by reason of the fact that he,
his testator or intestate is or was an officer or director of the
Corporation or is or was serving, at the request of the
Corporation, as an officer or director of another corporation,
partnership, joint venture, trust or other enterprise.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate to be signed by its Chief Executive Officer and
attested by its Secretary, this 10th day of February, 1992.
CMI CORPORATION, an Oklahoma
corporation
By:/s/George William Swisher, Jr.,
-------------------------------
George William Swisher, Jr.,
Chief Executive Officer and
Chairman of the Board
ATTEST:
/s/Thane Swisher
------------------------
Thane Swisher, Secretary
18
<PAGE>
NEW
AMENDED CERTIFICATE OF INCORPORATION
OF
CMI CORPORATION
TO THE SECRETARY OF STATE OF THE STATE OF OKLAHOMA, 101 State
Capitol Building, Oklahoma City, Oklahoma 73105:
The undersigned Oklahoma corporation, for the purpose of
amending its Certificate of Incorporation as provided by Section
1077 of the Oklahoma General Corporation Act, hereby certifies:
ARTICLE SIXTH
As amended, Article Sixth shall read as follows:
SIXTH: The preferences, qualifications, limitations,
restrictions, and other special or relative attributes of the
classes of shares of stock of this Corporation are as follows:
(A) Each share of Voting Common Stock and Voting Class A
Common Stock shall be entitled to one vote per share on all
matters to be submitted to the shareholders of the Corporation.
The shareholders of Voting Common Stock and Voting Class A Common
Stock shall vote together as a single class.
(B) The Preferred Stock may be issued from time-to-time in
one or more series, each of said series to have such
designations, preferences and relative, participating, optional,
voting or other special rights and qualifications, and
limitations or restrictions thereof as are stated and expressed
in a resolution or resolutions providing for the issue of such
series adopted by the Board of Directors as hereinafter provided.
(C) Authority is hereby expressly granted to the Board of
Directors, subject to the provisions of this Article Sixth, to
authorize one or more series of Preferred Stock and, with respect
to each series, to fix by resolution or resolutions providing for
the issue of such series:
(a) The number of shares to constitute such series and the
distinctive designation thereof;
(b) The dividend rate of such series, if any;
19
<PAGE>
(c) Whether or not dividends on the shares of such series
shall be cumulative and, if cumulative, the date or dates from
which dividends shall accumulate;
(d) Whether or not the shares of such series shall be
redeemable and, if redeemable, the premium, if any, over and
above the par value thereof and any dividends accrued thereon
which the shares of such series shall be entitled to receive upon
the redemption thereof;
(e) Whether or not the shares of such series will be
subject to the creation of retirement or sinking funds to be
applied to the purchase or redemption of such shares for
retirement and, if such retirement or sinking fund or funds be
established, the annual amount thereof and the terms and
provisions relative to the operation thereof;
(f) Whether or not the shares of such series shall be
convertible into, or exchangeable for, shares of any other class
or classes or of any other series of the same or any other class
or classes of the stock of the Corporation and the conversion
price or prices or the rate or rates on which such exchange may
be made, with such adjustments, if any, as shall be stated,
expressed or provided in such resolution or resolutions;
(g) The amount of premium, if any, over and above the par
value thereof and any dividends accrued thereon, which the shares
of such series shall be entitled to receive upon the voluntary or
involuntary liquidation, dissolution or winding up of the
Corporation;
(h) The voting power, if any, of the shares of such series;
(i) The rights of the shares of such series in the event of
any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation; and
(j) Such other special rights, qualifications, limitations
or restrictions as shall be stated, expressed or provided in such
resolution or resolutions.
(D) Shares of Voting Common Stock and Voting Class A Common
Stock shall be identical in all respects and, subject to the
prior rights, if any, of any holders of Preferred Stock that may
be outstanding from time to time, shall share equally on a per
20
<PAGE>
share basis in any dividends declared and paid by the Corporation
or in the proceeds of any liquidation, dissolution or winding up
of the Corporation, except that no share of Voting Class A Common
Stock shall be transferable or assignable in any respect, either
of record or beneficially, unless such transfer or assignment is
permitted under the following provisions:
(a) Until the earliest of January 1, 2006, such date
as the Corporation shall no longer have any unutilized
federal income tax net operating loss carryovers or capital
loss carryovers, whether or not such carryovers are
currently in existence (the "Carryforwards") or such date
after which Section 382 of the Internal Revenue Code of
1986, as amended (the "Code"), is repealed or so
substantially modified such that, in the opinion of counsel
to the Corporation, the restrictions on transfer described
herein are no longer necessary to accomplish their intended
purpose: (1) any attempted sale, transfer, assignment or
other disposition (including the granting of any option
(within the meaning of section 382 of the Code and the
Income Tax Regulations as now in effect or hereafter
promulgated pursuant thereto (the "Regulations")) (any such
option being referred to hereinafter as an "Option") or
entering into of any agreement for the sale, transfer or
other disposition), whether voluntary or involuntary,
whether of record or beneficially and whether by operation
of law or otherwise (a "Transfer"), of any share or shares
of the Voting Class A Common Stock of the Corporation or of
any Option to acquire such stock, to any person or entity or
group of persons or entities acting in concert (a
"Transferee") who or which owns or owned, directly,
indirectly or by application of the constructive ownership
rules set forth in Sections 382 and 318 of the Code and the
Regulations, or in any other manner representing "ownership"
under any circumstances for purposes of section 382 of the
Code and the Regulations (collectively, "Owns" or "Owned"),
at any time during the 3-year period ending on the day of
the Transfer, an aggregate number of shares of the
Corporation's stock (taking into account for this purpose
all interests in the Corporation that are treated as stock
for purposes of Section 382(g)(1) of the Code and no other
interests in the Corporation (any interest that is so
treated being referred to hereinafter as "Stock")) having a
fair market value equal to or greater than 4.75 percent of
the fair market value of the Corporation's then outstanding
Stock shall be void ab initio insofar as it purports to
transfer ownership to such Transferee of any shares of
Voting Class A Common Stock or any Option to acquire Voting
Class A Common Stock and (2) any attempted Transfer of any
share or shares of the Voting Class A Common Stock of the
Corporation or of any Option to acquire Voting Class A
Common Stock to any Transferee not described in clause (1)
hereof who or which would Own, as a result of the Transfer
or as a result of a subsequent Transfer of any share or
shares of the Corporation's Stock or of any Option to
acquire the Corporation's Stock, an aggregate number of
shares of the Corporation's Stock, having a fair market
value equal to or greater than 4.75 percent of the aggregate
fair market value of all of the Corporation's Stock then
outstanding, shall, as to the number of shares representing
such excess over 4.75 percent, be void ab initio insofar as
it purports to transfer ownership to such Transferee of any
21
<PAGE>
shares of Voting Class A Common Stock or any Option to
acquire Voting Class A Common Stock; provided, however, that
nothing contained in this Section (D) shall preclude the
settlement of any transaction entered into through the
facilities of the New York Stock Exchange, Inc. or any other
stock exchange on which the Voting Class A Common Stock is
traded.
(b) The restrictions contained in paragraph (a) of
this Section (D) of this Article Sixth have been included
herein for the purpose of reducing the risk of occurrence of
an "ownership change" within the meaning of Section 382(g)
of the Code and the Regulations that would result in the
disallowance or limitation of the Corporation's utilization
of the Carryforwards and to maintain the tax advantage of
the Corporation associated with the Carryforwards.
(c) Neither clause (1) nor clause (2) of paragraph (a)
of this Section (D) of this Article Sixth shall restrict any
Transfer of Voting Class A Common Stock of the Corporation
if (1) the prior written approval of the Board of Directors
of the Corporation (based on a majority vote of the Board of
Directors) shall have been obtained with respect to such
Transfer and (2) if so requested by the Board of Directors,
counsel to the Corporation shall have delivered its opinion
that such Transfer would not result in an "ownership change"
within the meaning of Section 382(g) of the Code and the
Regulations that would result in the elimination or
limitation of the Corporation's utilization of the
Carryforwards. The Board of Directors shall have the
authority, in its sole discretion, to adopt procedures for
the orderly and effective administration and implementation
of this Section (D) and, in deciding whether to approve any
proposed Transfer of Voting Class A Common Stock of the
Corporation, the Corporation acting through any officer may
request all relevant information, as well as an opinion of
counsel in form and substance reasonably satisfactory to the
Board of Directors. No employee or agent of the Corporation
shall be permitted to record any attempted or purported
Transfer of Voting Class A Common Stock of the Corporation
made in violation of this Article Sixth and no Transferee of
Voting Class A Common Stock of the Corporation effected in
violation of this Article Sixth shall be deemed to have
acquired ownership of Voting Class A Common Stock for any
purpose. Such intended Transferee shall not be entitled to
any rights as a shareholder of the Corporation with respect
to such Voting Class A Common Stock including, but not
limited to, the right to vote such Voting Class A Common
Stock or to receive any distributions in respect thereof,
whether as dividends or in liquidation.
(d) If the procedures adopted by the Board of
Directors so require, the Corporation's transfer agent shall
not issue any certificates transferring, assigning or
disposing of or purporting to transfer, assign or otherwise
dispose of legal ownership of any shares of Voting Class A
Common Stock unless the transfer agent receives from the
proposed Transferee, in addition to any other information
requested by it, a certificate signed under penalty of
perjury attesting to the fact that the Transferee does not,
22
<PAGE>
and will not become as a result of the proposed Transfer,
assignment or other disposition, Own an aggregate number of
shares of the Corporation's outstanding Stock having a fair
market value equal to or greater than 4.75 percent of the
aggregate fair market value of all of the Corporation's
outstanding Stock. If at any time the Corporation's
transfer agent receives a request to make a change in record
ownership of shares of Voting Class A Common Stock of the
Corporation which, if effected, would appear to the transfer
agent on the basis of information in its possession to
constitute a violation of this Article Sixth, then, prior to
registering such change in ownership on the books of the
Corporation, the transfer agent shall notify the
Corporation. If the Board of Directors or an officer of the
Corporation designated by the Board of Directors determines
that the proposed change in ownership would violate this
Article Sixth, then the Corporation shall so advise the
transfer agent and the transfer agent shall not make such
change in ownership on the books of the Corporation.
(e) Unless approval of the Board of Directors is
obtained as provided in Paragraph (c) above, any attempted
Transfer of shares of Voting Class A Common Stock of the
Corporation or any Option to acquire shares of Voting Class
A Common Stock of the Corporation in excess of the shares
that could be Transferred to the Transferee without
restriction under paragraph (a) above shall not be effective
to Transfer ownership of such excess shares or Options (the
"Prohibited Shares") to the purported acquiror thereof (the
"Purported Acquiror"), who shall not be entitled to any
rights as a shareholder of the Corporation with respect to
the Prohibited Shares (including, without limitation, the
right to vote or to receive dividends with respect thereto).
All rights with respect to the Prohibited Shares shall be
deemed to be held by an agent designated by the Corporation
from time to time (the "Agent") until such time as the
Prohibited Shares are resold as set forth in subparagraph
(1) or subparagraph (2) below. The Purported Acquiror, by
acquiring ownership of shares of Voting Class A Common Stock
of the Corporation that are not Prohibited Shares, shall be
deemed to have consented to all of the provisions of this
Section (D) and to have agreed to act as provided in the
following subparagraph (1).
(1) Upon demand by the Corporation, the
Purported Acquiror shall transfer any certificate, or
other evidence of purported ownership of the Prohibited
Shares within the Purported Acquiror's possession or
control, along with any dividends or other
distributions paid by the Corporation with respect to
the Prohibited Shares that were received by the
Purported Acquiror (the "Prohibited Distributions"), to
the Agent. If the Purported Acquiror has sold the
Prohibited Shares to an unrelated party in any arm's-
length transaction after purportedly acquiring them,
the Purported Acquiror shall be deemed to have sold the
Prohibited Shares on behalf of the Agent and, in lieu
of transferring the Prohibited Shares and Prohibited
Distributions to the Agent, shall transfer to the Agent
the Prohibited Distributions and the proceeds of such
23
<PAGE>
sale (the "Resale Proceeds") except to the extent that
the Agent grants written permission to the Purported
Acquiror to retain a portion of the Resale Proceeds not
exceeding the amount that would have been payable by
the Agent to the Purported Acquiror pursuant to the
following subparagraph (2) if the Prohibited Shares had
been sold by the Agent rather than by the Purported
Acquiror. Any purported transfer of the Prohibited
Shares by the Purported Acquiror other than a transfer
described in one of the two preceding sentences shall
not be effective to transfer any ownership of the
Prohibited Shares.
(2) The Agent shall sell in an arm's-length
transaction (through the stock exchange, if any, on
which the Voting Class A Common Stock is traded, if
possible) any Prohibited Shares transferred to the
Agent by the Purported Acquiror, and the proceeds of
such sale (the "Sales Proceeds"), or the Resale
Proceeds, if applicable, and any Prohibited
Distributions shall be distributed as follows: (i)
first, to the Agent and/or the Corporation for any
costs incurred in respect of their efforts to enforce
the provisions of this Section (D) of this Article
Sixth, (ii) second, with respect to the Sales Proceeds
(or Resale Proceeds) only, to the Purported Acquiror,
in an amount up to the purported purchase price paid or
value of consideration surrendered by the Purported
Acquiror for the Prohibited Shares (or, where the
purported Transfer of the Prohibited Shares to the
Purported Acquiror was by gift, inheritance, or any
similar purported Transfer, the fair market value of
the Prohibited Shares at the time of such purported
Transfer), and (iii) the remainder, if any, to any
entity designated by the Corporation that is described
in Section 501(c)(3) of the Code. The recourse of any
Purported Acquiror in respect of any Prohibited Shares
shall be limited to the amount specified in clause (ii)
of the preceding sentence. With respect to the
application of clause (i) of the second preceding
sentence, any Prohibited Distributions will first be
applied to reimburse the Agent and/or the Corporation
for any costs incurred in respect of their efforts to
enforce the provisions of this Section (D) of this
Article Sixth prior to application of the Sales
Proceeds or the Resale Proceeds, as the case may be.
Except as otherwise provided herein, in no event shall
the proceeds of any sale of Prohibited Shares pursuant
to this Article Sixth inure to the benefit of the
Corporation or the Agent.
(3) Within thirty (30) business days of
learning of a purported Transfer of Prohibited Shares
to a Purported Acquiror, the Corporation through its
Secretary shall demand that the Purported Acquiror
surrender to the Agent the certificates representing
the Prohibited Shares, or any Resale Proceeds, and any
Prohibited Distributions, and if such surrender is not
made by the Purported Acquiror within thirty (30)
business days from the date of such demand, the
24
<PAGE>
Corporation shall institute legal proceedings to compel
such transfer; provided, however, that nothing in this
paragraph shall preclude the Corporation in its
discretion from immediately bringing legal proceedings
without a prior demand, and also provided that failure
of the Corporation to act within the time periods set
out in this paragraph shall not constitute a waiver of
any right of the Corporation to compel any transfer
required by this paragraph.
(4) Upon a determination by the Board of
Directors that there has been or is threatened a
purported Transfer of Prohibited Shares to a Purported
Acquiror, the Board of Directors may take such action
in addition to any action required by the preceding
subparagraph as it deems advisable to give effect to
the provisions of this Section (D), including, without
limitation, refusing to give effect on the books of the
Corporation to such purported Transfer of the
Prohibited Shares or instituting proceedings to enjoin
such purported Transfer of the Prohibited Shares.
(f) Until the earliest of January 1, 2006, such date
as the Corporation shall no longer have any unutilized
Carryforwards or such date after which Section 382 of the
Code is repealed or so substantially modified such that, in
the opinion of counsel to the Corporation, the restrictions
on transfer described in this Section (D) of this Article
Sixth are no longer necessary to accomplish their intended
purpose, all certificates representing shares of Voting
Class A Common Stock shall conspicuously bear the following
legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE
ARE SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFERS SET
FORTH IN ARTICLE SIXTH OF THE CORPORATION'S CERTIFICATE
OF INCORPORATION, THE TEXT OF WHICH IS SUMMARIZED ON
THE REVERSE SIDE OF THIS CERTIFICATE. ANY ATTEMPT TO
ACQUIRE VOTING CLASS A COMMON STOCK OF THE CORPORATION
IN VIOLATION OF SUCH RESTRICTIONS SHALL BE NULL AND
VOID AND MAY RESULT IN FINANCIAL LOSS TO THE PERSON OR
ENTITY ATTEMPTING SUCH ACQUISITION."
(E) Pursuant to the authority expressly granted to and
vested in the Board of Directors of the Corporation, the Board of
Directors has created a series of Preferred Stock of the
Corporation to consist of 4,800 shares and hereby restates the
voting powers, designations, rights, preferences, privileges and
restrictions of the shares of such series as follows:
25
<PAGE>
(k) DESIGNATION.
The designation of the series of
Preferred Stock created by this Resolution shall
be "7% Preferred Stock, Series B ($1.00 Par
Value)" (hereinafter called the "Series B
Preferred Stock").
(l) DIVIDENDS.
(i) Accrual. Dividends shall
accrue on each share of Series B Preferred Stock
at the rate of $70.00 per share per annum from the
date of issuance of such share (whether or not
they have been declared and whether or not there
are earnings or funds of the Corporation available
for the payment of such dividends).
(ii) Cumulation. Dividends upon
each share of Series B Preferred Stock shall be
cumulative. Each January 15th and July 15th which
shall occur after the date of issuance of each
share shall be deemed a "Cumulation Date". Each
semi-annual period on a Cumulation Date shall be
deemed a "Dividend Period".
(iii) Full Cumulative Dividends.
The term "Full Cumulative Dividends" shall mean
(whether or not they have been declared and
whether or not there are earnings or funds of the
Corporation available for the payment of such
dividends) that amount which is equal to dividends
at the full rate fixed for each share of Series B
Preferred Stock provided in this Paragraph (b) for
the period of time elapsed from the date of
issuance of such share to the date as to which
Full Cumulative Dividends are being computed
(including an amount for any fraction of a
Dividend Period equal to the product derived by
multiplying the dividend for the full period by
the fraction of the period elapsed to the time as
of which the computation shall be made).
(iv) Payments. The holders of
shares of the Series B Preferred Stock shall be
entitled to receive in cash the dividends (on a
pro rata basis if for less than a Dividend Period)
accruing on the Series B Preferred Stock each
January 15th and July 15th that any shares of
Series B Preferred Stock shall be outstanding.
(v) Unpaid Accrued Dividends. The
term "Unpaid Accrued Dividends" shall mean Full
Cumulative Dividends to the date as of which
Unpaid Accrued Dividends are to be computed upon
the relevant shares of Series B Preferred Stock.
Unpaid Accrued Dividends shall not bear interest.
26
<PAGE>
(vi) Dividend/Redemption
Limitations. Prior to the first Cumulation Date,
no dividend shall be paid nor shall any other
distribution, purchase or redemption be made of or
upon any stock ranking as to dividends or upon
liquidation junior to the Series B Preferred
Stock. If on the first Cumulation Date Full
Cumulative Dividends upon the Series B Preferred
Stock to such Cumulation Date shall not have been
paid, or declared and a sum sufficient for payment
thereof set apart, or if at any time after the
first Cumulation Date Full Cumulative Dividends on
Series B Preferred Stock to the last Cumulation
Date shall not have been paid, or declared and a
sum sufficient for payment thereof set apart, the
amount of the deficiency of such dividends shall
be fully paid, but without interest, before any
dividend shall be declared or paid or any other
distribution ordered or made upon, or any other
purchase or redemption made of, any stock ranking
as to dividends or upon liquidation junior to the
Series B Preferred Stock. All dividends declared
upon the shares of the Series B Preferred Stock
shall be declared pro rata.
(m) REDEMPTION.
The shares of the Series B
Preferred Stock shall be subject to redemption as
follows:
(i) Optional Redemption. Subject
to the succeeding provisions of this Paragraph
(c)(i), the shares of the Series B Preferred Stock
may be redeemed at the option of the Corporation,
in whole or in part, at any time or from time to
time, upon not less than 30 days' prior notice to
the holders of record of shares of the Series B
Preferred Stock to be so redeemed, sent by first
class mail, postage prepaid, to each registered
holder of shares of the Series B Preferred Stock
at such holder's address appearing on the Series B
Preferred Stock register maintained by the
Corporation, at the redemption price per share of
$1,000.00, plus in each case an amount equal to
Unpaid Accrued Dividends to and including the date
fixed for redemption of such shares (hereinafter
called an "Optional Redemption Date"). If less
than all shares of the Series B Preferred Stock
are to be redeemed pursuant to this Paragraph
(c)(i), the shares to be redeemed shall be
selected pro rata so that there shall be redeemed
from each registered holder of such shares that
number of whole shares, equal to or rounded, from
that number of shares which bears the same ratio
to the total number of shares of such Series B
27
<PAGE>
Preferred Stock held by such holder as the total
number of shares to be redeemed bears to the total
number of shares of the Series B Preferred Stock
at the time outstanding.
(ii) Scheduled Redemption. The
Corporation will redeem out of funds legally
available for such purpose, on each December 31st
of each year commencing December 31, 1988, for
each of which is hereinafter called a "Scheduled
Redemption Date", the following number of shares:
300 December 31, 1988
500 December 31, 1989
750 December 31, 1990
750 December 31, 1991
750 December 31, 1992
750 December 31, 1993
750 December 31, 1994
250 December 31, 1995
All shares shall be redeemed at the
redemption price per share of $1,000.00, plus an
amount per share equal to Unpaid Accrued Dividends
to and including each such Scheduled Redemption
Date. If any shares of the Series B Preferred
Stock remain unredeemed on December 31, 1995, or
on any Scheduled Redemption Date thereafter, all
such shares of Series B Preferred Stock shall be
redeemed on such date or on any later date when
and as there exists legally available funds
therefor.
(iii) Effect of Non-redemption. If
the Corporation shall fail to make any scheduled
redemption required by Paragraph (c)(ii) above
then until such scheduled redemption is made, the
Corporation shall not declare or pay any dividend,
or make any other distribution upon, or purchase
or redeem, any capital stock of the Corporation
ranking junior as to dividends, redemption or upon
liquidation to the Series B Preferred Stock.
28
<PAGE>
(iv) Effect of Redemption. Unless
default be made in the payment in full of the
redemption price and any Unpaid Accrued Dividends,
dividends on the shares of Series B Preferred
Stock called for redemption shall cease to accrue
on the Optional Redemption Date or Scheduled
Redemption Date on which such shares are to be
redeemed; all rights of the holders of such shares
as stockholders of the Corporation by reason of
the ownership of such shares shall cease on such
Optional Redemption Date or Scheduled Redemption
Date, except the right to receive the amount
payable upon redemption of such shares on
presentation and surrender of the respective
certificates representing such shares; and after
such Optional Redemption Date or Scheduled
Redemption Date, such shares shall have the status
of authorized but unissued shares. The
Corporation will send written notice of its intent
to redeem shares of Series B Preferred Stock,
indicating the number of shares to be redeemed and
directions for proper tender of such shares by the
holder thereof.
(v) Receipt of Redemption Price.
At any time on or after an Optional Redemption
Date or Scheduled Redemption Date, the respective
holders of record of shares of Series B Preferred
Stock to be redeemed on such Optional Redemption
Date or Scheduled Redemption Date shall be
entitled, provided there exists legally available
funds for such purpose, to receive the redemption
price upon actual delivery to the Corporation of
certificates for the shares to be redeemed, such
certificates, if required by the Corporation, to
be properly stamped for transfer and duly endorsed
in blank or accompanied by proper instruments of
assignment and transfer duly executed in blank.
(n) RIGHTS ON LIQUIDATION, DISSOLUTION, WINDING UP.
(i) Liquidation Payment. In the
event of any voluntary or involuntary liquidation,
dissolution or winding up of the Corporation, the
holders of shares of the Series B Preferred Stock
then outstanding shall be subordinate to all
claims of the Corporation's creditors but
otherwise entitled to be paid out of the assets of
the Corporation available for distribution to its
stockholders, before any payment is made to the
holders of any class of capital stock of the
Corporation ranking junior upon liquidation to the
Series B Preferred Stock, an amount per share
equal to $1,000.00 plus all Unpaid Accrued
Dividends thereon to and including the date of
payment.
29
<PAGE>
(ii) Proportionate Distribution.
In the event the assets of the Corporation
available for distribution to the holders of
shares of Series B Preferred Stock upon any
voluntary or involuntary liquidation, dissolution
or winding up of the Corporation are insufficient
to pay in full all amounts to which such holders
are entitled pursuant to Paragraph (d)(i),
proportionate distributive amounts shall be paid
on account of the shares of Series B Preferred
Stock, ratably, in proportion to the full
distributive amounts to which the holders of all
such shares are respectively entitled upon such
liquidation, dissolution or winding up.
(iii) Effect of Reorganization.
Neither the consolidation or merger of the
Corporation with or into any other company or
corporation or the lease or sale of all or
substantially all of the assets of the Corporation
nor the dissolution and liquidation of the
Corporation following a sale of all the assets of
the Corporation pursuant to a plan of liquidation
adopted under Section 337 of the Internal Revenue
Code of 1986, as such Section may be amended,
shall be deemed to be a liquidation, dissolution
or winding up of the affairs of the Corporation,
whether voluntary or otherwise within the meaning
of this Section.
(o) VOTING.
(i) Voting Rights. The shares of
the Series B Preferred Stock shall have all the
voting rights of the Voting Common Stock and
Voting Class A Common Stock of the Corporation,
shall vote together as a class with the Voting
Common Stock and Voting Class A Common Stock of
the Corporation and shall have such other voting
rights as may be required by applicable law. Such
stock shall not have the right to vote as a class,
except as otherwise provided by law or herein.
Each share of Series B Preferred Stock shall be
entitled to one vote.
(ii) Default in Dividends or
Redemption. Whenever (A) Unpaid Accrued Dividends
equal or exceed the amount of dividends which
accrue in respect of two (2) Dividend Periods for
all Series B Preferred Stock then outstanding or
(B) the Corporation fails to make redemptions
under Paragraph (c)(ii) hereof for two (2)
consecutive redemption periods for all Series B
Preferred Stock then outstanding, then the number
of directors constituting the Board of Directors
30
<PAGE>
of the Corporation shall be increased by one (1)
and the holders of the Series B Preferred Stock
shall have, in addition to any other voting
rights, the exclusive and special right, voting
separately as a class, to elect a person to fill
such newly created directorship. Whenever such
right of holders of the Series B Preferred Stock
shall have vested, it may be exercised initially
either at a special meeting of such holders called
as provided below, or at any annual meeting of
stockholders, and thereafter at annual meetings of
stockholders. The right of holders of shares of
the Series B Preferred Stock voting separately as
a class to elect one (1) member of the Board of
Directors as aforesaid shall continue until the
Corporation has paid the full amount of all Unpaid
Accrued Dividends or become current in making
redemptions under said Paragraph (c)(ii), as
applicable, at which time, the special right of
the holders of shares of the Series B Preferred
Stock so to vote separately as a class for the
election of one (1) director shall terminate,
subject to revesting in the event of each and
every subsequent occasion upon which either of
events (e)(ii)(A) or (e)(ii)(B) above shall occur.
At any time when special voting
powers shall have been vested in the holders of
the Series B Preferred Stock as provided in this
Paragraph (e)(ii), a proper officer of the
Corporation shall, upon the written request of the
holders of record of at least ten percent (10%) of
the number of shares of the Series B Preferred
Stock at the time outstanding and entitled to
vote, addressed to the Secretary of the
Corporation, call a special meeting of the holders
of shares of the Series B Preferred Stock for the
purpose of electing a director hereunder. Such
meeting shall be held at the earliest practicable
date at the principal office of the Corporation.
If such meeting shall not be called by a proper
officer of the Corporation within twenty (20) days
after period service of said written request upon
the Secretary of the Corporation, then the holders
of record of at least ten percent (10%) of the
number of shares of the Series B Preferred Stock
at the time outstanding and entitled to vote,
regardless of series, may designate in writing one
of their numbers to call such meeting at the
expense of the Corporation, and such meeting may
be called by such person so designated upon the
notice required for annual meeting of stockholders
and shall be held at said principal office.
At any meeting held for the purpose
of electing directors at which the holders of
shares of the Series B Preferred Stock shall have
the special right, voting separately as a class,
to elect one (1) director as provided in this
Paragraph (e)(ii), the presence, in person or by
proxy, of the holders of fifty-one percent (51%)
of the number of shares of the Series B Preferred
31
<PAGE>
Stock at the time outstanding and entitled to vote
shall be required to constitute quorum of such
class for the election of any director by the
holders of the Series B Preferred Stock as a
class, each share of Series B Preferred Stock
outstanding and entitled to vote for purposes only
of determining the presence of such quorum, as one
(1) share of Series B Preferred Stock.
During any period the holders of
Series B Preferred Stock have the right to vote as
a class for one (1) director as provided in this
Paragraph (e)(ii), the director so elected by the
holders and the Series B Preferred Stock shall
continue in office until termination of the right
of the holders of the Series B Preferred Stock to
vote as a class for one (1) director and such
director may not otherwise be removed by the Board
of Directors except for cause. If the holders of
Series B Preferred Stock elect a director pursuant
hereto, they may remove such director at any time
upon the same method.
(p) RANK OF SERIES B PREFERRED STOCK.
The shares of the Series B
Preferred Stock shall rank prior as to dividends,
redemption and upon liquidation to the shares of
Voting Common Stock, Voting Class A Common Stock,
any other shares of Series B Preferred Stock
issued after the date of the Statement of
Resolution dated October 1, 1985 or any other
shares of any other series or issue of Preferred
or Common Stock or any other form of equity
securities of the Corporation.
(q) FRACTIONAL SHARES.
The Series B Preferred Stock may be
issued in fractions of a share equal to one-tenth
(1/10) share or any integral multiple thereof.
Each fractional share of Series B Preferred Stock
issued shall have a corresponding fraction of the
voting powers, preferences and relative,
participating, optional or other special rights,
and the qualifications, limitations or
restrictions thereof, attributable to a full share
of Series B Preferred Stock.
(r) RETIREMENT OF REDEEMED SHARES.
Shares of the Series B Preferred
Stock which have been redeemed shall have the
status of authorized and unissued Preferred Stock
of the Corporation.
32
<PAGE>
ALL OTHER ARTICLES
No change, as filed.
That, at a meeting of the Board of Directors, a resolution
was duly adopted setting forth the foregoing proposed amendment
to the Certificate of Incorporation of the corporation, declaring
said amendment to be advisable and calling for the submission of
a proposal to the shareholders of the corporation to amend
Article Sixth of the Certificate of Incorporation.
Pursuant to the resolution of its Board of Directors, a
meeting of the shareholders of the corporation was duly called
and held, at which meeting a majority of the outstanding stock
entitled to vote thereon, and a majority of the outstanding stock
of each class entitled to vote thereon as a class, was voted in
favor of the amendment.
SUCH AMENDMENT WAS DULY ADOPTED IN ACCORDANCE WITH SECTION
1077 OF THE OKLAHOMA GENERAL CORPORATION ACT.
IN WITNESS WHEREOF, the undersigned has caused this
Certificate to be signed by its Chief Executive Officer and
attested by its Secretary this 8th day of May, 1995.
CMI CORPORATION, an Oklahoma
corporation
By:/s/George William Swisher, Jr.,
-------------------------------
George William Swisher, Jr.,
Chief Executive Officer and
Chairman of the Board
ATTEST:
/s/Thane Swisher
------------------------
Thane Swisher, Secretary
33
<PAGE>
EXHIBIT (11)
CMI CORPORATION
STATEMENTS RE COMPUTATION PER SHARE EARNINGS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------ ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE
Net income per statement of operations $14,804 18,337 $17,176 20,555
Deduct dividends on preferred stock $ 24 - $ 181 -
Deduct accretion of preferred stock
discount $ 3 8 $ 5 15
------ ------ ------ ------
Net Income Available to Common Stock $14,777 18,329 $16,990 $20,540
------ ------ ------ ------
Weighted average common shares
outstanding 20,357 20,352 20,355 20,352
Add dilutive effect of outstanding
stock options (as determined using
the treasury stock method) 571 601 564 652
------ ------ ------ ------
Weighted average common shares
outstanding, as adjusted 20,928 20,953 20,919 21,004
------ ------ ------ ------
Primary earnings per share $ .71 .87 $ .81 .98
====== ====== ====== ======
FULLY DILUTED EARNINGS PER SHARE
Net income applicable to common stock
as shown in primary computation above $14,777 18,329 $16,990 20,540
------ ------ ------ ------
Weighted average common shares
outstanding 20,357 20,352 20,355 20,352
Add fully dilutive effect of outstanding
stock options (as determined using the
treasury stock method) 571 601 564 652
------ ------ ------ ------
Weighted average common shares
outstanding, as adjusted 20,928 20,953 20,919 21,004
------ ------ ------ ------
Fully diluted earnings per share $ .71 .87 $ .81 .98
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> APR-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 2,334
<SECURITIES> 0
<RECEIVABLES> 17,154
<ALLOWANCES> 0
<INVENTORY> 53,787
<CURRENT-ASSETS> 82,627
<PP&E> 45,523
<DEPRECIATION> 34,091
<TOTAL-ASSETS> 105,174
<CURRENT-LIABILITIES> 24,068
<BONDS> 17,040
<COMMON> 2,036
4,903
0
<OTHER-SE> 57,127
<TOTAL-LIABILITY-AND-EQUITY> 105,174
<SALES> 76,275
<TOTAL-REVENUES> 76,275
<CGS> 53,238
<TOTAL-COSTS> 66,377
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,461
<INCOME-PRETAX> 8,733
<INCOME-TAX> (8,443)
<INCOME-CONTINUING> 17,176
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,176
<EPS-PRIMARY> $.81
<EPS-DILUTED> $.81
</TABLE>
