SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
__________________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to _________
Commission File Number 1-13612
CONGOLEUM CORPORATION
(Exact name of Registrant as specified in Its Charter)
DELAWARE 02-0398678
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3705 Quakerbridge Road
P.O. Box 3127
Mercerville, NJ 08619-0127
(Address of Principal Executive Offices, including Zip Code)
Telephone number: (609) 584-3000
(Registrant's telephone number, including area code)
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.
Class Outstanding at August 1, 1996
- --------------------- -----------------------------
Class A Common Stock 4,645,500
Class B Common Stock 5,350,000
Page 1 of 72
Index To Exhibits At Page 13
<PAGE>
Congoleum Corporation
Index
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Balance Sheets as of June 30, 1996
(unaudited) and December 31, 1995 3
Statements of Operations for the three and six months
ended June 30, 1996 and 1995 (unaudited) 4
Statements of Cash Flows for the six months
ended June 30, 1996 and 1995 (unaudited) 5
Notes to Unaudited Condensed Financial Statements 6
Item 2. 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 Security Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
Exhibit Index 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
CONGOLEUM CORPORATION
BALANCE SHEETS
<CAPTION>
June 30, December 31,
1996 1995
(Unaudited)
(Dollars in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 10,538 $ 40,103
Short-term investments 27,500 --
Accounts and notes receivable, net 22,027 16,755
Inventories 54,038 48,018
Prepaid expenses and other current assets 680 918
Deferred income taxes 4,210 4,210
--------- ---------
Total current assets 118,993 110,004
Property, plant and equipment, net 74,715 74,208
Goodwill, net 12,899 13,115
Deferred income taxes 2,873 2,873
Other noncurrent assets 6,345 6,642
--------- ---------
Total assets $ 215,825 $ 206,842
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 19,157 $ 21,397
Accrued expenses 35,751 29,634
Accrued income taxes 1,650 346
Deferred income taxes 2,072 2,072
--------- ---------
Total current liabilities 58,630 53,449
Long-term debt 90,000 90,000
Other liabilities 17,646 17,601
Noncurrent pension liability 12,575 12,575
Accrued postretirement benefit obligation 10,615 10,615
--------- ---------
Total liabilities 189,466 184,240
--------- ---------
STOCKHOLDERS' EQUITY
Preferred stock, par value $0.01; 1,000,000 shares
authorized; none issued or outstanding -- --
Class A common stock, par value $0.01; 20,000,000
shares authorized, 4,650,000 shares issued;4,645,500
and 4,650,000 outstanding as of June 30, 1996 and
December 31, 1995 47 47
Class B common stock, par value $0.01; 5,350,000
shares authorized, issued and outstanding as of
June 30, 1996 and December 31, 1995 53 53
Additional paid-in capital 55,172 55,172
Retained deficit (27,852) (31,658)
Minimum pension liability adjustment (1,012) (1,012)
Common stock held in treasury, at cost; 4,500
shares at June 30, 1996 and none at December 31, 1995 (49) --
--------- ---------
Total stockholders' equity 26,359 22,602
--------- ---------
Total liabilities and stockholders' equity $ 215,825 $ 206,842
========= =========
The accompanying notes are an integral part
of the condensed financial statements.
</TABLE>
3
<PAGE>
CONGOLEUM CORPORATION
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------ ----------------
1996 1995 1996 1995
(In thousands, except
per share amounts)
<S> <C> <C> <C> <C>
Net sales $ 74,380 $ 68,703 $ 128,498 $ 131,924
Cost of sales 48,851 47,537 88,621 90,465
Selling, general and administrative
expenses 16,114 13,396 30,787 28,258
--------- --------- --------- ---------
Income from operations 9,415 7,770 9,090 13,201
Other income (expense):
Interest income 356 282 689 662
Interest expense (2,044) (2,044) (4,082) (4,092)
Other income 308 526 664 1,106
Other expense (19) (68) (70) (149)
--------- --------- --------- ---------
Income before income taxes 8,016 6,466 6,291 10,728
--------- --------- --------- ---------
Provision for income taxes 3,166 2,645 2,485 4,388
--------- --------- --------- ---------
Net income $ 4,850 $ 3,821 $ 3,806 $ 6,340
========= ========= ========= =========
Primary earnings per common share $ .48 $ .38 $ .38 $ .63
========= ========= ========= =========
Weighted average number of common
shares and equivalent shares
outstanding 10,000 10,046 10,000 10,045
========= ========= ========= =========
The accompanying notes are an integral part
of the condensed financial statements.
</TABLE>
4
<PAGE>
<TABLE>
CONGOLEUM CORPORATION
STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
---------------------
1996 1995
(In thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,806 $ 6,340
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and amortization 4,362 4,260
Provision for doubtful accounts 300 183
Loss on disposition of assets -- 6
Changes in certain assets and liabilities:
Accounts and notes receivable (5,572) (7,854)
Inventories (6,020) (9,616)
Prepaid expenses and other assets 238 439
Accounts payable (2,240) (3,929)
Accrued expenses 7,421 3,830
Other liabilities 45 138
--------- --------
Net cash provided (used) by operating activities 2,340 (6,203)
--------- --------
Cash flows provided (used) by investing activities:
Capital expenditures (4,356) (2,948)
Purchase of short-term investments (27,500) (12,500)
Maturities of short-term investments -- 24,000
--------- --------
Net cash provided (used) by investing activities (31,856) 8,552
--------- --------
Cash flows from financing activities:
Payment of equity offering costs -- (870)
Proceeds from equity offering -- 56,219
Purchase of class B shares -- (60,450)
Purchase of treasury stock (49) --
--------- --------
Net cash used by financing activities (49) (5,101)
--------- --------
Net decrease in cash and cash equivalents (29,565) (2,752)
Cash and cash equivalents:
Beginning of period 40,103 14,818
--------- --------
End of period $ 10,538 $ 12,066
========= ========
The accompanying notes are an integral part
of the condensed financial statements.
</TABLE>
5
<PAGE>
CONGOLEUM CORPORATION
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands, except per share amounts)
1. BASIS OF PRESENTATION
- --------------------------
The condensed financial statements have been prepared in
accordance with generally accepted accounting principles for
interim financial information and with Rule 10-01 of Regulation S-
X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal and recurring adjustments)
considered necessary for a fair presentation have been included.
The results of operations for the six months ended June 30, 1996
are not necessarily indicative of the results to be expected for a
full year. These condensed financial statements should be read in
conjunction with the Company's audited financial statements which
appear in the Company's Annual Report to Stockholders for the
period ended December 31, 1995.
2. INVENTORIES
- ----------------
A summary of the major classifications of inventories is as
follows:
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- -----------
<S> <C> <C>
Finished goods $ 40,441 $ 34,122
Work-in-process 4,655 4,298
Raw materials and supplies 8,942 9,598
--------- ---------
$ 54,038 $ 48,018
========= =========
</TABLE>
If the FIFO (first-in, first-out) method of inventory
accounting had been used, inventories would have been approximately
$1,166 lower and $226 higher than reported at June 30, 1996 and
December 31, 1995, respectively.
6
3. EARNINGS PER SHARE
- -----------------------
Earnings per share is calculated by dividing net income by the
weighted average number of shares of common stock outstanding. For
1996, common stock equivalents have not been included in the weighted
average number of shares of common stock outstanding since the effect
would be antidilutive. For 1995, common stock equivalents have been
included in the weighted average number of shares of common stock
outstanding and amounted to approximately 46,000 and 45,000 shares for
the three and six months ended June 30, 1995, respectively.
4. COMMITMENTS AND CONTINGENCIES
- ----------------------------------
Certain legal and administrative claims are pending or have
been asserted against the Company, which are considered incidental
to its business. Among these claims, the Company is a named party
in several actions associated with waste disposal sites and
asbestos-related claims. These actions include possible
obligations to remove or mitigate the effects on the environment of
wastes deposited at various sites, including Superfund sites. The
amount of such future cost is indeterminable due to such unknown
factors as the magnitude of clean-up costs, the timing and extent
of the remedial actions that may be required, the determination of
the Company's liability in proportion to other potentially
responsible parties, and the extent to which costs may be
recoverable from insurance. The contingencies also include claims
for personal injury and/or property damage.
The Company records a liability for environmental remediation
and asbestos-related claim costs when a clean-up program or claim
payment becomes probable and the costs can be reasonably estimated.
As assessments and clean-ups progress, these liabilities are
adjusted based upon progress in determining the timing and extent
of remedial actions and the related costs and damages. The extent
and amounts of the liabilities can change substantially due to
factors such as the nature or extent of contamination, changes in
remedial requirements and technological improvements. Estimated
insurance recoveries related to these liabilities are reflected in
other non-current assets.
Although the outcome of these matters could result in
significant expenses or judgments, management does not believe that
their disposition will have a material adverse effect on the
financial position or results of operations of the Company.
7
<PAGE>
Item 2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
Three and six months ended June 30, 1996 as compared to three and
six months ended June 30, 1995.
Net sales for the second quarter of 1996 were $74.4 million as
compared to $68.7 million for the second quarter of 1995, an
increase of $5.7 million or 8.3%. Year-to-date net sales were
$128.5 million, a decrease of $3.4 million or 2.6% from the first
six months of 1995. Second quarter sales of nearly all product
categories increased over year earlier levels, with the most
significant increase in sales to the manufactured housing segment.
Gross profit for the second quarter of 1996 was $25.5 million,
up $4.4 million from $21.2 million in the second quarter of 1995,
reflecting improved gross profit margins and the increase in sales.
Gross profit as a percent of sales in the second quarter of 1996
was 34.3%, compared to 30.8% in the second quarter of 1995. This
improvement in gross margin is the result of more moderate raw
material costs coupled with improved productivity. Year-to-date
gross profit was $39.9 million (31.0% of sales), down from $41.5
million (31.4% of sales) in the first six months of 1995.
Selling, general, and administrative costs increased by $2.7
million or 20.3% to $16.1 million in the second quarter of 1996
from $13.4 million in the second quarter of 1995. As a percent of
sales, selling, general, and administrative costs were 21.7% for
the second quarter of 1996 and 19.5% for the second quarter of
1995. Increased expenses for product promotions, expanded
distribution, new product development, coupled with a charge for a
headcount reduction in the second quarter of 1996, were the major
reasons for the increase. Year-to-date selling, general and
administrative expense of $30.8 million (24.0% of sales) remains
above prior period costs of $28.3 million (21.4% of sales).
Income from operations for the second quarter of 1996 was $9.4
million (12.7% of net sales), compared to $7.8 million (11.3% of
net sales) for the second quarter of 1995, an increase of $1.6
million, or 21.2%. The increase resulted from the higher sales and
improved gross profit margins, partly offset by increased selling,
general, and administrative costs. Income from operations for the
six months ended June 30, 1996 totaled $9.1 million, $4.1 million
lower than the same period in 1995.
Net income for the second quarter of 1996 was $4.8 million,
compared to $3.8 million for the second quarter of 1995, an
increase of $1.0 million, reflecting the higher income from
operations. For the six months ended June 30, 1996, net income was
$3.8 million, $2.5 million lower than net income in the first half
of 1995.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents, including short-term investments at
June 30, 1996 were $38.0 million, a decrease of $2.1 million from
December 31, 1995. Working capital at June 30, 1996 was $60.4
million, up from $56.6 million one year earlier. The ratio of
current assets to current liabilities at June 30, 1996 was 2.0, and
the ratio of debt to total capital was .42. Net cash provided by
8
<PAGE>
operations during the six months ended June 30, 1996 was $2.3
million and capital expenditures totaled $4.4 million.
Capital expenditures are expected to increase during the
remainder of the year, with total year capital spending anticipated
to be approximately $14 to $15 million.
The Company has recorded what it believes are adequate
provisions for environmental remediation and product-related li
abilities, including provisions for testing for potential
remediation of conditions at its own facilities. While the Company
believes its estimate of the future amount of these liabilities is
reasonable, that such amounts will not have a material adverse
impact on the Company's financial position or results of
operations, and that they will be paid over a period of five to ten
years, the timing and amount of such payments may differ
significantly from the Company's assumptions. Although the effect
of future government regulation could have a significant effect on
the Company's costs, the Company is not aware of any pending
legislation which could have a material adverse effect on its
results of operations or financial position. There can be no
assurances that such costs could be passed along to its customers.
The Company's principal sources of liquidity are net cash
provided by operating activities and borrowings under its Amended
and Restated Financing Agreement. The Company believes that these
sources will be adequate to fund working capital requirements, debt
service payments and planned capital expenditures through the
foreseeable future.
9
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings: None
Item 2. Changes in Securities: None
Item 3. Defaults Upon Senior Securities: None
Item 4. Submission of Matters to a Vote of Security Holders:
At the Annual Meeting of Stockholders held on
May 6, 1996 the following actions were taken:
Eight nominees were elected as directors as follows:
Name Class Votes For Votes Withheld
--------------------- ----- ------------ --------------
Cyril C. Baldwin, Jr. C 14,636,087 206,891
David N. Hurwitz B 14,634,787 208,191
John N. Irwin III C 14,636,393 206,585
Mark N. Kaplan B 14,623,787 219,191
Richard G. Marcus B 14,623,893 219,085
Roger S. Marcus C 14,623,008 219,970
William M. Marcus A 14,623,839 219,139
C. Barnwell Straut A 14,588,793 254,185
An amendment to the Company's Certificate of Incorporation to
provide for the classification of the Board of Directors
into three separate classes was approved. The Board of
Directors has been divided into three classes with each class
of directors to serve a three-year staggered term, except for
the initial year of the classified Board of Directors during
which the nominees for designation as Class A directors were
elected for a one-year term, the nominees for designation as
Class B directors were elected for a two-year term, and the
nominees for designation as Class C directors were elected for
a three-year term, each such term to expire at the Annual
Meeting of Stockholders of the Company held in the relevant
year upon the due election and qualification of the director's
successor unless sooner terminated by the death or resignation
of the director.
Votes For Votes Against Votes Withheld
----------- --------------- ----------------
12,190,208 1,886,765 766,006
Item 5. Other Information: None
10
<PAGE>
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits: 3.1 Amended Certificate of
Incorporation
3.2 Amended and Restated
Bylaws
11 Computation of Per
Share Earnings
(b) Reports on Form 8-K: None
11
<PAGE>
CONGOLEUM CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CONGOLEUM CORPORATION
(Registrant)
Date: August 6, 1996 By:/s/ Howard N. Feist III
--------------------------
(signature)
Howard N. Feist III
Sr. Vice President - Finance
(Principal Financial & Accounting
Officer)
12
<PAGE>
EXHIBIT INDEX
Sequentially
Numbered
Exhibit Number Page
- ------- ------ ----------
Amended Certificate of Incorporation 3.1 14 To 48
Amended and Restated Bylaws 3.2 48 To 70
Computation of Per Share Earnings 11 71 To 72
13
<PAGE>
EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF
RESILCO, INC.
FIRST: The name of the Corporation is Resilco, Inc.
(hereinafter called the "Corporation").
SECOND: The address of the registered office of the
Corporation in the State of Delaware is 1209 Orange Street, in
the City of Wilmington, County of New Castle. The name of its
registered agent at that address is The Corporation Trust
Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized
under the General Corporation Law of the State of Delaware as set
forth in Title 8 of the Delaware Code (the "GCL").
FOURTH: The total number of shares of stock which the
Corporation shall have authority to issue is 1000 shares of
Common Stock, each having a par value of one penny ($.01).
FIFTH: The name and mailing address of the Sole
Incorporator is as follows:
Name Mailing Address
---- ---------------
Catherine Davis P.O. Box 636
Wilmington, Delaware 19899
SIXTH: The following provisions are inserted for the
management of the business and the conduct of the affairs of the
Corporation, and for further definition, limitation and
regulation of the powers of the Corporation and of its directors
and stockholders:
1
<PAGE>
(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.
(2) The directors shall have concurrent power with the
stockholders to make, alter, amend, change, add to or repeal the
By-Laws of the Corporation.
(3) The number of directors of the Corporation shall be as
from time to time fixed by, or in the manner provided in, the By-
Laws of the Corporation. Election of directors need not be by
written ballot unless the By-Laws so provide.
(4) In addition to the powers and authority hereinbefore or
by statute expressly conferred upon them, the directors are
hereby empowered to exercise all such powers and do all such acts
and things as may be exercised or done by the Corporation,
subject, nevertheless, to the provisions of the GCL, this
Certificate of Incorporation, and any By-Laws adopted by the
stockholders; provided, however, that no By-Laws hereafter
adopted by the stockholders shall invalidate any prior act of the
directors which would have been valid if such By-Laws had not
been adopted.
SEVENTH: Meetings of stockholders may be held within or
without the State of Delaware, as the By-Laws may provide. The
books of the Corporation may be kept (subject to any provision
contained in the GCL) outside the State of Delaware at such place
or places as may be designated from time to time by the Board of
Directors or in the By-Laws of the Corporation.
EIGHTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this
corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this
Corporation under the provisions of Section 291 of the GCL or on
the application of trustees in dissolution or of any receiver or
receivers appointed for this Corporation under the provisions of
Section 279 of the GCL, order a meeting of the creditors or class
2
<PAGE>
of creditors, and/or of the stockholders or class of stockholders
of this Corporation, as the case may be, to be summoned in such
manner as the said court directs. If a majority in number
representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of
this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as a
consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if
sanctioned by the Court to which the said application has been
made, be binding on all the creditors or class of creditors
and/or on all the stockholders or class of stockholders, of this
Corporation, as the case may be, and also on this Corporation.
NINTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders herein are
granted subject to this reservation.
I, THE UNDERSIGNED, being the Sole Incorporator hereinbefore
named, for the purpose of forming a corporation pursuant to the
GCL, do make this Certificate, hereby declaring and certifying
that this is my act and deed and the facts herein stated are
true, and accordingly have hereunto set my hand this 31st day of
March, 1986.
/s/Catherine Davis
------------------
Catherine Davis
Sole Incorporator
3
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
RESILCO, INC., a corporation organized and existing under
and by virtue of the General Corporation Law of the State of
Delaware, (the "Corporation")
DOES HEREBY CERTIFY:
FIRST: That the Amendment to the Certificate of
Incorporation of the Corporation to be effected hereby is as
follows:
Article FIRST of the Certificate of Incorporation
of the Corporation is deleted and the following Article is
inserted in its place:
"FIRST: The name of the Corporation is
CONGOLEUM CORPORATION (hereinafter the "Corporation").
SECOND: That the Board of Director of RESILCO, INC., by the
unanimous written consent of its members in accordance with the
provisions of section 141(f) of the General Corporation Law of
the State of Delaware, duly adopted resolutions setting forth
said amendment, declaring its advisability, and directing that it
be submitted for consideration by the stockholders of the
Corporation.
THIRD: That thereafter said amendment was approved by
written consent of the stockholders of the Corporation in
accordance with the provisions of section 228 of the General
Corporation Law of the State of Delaware.
4
<PAGE>
FOURTH: That said amendment was duly adopted in accordance
with the provisions of section 242 of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, RESILCO, INC. has caused this
certificate to be signed by Terry L. Morton, its Vice President,
and attested by J. Robert O'Brien, its Secretary, this 28th day
of April, 1986.
RESILCO, INC.
By /s/ Terry Morton
-------------------
Vice President
ATTEST:
/s/ J. Robert O'Brien
- ---------------------
Secretary
5
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION OF
CONGOLEUM CORPORATION
Pursuant to Sections 228 and 242 of the Delaware General
Corporation Law, Congoleum Corporation, formerly known as
Resilco, Inc. (hereinafter referred to as the "Corporation"), a
corporation organized and existing under and by virtue of the
Delaware General Corporation Law, does hereby certify:
FIRST: That the Certificate of Incorporation of the
Corporation is hereby amended as follows:
1. The Certificate of Incorporation of the Corporation is
hereby amended by adding the following Article TENTH:
"TENTH: No director of the Corporation shall have
any personal liability to the Corporation or to the
Corporation's stockholders for monetary damages for any
breach of his or her fiduciary duty as a director:
provided, that the foregoing shall not eliminate or
limit the liability of any such director (i) for any
breach of such director's duty of loyalty to the
Corporation or to the Corporation's stockholders, (ii)
for acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the GCL, (iv) for
any transaction from which the director derived an
improper personal benefit, or (v) for any act or
omission which shall have occurred prior to the date as
of which the Amendment to this Certificate providing
for the addition of this Article TENTH to this
Certificate shall have become effective."
SECOND: That the board of directors of the Corporation duly
adopted a resolution setting forth the proposed amendment to the
Certificate of Incorporation of the Corporation set forth above
in Article FIRST, declaring said amendment to be advisable.
6
<PAGE>
THIRD: That, in lieu of a meeting and vote of stockholders,
the requisite number of stockholders have given written consent
to said amendment in accordance with the provisions of Section
228 of the General Corporation Law of the State of Delaware and
written consent has been filed with the Corporation.
FOURTH: That said amendment was duly adopted in accordance
with the provisions of Section 242 of the General Corporation Law
of the State of Delaware.
FIFTH: That the capital of the Corporation shall not be
reduced under or by reason of said amendment.
IN WITNESS WHEREOF, Congoleum Corporation has caused its
corporate seal to be hereunto affixed and this Certificate to be
signed by Terry L. Morton, its Vice President, and Patrick P.
Oliver, its Assistant Secretary, this 14th day of August, 1986.
By: /s/ Terry L. Morton
---------------------
ATTEST:
By /s/ Patrick P. Oliver
------------------------
7
<PAGE>
CERTIFICATE OF MERGER
OF
RESILIENT ACQUISITION INCORPORATED
INTO
CONGOLEUM CORPORATION
----------------------------------------
Pursuant to Section 251 of the General
Corporation Law of the State of Delaware
----------------------------------------
Congoleum Corporation, a Delaware corporation, hereby certifies
as follows:
FIRST: The names of the constituent corporations are
Resilient Acquisition Incorporated and Congoleum Corporation.
Each constituent corporation is incorporated under the laws of
the State of Delaware.
SECOND: An Agreement and Plan of Merger (the "Merger
Agreement") has been approved, adopted, certified, executed and
acknowledged by each constituent corporation in accordance with
Section 251(c) of the General Corporation Law of the State of
Delaware.
THIRD: The name of the surviving corporation is "Congoleum
Corporation" (the "Surviving Corporation").
FOURTH: The Certificate of Incorporation of Congoleum
Corporation shall be the Certificate of Incorporation of the
Surviving Corporation; provided, however, that such Certificate
of Incorporation shall be amended in its entirety to read as set
forth in Exhibit A attached hereto.
FIFTH: An executed copy of the Merger Agreement is on file
at the principal place of business of the Surviving Corporation,
195 Belgrove Drive, Kearny, New Jersey 07032, and a copy of the
Merger Agreement will be furnished by the Surviving Corporation,
on request and without cost, to any stockholder of either
constituent corporation.
8
<PAGE>
IN WITNESS WHEREOF, Congoleum Corporation has caused this
Certificate of Merger to be executed in its corporate name by
Terry L. Morton, its Vice President, and attested to by Patrick
P. Oliver, its Assistant Secretary, on this 18th day of August,
1986.
CONGOLEUM CORPORATION
By /s/ Terry L. Morton
--------------------
Terry L. Morton
Vice President
ATTEST:
By /s/ Patrick P. Oliver
----------------------
Patrick P. Oliver
Assistant Secretary
9
<PAGE>
EXHIBIT A
CERTIFICATE OF INCORPORATION
OF
CONGOLEUM CORPORATION
FIRST: The name of the corporation is CONGOLEUM CORPORATION
(hereinafter called the "Corporation").
SECOND: The registered office of the Corporation is to be
located at 229 South State Street, in the City of Dover, County
of Kent, State of Delaware. The name of its registered agent at
such address is United States Corporation Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity, without limitation, for which
corporations may be organized under the General Corporation Law
of Delaware.
FOURTH: The total number of shares of all classes of stock
which the Corporation is authorized to issue is One Thousand
(1,000) shares, consisting entirely of Common Stock, of the par
value of One Dollar ($1.00) per share.
FIFTH: The election of directors need not be by written
ballot unless the by-laws so provide.
SIXTH: The Board of Directors of the Corporation is
authorized and empowered from time to time in its discretion to
make, alter, amend or repeal by-laws of the Corporation, except
as such power may be restricted or limited by the General
Corporation Law of the State of Delaware.
10
<PAGE>
SEVENTH: Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them
and/or between this Corporation and its stockholders or any class
of them, any court of equitable jurisdiction within the State of
Delaware may, on the application in a summary way of this
Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this
Corporation under the provisions of Section 291 of Title 8 of the
Delaware Code or on the application of trustees in dissolution or
of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of Title 8 of the Delaware Code
order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as
the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in
value of the creditors or class of creditors, and/or of the
stockholders or class of stockholders of this Corporation, as the
case may be, agree to any compromise or arrangement and to any
reorganization of this Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and
the said reorganization shall, if sanctioned by the court to
which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders
or class of stockholders of this Corporation as the case may be,
and also on this Corporation.
11
<PAGE>
EIGHTH: The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of
Incorporation in the manner now or hereafter described by law,
and all rights and powers conferred herein on stockholders,
directors and officers are subject to this reserved power.
12
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CONGOLEUM CORPORATION
-----------------------------------------
Adopted in accordance with the provisions
of Section 242 of the General Corporation
Law of the State of Delaware
-----------------------------------------
WE, James F. Higgins, Senior Vice President and Nancy J.
Esh, Assistant Secretary, of CONGOLEUM CORPORATION, a Corporation
existing under the laws of the State of Delaware, do hereby
certify as follows:
FIRST: That the name of the Corporation (hereinafter called
the "Corporation") is CONGOLEUM CORPORATION.
SECOND: That the Certificate of Incorporation of the
Corporation has been amended as follows:
By inserting a new Article EIGHTH to read as follows:
EIGHTH: No director of the Corporation shall be liable to
the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director, except for liability (i)
for any breach of the director's duty of loyalty to the
Corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware
13
<PAGE>
General Corporation Law, or (iv) for any transaction from which
the director derived an improper personal benefit and by changing
the Article thereof number "EIGHTH" to read as Article "NINTH".
THIRD: That such amendment has been duly adopted in
accordance with the provisions of the General Corporation Law of
the State of Delaware by the unanimous written consent of all of
the stockholders entitled to vote in accordance with the
provisions of Section 228 of the General Corporation Law of the
State of Delaware.
IN WITNESS WHEREOF, we have signed this certificate this
28th day of January, 1988.
CONGOLEUM CORPORATION
By: /s/ James F. Higgins
-------------------------------
James F. Higgins, Senior
Vice President
ATTEST:
By: /s/ Nancy J. Esh
-------------------------
Nancy J. Esh, Secretary
14
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CONGOLEUM CORPORATION
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware
------------------------------------------------------
CONGOLEUM CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"),
pursuant to the provisions of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY as follows:
FIRST: The name of the Corporation is Congoleum
Corporation.
SECOND: The Certificate of Incorporation of the Corporation
is hereby amended by deleting Article FOURTH thereof and
substituting therefor the following:
"FOURTH: The total number of shares of capital
stock which the Corporation shall have authority to
issue is Twenty-One Thousand (21,000) shares,
consisting of two classes of capital stock:
(i) Eleven Thousand (11,000) shares of common
stock, par value One Dollar ($1.00) per share; and
(ii) Ten Thousand (10,000) shares of preferred
stock, par value One Dollar ($1.00) per share, which
shares shall have such voting rights, designations,
preferences and relative participating, optional or
other rights, qualifications, limitations or
restrictions as may be determined and set forth in a
resolution or resolutions adopted from time to time by
the Board of Directors of the Corporation, which
resolution or resolutions shall be executed,
acknowledged, filed and recorded and shall become
effective in accordance with Section 103 of the General
Corporation Law of the State of Delaware."
15
<PAGE>
THIRD: That the amendment to the Certificate set forth in
this Certificate of Amendment has been duly adopted in accordance
with Section 242 of the General Corporation Law of the State of
Delaware by the adoption by unanimous written consent of all the
members of the Board of Directors of the Corporation of a
resolution approving such amendment and by the approval of such
amendment by written consent of the sole stockholder of the
Corporation.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be hereunto affixed and this Certificate of Amendment to
be signed by Edwin R. Cowherd, its Executive Vice President, and
by Howard N. Feist, its Secretary, on behalf of the Corporation
as of April 16, 1991.
CONGOLEUM CORPORATION
By: /s/ Edwin R. Cowherd
-------------------------
Edwin R. Cowherd
Executive Vice President
ATTEST:
/s/ Howard N. Feist
- --------------------
Howard N. Feist
Secretary
(Corporate Seal)
16
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
CONGOLEUM CORPORATION
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware
------------------------------------------------------
CONGOLEUM CORPORATION, a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"),
pursuant to the provisions of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY as follows:
FIRST: The name of the Corporation is "Congoleum
Corporation."
SECOND: The Certificate of Incorporation of the Corporation
is hereby amended by deleting Article FOURTH thereof and
substituting therefor the following:
"FOURTH: The total number of shares of all
classes of capital stock which the Corporation has the
authority to issue is 9,729.853 shares of common stock,
par value $1.00 per share (the "Common Stock"), of
which 3,400 shares shall be Class A Common Stock, 5,100
shares shall be Class B Common Stock and 1,229.853
shares shall be Class C Common Stock.
Class A Common Stock, Class B Common Stock and Class C
Common Stock shall be identical in all respects, except
as otherwise provided herein. Each matter submitted to
holders of Common Stock for approval shall require the
following vote (the "Class Vote"): the affirmative
vote of holders of a majority of the outstanding shares
of Class A Common Stock and the affirmative vote of
holders of a majority of the outstanding shares of
17
<PAGE>
Class B Common Stock, each voting as a class, and the
affirmative vote of the holders of a majority of all of
the outstanding Common Stock. Notwithstanding the
foregoing, the Board of Directors of the Corporation
shall consist of not less than six nor more than eight
directors, three of whom shall be elected by the
affirmative vote of the holders of a majority of the
outstanding Class A Common Stock, three of whom shall
be elected by the affirmative vote of the holders of a
majority of the outstanding Class B Common Stock and up
to two of whom shall be elected by the holders of the
outstanding Common Stock by the Class Vote. Neither
this Certificate of Incorporation nor the By-Laws of
the Corporation may be amended without the approval of
the holders of the outstanding Common Stock by the
Class Vote.
The requirements set forth above that (i) matters
submitted to holders of Common Stock for approval shall
require the approval of such holders by the Class Vote
and (ii) three directors of the Corporation shall be
elected by the affirmative vote of the holders of a
majority of the outstanding Class A Common Stock, three
directors shall be elected by the affirmative vote of
the holders of a majority of the outstanding Class B
Common Stock, and up to two directors shall be elected
by the affirmative vote of the holders of the
outstanding Common Stock by the Class Vote shall
terminate and be of no further force and effect from
and after the date that (x) American Biltrite, Inc., A
Delaware corporation ("Biltrite"), ceases to own a
majority of the outstanding shares of Class A Common
Stock of Congoleum Holdings Incorporated, a Delaware
corporation ("Congoleum Holdings"), or (y) there is a
Change in Control of Biltrite. From and after the
effective date of the termination of the voting
provisions specified in the preceding sentence upon the
happening of one of the events specified therein, the
holders of Class A Common Stock, Class B Common Stock
and Class C Common Stock shall vote as a single class
on all matters submitted to the holders of Common Stock
for approval and such vote shall be deemed to be the
class vote for all purposes of this Certificate of
Incorporation. As used in this paragraph, "Change in
Control" shall mean that: (a) any "Person" (as such
term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the
"Exchange Act'), other than (i) Natalie S. Marcus, (ii)
members of her immediate family (defined as children,
grandchildren, siblings, nieces, nephews, grandnieces
and grandnephews), (iii) trusts for the benefit of one
18
<PAGE>
or more of the foregoing individuals or (iv) a
corporation owned, directly or indirectly, by the
stockholders of Biltrite in substantially the same
proportions as their ownership of stock of Biltrite, is
or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly,
of securities of representing thirty percent (30%) or
more of the combined voting power of Biltrite's then
outstanding securities; or (b) thirty percent (30%) or
more of the directors elected by Biltrite's
stockholders to the Board of Directors of Biltrite are
persons who were not nominated in the most recent proxy
statement of Biltrite; or (c) there has been a merger,
consolidation or equivalent combination involving
Biltrite after which forty-nine percent (49%) or more
of the voting stock of the surviving corporation is
held by persons other than former stockholders of
Biltrite; or (d) there has been a sale or other
disposition of all or substantially all of the assets
of Biltrite.
Fractional shares of any and all classes of capital
stock of the Corporation may be issued. Each such
fractional share shall have and carry with it
proportionate rights with respect to voting, dividends,
redemption payments, liquidation distributions, other
distributions and all other matters, and shall be
valued proportionately for all purposes of this Article
Fourth, in each case based upon the portion of a full
share which such fractional share represents."
THIRD: That the amendment to the Certificate of
Incorporation set forth in this Certificate of Amendment has been
duly adopted in accordance with Section 242 of the General
Corporation Law of the State of Delaware by the adoption by
unanimous written consent of all the members of the Board of
Directors of the Corporation of a resolution approving such
amendment and by the approval of such amendment by written
consent of the sole stockholder of the Corporation.
IN WITNESS WHEREOF, the Corporation has caused its corporate
seal to be hereunto affixed and this Certificate of Amendment to
19
<PAGE>
be signed by its duly authorized officers on behalf of the
Corporation as of February 26, 1993.
CONGOLEUM CORPORATION
By: /s/ Howard N. Feist
-------------------
Howard N. Feist
Vice President-Finance
ATTEST
/s/ Stephen W. Schwarz
- -----------------------
Stephen W. Schwarz
Assistant Secretary
(Corporate Seal)
20
<PAGE>
CERTIFICATE OF MERGER
OF
CONGOLEUM HOLDINGS INCORPORATED
(a Delaware corporation)
and
RESILIENT HOLDINGS INCORPORATED,
(a Delaware corporation)
with
CONGOLEUM CORPORATION
(a Delaware corporation)
--------------------------------
Congoleum Holdings Incorporated, a Delaware corporation
("Holdings"), Resilient Holdings Incorporated, a Delaware
corporation ("Resilient"), and Congoleum Corporation, a Delaware
corporation ("Congoleum", and together with Holdings and
Resilient, the "Constituent Corporation"), desiring that Holdings
and Resilient merge with and into Congoleum, with Congoleum being
the surviving corporation (the "Surviving Corporation"), pursuant
to the provisions of Section 251 of the General Corporation Law
of the State of Delaware (the "DGCL"), do hereby certify as
follows:
FIRST: Each of Holdings, Resilient and Congoleum is a
corporation duly organized, validly existing and in good standing
pursuant to the DGCL.
21
<PAGE>
SECOND: An agreement of merger (the "Merger Agreement")
providing for the merger of Holdings and Resilient into
Congoleum, as the Surviving Corporation, has been approved,
adopted, certified, executed and acknowledged by each of the
constituent Corporations in accordance with Section 251 of the
DGCL.
THIRD: The name of the Surviving Corporation is Congoleum
Corporation.
FOURTH: Upon the effectiveness of the merger:
(i) Article FOURTH of the Certificate of Incorporation of the
Surviving Corporation shall be amended to read in full as
follows:
FOURTH: (a) The total number of shares of all
classes of capital stock which the Corporation shall
have authority to issue is 31,000,000 shares which
shall be divided into classes as follows:
(i) 20,000,000 shares of Class A common stock, par
value $0.01 per share (the "Class A Common
Stock");
(ii) 10,000,000 shares of Class B common stock, par
value $.01 per share (the "Class B Common Stock");
and
(iii)1,000,000 shares of preferred stock, par
value $.01 per share (the "Preferred Stock"),
which shares shall have such voting rights,
designations, preferences and relative
participating, optional or other rights,
qualifications, limitations or restrictions as may
be determined and set forth in a resolution or
22
<PAGE>
resolutions adopted from time to time by the Board
of Directors of the Corporation which resolution
or resolutions shall be executed, acknowledged,
filed and recorded and shall become effective in
accordance with Section 103 of the Delaware
General Corporation Law.
(b) The rights, qualifications, limitations and
restrictions of the shares of Class A Common Stock
shall be as follows:
1. Voting Rights. Except as otherwise set forth
herein or as otherwise required by the Delaware General
Corporation Law, each outstanding share of Class A
Common Stock shall be entitled to vote on each matter
on which the stockholders of the Corporation shall be
entitled to vote and each holder of Class A Common
Stock shall be entitled to one vote for each share of
such stock held by such holder. Except as otherwise
set forth herein or as otherwise required by the
Delaware General Corporation Law, the shares of Class A
Common Stock shall vote together with the shares of
Class B Common Stock as a single class.
Notwithstanding the foregoing, the holders of shares of
Class A Common Stock shall be entitled to vote as a
separate class with respect to any amendment to the
Certificate of Incorporation of the Corporation which
would increase the authorized number of shares of or
affect the voting, dividend or liquidation rights of
the Class B Common Stock or amend any of the provisions
of ARTICLE TENTH of the Certificate of Incorporation
and any such amendment shall, in addition to any vote
required by the Delaware General Corporation Law,
require the affirmative vote of the holders of a
majority of issued and outstanding shares of Class A
Common Stock for its adoption.
2. Dividends. The holders of Class A Common
Stock shall be entitled to receive, when, as and if
declared by the Board of Directors of the Corporation
out of funds at the time legally available therefor,
dividends in cash or in property. Any dividend or
distribution on shares of Class A Common Stock shall
only be declared or paid in such a manner so that such
23
<PAGE>
dividend or distribution shall be payable on shares of
Class A Common Stock and Class B Common Stock equally
on a per share basis; provided, that in the case of
dividends payable in shares (or fractions thereof) of
Class A Common Stock or shares (or fractions thereof)
of preferred stock having equivalent rights,
qualifications, limitations, and restrictions to shares
of Class A Common Stock (a "Common Stock Equivalent"),
or options, warrants or rights to acquire shares (or
fractions thereof) of Class A Common Stock or a Common
Stock Equivalent or securities convertible into or
exchangeable for shares (or fractions thereof) of Class
A Common Stock or a Common Stock Equivalent, the shares
(or fractions thereof), options, warrants, rights or
securities so payable shall be payable to the holders
of the Class A Common Stock and the Class B Common
Stock solely in shares (or fractions thereof) or
options, warrants or rights to acquire, or securities
convertible into or exchangeable for, Class A Common
Stock or a Common Stock Equivalent thereof.
3. Liquidation. In the event of any voluntary
or involuntary liquidation, dissolution or winding up
of the Corporation, after payment or provision for
payment of the debt and other liabilities of the
Corporation, and subject to the preferences of any
outstanding series of Preferred Stock, the holders of
shares of Class A Common Stock and the holders of Class
B Common Stock shall be entitled to share equally on a
per share basis in the remaining net assets of the
Corporation. Neither the merger nor the consolidation
of the Corporation, nor the sale, lease or conveyance
of all or substantially all of its assets, shall be
deemed to be a liquidation, dissolution or winding up
of the Corporation, either voluntarily or
involuntarily, within the meaning of this subsection.
4. Conversion. The shares of Class A Common
Stock shall not be convertible into any other
securities of the Corporation.
5. Status of Acquired Shares. Shares of Class A
Common Stock redeemed or otherwise acquired by the
24
<PAGE>
Corporation shall, if retired, be restored to the
status of authorized but unissued Class A Common Stock
and may be reissued thereafter.
(c) The rights, qualifications, limitations and
restrictions of the shares of Class B Common Stock
shall be as follows:
1. Voting Rights. Except as otherwise set forth
herein or as otherwise required by the Delaware General
Corporation Law, each outstanding share of Class B
Common Stock shall be entitled to vote on each matter
on which the stockholders of the Corporation shall be
entitled to vote and each holder of Class B Common
Stock shall be entitled to two votes for each share of
such stock held by such holder. Notwithstanding the
foregoing, each holder of Class B Common Stock shall
be entitled to one vote for each share of such stock
held by such holder in connection with the approval of
(i) any merger or consolidation involving the
Corporation immediately after which forty-nine (49%) or
more of the voting stock of the surviving or resulting
corporation will be held by persons other than persons
who were stockholders of the Corporation immediately
prior to the consummation thereof, (ii) any sale or
other disposition of all or substantially all of the
assets of the corporation, (iii) any dissolution of the
corporation or (iv) any proposed "Rule 13e-3
transaction" (as such term is defined in Rule 13e-3
promulgated by the Securities and Exchange Commission
pursuant to the provisions of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) involving
the Corporation and American Biltrite, Inc. ("American
Biltrite"), any "affiliate" of American Biltrite
(defined as any individual or entity who or that
directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under
common control with American Biltrite) or any group of
which American Biltrite or any affiliate of American
Biltrite is a member. For purposes of the foregoing
definition, the term "control" shall mean the
possession, direct or indirect, of the power to direct
or cause the direction of the management and policies
of a person, whether through the ownership of voting
25
<PAGE>
securities, by contract or otherwise. Except as
otherwise set forth herein or as otherwise required by
the Delaware General Corporation Law, the shares of
Class B Common Stock shall vote together with the
shares of Class A Common Stock as a single class.
Notwithstanding the foregoing, the holders of shares of
Class B Common Stock shall be entitled to vote as a
separate class with respect to the conversion of all of
the outstanding shares of Class B Common Stock into an
equal number of shares of Class A Common Stock pursuant
to subsection 4(a) below, and any such conversion shall
require the affirmative vote of the holders of a
majority of the issued and outstanding shares of Class
B Common Stock for its adoption.
2. Dividends. The holders of Class B Common
Stock shall be entitled to receive, when, as and if
declared by the Board of Directors of the Corporation
out of funds at the time legally available therefor,
dividends in cash or in property. Any dividend or
distribution on shares of Class B Common Stock shall
only be declared or paid in such a manner so that such
dividend or distribution shall be payable on shares of
Class A Common Stock and Class B Common Stock equally
on a per share basis; provided, that in the case of
dividends payable in shares (or fractions thereof) of
Class A Common Stock or a Common Stock Equivalent, or
options, warrants or rights to acquire shares (or
fractions thereof) of Class A Common Stock or a Common
Stock Equivalent or securities convertible into or
exchangeable for shares (or fractions thereof) of Class
A Common Stock or a Common Stock Equivalent, the shares
(or fractions thereof), options, warrants, rights or
securities so payable shall be payable to the holders
of the Class A Common Stock and the Class B Common
Stock solely in shares (or fractions thereof) of or
options, warrants or rights to acquire, or securities
convertible into or exchangeable for, Class A Common
Stock or a Common Stock Equivalent thereof.
3. Liquidation. In the event of any voluntary
or involuntary liquidation, dissolution or winding up
of the Corporation, after payment or provisions for
26
<PAGE>
payment of the debt and other liabilities of the
Corporation, and subject to the preferences of any
outstanding series of Preferred Stock, the holders of
shares of Class A Common Stock and the holders of Class
B Common Stock shall be entitled to share equally on a
per share basis in the remaining net assets of the
Corporation. Neither the merger nor the consolidation
of the Corporation, nor the sale, lease or conveyance
of all or substantially all of its assets, shall be
deemed to be a liquidation, dissolution or winding up
of the Corporation, either voluntarily or
involuntarily, within the meaning of this subsection.
4. Conversion. (a) Each share of Class B
Common Stock may be converted into one share of Class A
Common Stock at any time at the option of the holder
thereof and shall be converted automatically into one
share of Class A Common Stock without any further
action by the Corporation or any holder of Class B
Common Stock and whether or not the certificate(s)
representing such shares of Class B Common Stock are
surrendered to the Corporation, upon the adoption of a
resolution authorizing such conversion approved by the
holders of a majority of the outstanding shares of
Class B Common Stock voting as a separate class. Upon
the adoption of such a resolution, all shares of Class
B Common Stock shall be deemed to have ceased to be
outstanding, and the certificate(s) evidencing such
shares shall be deemed to evidence shares of Class A
Common Stock as provided above, each of which shares of
Class A Common Stock shall be duly authorized, validly
issued, fully paid and nonassessable. On or after the
date of the adoption of such a resolution, the holder
of any certificate(s) formerly representing shares of
Class B Common Stock which have been converted into
shares of Class A Common, as provide above, may
surrender the certificate(s) representing the shares so
converted at the principal offices of the Corporation
(or such other office or agency of the Corporation as
the Corporation may designate by written notice to the
holders of certificates which formerly represented the
Class B Common Stock) at any time during its usual
business hours, together with written notice by such
holder stating that such holder desires to receive a
27
<PAGE>
new certificate or certificates evidencing the shares
of Class A Common Stock into which such shares of Class
B Common Stock were so converted. Such notice shall
also state the name or names (with addresses) and
denominations in which such certificate or certificates
are to be issued and shall include instructions for the
delivery thereof. Promptly after such surrender and
the receipt of such written notice, the Corporation
will issue and deliver in accordance with the
surrendering holder's instructions the certificate or
certificates evidencing such shares of Class A Common
Stock.
(b) In addition, the affected shares of Class B Common
Stock shall be converted automatically into an equal
number of shares of Class A Common Stock without any
further action by the Corporation or any holder of
Class B Common Stock and whether or not the
certificate(s) representing such shares of Class B
Common Stock are surrendered to the Corporation (i)
upon the sale or other transfer of such shares to a
person or entity other than an Affiliate (as
hereinafter defined) of the transferer (a pledge of
shares of Class B Common Stock is not considered a
transfer for this purpose unless and until the pledge
is enforced) or (ii) in the case of the shares of Class
B Common Stock held by American Biltrite, upon the
occurrence of a Change in Control (as hereinafter
defined). As used herein, an "Affiliate" shall mean,
with reference to a specified person, a person or
entity that directly, or indirectly through one or more
intermediaries, controls, is controlled by or is under
common control with, the person specified. For
purposes of the foregoing definition, the term
"control" shall mean the possession, direct or
indirect, of the power to direct or cause the direction
of the management and policies of a person, whether
through the ownership of voting securities, by contract
or otherwise. As used herein, a "Change in Control"
shall occur if (a) any "person" (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), other
than (i) Natalie S. Marcus, (ii) members of her
immediate family (defined as children, siblings,
nieces, nephews and their issue), (iii) trusts for the
28
<PAGE>
benefit of one or more of the foregoing individuals or
(iv) a corporation owned, directly or indirectly, by
the stockholders of American Biltrite in substantially
the same proportions as their ownership of stock of
American Biltrite, is or becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act)
directly or indirectly, of securities representing
thirty percent (30%) or more of the combined voting
power of American Biltrite's then outstanding
securities; or (b) thirty percent (30%) or more of the
directors elected by American Biltrite's stockholders
to the Board of Directors of American Biltrite are
persons who were not nominated in the most recent proxy
statement of American Biltrite; or (c) there has been a
merger, consolidation or equivalent combination
involving American Biltrite after which forty-nine
(49%) or more of the voting stock of the surviving
corporation is held by persons other than persons who
were stockholders of American Biltrite immediately
prior to the consummation thereof; or (d) there has
been a sale or other disposition of all or
substantially all of the assets of American Biltrite.
5. Status of Acquired Shares. Shares of Class B
Common Stock converted into shares of Class A Common
Stock, redeemed or otherwise acquired by the
Corporation shall be retired and canceled and shall not
be restored to the status of authorized but unissued
Class B Common Stock or be reissued thereafter.
Promptly after the retirement of any shares of Class B
Common Stock, the Corporation shall file a Certificate
pursuant to Section 343 of the Delaware General
Corporation Law reducing the number of authorized
shares of Class B Common Stock accordingly,
(ii) a new ARTICLE TENTH shall be added to the Certificate
of Incorporation of the Surviving Corporation to read in
full as follows:
TENTH: (a) The Board of Directors of the
Corporation shall consist of not less than seven nor
more than 11 members, of which at least two directors
29
<PAGE>
must be persons who are Non-Affiliates. For purposes
of this ARTICLE TENTH, a "Non-Affiliate" shall be any
person who (i) is eligible to serve on an audit
committee of the Board of Directors of the Corporation
if it were established in accordance with the policies
of the New York Stock Exchange, (ii) is not an officer
or employee of the Corporation, (iii) is not an
officer, director, employee or beneficial owner of 1%
or more of any class of the outstanding equity
securities of either of American Biltrite or Hillside
Industries Incorporated ("Hillside") or any of their
subsidiaries (other than the Corporation) and (iv) is
not a former officer, director or employee of the
Corporation, American Biltrite or Hillside or any of
their subsidiaries.
(b) The exact number of directors which shall
constitute the Board of Directors of the Corporation
shall be fixed from time to time by the affirmative
vote of the majority of directors then in office.
(c) Any amendment to this ARTICLE TENTH, in order to
be effective, shall require, in additional to any vote
required by the Delaware General Corporation Law, the
affirmative vote of a majority of the Class A Common
Stock of the Corporation then outstanding, voting as a
separate class.
FIFTH: Pursuant to the Merger Agreement, effective as of
the date and time of the merger, (i) each share of Class A common
stock, par value $.01 per share, of Holdings issued and
outstanding immediately prior to the Merger shall be converted
into 10,989.0125 shares of Class B Common Stock of the Surviving
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Corporation, (ii) each share of Class B Common Stock, par value
$.01 per share, of Holdings issued and outstanding immediately
prior to the Merger shall be converted into 10,989.0098 shares of
Class B Common Stock of the Surviving Corporation (rounded to the
nearest whole share), (iii) each share of capital stock of
Holdings held in its treasury immediately prior to the Merger
shall be canceled and (iv) each share of capital stock of
Resilient and Congoleum issued and outstanding immediately prior
to the merger shall be canceled.
SIXTH: The executed Merger Agreement is on file at the
principal place of business of the Surviving Corporation, located
at Congoleum Corporation, 3705 Quakerbridge Road, P.O. Box 3127,
Mercerville, New Jersey 08619-0127, and a copy of such Merger
Agreement will be furnished by the Surviving Corporation, on
request and without cost, to any stockholder of any Constituent
corporation.
SEVENTH: The merger contemplated hereby shall not be
effected on the date of the filing of this Certificate of Merger
with the Secretary of State of the State of Delaware, but shall
instead become effective at 9:15 A.M., New York City time, on
Wednesday, February 8, 1995.
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IN WITNESS WHEREOF, the undersigned have executed,
acknowledged and filed this Certificate of Merger on behalf of
Holdings, Resilient and Congoleum, this 6th day of February,
1995.
CONGOLEUM HOLDINGS INCORPORATED
By: /s/ Roger S. Marcus
---------------------
Name: Roger S. Marcus
Title: President
RESILIENT HOLDINGS INCORPORATED
By: /s/ Roger S. Marcus
---------------------
Name: Roger S. Marcus
Title: President
CONGOLEUM CORPORATION
By: /s/ H. N. Feist
-----------------
Name: H. N. Feist
Title: Sr. Vice President -Finance
32
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CERTIFICATE OF AMENDMENT
OF THE
CERTIFICATE OF INCORPORATION
OF
CONGOLEUM CORPORATION
--------------------------------------------------------
Adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware
--------------------------------------------------------
CONGOLEUM CORPORATION, a corporation organized and existing
under the laws of the State of Delaware, pursuant to the
provisions of the General Corporation Law of the State of
Delaware, DOES HEREBY CERTIFY as follows:
FIRST: The name of the corporation is CONGOLEUM CORPORATION
(the "Corporation").
SECOND: The Certificate of Incorporation of the Corporation
is hereby amended to add a new Article ELEVENTH which shall read
in full as follows:
"ELEVENTH: The Board of Directors shall be divided
into three classes, as nearly equal in number as possible,
which shall be designated Class A, Class B and Class C. The
class of each of the directors elected at the 1996 annual
meeting of stockholders (the "1996 Meeting") shall be
designated by the Board. The term of office of each member
then designated as a Class A director shall expire at the
annual meeting of stockholders next ensuing the 1996
Meeting, that of each member then designated as a Class B
director at the annual meeting of stockholders one year
thereafter, and that of each member then designated as a
Class C director at the annual meeting of stockholders two
year thereafter. At each annual meeting of stockholders
33
<PAGE>
held after the election and classification of the Board of
Directors at the 1996 Meeting, directors elected to succeed
those whose terms then expire shall be elected for a term of
three years expiring at the third succeeding annual meeting
thereafter and until their respective successors are elected
and have qualified or until their earlier displacement from
office by resignation, removal or otherwise. If the number
of directors has changed, any increase or decrease in the
number of directors shall be apportioned by the Board among
the classes so that the number of directors in each class
remain as nearly equal as possible; provided, however, that
no decrease in the number of directors shall shorten the
term of any incumbent director. Subject to the rights, if
any, of the holders of any class of capital stock of the
Corporation other than common stock then outstanding, any
vacancies in the Board of Directors that occur for any
reason prior to the expiration of the term of office of the
class in which the vacancy occurs, including vacancies that
occur by reason of an increase in the number of directors,
may be filled only by the Board of Directors of the
Corporation, acting by the affirmative vote of a majority of
the remaining directors then in office (even if less than
quorum). A director elected to fill a vacancy shall hold
office during the term to which his predecessor had been
elected and until his successor shall have been elected and
shall qualify, or until his earlier death, resignation or
removal. Directors need not be stockholders."
THIRD: The amendment to the Certificate of Incorporation of
the Corporation set forth in this Certificate of Amendment has
been duly adopted in accordance with the provision of Section 242
of the General Corporation Law of the State of Delaware by the
adoption by unanimous written consent of all of the members of
the Board of Directors of the Corporation of a resolution
approving such amendment followed by approval of such amendment
at the annual meeting of the stockholders of the Corporation by
the affirmative vote of the holders of a majority of the Class A
common stock, par value $.01 per share, and Class B common stock,
par value $.01 per share, of the Corporation, voting together as
a single class.
34
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Amendment of the Certificate of Incorporation of
the Corporation to be signed by Roger S. Marcus, its President,
and attested by Howard N. Feist, its Secretary, on behalf of the
Corporation this 6th day of May, 1996.
CONGOLEUM CORPORATION
By: /s/ Roger S. Marcus
-------------------
Roger S. Marucs
President
ATTEST:
/s/ Howard N. Feist
- -------------------
Howard N. Feist
Secretary
35
<PAGE>
EXHIBIT 3.2
AMENDED AND RESTATED BYLAWS*
of
CONGOLEUM CORPORATION
ARTICLE I
OFFICES AND RECORDS
-------------------
1.1 The Corporation shall maintain a registered
office in Delaware, and may maintain such other offices and keep
its books, documents and records at such places within or without
Delaware as may from time to time be designated by the Board of
Directors.
ARTICLE II
MEETINGS OF STOCKHOLDERS
------------------------
2.1 PLACE OF MEETINGS. All meetings of the
stockholders shall be held either at the office of the Corporation
in Mercerville, New Jersey, or at such other place within or
without Delaware as the Board shall designate. The place at which
any meeting is to be held shall be specified in the notice of such
meeting.
2.2 TIME OF ANNUAL MEETING. An annual meeting
of the stockholders, for the election of directors and for the
transaction of any other proper business, shall be held either
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<PAGE>
(i) at 10:00 a.m. on the third Tuesday in May, unless such
day is a legal holiday, in which event the meeting shall be held
at the same time on the next business day, or (ii) at such other
time and date, not more than thirteen months after the last
preceding annual meeting, as the Board shall designate.
2.3 CALL OF SPECIAL MEETINGS. Special meetings
of the stockholders shall be called by the Secretary at the request
in writing of the President or a majority of the directors then in
office. Such request shall state the purpose or purposes of the
proposed meeting.
2.4 QUORUM AND ADJOURNED MEETINGS. Except as
otherwise provided by the laws of Delaware or by the Certificate
of Incorporation, a quorum for the transaction of business at
meetings of the stockholders shall consist of the holders of a
majority of the stock entitled to vote thereat, present in person
or represented by proxy. Whether or not a quorum is present, a
majority in interest of the stockholders present in person or by
proxy at any duly called meeting and entitled to vote thereat may
adjourn the meeting from time to time to another time or place,
at which time, if a quorum is present, any business may be
transacted which might have been transacted at the meeting as
originally scheduled. Notice need not be given of the adjourned
meeting if the time and place thereof are announced at the
meeting at which the adjournment is taken, unless the adjournment
is for more than thirty days or a new record date is fixed for
2
<PAGE>
the adjourned meeting, in which event a notice of the adjourned
meeting shall be given to each stockholder of record entitled to
vote at the meeting.
2.5 VOTE OF STOCKHOLDERS AND PROXIES. Every
stockholder having the right to vote at a meeting of stockholders
shall be entitled to exercise such vote in person or by proxy
appointed by an instrument in writing subscribed by such
stockholder or by his duly authorized attorney-in-fact. Each
stockholder shall have such number of vote(s) for each share of
stock having voting power held by him as shall be specified by
the Certificate of Incorporation. Except as otherwise provided
by the laws of Delaware, by the Certificate of Incorporation or
by these Bylaws, all elections shall be determined and all
questions decided by a plurality, and all other corporate actions
decided by a majority, of the votes cast in respect thereof, a
quorum being present.
2.6 LIST OF STOCKHOLDERS. The Secretary shall
prepare and make, at least ten days before every meeting of the
stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, and showing
the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be
open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten days prior to the meeting, either at a
3
<PAGE>
place within the city where the meeting is to be held, which
place shall be specified in the notice of meeting, or, if not so
specified, at the place where the meeting is to be held. The
list shall also be produced and kept at the time and place of the
meeting during the whole time thereof, and may be inspected by
any stockholder who is present.
2.7 NOTICE OF MEETINGS. Notice of each meeting
of the stockholders shall be given by the Secretary, not less
than ten nor more than 60 days before the meeting, to each
stockholder entitled to receive the same. Such notice shall set
forth the place, date and hour of the meeting, and, in the case
of a special meeting, the purpose or purposes thereof. The
business transacted at any special meeting shall be confined to the
purposes stated in such notice. No such notice of any meeting
need be given to any stockholder who files a written waiver of
notice thereof with the Secretary, either before or after the
meeting. Attendance of a person at a meeting of stockholders, in
person or by proxy, shall constitute a waiver of notice of such
meeting, except when the stockholder attends the meeting for the
express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not
lawfully called or convened.
2.8 ACTION WITHOUT A MEETING. Any action required
or permitted by these Bylaws to be taken at an annual or special
meeting of stockholders may be taken without a meeting, without
4
<PAGE>
prior notice and without a vote, if a consent or consents in
writing, setting forth the action so taken, shall be signed by
the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such
action at a meeting at which all shares entitled to vote thereon
were present and voted, and shall be delivered to the Corporation
by delivery to its registered office in Delaware, its principal
place of business, or an officer or agent of the Corporation
having custody of the book in which proceedings of meetings of
stockholders are recorded. Delivery made to the Corporation's
registered office shall be by hand or by certified or registered
mail, return receipt requested. Every written consent shall bear
the date of signature of each stockholder who signs the consent,
and no written consent shall be effective to take the corporate
action referred to therein unless, within 60 days of the earliest
dated consent delivered to the Corporation in the manner
required, written consents signed by a sufficient number of
holders to take action are delivered to the Corporation in the
manner required. Prompt notice of the taking of the corporate
action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented in
writing.
5
<PAGE>
ARTICLE III
BOARD OF DIRECTORS
------------------
3.1 NUMBER AND QUALIFICATIONS OF DIRECTORS.
The business and affairs of the Corporation shall be managed by or
under the direction of its Board of Directors, consisting of such
number of directors as may be determined from time to time by the
Board consistent with the Corporation's Certificate of
Incorporation. The Directors shall be divided into three
classes, each class to contain as near as possible to one-third
(1/3) of the total number of directors of the Board of Directors
so fixed by the Board consistent with the Corporation's
Certificate of Incorporation, and, except as otherwise provided
by statute, in case of any increase in the number of Directors,
such increase shall be apportioned among the classes of Directors
so as to maintain each class as near as possible to one-third
(1/3) of the total number of Directors as so increased. Unless he
resigns, dies or is removed prior thereto, each Director shall
continue to hold office until his successor has been elected and
has qualified. Resignations of Directors must be in writing and
shall be effective upon the date of receipt hereof by the
Secretary of upon an effective date specified therein, whichever
date is later, unless acceptance is made a condition of
resignation, in which event, resignations shall be effective upon
acceptance by the Board.
6
<PAGE>
3.2 POWERS. The Board may exercise all such
powers of the Corporation and do all such lawful acts and things
as are not, by the laws of Delaware, by the Certificate of
Incorporation or by these Bylaws, directed or required to be
exercised or done by the stockholders.
3.3 FIRST MEETING. The first meeting of the
Board after the annual meeting of stockholders may be held without
notice, either immediately after said meeting of stockholders and
at the place where it was held, or at such other time and place,
whether within or without Delaware, as shall be determined by the
Board prior to the annual meeting or by the consent in writing of
all the directors.
3.4 REGULAR MEETINGS. Regular meetings of the
Board may be held without notice at such time and place, whether
within or without Delaware, as shall from time to time be determined
by the Board.
3.5 SPECIAL MEETINGS. Special meetings of the
Board shall be called by the Secretary at the request in writing
of the President or of any one director. Such request shall state
the purpose or purposes of the proposed meeting. Such meetings may
be held at any place, whether within or without Delaware. Notice
of each such meeting shall be given by the Secretary to each
director at least two days before the meeting. Such notice shall
set forth the time and place at which the meeting is to be held
and the purpose or purposes thereof. No such notice of any
7
<PAGE>
meeting need be given to any director who attends the meeting or
who files a written waiver of notice thereof with the Secretary,
either before or after the meeting.
3.6 QUORUM OF DIRECTORS. A quorum for the
transaction of business at meetings of the Board shall consist of
a majority of the directors then in office, but in no event less
than one-third of the whole Board. In the absence of a quorum at
any duly scheduled or duly called meeting, a majority of the
directors present may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a
quorum is present, at which time any business may be transacted
which might have been transacted at the meeting as originally
scheduled.
3.7 ACTION WITHOUT A MEETING. Any action
required or permitted to be taken at any meeting of the Board or
any committee thereof may be taken without a meeting if all members
of the Board or committee consent thereto in writing and the
writing is filed with the minutes of the proceedings of the Board
or committee.
3.8 MEETINGS BY CONFERENCE TELEPHONE. Members
of the Board, or of any committee of the Board, may participate
in any meeting of the Board or of such committee by means of
conference telephone or similar communications equipment by means
of which all persons participating in the meeting can hear each
8
<PAGE>
other, and such participation shall constitute presence in person
at such meeting.
3.9 EXECUTIVE AND OTHER COMMITTEES. The Board of
Directors, by resolution passed by a majority of the whole Board,
may designate from its members an Executive Committee and such
other standing or special committees, each to consist of two or
more directors, as may be provided in such resolution. The Board
may designate one or more directors as alternate members of each
committee who may replace any absent or disqualified member at
any meeting of the committee. Each committee may meet at stated
times, or on notice to all by any of their own number. During
the intervals between meetings of the Board, the Executive
Committee shall advise with and aid the officers of the
Corporation in all matters concerning its interests and the
management of its business, and generally perform such duties as
may be directed by the Board from time to time. Subject to any
limitations imposed by the Board, the Executive Committee shall
possess and may exercise all the powers of the Board while the
Board is not in session, except in reference to amending the
Certificate of Incorporation, adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease
or exchange of all or substantially all of the Corporation's
property and assets, recommending to the stockholders a dissolution
of the Corporation or a revocation of a dissolution, amending the
Bylaws, filling newly created directorships and vacancies on
9
<PAGE>
the Board or the Committee, or (unless expressly authorized
by resolution of the Board) declaring a dividend or
authorizing the issuance of stock. Each other committee shall
have all such powers and perform all such duties as may be
expressly determined by the Board. Vacancies in the membership
of each committee shall be filled by the Board. Unless he
resigns, dies or is removed prior thereto, each member of a
committee shall continue to hold office until the first meeting
of the Board after the annual meeting of stockholders next
following his designation, and until his successor has been
designated. Any member of a committee may be removed at any
time, with or without cause, by the affirmative vote of a
majority of the whole Board.
3.10 COMMITTEE MINUTES. Each committee shall keep
regular minutes of its proceedings and report the same to the
Board.
3.11 COMPENSATION OF DIRECTORS. The directors as
such, and as members of any standing or special committee, may
receive such compensation for their services as may be fixed from
time to time by resolution of the Board. Nothing herein
contained shall be construed to preclude any director from
serving the Corporation in any other capacity and receiving
compensation therefor.
10
<PAGE>
ARTICLE IV
OFFICERS
--------
4.1 PRINCIPAL OFFICERS, ELECTION AND COMPENSATION.
The officers of the Corporation shall be chosen by the Board.
The principal officers shall be a President, one or more Vice
Presidents, a Secretary and a Treasurer, and may, in the
discretion of the Board, include a Chairman of the Board and a
Vice Chairman of the Board, all of whom shall be elected each
year at the first meeting of the Board after the annual meeting
of the stockholders of the Corporation. Two or more offices may
be held by the same person. The Chairman of the Board and a Vice
Chairman of the Board, if one is elected, and the President,
shall be chosen by the directors from their own number. The
salaries of the principal officers of the Corporation shall be
fixed by the Board.
4.2 OTHER OFFICERS. The Board may appoint
such other officers, assistant officers and agents as it shall
deem necessary, who shall hold their offices for such terms and
shall exercise such powers and perform such duties as shall be
determined by the Board. The salaries of persons appointed under
this section may be fixed by the President, who shall report to
the Board annually thereon.
4.3 TERM AND REMOVAL. Unless he resigns, dies
or is removed prior thereto, each officer of the Corporation shall
hold office until his successor has been chosen and has qualified.
Any person elected or appointed by the Board may be removed at
any time, with or without cause, and all vacancies (however
arising) may be filled at any time, by the affirmative vote of a
majority of the directors then in office. Any other employee of
the Corporation may be removed at any time, with or without
cause, by the President or by any superior of such employee to
whom the power of removal has been delegated by the President.
4.4 CHAIRMAN OF THE BOARD. The Chairman of
the Board, if one is elected, shall preside at all meetings of
the stockholders and directors. He shall be a member of the
Executive Committee and of all other committees appointed by the
Board, and he shall have such other powers and perform such other
duties as may be prescribed from time to time by the Board.
4.5 VICE CHAIRMAN OF THE BOARD. In the absence
or disability of the Chairman of the Board, if one is elected,
the Vice Chairman of the Board, if one is elected, shall be
vested with all of the powers and authorized to perform all of the
duties of the Chairman of the Board, and the performance of any
act or the execution of any instrument by the Vice Chairman of
the Board in any instance in which such performance or execution
would customarily have been accomplished by the Chairman of the
Board shall constitute conclusive evidence of the absence or
disability of the Chairman of the Board. In addition, the Vice
Chairman of the Board, if one is elected, shall have such other
11
<PAGE>
powers and perform such other duties as may be prescribed from
time to time by the Board.
4.6 PRESIDENT. The President shall be the chief
executive officer and shall have general supervision and
direction of the business of the Corporation, and shall see that
all orders and resolutions of the Board are carried into effect.
He shall have all the general powers and duties usually vested in
the chief executive officer of a corporation, and in addition
shall have such other powers and perform such other duties as may
be prescribed from time to time by the Board. He shall be vested
with all the powers and perform all the duties of the Chairman of
the Board in the absence or disability of the Chairman of the
Board and the Vice Chairman of the Board.
4.7 VICE PRESIDENTS. Each Vice President shall
have such powers and perform such duties as may be prescribed
from time to time by the Board or the President.
4.8 SECRETARY. The Secretary shall attend all
sessions of the Board and all meetings of the stockholders and
record all votes and the minutes of all proceedings in a book to
be kept for that purpose. He shall perform like duties for the
standing committees when required. He shall give, or cause to be
given, notice of all meetings of the stockholders and of the
Board, when notice is required by these Bylaws. He shall have
custody of the seal of the Corporation, and, when authorized by
the Board, or when any instrument requiring the corporate seal to
12
<PAGE>
be affixed shall first have been signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a Vice
President, shall affix the seal to such instrument and shall
attest the same by his signature. He shall have such other
powers and perform such other duties as may be prescribed from
time to time by the Board or the President.
4.9 ASSISTANT SECRETARY. Each Assistant Secretary,
if one or more are appointed, shall be vested with all the powers
and authorized to perform all the duties of the Secretary in his
absence or disability. The performance of any act or the
execution of any instrument by an Assistant Secretary in any
instance in which such performance or execution would customarily
have been accomplished by the Secretary shall constitute
conclusive evidence of the absence or disability of the
Secretary. Each Assistant Secretary shall perform such other
duties as may be prescribed from time to time by the Board, the
President or the Secretary.
4.10 TREASURER. The Treasurer shall have custody
of the corporate funds and securities, shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
Corporation and shall deposit all moneys and other valuable
effects in the name and to the credit of the Corporation in such
depositaries as may be designated by the Board. He shall
disburse the funds of the Corporation, taking proper vouchers for
such disbursements, and shall render to the President and the
13
<PAGE>
Board at the regular meetings of the Board, or whenever they may
require it, an account of all his transactions as Treasurer and
of the financial condition of the Corporation. He shall have
such other powers and perform such other duties as may be
prescribed from time to time by the Board or the President.
4.11 ASSISTANT TREASURER. Each Assistant Treasurer,
if one or more are appointed, shall be vested with all the powers
and authorized to perform all the duties of the Treasurer in his
absence or disability. The performance of any act or the
execution of any instrument by an Assistant Treasurer in any
instance in which such performance or execution would customarily
have been accomplished by the Treasurer shall constitute
conclusive evidence of the absence or disability of the
Treasurer. Each Assistant Treasurer shall perform such other
duties as may be prescribed from time to time by the Board, the
President or the Treasurer.
4.12 FIDELITY BONDS. If required by the Board, any
officer shall give the Corporation a bond, in a sum and with one
or more sureties satisfactory to the Board, for the faithful
performance of the duties of his office, and for the restoration
to the Corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his
control belonging to the Corporation.
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<PAGE>
4.13 DUTIES OF OFFICERS MAY BE DELEGATED. In case
of the absence of any officer of the Corporation, or for any
other reason that the Board may deem sufficient, the Board may
delegate, for the time being, the powers or duties, or any of
them, of such officer to any other officer, or to any director,
provided a majority of the directors then in office concur
therein.
ARTICLE V
INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
5.1 (a) Each person who was or is a party or is
threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is
or was a director or officer of the Corporation, or is or was
serving at the request of the Corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, including service with
respect to employee benefit plans, whether the basis of such
proceeding is alleged action in an official capacity as a
director, officer, employee or agent or in any other capacity
while serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the Corporation to the fullest
extent authorized or permitted by the General Corporation Law of
Delaware, as the same exists or may hereafter be amended (but, in
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<PAGE>
the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader
indemnification rights than said law permitted the Corporation to
provide prior to such amendment), against all expense, liability
and loss (including attorneys' fees, judgments, fines, excise
taxes or penalties and amounts paid or to be paid in settlement)
actually and reasonably incurred by such person in connection
with such action, suit or proceeding, and such indemnification
shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such person; provided,
however, that, except as provided in paragraph (b), the
Corporation shall indemnify any such person seeking
indemnification in connection with an action, suit or proceeding
(or part thereof) initiated by such person only if such action,
suit or proceeding (or part thereof) was authorized by the board
of directors of the Corporation. The right to indemnification
conferred in this Section shall be a contract right and shall
include the right to be paid by the Corporation the expenses
incurred in defending any such action, suit or proceeding in
advance of its final disposition; provided, however, that if the
General Corporation Law of Delaware requires, the payment of such
expenses incurred by a director or officer in his capacity as
such in advance of the final disposition of any such action, suit
or proceeding shall be made only upon receipt by the Corporation
16
<PAGE>
of an undertaking by or on behalf of such director or officer to
repay all amounts so advanced if it shall ultimately be
determined that such director or officer is not entitled to be
indemnified under this Section or otherwise. The Corporation
may, by action of the Board of Directors, provide indemnification
to employees and agents of the Corporation with the same scope
and effect as the foregoing indemnification of directors and
officers.
(b) If a claim under paragraph (a) is not
paid in full by the Corporation within 30 days after a written
claim has been received by the Corporation, the claimant may at
any time thereafter bring suit against the Corporation to recover
the unpaid amount of the claim and, if successful in whole or in
part, the claimant shall be entitled to be paid also the expense
of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for
expenses incurred in defending any proceeding in advance of its
final disposition where the required undertaking, if any is
required, has been tendered to the Corporation) that the claimant
has not met the standards of conduct which make it permissible
under the General Corporation Law of Delaware for the Corporation
to indemnify the claimant for the amount claimed, but the burden
of proving such defense shall be on the Corporation. Neither the
failure of the Corporation (including the Board of Directors,
independent legal counsel or its stockholders) to have made a
17
<PAGE>
determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth
in the General Corporation Law of Delaware, nor an actual
determination by the Corporation (including the Board of
Directors, independent legal counsel or its stockholders) that
the claimant has not met such applicable standard of conduct,
shall be a defense to the action or create a presumption that the
claimant has not met the applicable standard of conduct.
(c) The right to indemnification and the
payment of expenses incurred in defending a proceeding in advance
of its final disposition conferred in this Section shall not be
exclusive of any other right which any person may have or
hereafter acquire under any statute, provision of the Certificate
of Incorporation (as it may be amended), these Bylaws, agreement,
vote of stockholders or disinterested directors or otherwise.
(d) The Corporation may maintain insurance,
at its expense, to protect itself and any director, officer,
employee or agent of the Corporation or another corporation,
partnership, joint venture, trust or other enterprise against
any such expense, liability or loss, whether or not the Corporation
would have the power to indemnify such person against such
expense, liability or loss under the General Corporation Law of
Delaware.
18
<PAGE>
ARTICLE VI
CAPITAL STOCK
-------------
6.1 CERTIFICATES OF STOCK. The certificates of
stock of the Corporation shall be numbered and shall be entered
in the books of the Corporation as they are issued. They shall
exhibit the holder's name and number of shares and shall be signed
by (i) the Chairman of the Board, Vice Chairman of the Board,
President or a Vice President and (ii) the Treasurer or an Assistant
Treasurer or the Secretary or an Assistant Secretary. Any or all
of the signatures on the certificate may be a facsimile. If any
officer, transfer agent or registrar who has signed or whose
facsimile signature has been placed upon a stock certificate
shall cease to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer,
transfer agent or registrar at the date of issue.
6.2 TRANSFERS OF STOCK. Transfers of stock
shall be made on the books of the Corporation only by the person
named in the certificate or by his attorney, lawfully constituted
in writing, and upon surrender of the certificate therefor.
6.3 REGISTERED STOCKHOLDERS. The Corporation
shall be entitled to treat the holder of record of any share or
shares of stock as the holder in fact thereof, and accordingly shall
not be bound to recognize any equitable or other claim to or interest
in such share on the part of any other person, whether or not it
19
<PAGE>
shall have express or other notice thereof, save as expressly
provided by the laws of Delaware.
6.4 LOST CERTIFICATES. Any person claiming a
certificate of stock to be lost, stolen or destroyed shall
furnish proof of that fact satisfactory to an officer of the
Corporation, and shall give the Corporation a bond of indemnity
in form and amount and with one or more sureties satisfactory to
such officer, whereupon a new certificate may be issued of the
same tenor and for the same number of shares as the one alleged
to be lost, stolen or destroyed. The Board may at any time
authorize the issuance of a new certificate to replace a
certificate alleged to be lost, stolen or destroyed upon such
other lawful terms and conditions as the Board shall prescribe.
6.5 DIVIDENDS. Dividends upon the capital stock
of the Corporation may be declared by the Board at any regular or
special meeting as provided by the laws of Delaware and the
Certificate of Incorporation. Before payment of any dividend or
making any distribution of profits, there may be set aside out of
the surplus or net profits of the Corporation such sum or sums as
the directors, from time to time, in their absolute discretion,
think proper as a reserve fund to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any
property of the Corporation, or for such other purposes as the
directors shall deem conducive to the interests of the
Corporation.
20
<PAGE>
6.6 FIXING RECORD DATE. In order that the
Corporation may determine the stockholders entitled to notice of
or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend
or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange
of stock or for the purpose of any other lawful action, the Board
may fix, in advance, a record date, which shall not be more than
60 nor less than ten days before the date of such meeting, nor
more than sixty days prior to any other action.
Article VII
CONDUCT OF BUSINESS
-------------------
7.1 POWERS OF EXECUTION. (a) All checks and
other demands for money and notes and other instruments for
the payment of money shall be signed on behalf of the Corporation
by such officer or officers or by such other person or persons as
the Board may from time to time designate.
(b) All contracts, deeds and other instruments
to which the seal of the Corporation is affixed shall be signed on
behalf of the Corporation by the Chairman of the Board, by the
Vice Chairman of the Board, by the President, by any Vice
President, or by such other person or persons as the Board may
21
<PAGE>
from time to time designate, and shall be attested by the
Secretary or an Assistant Secretary.
(c) All other contracts, deeds and
instruments shall be signed on behalf of the Corporation by the
Chairman of the Board, by the Vice Chairman of the Board, by the
President, by any Vice President, or by such other person or
persons as the Board or the President may from time to time
designate.
(d) All shares of stock owned by the
Corporation in other corporations shall be voted on behalf of the
Corporation by the President or by such other person or persons as
the Board may from time to time designate.
7.2 SEAL. The corporate seal shall have inscribed
thereon the name of the Corporation, the year of its organization
and the words, "Corporate Seal, Delaware."
7.3 FISCAL YEAR. The fiscal year of the Corporation
shall be the calendar year.
Article VIII
NOTICES
-------
Whenever, under the provisions of these Bylaws, notice
is required to be given to any director or stockholder, such
notice may be given in writing (i) by mail, by depositing the
same in the United States mail, postage prepaid, or (ii) by
telegram, by delivering the same with payment of the applicable
tariff to a telegraph company for transmission, in either case
addressed to such director or stockholder at such address as
appears on the records of the Corporation, and such notice shall
be deemed to be given at the time when the same shall be so
mailed or so delivered to a telegraph company.
Article IX
AMENDMENTS
----------
These Bylaws may be amended (i) at any meeting of the
stockholders by the affirmative vote of the holders of a majority
of the stock issued and outstanding and entitled to vote thereat
or (ii) at any meeting of the Board by the affirmative vote of a
majority of the directors then in office; provided, however, that
in either case notice of the proposed amendment shall have been
contained in the notice of the meeting.
*Adopted as of March 5, 1996.
22
<PAGE>
EXHIBIT 11
<TABLE>
Congoleum Corporation
Computation of Per Share Earnings
(Amounts in thousands, except earnings per share)
<CAPTION>
Primary Fully diluted
earnings per earnings per
Three months ended June 30, 1996 common share common share
- -------------------------------- ------------ -------------
<S> <C> <C>
Net income $ 4,850 $ 4,850
(less) preferred dividends -- --
------------ -------------
Earnings for per-share calculations $ 4,850 $ 4,850
------------ -------------
Average number of shares outstanding 10,000 10,000
Average stock option shares -- --
Average warrant shares -- --
------------ -------------
Shares for earnings calculation 10,000 10,000
------------ -------------
Earnings per share $ 0.48 $ 0.48
============ =============
Three months ended June 30, 1995
- --------------------------------
Net income $ 3,821 $ 3,821
(less) preferred dividends -- --
------------ -------------
Earnings for per-share calculations $ 3,821 $ 3,821
------------ -------------
Average number of shares outstanding 10,000 10,000
Average stock option shares 46 46
Average warrant shares -- --
------------ -------------
Shares for earnings calculation 10,046 10,046
------------ -------------
Earnings per share $ 0.38 $ 0.38
============ =============
</TABLE>
1
<PAGE>
EXHIBIT 11
<TABLE>
Congoleum Corporation
Computation of Per Share Earnings
(Amounts in thousands, except earnings per share)
<CAPTION>
Primary Fully diluted
earnings per earnings per
Six months ended June 30, 1996 common share common share
- ------------------------------ ------------ -------------
<S> <C> <C>
Net income $ 3,806 $ 3,806
(less) preferred dividends -- --
------------ -------------
Earnings for per-share calculations $ 3,806 $ 3,806
------------ -------------
Average number of shares outstanding 10,000 10,000
Average stock option shares -- --
Average warrant shares -- --
------------ -------------
Shares for earnings calculation 10,000 10,000
------------ -------------
Earnings per share $ 0.38 $ 0.38
============ =============
Six months ended June 30, 1995
- ------------------------------
Net income $ 6,340 $ 6,340
(less) preferred dividends -- --
------------ -------------
Earnings for per-share calculations $ 6,340 $ 6,340
------------ -------------
Average number of shares outstanding 10,000 10,000
Average stock option shares 45 56
Average warrant shares -- --
------------ -------------
Shares for earnings calculation 10,045 10,056
------------ -------------
Earnings per share $ 0.63 $ 0.63
============ =============
</TABLE>
2
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated Balance Sheets and Statements of Operations as reported in the Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 10,538
<SECURITIES> 27,500
<RECEIVABLES> 22,027
<ALLOWANCES> 0
<INVENTORY> 54,038
<CURRENT-ASSETS> 118,993
<PP&E> 74,715
<DEPRECIATION> 0
<TOTAL-ASSETS> 215,825
<CURRENT-LIABILITIES> 58,630
<BONDS> 90,000
0
0
<COMMON> 100
<OTHER-SE> 26,259
<TOTAL-LIABILITY-AND-EQUITY> 215,825
<SALES> 128,498
<TOTAL-REVENUES> 129,851
<CGS> 88,621
<TOTAL-COSTS> 88,621
<OTHER-EXPENSES> 30,787
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,082
<INCOME-PRETAX> 6,291
<INCOME-TAX> 2,485
<INCOME-CONTINUING> 3,806
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,806
<EPS-PRIMARY> .38
<EPS-DILUTED> .38
</TABLE>
