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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
FOR THE TRANSITION PERIOD FROM ___________________ TO ___________________
COMMISSION FILE NUMBER 0-1162
CALMAT CO.
(Exact name of Registrant as specified in its charter)
Delaware 95-0645790
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3200 SAN FERNANDO ROAD, LOS ANGELES, CALIFORNIA 90065
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (213) 258-2777
Securities registered pursuant to Section 12(b) of the Act:
TITLE OF EACH CLASS NAME OF EACH EXCHANGE ON WHICH REGISTERED
------------------- -----------------------------------------
COMMON STOCK, $1 PAR VALUE NEW YORK STOCK EXCHANGE
PACIFIC STOCK EXCHANGE
Securities registered pursuant to Section 12(g) of the Act:
NONE REGISTERED
(Title of Class)
Indicate by check mark whether 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 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 by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
State the aggregate market value of the voting stock held by non-affiliates
of Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock, as of a specified date within 60 days prior to the date of the filing.
$334,294,110 COMPUTED ON THE BASIS OF $18.00 PER SHARE, WHICH WAS THE LAST SALE
PRICE ON THE NEW YORK STOCK EXCHANGE ON MARCH 21, 1997.
Indicate the number of shares outstanding of each of Registrant's classes of
common stock, as of the latest practicable date.
23,244,812 SHARES OF COMMON STOCK, $1 PAR VALUE, AS OF MARCH 21, 1997.
LIST OF DOCUMENTS INCORPORATED BY REFERENCE
CALMAT CO.'S DEFINITIVE PROXY STATEMENT WITH RESPECT TO THE ANNUAL MEETING TO BE
HELD IN MAY 1997
IS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K.
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TABLE OF CONTENTS
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ITEM
NUMBER PAGE
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PART I
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Item 1. Business........................................................................................ 1
Item 2. Properties...................................................................................... 6
Item 3. Legal Proceedings............................................................................... 6
Item 4. Submission of Matters to a Vote of Security Holders............................................. 7
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters........................... 10
Item 6. Selected Financial Data......................................................................... 11
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations........... 12
Item 8. Financial Statements and Supplementary Data..................................................... 15
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure............ 34
PART III
Item 10. Directors and Executive Officers of Registrant................................................. 34
Item 11. Executive Compensation......................................................................... 34
Item 12. Security Ownership of Certain Beneficial Owners and Management................................. 34
Item 13. Certain Relationships and Related Transactions................................................. 34
PART IV
Item 14. Exhibits, Financial Statement Schedule, and Reports on Form 8-K............................... 34
Signatures................................................................................................... 42
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PART I
ITEM 1. BUSINESS
GENERAL DEVELOPMENT OF BUSINESS
CalMat Co. (the "Company" or "Registrant") has its corporate headquarters
in Los Angeles, California and has operations throughout the state of
California, in Phoenix and Tucson, Arizona, and in Albuquerque, New Mexico. The
Company was formed in 1984 by the business combination of California Portland
Cement Company ("CPC") and Conrock Co. ("Conrock"). Following its formation, the
Company operated CPC as its Cement Division. The Company subsequently disposed
of the Cement Division in an exchange transaction with Onoda California, Inc. in
1990. The Company's operations are primarily concentrated in two business
segments. One business segment, the Construction Materials Division, is engaged
in the manufacture, production, distribution and sale of construction materials:
aggregates (crushed rock, sand and gravel), hot-mix asphalt and ready mixed
concrete. This business segment experiences fluctuations with general levels of
activity in the construction industry and with weather-related construction
delays, which normally occur during the first and fourth quarters each year. The
other business segment, the Properties Division, is engaged in the ownership,
leasing and management of industrial and office buildings, the ownership and
leasing of undeveloped real property and sales of real property.
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
Information about the Company's business segments for the years ended
December 31, 1996, 1995 and 1994 is incorporated in Note 11 of the "Notes to
Consolidated Financial Statements," located on pages 30 and 31 of this Annual
Report on Form 10-K.
NARRATIVE DESCRIPTION OF BUSINESS
CONSTRUCTION MATERIALS DIVISION
The Construction Materials Division produces and sells construction
aggregates, hot-mix asphalt, and ready mixed concrete for use in commercial and
residential construction, public construction projects and projects to build,
expand and repair roads and highways. Included within this Division is Western
Environmental Contracting, Inc., a wholly owned subsidiary that provides soil
remediation, crushing and contracting services. The Division operates aggregates
processing plants at 32 locations in the major markets of Southern and Central
California, the San Francisco Bay Area, Phoenix and Tucson, Arizona, and
Albuquerque, New Mexico. The Division also operates asphalt plants at 35
locations in the same markets as the aggregates processing plants, but in
addition, also operates in the Sacramento area. Of the 35 hot-mix locations, 20
are sites which also have aggregates processing plants and/or ready mixed
concrete plants. Ready mixed concrete batch plants are operated at 25 locations
in the same markets as the aggregates processing plants, except for the Los
Angeles and the San Francisco Bay Area. Of the 25 ready mixed concrete
locations, 13 are sites which also have aggregates processing plants. Examples
of projects to which the Company will supply aggregates, asphalt and/or ready
mixed concrete in 1997 include: in California, the Alameda Corridor project, a
$1.8 billion venture connecting downtown Los Angeles to the Long Beach/Los
Angeles Harbor areas via new rail lines and major street improvements, the Light
Rail Transit line from downtown San Diego to Jack Murphy Stadium, the new San
Diego prison, California's Highway 15 expansion and the Bay Area's Cypress
Structure; in Arizona, the new Banc One ballpark for Phoenix's first
professional baseball team; and, in New Mexico, Albuquerque's nitrogen
processing facility, an expansion to its water treatment plant.
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Aggregates
The Company operates aggregates processing plants at 32 locations, serving
Los Angeles, San Diego, Bakersfield, Fresno, Ventura, Santa Barbara and San
Francisco Bay areas of California; Phoenix and Tucson, Arizona and Albuquerque,
New Mexico. The Company believes it is the largest supplier of construction
aggregates in the greater Los Angeles area. During 1996, the Company sold 24.5
million tons of aggregates, representing less than half of the Company's annual
maximum production capacity. As of December 31, 1996, the Company had estimated
aggregates reserves of approximately 1.9 billion tons, located near the major
urban centers of the markets it serves. A schedule of the Company's estimated
aggregates reserves is found on page 40 of this Annual Report on Form 10-K. The
Company owns (or has long-term leases or options for) all of the properties on
which its reserves are located, and in all cases where required by law, the
Company obtains permits from various governmental authorities prior to the
commencement of its mining activities. Approximately 53% of the Company's total
reserves are either fully permitted or in the process of being permitted. As is
typical of major aggregates producers with a number of production facilities,
the currently permitted reserves at the Company's quarries, expressed in terms
of years of production at historical rates, varies widely. In the Company's
case, permitted reserves vary from approximately two to three years at several
older facilities to 20 years or more at many others. The Company has permitting
or alternative production plans for all of its sites where reserves could be
depleted in less than 10 years, and believes that its current reserves position
provides it with a significant long-term competitive advantage.
To further assure sufficient reserves and adequate facilities to meet
future demand, the Company continues to add new aggregates reserves. In 1996,
the Company acquired a 611-acre site in south San Diego County, which is
expected to yield 30 million tons of aggregates reserves. Also, in 1996 the
Company purchased the 2,000-acre San Emigdio reserves near Bakersfield,
California. The Company believes that San Emigdio contains enough aggregates to
meet the needs of this growing area for many years. During 1995, the Company
purchased its joint venture partner's 50% share of the partnership which owns
Azusa Rock, Inc., located ten miles from Los Angeles, to become the sole owner
of this 120-million ton reserve. In March 1994, the Company was awarded a
contract to remove 18 million tons of rock, sand and silts from Irvine Lake in
Orange County, California where commercial aggregates production has recently
commenced. In addition, the Company obtained permits for more than 50 million
tons of sand and gravel near San Bernardino, California in 1993, which should
allow the Company to meet the needs of that region for several decades.
Hot-Mix Asphalt
The Company believes that its asphalt operation, known by the trade name
Industrial Asphalt, is one of the largest suppliers of hot-mix asphalt to the
construction industry nationwide, and the Company believes it is the largest
such supplier in California. The Company produces and supplies asphalt and
related specialty products. Unlike most of its competitors, the Company
undertakes paving work on a limited basis, and does not directly compete with
its customers, who are principally contractors engaged in the paving business.
The primary source of revenue from asphalt operations is from the sale of
hot-mix asphalt. Hot-mix asphalt consists by volume of approximately 95%
aggregates and 5% liquid asphalt (a refined petroleum product). Of the 35
Company locations with asphalt facilities, 20 are sites that also have
aggregates processing plants and/or ready mixed concrete plants. This proximity
provides the Company with a competitive advantage in those markets due to the
availability of aggregates and transportation cost savings. At all other asphalt
plants, more than one source of aggregates is available, and at all asphalt
plants, more than one source of liquid asphalt is available.
In addition, the Company operates 14 asphalt recycling systems at its major
plants that recover aggregates and oil from asphalt that has been salvaged from
roads and other surfaces. Used in the production of new asphalt paving, the
recovered aggregates and oil offer substantial cost savings, strengthen the
Company's ability to secure public projects, and provide a high return on
investment.
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During 1996, the Company began operating its new asphalt plant at Romoland
in Riverside County, California. Also during 1996, the Company's Phoenix
operation replaced its asphalt plant with a new plant that provides improved
production capabilities and environmental benefits. The Company also entered
into a lease option on a new asphalt plant at the Higley facility in the eastern
Phoenix Valley.
The Company also manufactures related specialty products, including
GUARDTOP(R), a coating material used for sealing asphalt pavement to prevent
water damage and surface erosion. Under a license agreement, the Company is the
exclusive distributor in metropolitan Los Angeles of PETROMAT(R), a
polypropylene reinforcing fabric used in the resurfacing of pavement. The
Company also maintains a fleet of paving machines and specialty paving equipment
which it rents, along with qualified operators, to contractors.
Ready Mixed Concrete
Ready mixed concrete, which consists by volume of approximately 80%
aggregates and 20% cement, water and other materials, is either delivered by the
Company's fleet of approximately 375 mixer trucks or by independent haulers. The
Company has vertically integrated into the ready mixed concrete business
primarily in those geographic areas where it has been necessary from a
competitive standpoint to provide an outlet for the Company's aggregates
production.
In 1996, the Company purchased the assets of a small ready mixed concrete
company in Central California, now operating under the Company's subsidiary,
Triangle Rock Products, Inc., giving the Company entry into the south Fresno
market.
PROPERTIES DIVISION
CalMat's 36,000 acres of fee owned and leased lands are managed and
overseen by the Properties Division in conjunction with the Resource Management
Department of the Construction Materials Division. The Resource Management
Department is responsible for the acquisition of all property used in the
Company's aggregates operations and for obtaining all necessary land use
entitlements for aggregates operations and planning for reclamation of the land
once reserves are depleted. The Properties Division is responsible for
maximizing the value of property not used in the construction materials business
by developing, selling or leasing these properties. Income sources for this
Division include rentals, landfill operations and self-storage facilities.
Key to the land management cycle is a strategy that encompasses a variety
of post-mining uses such as agriculture, native habitat restoration, water
conversation and commercial, residential and industrial development. Reclaimed
property is typically subdivided into lots and developed by the Company or sold
in lot parcels to developers once necessary zoning and permits are obtained.
Currently, the Company owns approximately 800,000 square feet of office and
industrial buildings, of which approximately 550,000 square feet are adjacent to
mining and processing operations.
As part of the Company's restructuring in 1988, the Company decided to
discontinue its business of developing industrial and office buildings. Since
that time, the Company has sold 35 such buildings (totaling approximately 1.8
million square feet). As market conditions permit, the Company intends to
dispose of its remaining commercial and industrial developments, except for
certain industrial buildings that buffer the Company's mining and production
operations. The Division currently operates ten landfills and expects to develop
one additional landfill site in 1997. All of the Company's existing and planned
landfills are designed and have permits to accept only non-hazardous
construction rubble.
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COMPETITIVE CONDITIONS
The aggregates operations and the ready mixed concrete operations have
numerous competitors in each of their markets, but generally the aggregates
operations have fewer competitors than the ready mixed concrete operations. A
majority of the ready mixed concrete business is obtained by competitive bid.
In addition to competitive pricing, the Company's other methods of meeting
competition include providing higher levels of service and higher quality
products to its customers. Most of the Company's aggregates are delivered to
customers by third-party haulers. The Company consumes a portion of its
aggregates production in the manufacturing of ready mixed concrete, and supplies
a portion of its production to its asphalt operations for use in the production
of hot-mix asphalt. Other sources of raw materials, such as cement used in
ready mixed concrete, are readily available.
The Company's asphalt operations have more than one competitor in each
market and have several competitors in most markets. These operators compete
for business through price, quality and service to customers.
In 1987, the Company entered into a ten-year consent decree with the United
States Department of Justice limiting its ability to acquire additional asphalt
operations in the greater Los Angeles area, western San Diego County and other
specified areas of Southern California. The 1995 acquisition of the Carroll
Canyon asphalt plant was completed with the consent of the Justice Department.
REGULATIONS AND EMPLOYEES
Regulations
Substantial time and resources are expended by the Company to comply with
local, state and federal regulations for land use, health and safety, air
pollution and other environmental matters. This is essential because changes in
the enforcement of existing regulations or the addition of new laws and
regulations may require the Company to modify, supplement or replace equipment
or facilities.
During the normal course of its operations, the Company uses and disposes
of materials, such as solvents and lubricants used in equipment maintenance,
which are classified as hazardous by some government agencies. The Company
attempts to minimize the generation of such waste material and recycles most of
it. A small amount of remaining wastes is disposed of in fully permitted off-
site landfills.
Because of the nature of the Company's business, both the Occupational
Safety and Health Administration (OSHA) and the Mine Safety and Health
Administration (MSHA) have jurisdiction over its safety standards and controls.
The Company expends considerable effort to train, inspect, report and enforce
OSHA and MSHA requirements.
The Company has been successful in obtaining zoning approvals and other
required permits from local governing bodies allowing the mining of aggregates
and the conducting of the Company's other businesses. The state, county and
city governing bodies within California, Arizona and New Mexico continue to
adopt new laws and regulations relating to land use. Some of these laws and
regulations, including but not limited to the California Endangered Species Act,
may lead to attempts by special interest groups to reduce or restrict the
Company's use of its properties.
Employees and Other Labor Information
The Company had 1,776 full-time employees as of December 31, 1996. Of
these, 523 were salaried and 1,253 were hourly.
The Company is party to 27 collective bargaining agreements covering an
aggregate of 898 employees. Ten (10) of these agreements, covering an aggregate
of 201 employees, are currently being negotiated, including one with its
Teamster employees in Bakersfield and one with its Operating Engineer employees
in San Diego. If the Company
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is unable to reach negotiated settlements for either of these contracts, it is
likely that a strike would occur. A strike, should one occur, will depress
volumes and cause plant efficiencies to suffer.
In July 1995, a labor strike by Southern California's I.U.O.E. Local 12
members affected 141 asphalt and aggregates employees. Of those employees, 97
remain on strike but are not included in the total number of employees of the
Company. The work has been performed by a combination of new and returning
workers since 1995.
In January 1997, the National Labor Relations Board certified the results
of an election decertifying Operating Engineers Local 12 as the bargaining
representative of the Company's 47 employees working in its 21 asphalt plants
located in Southern California. These plants are now being operated as non-
union.
In January 1997, a two-week labor strike by San Diego, California's
Teamster members, affecting 61 Teamster and 51 Operating Engineer aggregates and
ready mixed concrete employees, caused the Company to experience temporary
volume losses and higher costs.
The Company is negotiating new contracts with two other Operating Engineers
local unions to succeed those which expired in 1996 for its California locations
in the City of Sanger (aggregates plant with 11 employees) and two of the
Properties Division's landfill facilities in the County of Los Angeles (2
employees). In addition, the Company has ten (10) contracts with other local
unions (Teamsters, Operating Engineers, Laborers, and Electricians) that expire
in 1997 covering an aggregate of 239 employees.
OTHER
In 1990 Onoda California, Inc., ("Onoda") and the Company consummated a
transaction whereby the Company distributed to Onoda all of its shares of stock
in CPC in exchange for certain shares of stock of the Company that were then
held by Onoda. In addition, prior to 1990, certain other related transactions
were accomplished, including the Company's contribution of certain assets to CPC
and CPC's distribution of all of its shares of stock in one of its subsidiaries
to the Company (along with the Company's distribution of the CPC stock to Onoda,
the "Onoda Transactions"). The Onoda Transactions were reported as tax-free
transactions for federal income tax purposes. Based on an analysis of the tax
law in effect at the time of the Onoda Transactions, the Company believes that
this treatment of the Onoda Transactions is correct, and has not established
financial statement reserves for this matter. The Internal Revenue Service (the
"IRS"), is now examining the Onoda Transactions. There can be no assurance that
the IRS will not challenge the Company's position regarding the proper tax
treatment of the Onoda Transactions. If the IRS does challenge the Company's
position and is ultimately successful in denying the Company's treatment of the
Onoda Transactions, the resulting tax liability would have a material adverse
effect on the Company's financial position.
As is the case with other companies in the same industries, the Company's
products contain varying amounts of crystalline silica, a common mineral that is
a component of most sands. Excessive, prolonged inhalation of very small
particles (principally those less than ten microns in size) of crystalline
silica has been associated with non-malignant lung disease. In 1987, the
carcinogenic potential of crystalline silica was evaluated by the International
Agency for Research on Cancer ("IARC") and later by the National Toxicology
Program. The IARC found limited evidence of carcinogenicity in humans but
sufficient evidence of carcinogenicity in animals. The National Toxicology
Program concluded in 1991 that crystalline silica is "reasonably anticipated to
be a carcinogen." However, in October 1996, an IARC working group voted 10 to
7 to reclassify crystalline silica as a "Group One" substance, considered to be
a human carcinogen. The IARC Report will be finalized in 1997 and is expected
to be relied upon by OSHA and MSHA. In anticipation of new federal requirements
resulting from the IARC Report, the Company has added the appropriate warnings
to all of its sales documents, posted warnings at affected sites, and is
currently revising all Material Safety Data Sheets (MSDSs) and developing
information packets for affected employees. The Company is not a party to any
litigation regarding crystalline silica.
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ITEM 2. PROPERTIES
PLANT FACILITIES
See "Item 1. Business" on page 1 of this Annual Report on Form 10-K for
additional information relating to these properties.
The Company makes a practice of leasing idle land which has been obtained
for its aggregates reserves during periods when the land is not used for
operations. During 1996, approximately 152 leases covering more than 1,400
acres were in effect. These leaseholds were used for farming, storage locations
and other uses. Additionally, the Company owns approximately 800,000 square
feet of commercial and industrial buildings, approximately 550,000 square feet
of which are located in close proximity to aggregates operations and buffer the
adjacent mining and processing operations. A total of 36,111 acres are owned or
leased by the Company.
See "CalMat Co., Property Owned and Leased" on page 39 of this Annual
Report on Form 10-K for additional information relating to these properties.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are involved in various lawsuits and
claims which the Company considers ordinary and routine in view of its size and
the nature of its business. The Company does not believe that any ultimate
liability resulting from any such lawsuits will have a material adverse effect
on the operations or financial position of the Company.
ENVIRONMENTAL - GENERAL
During the third quarter of 1992, the Company received a letter from CPC,
Onoda and Onoda U.S.A., purporting to assert a claim for indemnification with
respect to certain environmental matters, pursuant to certain provisions of the
agreement, dated July 19, 1988, under which Onoda acquired the stock of CPC.
The Company has notified these companies that it believes that it has no
liability with respect to the matters identified in the letter. No dollar
amount of damages was specified, but the July 19, 1988 agreement limits any
potential liability with respect to such matters to a maximum of $16,000,000.
ENVIRONMENTAL - ADMINISTRATIVE AND JUDICIAL PROCEEDINGS
Operating Industries, Inc. Landfill Site
The U.S. Environmental Protection Agency ("EPA"), the State of California
and the California Hazardous Substance Account have named the Company and over
200 other parties defendants in a civil action alleging joint and several
liability pursuant to certain California statutes and the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") in connection
with the cleanup of the former Operating Industries, Inc. landfill site in
Monterey Park, California. The EPA alleges that the Company disposed of
hazardous substances representing 0.078 percent of the total volume of waste at
the site. The Company believes, however, that the substances attributed to it
at the site were not hazardous.
To date, the Company has contributed approximately $300,000 to fund certain
interim remedial actions at the site, as part of two partial settlements of this
matter (which in part remain subject to court approval). The EPA issued a
Remedial Investigation Report in October 1994. A Feasibility Study, upon which
the final remedy will be based, is currently expected to be issued in the near
future.
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Because, among other things, the EPA has yet to select a final remedy for
the site and the Company's share of any liability is undetermined, the ultimate
outcome of this action cannot be predicted with certainty. The Company
believes, however, that this matter will be resolved without a material adverse
effect on its financial position. The Company's belief is based on its position
that the waste attributed to it at the site were not hazardous, its extremely
small share of the waste at the site and the large number of other defendants,
and its belief that it has recourse to insurance coverage for at least a
substantial portion of any resulting liability.
In a related development, the Company was among 150 defendants named in a
civil action filed in September 1994 in Superior Court in Los Angeles,
California by approximately 100 individuals, alleging personal injuries and
property damage arising from the existence and operation of the Operating
Industries landfill site. The complaint seeks "general, special and punitive"
damages "according to proof" at time of trial. The Company contends that it has
no liability in this matter. However, the ultimate outcome of this action for
the Company cannot be predicted because the case is still in the preliminary
stages of development, there are a large number of parties alleged to be
involved, the damages, if any, will likely be apportioned between any defendants
found to be responsible, and there exists the potential for insurance coverage.
San Gabriel Valley Superfund Area
The EPA has named the Company and more than 300 other entities as
"potentially responsible parties" ("PRPs") under CERCLA in connection with
alleged groundwater contamination at four sites designated as San Gabriel Valley
Areas 1 to 4 in Los Angeles County, California (the "Sites"). In January 1995,
the Company received a letter from the EPA advising it that the EPA does not
plan to ask the Company to participate in the clean up of the regional
groundwater contamination at the Sites.
San Fernando Valley Superfund Area
The EPA named the Company as a PRP under CERCLA in connection with ongoing
containment and remediation being conducted pursuant to an EPA Record of
Decision issued in 1987 for the San Fernando Valley Area 1 Superfund Site, North
Hollywood Operable Unit. The Company was named as a defendant in joint cost
recovery actions filed by the EPA and the California Department of Toxic
Substance Control in the United States District Court, Central District of
California. Subsequently, the Company, with other PRPs, entered into a Partial
Consent Decree that was approved by the Court in July 1996 and resulted in
dismissal of the Company from the actions.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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EXECUTIVE OFFICERS OF THE COMPANY
Executive officers are elected by the Board of Directors annually, and serve at
the pleasure of the Board or until their successors are qualified and elected.
The following is a list of executive officers of the Company:
NAME OFFICE
---- ------
A. FREDERICK GERSTELL Chairman of the Board and Chief Executive Officer
Mr. Gerstell, 59, has held the office of Chairman of the Board and Chief
Executive Officer of the Company since July 1996. He previously served as
Chairman, President, Chief Executive Officer and Chief Operating Officer. He
became Chairman of the Board in January 1991. He served as President and Chief
Executive Officer from 1988 through 1990. From 1984 to 1988, he served as
President and Chief Operating Officer. Prior to the formation of the Company by
the merger of Conrock and CPC in 1984, he was President and Chief Operating
Officer of CPC and employed by CPC from 1975.
R. BRUCE RIESER President and Chief Operating Officer
Mr. Rieser, 46, was elected to his current position in July 1996. From December
1995 to July 1996, he served as Executive Vice President, Construction
Materials. From March 1995 to December 1995, he served as Senior Vice President,
Construction Materials. Before joining the Company, he was employed by Southwest
Construction Materials & Services, a division of Beazer USA/Hanson, where he
served as President from 1992. Prior to that, he served as Vice
President/General Manager of Beazer USA, San Diego Division, from March 1990.
SCOTT J WILCOTT Executive Vice President, Law and Property
Mr. Wilcott, 59, was elected to his current position in August 1990. He also
serves as President of CalMat Properties Co., a subsidiary of the Company. In
1989, he served as Executive Vice President, General Counsel and Secretary of
the Company. From 1984 to 1989, he served as Senior Vice President, Legal
Counsel and Secretary. From 1968 until the formation of the Company in 1984, Mr.
Wilcott was employed by Conrock.
PAUL STANFORD Executive Vice President, General Counsel and
Secretary
Mr. Stanford, 54, was elected to his current position in August 1996. From
February 1995 to August 1996, he served as Executive Vice President -
Administration, General Counsel and Secretary. From June 1993 until February
1995, he served as Senior Vice President - Administration, General Counsel and
Secretary. From August 1990 until June 1993, he served as Vice President,
General Counsel and Secretary. Before joining the Company, from 1981, he was
engaged in the practice of business law with the firm of Paul, Hastings,
Janofsky & Walker.
H. JAMES GALLAGHER Executive Vice President, Finance, Chief Financial
Officer and Treasurer
Mr. Gallagher, 50, was elected to his current position in November 1996. From
August 1993 to November 1996, he served as Executive Vice President, Finance and
Chief Financial Officer. From 1987 to August 1993, he served concurrently as
Executive Vice President, Chief Financial Officer and Director of Pacific
Enterprises Oil Co., and Senior Vice President, Chief Financial Officer and
Director of Pacific Interstate Company. He previously served as Vice President,
Controller and Chief Financial Officer of Pacific Interstate Company from 1979,
and Manager of Internal Audits of Pacific Enterprises, Inc. from 1975.
EARL G. ANDERSON, JR. Executive Vice President, Construction Materials
Mr. Anderson, 50, was elected to his current position in August 1996. From May
1995 to August 1996, he served as Director of Special Projects, Construction
Materials, where he was responsible for acquisition-related projects and the
Company's subsidiary, Western Environmental Contracting, Inc. Prior to joining
the Company in May 1995, Mr. Anderson served for over thirty years with Sully-
Miller/Blue Diamond and Kaiser Materials Corporation, divisions of Beazer
USA/Hanson.
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EDWARD J. KELLY Senior Vice President, Corporate Development
Mr. Kelly, 41, was elected to his current position in November 1996. From
January 1994 to November 1996, he served as Senior Vice President, Treasurer and
Chief Accounting Officer. He served as Senior Vice President, Controller and
Chief Accounting Officer from June 1993 to January 1994. From December 1990
until June 1993, he served as Vice President and Controller. He was employed by
Superior Industries International, Inc., a manufacturer of automotive products,
as Vice President, Corporate Controller and Secretary, from 1985 to 1990.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded on the New York, Pacific and Chicago
Stock Exchanges under the trading symbol "CZM." The following table sets forth
the high and low sales prices of the Common Stock of the Company as reported on
the New York Stock Exchange Composite Tape for the periods indicated and the
cash dividends declared on the Company's Common Stock during each quarter
presented.
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<CAPTION>
Dividends
Period High Low Declared
------ ---- --- --------
<S> <C> <C> <C>
1996
First Quarter 18 3/4 17 1/4 $.10
Second Quarter 18 7/8 16 3/8 .10
Third Quarter 18 3/4 16 3/4 .10
Fourth Quarter 19 3/4 18 .10
1995
First Quarter 19 1/8 17 $.10
Second Quarter 21 3/8 18 1/4 .10
Third Quarter 20 5/8 17 1/4 .10
Fourth Quarter 18 7/8 16 3/8 .10
</TABLE>
At December 31, 1996, there were 956 holders of record of the Company's Common
Stock, $1 par value.
10
<PAGE>
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
For the years ended December 31,
----------------------------------------------------------
(Amounts in thousands, except per share data) 1996 1995 1994 1993 1992
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Summary of Operations
Net sales and operating revenues $399,083 $370,313 $365,243 $348,413 $347,282
Net gains on sale of real estate 5,500 4,133 7,678 2,081 453
Total revenues 407,895 378,182 376,797 353,506 350,260
Gains from disposal of assets held for sale -- -- -- -- 1,786
Income (loss) from continuing operations
before income taxes and cumulative effect
of change in accounting principle /(a)/ 15,178 (36,858) 29,609 14,897 (17,506)
Federal and state income taxes 5,844 (15,487) 10,881 6,600 (7,002)
Income (loss) from continuing operations
before cumulative effect of change in
accounting principle 9,334 (21,371) 18,728 8,297 (10,504)
Cumulative effect of change in accounting
principle -- -- -- 919 (6,000)
Net income (loss) 9,334 (21,371) 18,728 9,216 (16,504)
Per Share Data
Income (loss) from continuing operations
before cumulative effect of change in
accounting principle .40 (.92) .81 .36 (.45)
Cumulative effect of change in accounting principle -- -- -- .04 (.26)
Net income (loss) .40 (.92) .81 .40 (.71)
Weighted average number of shares outstanding
during year 23,245 23,176 23,224 23,117 23,242
Cash dividends declared 9,282 9,264 9,256 9,244 14,800
Regular dividends per share .40 .40 .40 .40 .64
Balance Sheet Data
Total assets $600,716 $559,530 $572,837 $604,895 $597,240
Working capital 52,702 33,551 34,882 38,916 34,003
Long-term debt 116,233 84,321 68,694 109,635 131,129
Stockholders' equity 332,192 331,149 361,104 351,046 350,687
Stockholders' equity per share at year end 14.29 14.29 15.55 15.19 15.19
</TABLE>
(a) 1995 includes $47.0 million of special charges related to adoption of SFAS
121, the accounting standard for impairment of long-lived assets ($45.0
million) and costs related to a management consolidation within construction
materials operations ($2.0 million). 1992 includes $26.1 million of special
charges related to the consolidation of certain construction materials
operations ($11.1 million) and the write down of the book value of certain
developed real estate ($15.0 million). Excluding these charges, income from
continuing operations before income taxes and cumulative effect of change in
accounting principle would have been $10.1 million and $8.6 million for 1995
and 1992, respectively.
11
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
This discussion should be read in connection with the consolidated
financial statements.
RESULTS OF OPERATIONS
The Company's market areas showed economic improvement during 1996, however
product demand was negatively impacted by a slow construction market recovery in
Southern California. Construction Materials Division earnings were higher than
in 1995, due to increases in aggregates and ready mixed concrete, partially
offset by decreases in asphalt. All segments of the Properties Division
delivered improved results in 1996.
The Company reported net income of $9.3 million, or $0.40 per share, for
1996, compared with a net loss of $21.4 million, or $0.92 per share, for 1995.
The 1995 results included a non-cash charge of $26.5 million, or $1.14 per
share, to adopt the accounting standard for impairment of long-lived assets
(SFAS 121), and a charge of $1.2 million, or $0.05 per share, related to a
management consolidation within the Company's construction materials operations.
Excluding these special charges in 1995, net income would have been $6.3
million, or $0.27 per share.
Net income in 1995, excluding the special charges, was $6.3 million, or
$0.27 per share, compared with net income of $18.7 million, or $0.81 per share,
for the year ended December 31, 1994. Record rainfall and related flooding in
the Company's California markets early in the year and a labor strike which
affected most of the Los Angeles area construction materials operations had a
pronounced negative impact on 1995 results. Construction Materials Division
earnings were lower than in 1994, due to decreases in aggregates and asphalt,
partially offset by increases in ready mixed concrete. Properties Division
earnings were also lower than in 1994, due to lower gains on sale of real
estate, a decline in income from developed properties caused by sales of such
properties and a decrease in income from landfill operations.
CONSOLIDATED REVENUES AND EARNINGS
Total revenues amounted to $407.9 million, $378.2 million and $376.8
million in 1996, 1995 and 1994, respectively. Included in total revenues are
gains from real estate sales of $5.5 million, $4.1 million and $7.7 million in
1996, 1995 and 1994, respectively. Net sales and operating revenues, which
excludes gains on sale of real estate and other income, of $399.1 million in
1996 were up $28.8 million, or 7.8%, compared with $370.3 million in 1995. The
increase was primarily due to higher sales volumes and average sales prices for
aggregates and ready mixed concrete operations. Net sales and operating revenues
were up $5.1 million, or 1.4%, in 1995 compared with 1994. Cost of goods sold as
a percentage of net sales and operating revenues was 87.0% in 1996 compared with
88.2% in 1995. This percentage was 83.4% in 1994.
Interest expense increased $3.3 million in 1996 compared with 1995, due
primarily to higher levels of average debt outstanding. Interest expense
decreased $1.8 million in 1995, compared with 1994, primarily because of a
decrease in the average borrowings.
Income (loss) before incomes taxes was $15.2 million in 1996, versus
($36.9) million in 1995. The 1995 amount includes special charges of $47.0
million related to SFAS 121 ($45.0 million) and costs related to a management
consolidation within the construction materials operations ($2.0 million).
Excluding these special charges, income before income taxes was $10.1 million.
The 1996 increase from 1995, excluding special charges in 1995, consists mainly
of improvements in earnings of the Construction Materials Division of $6.8
million, of which $3.3 million was due to incremental out-of-pocket labor strike
costs incurred in 1995, and the Properties Division of $3.6 million, of which
$1.4 million was due to increased gains on sales of real estate. Income before
income taxes, excluding special charges, was $10.1 million in 1995, down from
$29.6 million in 1994. The decrease consists of declines in earnings of the
Construction Materials Division and Properties Division of $13.9 million and
$6.3 million, respectively.
Selling, general and administrative expenses increased $1.9 million, or
5.3%, in 1996 compared with 1995, which in turn increased $1.3 million, or 3.8%,
from the 1994 level.
12
<PAGE>
The effective tax rate in 1996 was 38.5% compared with 42.0% in 1995 and
36.7% in 1994. The 42.0% in 1995 is due primarily to the fact that the SFAS 121
charge was tax effected at 41.1%, the combined federal and state statutory rate.
Excluding the SFAS 121 charge, the effective tax rate in 1995 was 37.0%.
OPERATING DIVISIONS
CONSTRUCTION MATERIALS DIVISION
The Construction Materials Division produces and sells construction
aggregates, hot-mix asphalt, and ready mixed concrete for use in commercial and
residential construction, public construction projects and projects to build,
expand and repair roads and highways. The Division operates aggregates
processing plants at 32 locations in the major markets of Southern and Central
California and the San Francisco Bay Area; Phoenix and Tucson, Arizona; and
Albuquerque, New Mexico. The Division also operates asphalt plants at 35
locations in the same markets as the aggregates processing plants, but in
addition, also operates in the Sacramento area. Of the 35 hot-mix locations, 20
are sites which also have aggregates processing plants and/or ready mixed
concrete plants. Ready mixed concrete batch plants are operated at 25 locations
in the same markets as the aggregates plants, except for the Los Angeles and San
Francisco Bay areas. Of the 25 ready mixed concrete locations, 13 are sites
which also have aggregates processing plants.
As shown in the following table, 1996 aggregates and ready mixed concrete
sales volumes increased from 1995. Aggregates sales volumes increased in part
because 1995 volumes were depressed by an organized labor strike in the Los
Angeles market area. Volumes in 1995 decreased from 1994, primarily due to the
labor strike and record rainfall in California in early 1995.
CONSTRUCTION MATERIALS - SALES VOLUMES
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- --------------------------------------------------------------------
<S> <C> <C> <C>
Aggregates:
Tons sold to outside customers 16,362 13,682 16,878
Tons used in ready mixed concrete 3,094 2,958 2,635
Tons used in asphalt 5,052 4,830 5,077
------------------------
24,508 21,470 24,590
------------------------
Tons of hot-mix asphalt sold 7,340 7,386 7,539
------------------------
Yards of ready mixed concrete sold 2,364 2,241 1,946
========================
</TABLE>
Overall Division revenue of $377.5 million was up 7.7% from 1995's revenue
of $350.5 million, which was up 2.8% from 1994's revenue of $340.8 million. The
increase in 1996's revenue was primarily due to higher sales volumes and average
sales prices for aggregates and ready mixed concrete. The increase in 1995's
revenues resulted from higher average sales prices for ready mixed concrete and
asphalt and higher volumes for ready mixed concrete.
Gross profit for aggregates in 1996 increased $6.2 million due to the
combination of 14% higher sales volumes, 3% higher average sales price and
slightly lower unit production costs. Ready mixed concrete gross profit
increased $1.7 million in 1996 due to a 5% increase in unit sales volumes and a
2% increase in average sales price. Asphalt gross profit declined by $6.0
million in 1996, due to 6% higher unit production costs, of which one-half was
the result of increased costs of liquid asphalt and natural gas.
In 1995, the average sales price of aggregates was virtually unchanged from
1994. Gross profit for aggregates in 1995, excluding incremental out-of-pocket
strike costs, decreased $4.4 million due to the combination of a 6% volume
decline and 5% higher unit production costs. Asphalt gross profit in 1995,
excluding incremental out-of-pocket strike costs, declined by $4.9 million due
to the combination of a 2% volume decline and 8% higher unit production costs,
partially offset by a 3%increase in average sales price. Gross profit for ready
mixed concrete increased $1.8 million due to a 15% increase in unit sales
volumes and a 2% increase in average sales price, partially offset by 2% higher
unit production costs. Income from soil remediation operations declined $2.0
million in 1995 from 1994 levels due to a substantial reduction in volumes
processed.
13
<PAGE>
Selling, general and administrative expenses increased 1.8% in 1996 from
the 1995 level, which in turn had increased 1.7% from 1994. Income from
operations increased to $17.1 million in 1996 from $10.3 million in 1995 which
had decreased from 1994's level of $24.2 million.
PROPERTIES DIVISION
CalMat's 36,000 acres of fee owned and leased lands are managed and
overseen by our Properties Division in conjunction with the Resource Management
Department of the Construction Materials Division. The Resource Management
Department is responsible for the acquisition of all property used in the
Company's aggregates operations and for obtaining all necessary land use
entitlements for aggregates operations and planning for reclamation of the land
once reserves are depleted. The Properties Division is responsible for
maximizing the value of property not used in the construction materials business
by developing, selling or leasing these properties. Income sources for this
Division include rentals, landfill operations and self-storage facilities.
Income from operations was $14.9 million in 1996 compared with $11.2
million in 1995. Included in 1996 are gains from real estate sales of $5.5
million versus gains of $4.1 million in 1995. Excluding real estate gains,
Properties Division income from operations increased $2.3 million. All segments
of the Properties Division delivered improved results in 1996.
Income from operations was $11.2 million in 1995 compared with $17.6
million in 1994. Excluding real estate gains, Properties Division income from
operations decreased $2.8 million. The decrease was due to a $1.2 million
decline in income from developed properties due to sales of such properties, and
a $0.9 million decrease in income from landfill operations due, in part, to the
adverse weather in California in early 1995 and an unusually large contract in
Arizona in 1994.
ENVIRONMENTAL MATTERS
The Company is subject to federal, state and local environmental laws and
regulations which require the Company to remove or mitigate the effect on the
environment of the disposal or release of certain chemical, mineral and
petroleum substances at various sites. Generally, the Company's exposure has
been limited to soil contamination from underground fuel tanks or fuel spillage
rather than exposure resulting from generation of hazardous waste, although it
is a "named party" at one federal Superfund site.
The Company conducts annual environmental assessments of each of its
operating sites. Liabilities are recorded when environmental assessments and/or
remedial efforts are probable, and the costs can be reasonably estimated.
Generally, the timing of these accruals coincides with completion of a
feasibility study or the Company's commitment to a formal plan of action. As
investigation or remediation proceeds, and as the scope of the Company's
obligations become more clearly defined, there may be changes to estimated
costs, which might result in future charges to earnings.
During 1996, the Company charged to income $0.9 million before tax for
environmental remediation costs and made related payments of $0.8 million. At
December 31, 1996, the reserve for environmental remediation costs totaled $5.5
million. The amount reserved represents the estimated undiscounted costs which
the Company will incur to remediate sites with known contamination. No
potential insurance recoveries have been offset against the reserve.
Substantially all amounts accrued are expected to be paid out over the next five
years.
LIQUIDITY AND CAPITAL RESOURCES
CASH FLOWS
Cash and cash equivalents increased $17.1 million in 1996, mainly due to
proceeds received from a private placement of long-term debt in 1996. Cash and
cash equivalents decreased $2.1 million in 1995 compared to 1994.
14
<PAGE>
Operating activities are the principal source of CalMat's cash flows. Over
the past three years, operating activities have provided $125.1 million in cash.
Net cash of $37.2 million generated from operating activities in 1996 was $6.6
million less than in 1995. Net cash of $43.8 million generated from operating
activities in 1995 was essentially unchanged from 1994.
Cash used for investing activities totaled $35.5 million in 1996, a $18.1
million decrease from 1995. The primary reasons for this change were the 1995
acquisition of the remainder of a business previously partially owned for $11.7
million, decreases in installments notes receivable of $11.3 million, decreased
spending on property, plant and equipment of $2.6 million, partially offset by a
decrease in proceeds from sale of real estate of $7.1 million. Cash used for
investing activities totaled $53.6 million in 1995, a $51.9 million increase
from the 1994 level. The primary reasons for this change were increased
spending on property, plant and equipment of $31.1 million, the acquisition of
the remainder of a business previously partially owned for $11.7 million, and
increases in installment notes receivable of $6.9 million.
Net cash provided by financing activities amounted to $24.0 million in
1996, a $16.4 million increase from the $7.6 million provided by financing
activities during 1995. The primary reason for the increase is $115.0 million
in proceeds from issuance of senior notes in 1996; offset by $48.0 million in
net payments on notes payable to banks in 1996 and $35.0 million in payments on
senior notes in 1996. Net cash provided by financing activities amounted to
$7.6 million in 1995, a $58.4 million change from the $50.8 million used for
financing activities during 1994. The primary reason for this change was a
$15.8 million net increase in notes payable in 1995 compared with $42.5 million
in net payments on notes payable in 1994.
Capital expenditures decreased in 1996 to $54.3 million from $57.0 million
in 1995. Capital expenditures increased in 1995 to $57.0 million from $25.8
million in 1994, which was largely due to expansion projects, including the
construction of mining and processing facilities located at Irvine Lake in
Orange County, California, two new asphalt plants in Southern California and a
portable aggregates crushing plant. Management believes that cash provided by
operations and existing borrowing arrangements will provide adequate funds for
current commitments and expected working capital requirements during 1997.
During 1996, 1995 and 1994, the Company paid $9.3 million in cash
dividends.
WORKING CAPITAL
Working capital totaled $52.7 million at December 31, 1996, a $19.2 million
increase from the 1995 level of $33.6 million. The increase was mainly due to
an increase of $25.8 million in cash and a decrease of $3.5 million in accounts
payable, partially offset by decreases in trade accounts receivable of $9.7
million and installment notes receivable of $6.9 million. Working capital
totaled $33.6 million at December 31, 1995, a $1.3 million decrease from the
1994 total of $34.9 million.
OTHER
Total consolidated long-term and short-term borrowings at December 31, 1996
of $116.3 million increased $31.9 million from the balance at December 31, 1995
of $84.4 million, which had in turn increased $15.6 million from the balance at
December 31, 1994 of $68.8 million. Debt as a percent of total capitalization
was 25.9% and 20.3% at December 31, 1996 and 1995, respectively.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The location in this Form 10-K of the Company's Consolidated Financial
Statements, Financial Statement Schedule and Selected Quarterly Financial Data
are set forth in the "Index" on page 16 hereof.
15
<PAGE>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULE
<TABLE>
<CAPTION>
PAGE NUMBER
<S> <C>
Report of Independent Accountants.............................. 17
Consolidated Balance Sheets as of December 31, 1996 and 1995... 18
Consolidated Statements of Operations for the
three years ended December 31, 1996, 1995, and 1994............ 19
Consolidated Statements of Cash Flow for the
three years ended December 31, 1996, 1995, and 1994............ 20
Consolidated Statements of Stockholders' Equity
for the three years ended December 31, 1996, 1995, and 1994.... 21
Notes to Consolidated Financial Statements..................... 22
Financial Statement Schedule:
II - Valuation and Qualifying Accounts and Reserves......... 33
</TABLE>
Schedules other than those listed above are omitted since they are not
applicable, not required, or the information required to be set forth therein is
included in the financial statements, or in notes thereto.
16
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and Board of Directors
CalMat Co.
Los Angeles, California
We have audited the accompanying consolidated balance sheets of CalMat Co.
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated
statements of operations, stockholders' equity and cash flows for each of the
three years in the period ended December 31, 1996, and the related financial
statement schedule as listed in the index on page 16 of this Annual Report on
Form 10-K. These consolidated financial statements and the financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and the
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
CalMat Co. and subsidiaries as of December 31, 1996 and 1995, and the
consolidated results of their operations and their cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles. In addition, in our opinion, the financial
statement schedule referred to above, when considered in relation to the basic
financial statements taken as a whole, presents fairly, in all material
respects, the information required to be included therein.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
February 28, 1997
17
<PAGE>
CALMAT CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31,
----------------------------
(Amounts in thousands, except share data) 1996 1995
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 17,127 $ --
Cash held in trust for section 1031 exchanges 8,648
Trade accounts receivable, less allowance for discounts and
doubtful accounts ($5,309 in 1996 and $4,570 in 1995) 52,558 62,274
Income taxes receivable 1,395 --
Inventories 13,972 11,705
Prepaid expenses 4,335 3,265
Deferred income taxes 11,867 9,361
Installment notes receivable 337 7,217
-------- --------
Total current assets 110,239 93,822
Installment notes receivable and other assets 27,237 20,670
Investment in and advances to affiliates 1,365 1,236
Costs in excess of net assets of businesses acquired, net 50,410 52,102
Property, plant and equipment:
Land and deposits 183,516 166,995
Buildings, machinery and equipment 495,320 465,631
Construction in progress 31,763 40,082
-------- --------
710,599 672,708
Less: accumulated depreciation and depletion (299,134) (281,008)
-------- --------
Property, plant and equipment, net 411,465 391,700
-------- --------
Total assets $600,716 $559,530
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 20,208 $ 23,753
Accrued liabilities 34,905 32,687
Notes and bonds payable - current portion 100 110
Income taxes payable -- 1,403
Dividends payable 2,324 2,318
-------- --------
Total current liabilities 57,537 60,271
Notes and bonds payable - long term portion 116,233 84,321
Other liabilities and deferred credits 38,429 30,670
Deferred income taxes 56,325 53,119
-------- --------
Total liabilities 268,524 228,381
-------- --------
Commitments and contingencies
Stockholders' equity:
Preferred stock, par value $1; authorized 5,000,000 shares;
none issued or outstanding
Common stock, par value $1; authorized 100,000,000 shares;
issued and outstanding 23,240,312 shares in 1996 and 23,182,312 shares in 1995 23,240 23,182
Additional paid-in capital 41,521 40,588
Retained earnings 267,431 267,379
-------- --------
Total stockholders' equity 332,192 331,149
-------- --------
Total liabilities and stockholders' equity $600,716 $559,530
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
18
<PAGE>
CALMAT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the years ended December 31,
---------------------------------
(Amounts in thousands, except per share data) 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Net sales and operating revenues $399,083 $370,313 $365,243
Net gains on sale of real estate 5,500 4,133 7,678
Other income 3,312 3,736 3,876
-------- -------- --------
407,895 378,182 376,797
-------- -------- --------
Costs and expenses:
Cost of products sold and operating expenses 347,163 326,513 304,721
Selling, general and administrative expenses 37,746 35,847 34,525
Interest expense 5,944 2,675 4,506
Other expenses 1,864 3,005 3,436
Special charges -- 47,000 --
-------- -------- --------
392,717 415,040 347,188
-------- -------- --------
Income (loss) before income taxes 15,178 (36,858) 29,609
Federal and state income taxes 5,844 (15,487) 10,881
-------- -------- --------
Net income (loss) $ 9,334 $(21,371) $ 18,728
======== ======== ========
Per Share Data
Net income (loss) $.40 $(.92) $ .81
======== ======== ========
Cash dividends $.40 $.40 $ .40
======== ======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
19
<PAGE>
CALMAT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<TABLE>
<CAPTION>
For the years ended December 31,
---------------------------------
(Amounts in thousands) 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operating Activities:
Net income (loss) $ 9,334 $(21,371) $ 18,728
Adjustments to reconcile net
income (loss) to cash
provided by operating activities:
Depreciation, cost
depletion and amortization 31,803 31,181 29,929
Special charges -- 47,000 --
Net gains from sale of real estate (5,500) (4,133) (7,678)
Net gains on disposal of property, plant
and equipment (224) (422) (291)
Deferred income taxes 700 (19,356) 389
Changes in operating
assets and liabilities
Trade accounts receivable, net 9,716 457 3,690
Inventories, prepaid expenses and
other assets (8,895) 113 (3,417)
Accounts payable, accrued
liabilities and other liabilities 3,100 8,850 1,984
Federal and state income taxes (2,798) 2,117 850
Other 3 (592) (174)
-------- -------- -------
Cash provided by operating activities 37,239 43,844 44,010
-------- -------- -------
Investing Activities:
Purchase of property, plant and equipment (54,320) (56,962) (25,836)
Proceeds from sale of property, plant and
equipment 835 1,554 773
Proceeds from sale of real estate 11,297 18,438 20,957
Installment notes receivable 6,817 (4,455) 2,397
Investment in and advances to affiliates (129) (706) 52
Business acquired -- (11,682) --
Other -- 2 --
-------- -------- -------
Cash used for investing activities (35,500) (53,563) (1,657)
-------- -------- -------
Financing Activities:
Stock options exercised 991 680 551
Notes payable to banks (48,000) 15,750 (21,759)
Principal payments on notes and bonds payable (98) (88) (20,721)
Retirement of senior notes (35,000) -- --
Proceeds from senior notes 115,000 -- --
Payment of cash dividends (9,285) (9,260) (9,253)
Hedge costs and other loan fees, net 428 498 372
-------- -------- -------
Cash provided by (used for) financing
activities 24,036 7,580 (50,810)
-------- -------- -------
Increase (decrease) in cash 25,775 (2,139) (8,457)
Cash held in trust for section 1031 exchanges (8,648) -- --
-------- -------- -------
Increase (decrease) in cash and cash equivalents 17,127 (2,139) (8,457)
Balance, beginning of period -- 2,139 10,596
-------- -------- -------
Balance, end of period $ 17,127 $ -- $ 2,139
======== ======== ========
Supplemental Disclosure of Cash Flow
Information:
Cash paid during the year for:
Interest $ 6,569 $ 2,353 $ 4,462
Income taxes 7,711 2,129 10,602
</TABLE>
The accompanying notes are an integral part of these financial statements.
20
<PAGE>
CALMAT CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
For the years ended December 31, 1996, 1995 and 1994
----------------------------------------------------
Additional Total
Common Paid-In Retained Stockholders'
(Amounts in thousands) Stock Capital Earnings Equity
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1993 $23,109 $39,202 $288,735 $351,046
Net income for 1994 -- -- 18,728 18,728
Common stock repurchased (8) (12) (172) (192)
Stock options exercised 38 740 -- 778
Cash dividends declared -- -- (9,256) (9,256)
------- ------- -------- --------
Balance, December 31, 1994 23,139 39,930 298,035 361,104
Net loss for 1995 -- -- (21,371) (21,371)
Common stock repurchased (1) (2) (21) (24)
Stock options exercised 44 660 -- 704
Cash dividends declared -- -- (9,264) (9,264)
------- ------- -------- --------
Balance, December 31, 1995 23,182 40,588 267,379 331,149
Net income for 1996 -- -- 9,334 9,334
Stock options exercised 58 933 -- 991
Cash dividends declared -- -- (9,282) (9,282)
Balance, December 31, 1996 $23,240 $41,521 $267,431 $332,192
------- ------- -------- --------
</TABLE>
The accompanying notes are an integral part of these financial statements.
21
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the
accounts of CalMat Co. (the Company) and all of its majority-owned subsidiaries.
All significant intercompany accounts and transactions have been eliminated in
consolidation. The Company uses the equity method of accounting for companies
where ownership is between 20 and 50 percent.
CASH AND CASH EQUIVALENTS: Cash and cash equivalents include all cash balances
and highly liquid investments with a maturity of three months or less when
purchased.
INVENTORIES: Inventories are recorded when purchased or produced and are stated
at the lower of cost or market.
COSTS IN EXCESS OF NET ASSETS OF BUSINESSES ACQUIRED: Costs in excess of the
fair value of net assets of businesses acquired are amortized on a straight-line
basis over periods not exceeding 40 years. Accumulated amortization of such
costs was $12.8 million and $11.1 million at December 31, 1996 and 1995,
respectively. The Company periodically assesses whether there has been a
permanent impairment in the value of goodwill and other intangible assets by
considering factors such as expected future operating income, current operating
results, trends and prospects, as well as the effects of demand, competition,
and other economic factors. Management believes no impairment has occurred.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment is carried at
cost. Depreciation is computed using straight-line rates over estimated useful
lives (5 to 35 years for plant structures and components and 4 to 25 years for
machinery and equipment).
Depletion of rock and sand deposits is computed by the unit-of-production
method based upon estimated recoverable quantities of rock and sand.
Significant expenditures which add materially to the utility or useful lives
of property, plant and equipment are capitalized. All other maintenance and
repair costs are charged to current operations.
The cost and related accumulated depreciation of assets replaced, retired or
otherwise disposed of are eliminated from the property accounts, and any gain or
loss is reflected in income.
RECLAMATION COSTS: The estimated costs of reclamation associated with mining
activities are accrued during production. Such costs are taken into account in
determining the cost of production. The reserve for reclamation costs was $14.6
million and $11.6 million at December 31, 1996 and 1995, respectively. Of these
balances, the non-current portions of $13.6 million and $10.9 million were
included in other liabilities and deferred credits at December 31, 1996 and
1995, respectively.
INCOME TAXES: Income taxes are determined in accordance with SFAS No. 109,
"Accounting for Income Taxes". Deferred income taxes are determined by the
liability method and arise from differences in bases between tax reporting and
financial reporting.
ENVIRONMENTAL: Environmental remediation expenditures that relate to current
operations are expensed or capitalized as appropriate. Expenditures that relate
to an existing condition caused by past operations, and which do not contribute
to current or future revenue generation, are expensed. Liabilities are recorded
when environmental assessments and/or remedial efforts are probable, and the
costs can be reasonably estimated. Estimated liabilities are not discounted to
present value. Generally, the timing of these accruals coincides with completion
of a feasibility study or the Company's commitment to a formal plan of action.
The reserve for environmental remediation costs was $5.5 million and $5.4
million at December 31, 1996 and 1995, respectively.
SELF-INSURANCE: The Company is self-insured up to certain levels for
automobile liability and general liability. The Company is also self-insured up
to certain levels for health care claims for eligible active and retired
employees. The Company accrues its estimated costs monthly in connection with
its portion of insurance losses/claims. Claims paid by the Company are charged
against the reserve. Additionally, the Company maintains a reserve for claims
incurred but not reported based on actuarially estimated costs.
22
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING ESTIMATES: The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the reported
period. Actual results could differ from those estimates.
REVENUE RECOGNITION: Sales and operating revenues are recorded upon shipment
of product, net of discounts, if any, and include revenue earned pursuant to the
terms of property leasing contracts. Gains and losses on real estate are
recorded upon consummation of the transaction. Other income relates primarily
to interest and dividend income, miscellaneous rental income and gains on sale
of fixed assets which are recognized in accordance with the terms of various
contractual arrangements or upon receipt (as applicable).
NOTE 2: ACCRUED LIABILITIES
Accrued liabilities consist of the following at December 31:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995
- ----------------------------------------------------------------------------
<S> <C> <C>
Payroll, vacation and other benefits $11,607 $ 7,585
Workers' compensation 1,648 2,550
Profit sharing 4,248 4,022
Other 17,402 18,530
------- -------
$34,905 $32,687
======= =======
</TABLE>
NOTE 3: FEDERAL AND STATE TAXES
Income (loss) before income taxes and the related income tax expense (benefit)
for the years ended December 31, are as follows:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income (Loss) Before Income Taxes and Cumulative
Effect of Change in Accounting Principle $15,178 $(36,858) $29,609
======= ======== =======
Income Tax Expense (Benefit) $ 5,844 $(15,487) $10,881
======= ======== =======
</TABLE>
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal Income Tax:
Currently payable $ 4,672 $ 1,376 $6,794
Deferred (169) (13,475) 1,792
------ -------- ------
4,503 (12,099) 8,586
------ -------- ------
State Income Tax:
Currently payable 1,327 532 2,012
Deferred 14 (3,920) 283
------ -------- ------
1,341 (3,388) 2,295
------ -------- ------
$5,844 $(15,487) $10,881
====== ======== =======
</TABLE>
23
<PAGE>
CALMAT CO. AND SUBSIDIARIES
Consolidated Statements of Cash Flow
<TABLE>
<CAPTION>
For the years ended December 31,
-----------------------------------------
(Amounts in thousands) 1996 1995 1994
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 9,334 $ (21,371) $ 18,728
Adjustments to reconcile net income (loss) to cash provided
by operating activities:
Depreciation, cost depletion and amortization 31,803 31,181 29,929
Special charges -- 47,000 --
Net gains from sale of real estate (5,500) (4,133) (7,678)
Net gains on disposal of property, plant and equipment (224) (422) (291)
Deferred income taxes 700 (19,356) 389
Changes in operating assets and liabilities
Trade accounts receivable, net 9,716 457 3,690
Inventories, prepaid expenses and other assets (8,895) 113 (3,417)
Accounts payable, accrued liabilities and other liabilities 3,100 8,850 1,984
Federal and state income taxes (2,798) 2,117 850
Other 3 (592) (174)
-----------------------------------------
Cash provided by operating activities 37,239 43,844 44,010
-----------------------------------------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (54,320) (56,962) (25,836)
Proceeds from sale of property, plant and equipment 835 1,554 773
Proceeds from sale of real estate 11,297 18,438 20,957
Installment notes receivable 6,817 (4,455) 2,397
Investment in and advances to affiliates (129) (706) 52
Business acquired -- (11,682) --
Other -- 2 --
-----------------------------------------
Cash used for investing activities (35,500) (53,563) (1,657)
-----------------------------------------
FINANCING ACTIVITIES:
Stock options exercised 991 680 551
Notes payable to bank (48,000) 15,750 (21,759)
Principal payments on notes and bonds payable (98) (88) (20,721)
Retirement of senior notes (35,000) -- --
Proceeds from senior notes 115,000 -- --
Payment of cash dividends (9,285) (9,260) (9,253)
Hedge costs and other loan fees, net 428 498 372
-----------------------------------------
Cash provided by (used for) financing activities 24,036 7,580 (50,810)
-----------------------------------------
Increase (decrease) in cash 25,775 (2,139) (8,457)
Cash held in trust for section 1031 exchanges (8,648) -- --
-----------------------------------------
Increase (decrease) in cash and cash equivalents 17,127 (2,139) (8,457)
Balance, beginning of period -- 2,139 10,596
=========================================
Balance, end of period $ 17,127 $ -- $ 2,139
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest $ 6,569 $ 2,353 $ 4,462
Income taxes 7,711 2,129 10,602
</TABLE>
The accompanying notes are an integral part of these financial statements.
24
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4: NOTES AND BONDS PAYABLE
Notes and bonds payable consist of the following at December 31:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995
- ----------------------------------------------------
<S> <C> <C>
Notes payable to banks $ -- $48,000
Senior notes 115,000 35,000
Municipal improvement bonds 1,333 1,431
-------- -------
Total 116,333 84,431
Less current portion 100 110
-------- -------
Long-term portion $116,233 $84,321
======== =======
</TABLE>
At December 31, 1996, the Company had a formal committed revolving credit
facility with a group of banks totaling $125.0 million which will expire in
1999. The Company pays a facility fee on the committed facility.
There were no borrowings outstanding under this credit facility at December
31, 1996. The $48.0 million of short-term bank borrowings made under this credit
facility and included in notes payable to banks at December 31, 1995 bore rates
equal to or less than the prime bank lending rate which was 8.5%. Committed
credit available under the revolving credit facility provides management with
the ability to refinance the short-term bank borrowings on a long-term basis
and, as it is management's intention to do so, these borrowings have been
classified as long-term debt.
The $115.0 million of senior notes outstanding at December 31, 1996 were
issued pursuant to a note purchase agreement dated December 18, 1996 between the
Company and a group of institutional investors. This private placement of senior
notes was issued in four tranches at interest rates ranging from 7.19% through
7.66%, with maturities beginning in December 2003 through December 2011.
A portion of the proceeds from the issuance of senior notes were employed to
pay down the $35.0 million of senior notes outstanding at December 31, 1995 as
well as the outstanding borrowings under the revolving credit facility.
The loan agreements contain certain covenants which address the incurrence of
additional debt, creation of liens, and maintenance of minimum net worth and
financial ratios.
Maturities of notes and bonds payable during the next five years are as
follows: 1997, $0.1 million; 1998, $0.1 million; 1999, $0.1 million; 2000, $0.1
million; and 2001, $0.1 million.
NOTE 5: STOCK OPTIONS AND RIGHTS
The Company has three stock option plans, the 1987 Stock Option Plan, the 1990
Stock Option Plan and the 1993 Stock Option Plan. Under these plans, the Company
has authorized the issuance of options up to 1,000,000, 600,000 and 900,000
shares of common stock for the 1987, 1990 and 1993 Plans, respectively, to
executives and certain key employees as determined by the Stock Option Sub-
Committee of the Management Development and Compensation Committee of the Board
of Directors. The price of the shares subject to each option is set by the
Committee but may not be less than the fair market value of the shares at the
date of grant. Options generally become exercisable in four annual installments
beginning one year after the date of grant and expire ten years after the date
of grant. In 1996, 92,484 options expired. No options expired in 1995. In 1994,
220 options expired. Stock option activity and weighted average option exercise
price for the years 1996, 1995 and 1994 follows:
25
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
1996 1995 1994
Weighted-Average Weighted-Average Weighted-Average
(Share amounts in thousands) Shares Exercise Price Shares Exercise Price Shares Exercise Price
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 1,797 $21.28 1,899 $21.32 1,680 $21.80
Granted 549 17.79 69 18.23 328 19.42
Exercised (58) 17.05 (45) 15.32 (38) 19.83
Forfeited and expired (261) 20.63 (126) 22.23 (71) 24.68
----- ------ ----- ------ ----- ------
Outstanding at end of year 2,027 $20.54 1,797 $21.28 1,899 $21.32
===== ====== ===== ====== ===== ======
Exercisable at end of year 1,229 $22.12 1,288 $22.16 1,082 $22.96
===== ====== ===== ====== ===== ======
Available for future options 431 812 762
===== ====== ===== ====== ===== ======
</TABLE>
The following table summarizes information about stock options outstanding at
December 31, 1996:
<TABLE>
<CAPTION>
(Share amounts in thousands) Options Outstanding Options Exercisable
- --------------------------------------------------------------------------------------------------------------------
Number Weighted-Average Number
Grant Outstanding Remaining Weighted-Average Exercisable Weighted-Average
Date at 12/31/96 Contractual Life Exercise Price at 12/31/96 Exercise Price
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
11/25/96 258 9.90 $18.28 -- $ --
1/23/96 223 9.06 17.25 -- --
11/22/94 231 7.90 18.87 115 18.87
11/23/93 281 6.90 17.50 209 17.50
11/24/92 191 5.90 22.25 191 22.25
11/26/91 230 4.90 19.37 230 19.37
All other 613 4.26 24.64 484 26.14
----- ---- ------ ----- ------
2,027 6.50 $20.54 1,229 $22.12
===== ==== ====== ===== ======
</TABLE>
The weighted average fair value at date of grant for options granted during
1996, 1995 and 1994 was $3.53, $4.03 and $5.04 per option, respectively. The
fair value of options at date of grant was estimated using the Black Scholes
model with the following weighted average assumptions:
<TABLE>
<CAPTION>
1996 1995 1994
- ------------------------------------------------------------------
<S> <C> <C> <C>
Expected life (years) 3.5 3.5 3.5
Interest Rate 6.31% 5.66% 7.88%
Volatility 0.1972 0.2561 0.2891
Dividend yield 2.15% 2.32% 2.11%
</TABLE>
The Company applies APB Opinion No. 25, "Accounting for Stock Issued to
Employees" and related Interpretations in accounting for its stock option plans.
Accordingly, no compensation cost has been recognized for this plan. Had
compensation cost for the Company's plan been determined based on the fair value
at the grant dates for awards under the plan consistent with the method of
Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation", the Company would have recorded stock-based
compensation expense of $0.9 million ($0.7 million after tax or $0.03 per share)
in 1996, $0.9 million ($0.7 million after tax or $0.03 per share) in 1995 and
$0.2 million ($0.1 million after tax or $0.01 per share) in 1994.
26
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In September 1987, the Company declared a dividend distribution of one common
share purchase right on each outstanding share of common stock. When
exercisable, each right will entitle its holder to buy one share of the
Company's stock at a price of $90 per share until September 1997. The rights
will become exercisable if a person acquires 25.0% or more of the Company's
stock or makes an offer, the consummation of which will result in the person's
owning 30.0% or more of the Company's stock. In the event the Company is
acquired in a merger, each right entitles the holder to purchase common stock of
the surviving company having a market value twice the exercise price of the
right. The rights may be redeemed by the Company at a price of $.05 per right at
any time prior to a person acquiring 25.0% of the Company's common stock.
NOTE 6: EARNINGS PER SHARE
Earnings per common equivalent share (common shares adjusted for dilutive
effect of common stock options) have been computed by dividing net income for
each period by the weighted-average shares of common stock outstanding.
Weighted-average shares used for 1996, 1995 and 1994 totaled 23,245,000,
23,176,000 and 23,224,000, respectively.
NOTE 7: FINANCIAL INSTRUMENTS AND CONCENTRATIONS OF CREDIT RISK
The Company has only limited involvement with derivative financial instruments
and does not use them for trading purposes. The Company enters into interest
rate swap agreements to manage its interest rate risk. Interest rate swaps allow
the Company to effectively convert a portion of its floating-rate borrowings
into fixed-rate obligations. The interest rate differential to be received or
paid is recognized over the lives of the agreements as an adjustment to interest
expense. Counterparties to these agreements are high credit quality financial
institutions, and nonperformance is considered remote. In the unlikely event
that a counterparty fails to meet the terms of an agreement, the Company's
exposure is limited to the interest rate differential.
At December 31, 1996, the Company had no outstanding interest rate swaps.
However, at December 31, 1995, the Company had an outstanding interest rate swap
agreement that effectively converted $15.0 million of variable rate debt to
fixed rate borrowings.
Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of periodic temporary investments of excess
cash and trade receivables. The Company places its temporary excess cash
investments in high quality short-term money market instruments through several
high credit quality financial institutions. A significant portion of the
Company's sales are to customers in the construction industry, and, as such, the
Company is directly affected by the well-being of that industry. However, the
credit risk associated with trade receivables is minimal due to the Company's
large customer base and ongoing control procedures which monitor the credit
worthiness of customers. The Company generally obtains lien rights on all major
projects. Historically, the Company has not experienced significant losses on
trade receivables.
The following disclosure of the estimated fair value of financial instruments
is made in accordance with the requirements of SFAS No. 107, "Disclosures About
Fair Value of Financial Instruments." The estimated fair value amounts have been
determined by the Company using available market information and valuation
methodologies described below. However, considerable judgments are required in
interpreting market data to develop the estimates of fair value. Accordingly,
the estimates presented herein may not be indicative of the amounts that the
Company could realize among willing parties in a current market transaction.
The carrying values of cash equivalents, trade receivables and accounts
payable approximate fair values due to the short-term maturities of these
instruments. The carrying amounts and estimated fair values of the Company's
other financial instruments at December 31 are as follows:
<TABLE>
<CAPTION>
1996 1995
---------------------------- ----------------------------
Carrying Amount Fair Value Carrying Amount Fair Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Notes receivable $ 2,842 $ 2,569 $ 9,830 $ 9,495
Notes and bonds payable 116,333 117,333 84,431 85,300
Interest rate swaps-unrealized loss -- -- -- (58)
</TABLE>
27
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The methods and assumptions used to estimate the fair value of each class of
financial instruments are as follows:
NOTES RECEIVABLE: The fair value has been estimated using the expected future
cash flows discounted at market interest rates.
NOTES AND BONDS PAYABLE: The fair value was estimated by discounting the future
cash flows using rates currently available for debt of similar terms and
maturity. The carrying values of short-term bank loans were assumed to
approximate fair values due to their short-term maturities.
INTEREST RATE SWAPS: Fair values are based on market value estimates from
dealers.
NOTE 8: RETIREMENT PLANS
The Company has a trusteed 401(k) plan, a profit-sharing plan and a money
purchase pension plan to provide funds from which retirement benefits are paid
to substantially all salaried employees of the Company and its wholly owned
subsidiaries, including officers and directors who are also employees. Annual
contributions to these plans made by the Company approximate 15.0% of the
aggregate compensation paid or accrued each year to participants in the plan.
The Company also has a nonqualified, defined benefit Supplemental Executive
Retirement Plan (SERP) for certain key executives. Benefits earned under the
SERP are fully vested at age 55 and seven years of service, however the full
amount of accrued benefit will not begin until age 62. The plan is unfunded and
had a projected benefit obligation of $5.3 million at December 31, 1996.
Pension expense related to the plan was $1.1 million in 1996. The Company also
contributes to various union pension plans, as specified by certain union
agreements, and non-union pension plans which cover substantially all hourly
employees. Contributions to all retirement plans charged to income totaled $9.9
million in 1996, $7.9 million in 1995 and $8.2 million in 1994.
The Company provides certain health care and life insurance benefits to
eligible retired employees. Salaried and non-union hourly participants generally
become eligible after reaching age 62 with 20 years of service or after reaching
age 65 with 15 years of service. The health care plan is contributory and the
life insurance plan is noncontributory. The plans are unfunded.
The following table sets forth the plans' funded status reconciled with the
amount included in the caption other liabilities and deferred credits in the
Company's balance sheets at December 31:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Accumulated Postretirement Benefit Obligation
Retirees $ 5,165 $ 6,224 $ 5,152
Fully eligible active plan participants 630 675 748
Other active plan participants 1,472 1,488 1,006
------- ------- -------
7,267 8,387 6,906
Plan assets at fair value -- -- --
------- ------- -------
Accumulated Postretirement Benefit Obligation in excess of plan assets 7,267 8,387 6,906
------- ------- -------
Unrecognized prior service cost 1,348 1,528 1,708
Unrecognized net gain 2,178 628 2,041
------- ------- -------
Accrued postretirement benefit cost at December 31 $10,793 $10,543 $10,655
======= ======= =======
</TABLE>
The net periodic postretirement benefit cost for 1996, 1995 and 1994 included
the following components:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits attributed to service during the period $ 290 $ 230 $ 289
Interest cost on the Accumulated Postretirement Benefit Obligation 554 452 511
Net amortization (180) (293) (192)
----- ----- -----
Net periodic postretirement benefit cost $ 664 $ 389 $ 608
===== ===== =====
</TABLE>
28
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For measurement purposes, a 10.9% annual rate of increase in the per capita
cost of covered health care benefits was assumed for 1997; the rate was assumed
to decrease gradually to 6.0% by 2011 and remain at that level thereafter. The
weighted-average discount rate used in determining the Accumulated
Postretirement Benefit Obligation was 7.5% in 1996, 7.0% in 1995 and 8.0% in
1994.
The health care cost trend rate assumption has a significant effect on the
amounts reported. To illustrate, increasing the assumed health care cost trend
rates by one percentage point in each year would increase the Accumulated
Postretirement Benefit Obligation as of December 31, 1996 by $0.8 million and
the aggregate of the service and interest cost components of net periodic
postretirement benefit cost for the year then ended by $0.1 million.
NOTE 9: SPECIAL CHARGES
The Company recorded a special charge of $2.0 million in the second quarter of
1995 relating to the consolidation of the Company's construction materials
operations. The net after-tax effect of this charge was $1.2 million, or $0.05
per share.
The Company adopted SFAS No. 121, "Accounting for the Impairment of Long-Lived
Assets and For Long-Lived Assets to be Disposed Of " during the fourth quarter
of 1995. This required accounting change resulted in a pre-tax charge of $45.0
million ($26.5 million after-tax, or $1.14 per share).
SFAS 121 changed the method of determining and measuring impairment for long-
lived assets. For operating properties, the standard requires that impairment be
measured at the plant or specific property level; under previous accounting
rules it was acceptable to measure impairment at the regional or divisional
level. Further, if an impairment, as now defined, is identified, the standard
requires measurement of the impairment using fair value, which in most cases
requires the use of discounted cash flows, which is the principal reason for the
write-down of real estate development projects. Given the nature of the
Company's assets, the requirements resulted in substantially greater write-downs
than under previous accounting rules.
The $45.0 million pre-tax charge can be broken out as follows:
<TABLE>
- -----------------------------------------------------------------------------
<S> <C>
Operating properties $24,648
Real estate development projects 14,821
Assets to be Disposed Of 5,531
-------
$45,000
=======
</TABLE>
Impairment charges for operating properties relate to sites where, due to
intense competition and/or difficult production environments, marginally
profitable or loss operations persist. Impairment charges for real estate,
including Assets to be Disposed Of, stem from severe declines in California and
Arizona real estate values for properties acquired or development projects
committed to at the peak of those markets.
NOTE 10: COMMITMENTS AND CONTINGENCIES
The Company had surety bonds and standby letters of credit outstanding
totaling approximately $58.5 million at December 31, 1996, which provide
security for various insurance and performance obligations.
The Company has retained certain self-insurance risks with respect to
automobile and general liability and certain health care claims.
29
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Company has been named by the U.S. Environmental Protection Agency ("EPA")
as a defendant in a civil action involving one "Superfund" cleanup site. The
Company is one of many entities so named. No final remedy has been selected and
the Company's share of total liability, if any, is unable to be quantified at
this time. The Company believes that the wastes attributed to it were not
hazardous and represents an extremely small (less than one tenth of one percent)
percentage of the total volume of waste at this site. At two other sites, the
Company had been named as a potentially responsible party. With respect to one
site, a settlement with the EPA has been entered into, and with respect to the
other, the EPA has informed the Company that it does not intent to pursue a
claim against the Company.
The Company is subject to various legal proceedings, claims and liabilities
which arise in the ordinary course of its business. In the opinion of
management, the amount of ultimate liability with respect to these actions will
not have a material adverse effect on the Company's results of operations, cash
flow or financial position.
NOTE 11: BUSINESS SEGMENT INFORMATION
The Company operates principally in two business segments: Construction
Materials and Properties. Operations in the Construction Materials Division
include the mining and sale of aggregates (rock, sand and gravel), the
manufacture and sale of ready mixed concrete, and the manufacture and sale of
hot-mix asphalt. The Division maintains a fleet of specialty paving equipment
which it rents to customers. It also markets Guardtop(R), an asphalt surface
sealer, and is a distributor of paving reinforcement fabric. Also included in
this Division is Western Environmental Contracting, Inc., a wholly owned
subsidiary that provides soil remediation, crushing and contracting services.
These products and services are used primarily in commercial and residential
construction, public construction projects and projects to build, expand and
repair roads and highways.
The Division operates aggregates processing plants at 32 locations serving the
Los Angeles, San Diego, Bakersfield, Fresno, Ventura, Santa Barbara and San
Francisco Bay areas of California; Phoenix and Tucson, Arizona; and Albuquerque,
New Mexico. Ready mixed concrete batch plants are operated at 25 locations in
these markets except for the Los Angeles and San Francisco Bay areas. Of the 25
ready mixed concrete locations, 13 are sites which also have aggregates
processing plants. Asphalt plants are operated at 35 locations in metropolitan
Los Angeles and San Diego, the San Francisco Bay and San Joaquin Valley areas of
California; Phoenix and Tucson, Arizona; and Albuquerque, New Mexico. Of the 35
asphalt plant locations, 20 are sites which also have aggregates processing
plants and/or ready mixed concrete plants.
CalMat's 36,000 acres of fee owned and leased lands are managed and overseen
by our Properties Division in conjunction with the Resource Management
Department of the Construction Materials Division. The Resource Management
Department is responsible for the acquisition of all property used in the
Company's aggregates operations and for obtaining all necessary land use
entitlements for aggregates operations and planning for reclamation of the land
once reserves are depleted. The Properties Division is responsible for
maximizing the value of property not used in the construction materials business
by developing, selling or leasing these properties. Income sources for this
Division include rentals, landfill operations and self-storage facilities.
30
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Business segment information for the years ended December 31, is as follows:
<TABLE>
<CAPTION>
(Amounts in thousands) 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenues:
Construction Materials $377,452 $350,536 $340,840
Properties - Operations 21,631 19,777 24,403
Properties - Real estate gains 5,500 4,133 7,678
Corporate and other 3,312 3,736 3,876
-------- -------- --------
Total $407,895 $378,182 $376,797
======== ======== ========
Income (loss) before income taxes:
Construction Materials $ 17,134 $ 10,316 $ 24,212
Properties - Operations 9,362 7,103 9,900
Properties - Real estate gains 5,500 4,133 7,678
Corporate and unallocated expenses, net (11,678) (11,092) (10,115)
Interest expense (5,944) (2,675) (4,506)
Other income 804 2,357 2,440
Special charges -- (47,000) --
-------- -------- --------
Total $ 15,178 $(36,858) $ 29,609
======== ======== ========
Identifiable assets (as of December 31):
Construction Materials $439,148 $428,437 $414,456
Properties 117,360 102,233 130,823
Corporate and other 44,208 28,860 27,558
-------- -------- --------
Total $600,716 $559,530 $572,837
======== ======== ========
Depreciation, cost depletion and amortization:
Construction Materials $ 28,272 $ 27,552 $ 25,400
Properties 2,674 2,729 3,683
Corporate and other 857 900 846
-------- -------- --------
Total $ 31,803 $ 31,181 $ 29,929
======== ======== ========
Capital expenditures and business expansion:
Construction Materials $ 39,421 $ 61,108 $ 17,181
Properties 14,862 8,365 8,025
Corporate and other 37 295 630
-------- -------- --------
Total $ 54,320 $ 69,768 $ 25,836
======== ======== ========
</TABLE>
Income (loss) from operations by business segment represents total revenues
less direct operating expenses, segment selling, general and administrative
expenses and certain allocated corporate general and administrative expenses.
Corporate and unallocated expenses include corporate administrative expenses and
support expenses not allocated to business segments. Assets classified as
corporate and other consist primarily of cash and cash equivalents, notes
receivable, general office facilities and other assets.
A substantial portion of the Company's revenues and income before income taxes
result from construction materials operations located in Southern California.
31
<PAGE>
CALMAT CO. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12: QUARTERLY OPERATING RESULTS (UNAUDITED)
<TABLE>
<CAPTION>
1996 Quarter Ended
- ------------------------------------------------------------------------------------------------------------------------------
(Unaudited; Amounts in thousands, except per share data) March 31 June 30 Sept. 30 Dec. 31 Year
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues $82,656 $106,682 $116,560 $101,997 $407,895
Gross profit 9,989 18,543 19,987 12,213 60,732
Net income (loss) (524) 4,368 5,194 296 9,334
Net income (loss) per share /(c)/ (.02) .19 .22 .01 .40
</TABLE>
<TABLE>
<CAPTION>
1995 Quarter Ended
- --------------------------------------------------------------------------------------------------------------------------------
(Unaudited; Amounts in thousands, except per share data) March 31 June 30 Sept. 30 Dec. 31 Year
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total revenues $69,954 $103,047 $100,862 $104,319 $378,182
Gross profit 6,958 18,846 14,701 11,164 51,669
Net income (loss) (1,982) 4,105/(a)/ 3,215 (26,709)/(b)/ (21,371)
Net income (loss) per share/ (c)/ (.09) .18 .14 (1.15) (.92)
</TABLE>
(a) Includes a charge of $1.2 million, or $0.05 per share, related to a
management consolidation of the Company's construction materials operations.
(b) Includes a non-cash charge of $26.5 million, or $1.14 per share, to adopt
the accounting standard for impairment of long-lived assets (SFAS 121).
(c) The sum of the quarterly net income per share amounts may not equal the year
because quarterly and annual figures are required to be independently
calculated.
32
<PAGE>
CALMAT CO. AND SUBSIDIARIES
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Col. A Col. B Col. C Col. D Col. E
- ---------------------------------------------------------------------------------------------------------------------
Balance at Additions Charged to Balance at
Beginning Costs and Other End of
Description of Period Expenses Accounts Deductions Period
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
DECEMBER 31, 1996:
Reserves deducted from assets to
which they apply:
Allowance for doubtful trade receivables... $ 4,176 $ 1,946 $ - $ 1,325 $ 4,797
Allowance for cash discounts............... 394 3,602 - 3,484 512
Allowance for doubtful notes receivable.... 1,219 86 - 759 546
Reserves included in liabilities:
Environmental remediation.................. 5,388 944 - 785 5,547
Reclamation................................ 11,604 3,186 - 207 14,583
------- ------- ----- ------- -------
Total................................... $22,781 $ 9,764 $ - $ 6,560 $25,985
======= ======= ===== ======= =======
DECEMBER 31, 1995:
Reserves deducted from assets to
which they apply:
Allowance for doubtful trade receivables... $ 3,906 $ 3,368 $ - $ 3,098 (a) $ 4,176
Allowance for cash discounts............... 348 2,790 - 2,744 (b) 394
Allowance for doubtful notes receivable.... 938 404 - 123 (a) 1,219
Reserves included in liabilities:
Environmental remediation.................. 3,214 2,343 - 169 (c) 5,388
Reclamation................................ 5,019 7,767 - 1,182 (c) 11,604
------- ------- ----- ------- -------
Total................................... $13,425 $16,672 $ - $ 7,316 $22,781
======= ======= ===== ======= =======
DECEMBER 31, 1994:
Reserves deducted from assets to
which they apply:
Allowance for doubtful trade receivables... $ 3,854 $ 3,325 $ - $ 3,273 (a) $ 3,906
Allowance for cash discounts............... 320 3,476 - 3,448 (b) 348
Allowance for doubtful notes receivable.... 897 384 - 343 (a) 938
Reserves included in liabilities:
Environmental remediation.................. 4,000 2,069 - 2,855 (c) 3,214
Reclamation................................ 1,200 4,276 - 457 (c) 5,019
------- ------- ----- ------- -------
Total................................... $10,271 $13,530 $ - $10,376 $13,425
======= ======= ===== ======= =======
</TABLE>
______________________
Notes:
(a) Write offs of uncollectible accounts, less recoveries.
(b) Cash discounts allowed.
(c) Payments made.
33
<PAGE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Except for information as to identification and business experience of
executive officers which is set forth in Part I of this report, the information
called for by Item 10 is incorporated herein by reference to the information
included under the caption "Election of Directors for a Term of One Year" on
pages 2 through 9 of the Company's Proxy Statement for the May 1997 Annual
Meeting of Stockholders ("Proxy Statement").
ITEM 11. EXECUTIVE COMPENSATION
The information called for by Item 11 is incorporated herein by reference to
the information included under the captions "Employment Agreements," "Summary
Compensation," "Option Grants for 1996," "Option Exercises and Year-End Value,"
and "Pension Plans" on pages 12 through 15 in the Company's Proxy Statement.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information called for by Item 12 is incorporated herein by reference to
the information included under the captions "Stock Ownership of Certain
Beneficial Owners and Management" and "Election of Directors for a Term of One
Year" on pages 2 through 9 of the Company's Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information called for by Item 13 is incorporated herein by reference to
the information included under the caption "Election of Directors for a Term of
One Year" on pages 2 through 9 of the Company's Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K
(a) List of documents filed as part of this report:
(1) Financial Statements:
See Index to Consolidated Financial Statements and Financial
Statement Schedule on page16 of this Annual Report on Form 10-K.
(2) Financial Statement Schedule:
See Index to Consolidated Financial Statements and Financial
Statement Schedule on page 16 of this Annual Report on Form 10-K.
(3) Exhibits:
The following exhibits are included as part of the Company's 1996
Annual Report on Form 10-K as required by Item 601 of Regulation
S-K. The exhibits identified by asterisks are the management
contracts and compensatory plans or arrangements required to be
filed as exhibits to this Annual Report on Form 10-K.
Stockholders may obtain copies of the exhibits not presented
herein upon written request to: Secretary, CalMat Co., 3200 San
Fernando Road, Los Angeles, CA 90065.
34
<PAGE>
Exhibit 3.1: CalMat Co. Certificate of Incorporation, as amended,
filed as Exhibit 3.1 to the Company's 1987 Annual
Report on Form 10-K, is incorporated herein by
reference.
Exhibit 3.2: Certificate of Amendment of Certificate of
Incorporation, filed May 20, 1992, with Delaware
Secretary of State, filed as Exhibit 3.2 to the
Company's 1992 Annual Report on Form 10-K, is
incorporated herein by reference.
Exhibit 3.3: CalMat Co. By-Laws, filed as Exhibit 3.3 to the
Company's 1993 Annual Report on Form 10-K, is
incorporated herein by reference.
Exhibit 4.1: Rights Agreement, dated as of September 22, 1987,
between CalMat Co. and Security Pacific National
Bank, filed as Exhibit 1 to the Company's Report on
Form 8-K, dated October 5, 1987, is incorporated
herein by reference.
Exhibit 4.2: First Amendment to Rights Agreement, dated as of
October 26, 1992, between CalMat Co. and Bank of
America, N.T.&S.A., formerly known as Security
Pacific National Bank, filed as Exhibit 4.2 to the
Company's 1992 Annual Report on Form 10-K, is
incorporated herein by reference.
Exhibit 10.1: Standby Letter of Credit Facility dated September 26,
1995, between CalMat Co. and ABN-AMRO Bank N.V.,
filed as Exhibit 10.1 to the Company's Report on Form
10-Q for the Quarterly Period Ended September 30,
1995, is incorporated herein by reference.
Exhibit 10.2: First Amended and Restated Credit Agreement dated as
of June 30, 1994, among CalMat Co., Bank of America
National Trust and Savings Association, as Agent, and
The Other Financial Institution Parties Hereto,
Arranged by BA Securities, Inc., filed as Exhibit
10.1 to the Company's Report on Form 10-Q for the
Quarterly Period Ended June 30, 1994, is incorporated
herein by reference.
Exhibit 10.3: Second Amendment, dated February 26, 1996, effective
December 31, 1995, to First Amended and Restated
Credit Agreement dated as of June 30, 1994, among
CalMat Co., Bank of America National Trust and
Savings Association, as Agent, and The Other
Financial Institution Parties Hereto, Arranged by BA
Securities, Inc., filed as Exhibit 10.3 to the
Company's 1995 Annual Report on Form 10-K, is
incorporated herein by reference.
Exhibit 10.4: Note Purchase Agreement, dated as of December 18,
1996, between CalMat Co. and each of the Purchasers
listed therein.
Exhibit 10.5: Amended and Restated CalMat Co. Supplemental
Executive Retirement Plan, effective February 1,
1996, signed by CalMat Co., filed as Exhibit 10.1 to
the Company's Report on Form 10-Q for the Quarterly
Period Ended June 30, 1996, is incorporated herein by
reference.
*Exhibit 10.6: Restatement of Amended and Restated Employment
Agreement originally effective as of July 1, 1984,
between the Company and A. Frederick Gerstell,
executed on April 13, 1993, filed as Exhibit 10.7 to
the Company's 1995 Annual Report on Form 10-K, is
incorporated herein by reference.
*Exhibit 10.7: First Amendment to Restatement of Amended and
Restated Employment Agreement, dated April 13, 1993,
originally effective as of July 1, 1984, between the
Company and A. Frederick Gerstell, executed June 6,
1996, filed as Exhibit 10.2 to the Company's Report
on Form 10-Q for the Quarterly Period Ended June 30,
1996, is incorporated herein by reference.
35
<PAGE>
*Exhibit 10.8: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and A. Frederick Gerstell, executed May 15,
1996, filed as Exhibit 10.3 to the Company's Report
on Form 10-Q for the Quarterly Period Ended June 30,
1996, is incorporated herein by reference.
*Exhibit 10.9: Amended and Restated Trust Agreement, dated April 13,
1993, by and between CalMat Co. and Wachovia Bank and
Trust Company, filed as Exhibit 10.6 to the Company's
1994 Annual Report on Form 10-K, is incorporated
herein by reference.
*Exhibit 10.10: Amended Employment Agreement between the Company and
Scott J Wilcott, filed as Exhibit 10.6 to the
Company's 1990 Annual Report on Form 10-K, is
incorporated herein by reference.
*Exhibit 10.11: Second Amendment to Employment Agreement between the
Company and Scott J Wilcott, dated April 8, 1991,
filed as Exhibit 10.11 to the Company's 1995 Annual
Report on Form 10-K, is incorporated herein by
reference.
*Exhibit 10.12: Third Amendment to Employment Agreement made
effective as of October 30, 1987, between the Company
and Scott J Wilcott, executed June 6, 1996, filed as
Exhibit 10.5 to the Company's Report on Form 10-Q for
the Quarterly Period Ended June 30, 1996, is
incorporated herein by reference.
*Exhibit 10.13: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and Scott J Wilcott, executed May 15, 1996,
filed as Exhibit 10.6 to the Company's Report on Form
10-Q for the Quarterly Period Ended June 30, 1996, is
incorporated herein by reference.
*Exhibit 10.14: Amended Employment Agreement between the Company and
Paul Stanford, filed as Exhibit 10.9 to the Company's
1992 Annual Report on Form 10-K, is incorporated
herein by reference.
*Exhibit 10.15: Second Amendment to Employment Agreement between the
Company and Paul Stanford, dated October 4, 1995,
filed as Exhibit 10.13 to the Company's 1995 Annual
Report on Form 10-K, is incorporated herein by
reference.
*Exhibit 10.16: Third Amendment to Employment Agreement made
effective as of May 31, 1991, between the Company and
Paul Stanford, executed June 6, 1996, filed as
Exhibit 10.7 to the Company's Report on Form 10-Q for
the Quarterly Period Ended June 30, 1996, is
incorporated herein by reference.
*Exhibit 10.17: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and Paul Stanford, executed May 15, 1996,
filed as Exhibit 10.8 to the Company's Report on Form
10-Q for the Quarterly Period Ended June 30, 1996, is
incorporated herein by reference.
36
<PAGE>
*Exhibit 10.18: Letter Agreement Regarding Employment between the
Company and H. James Gallagher, dated August 10,
1993, executed August 12, 1993, filed as Exhibit
10.17 to the Company's 1993 Annual Report on Form 10-
K, is incorporated herein by reference.
*Exhibit 10.19: Amendment, dated December 15, 1996, to Letter
Agreement regarding Employment dated August 10, 1993,
between the Company and H. James Gallagher.
*Exhibit 10.20: Agreement between the Company and H. James Gallagher
dated December 15, 1996, and executed December 30,
1996.
*Exhibit 10.21: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and H. James Gallagher, executed May 15,
1996, filed as Exhibit 10.9 to the Company's Report
on Form 10-Q for the Quarterly Period Ended June 30,
1996, is incorporated herein by reference.
*Exhibit 10.22: Letter Agreement Regarding Employment between the
Company and R. Bruce Rieser, dated January 20, 1995,
executed February 2, 1995, filed as Exhibit 10.16 to
the Company's 1995 Annual Report on Form 10-K, is
incorporated herein by reference.
*Exhibit 10.23: Amendment, dated December 15, 1996, to Letter
Agreement Regarding Employment, dated January 10,
1995, between the Company and R. Bruce Rieser.
*Exhibit 10.24: Agreement between the Company and R. Bruce Rieser,
dated December 15, 1996, and executed December 30,
1996.
*Exhibit 10.25: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and R. Bruce Rieser, executed May 15, 1996,
filed as Exhibit 10.4 to the Company's Report on Form
10-Q for the Quarterly Period Ended June 30, 1996, is
incorporated herein by reference.
*Exhibit 10.26: Supplemental Executive Retirement Plan Agreement,
entered into as of February 1, 1996, between the
Company and Edward J. Kelly, executed May 15, 1996,
filed as Exhibit 10.10 to the Company's Report on
Form 10-Q for the Quarterly Period Ended June 30,
1996, is incorporated herein by reference.
*Exhibit 10.27: Thrift and Profit Sharing Retirement Plan and Money
Purchase Pension Plan for Employees of CalMat Co.,
dated January 1, 1989, filed as Exhibit 10.8 to the
Company's 1989 Annual Report on Form 10-K, is
incorporated herein by reference.
*Exhibit 10.28: Trust Agreement pursuant to the Thrift and Profit
Sharing Retirement Plan and the Money Purchase
Pension Plan for Employees of CalMat Co., dated
October 24, 1989, filed as Exhibit 10.9 to the
Company's 1989 Annual Report on Form 10-K, is
incorporated herein by reference.
*Exhibit 10.29: Second Amended and Restated CalMat Co. Deferred
Compensation Plan, effective December 31, 1996,
executed December 1, 1996.
*Exhibit 10.30: 1987 Stock Option Plan for Executive and Key
Employees of CalMat Co., as amended, filed as Exhibit
4 to the Company's Registration Statement on Form S-8
(File Number 33-18760) effective December 19, 1987,
is incorporated herein by reference.
37
<PAGE>
*Exhibit 10.31: 1990 Stock Option Plan for Executive and Key
Employees of CalMat Co., filed as Exhibit 4.1 to the
Company's Registration Statement on Form S-8 (File
Number 33-43558) effective October 28, 1991, is
incorporated herein by reference.
*Exhibit 10.32: Amended and Restated 1993 Stock Option Plan for
Officers, Directors and Key Employees of CalMat Co.,
filed as Exhibit "A" to the Company's Definitive
Proxy Statement filed with the Commission on March
16, 1994, and mailed to the Company's stockholders on
March 17, 1994, is incorporated herein by reference.
Exhibit 21.1: Subsidiaries of the Company.
Exhibit 23.1: Consent of Coopers & Lybrand L.L.P., certified public
accountants, to incorporation by reference in the
Registration Statements on Form S-8 (File Numbers 33-
18760, 33-43558 and 33-56301) and the related
prospectuses pertaining to the 1987 Stock Option Plan
for Executive and Key Employees of CalMat Co., the
1990 Stock Option Plan for Executive and Key
Employees of CalMat Co., and the Amended and Restated
1993 Stock Option Plan for Officers, Directors and
Key Employees of CalMat Co., respectively, is on page
41 of this Annual Report on Form 10-K.
Exhibit 27: Financial Data Schedule.
(b) Reports on Form 8-K:
There were no Form 8-K reports filed by the Company during the fourth
quarter of 1996.
38
<PAGE>
CALMAT CO.
PROPERTY OWNED AND LEASED
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
ACREAGE /(a)/
----------------------------------------------
JOINT
OWNED LEASED VENTURES TOTAL
----------------------------------------------
<S> <C> <C> <C> <C>
CONSTRUCTION MATERIALS /(b)/
Production and sales property........................... 9,457 7,152 16,609
Reserve property held for future production/not zoned... 4,030 1,115 5,145
Fully depleted property................................. 98 98
Reserve property held for future production/zoned....... 2,599 2,599
Joint ventures, partnerships, partially owned subsidiaries 610 610
----------------------------------------------
Total Construction Materials Division............ 16,184 8,267 610 25,061
PROPERTIES:
Developable............................................. 1,303 13 1,316
Improved property/finished lots......................... 54 3 57
Improved property/fully developed....................... 60 2 62
Landfill/permitted...................................... 244 244
Public storage.......................................... 48 48
Property leased to others............................... 96 8 104
Miscellaneous properties /(c)/.......................... 9,219 9,219
----------------------------------------------
Total Properties Division...................... 11,024 13 13 11,050
Total All Divisions............................ 27,208 8,280 623 36,111
==============================================
</TABLE>
______________________
(a) The Company's continuing program of evaluating the best use of property may
result in reclassification of properties between categories from time to
time.
(b) Certain land in the Construction Materials Division is leased on a short-
term basis as undeveloped property and the revenues generated are reported
in the Properties Division.
(c) Consists of numerous parcels which have limited access and of which
approximately 63% are located in the Mojave Desert, Kern County, California.
39
<PAGE>
CALMAT CO.
SCHEDULE OF ESTIMATED AGGREGATES RESERVES
AS OF DECEMBER 31, 1996
(AMOUNTS IN MILLIONS)
<TABLE>
<CAPTION>
TONS OWNED TONS LEASED TOTAL TONS
---------- ----------- ----------
<S> <C> <C> <C>
Aggregates Reserves.................. 1,019.5 864.2 1,883.7
</TABLE>
40
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statements
of CalMat Co. and subsidiaries on Form S-8 (File Numbers 33-18760, 33-43558 and
33-56301) of our report dated February 28, 1997, on our audits of the
consolidated financial statements and the financial statement schedule of CalMat
Co. and subsidiaries as of December 31, 1996 and 1995, and for the years ended
December 31, 1996, 1995 and 1994, which report is included in this Annual Report
on Form 10-K.
COOPERS & LYBRAND L.L.P.
Los Angeles, California
March 26, 1997
41
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
CalMat Co.
By: /s/ A. FREDERICK GERSTELL
-----------------------------
A. Frederick Gerstell
Chairman of the Board and
Chief Executive Officer
March 25, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ A. FREDERICK GERSTELL
- ----------------------------------
A. Frederick Gerstell Chairman of the Board March 25, 1997
and Chief Executive
Officer
/s/ H. JAMES GALLAGHER
- ----------------------------------
H. James Gallagher Chief Financial Officer March 25, 1997
/s/ BRENT L. STUMME
- ----------------------------------
Brent L. Stumme Corporate Controller March 25, 1997
/s/ JOHN C. ARGUE
- ----------------------------------
John C. Argue Director
March 25, 1997
/s/ ARTHUR BROWN
- ----------------------------------
Arthur Brown Director March 25, 1997
/s/ DENIS R. BROWN
- ----------------------------------
Denis R. Brown Director March 25, 1997
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE CAPACITY DATE
--------- -------- ----
<S> <C> <C>
/s/ HARRY M. CONGER
- ----------------------------------
Harry M. Conger Director March 25, 1997
/s/ RAYBURN S. DEZEMBER
- ----------------------------------
Rayburn S. Dezember Director March 25, 1997
/s/ RICHARD A. GRANT, JR.
- ----------------------------------
Richard A. Grant, Jr. Director March 25, 1997
/s/ GROVER R. HEYLER
- ----------------------------------
Grover R. Heyler Director March 25, 1997
/s/ WILLIAM T. HUSTON
- ----------------------------------
William T. Huston Director March 25, 1997
/s/ WILLIAM JENKINS
- ----------------------------------
William Jenkins Director March 25, 1997
- -----------------------------------
Edward A. Landry Director March 25, 1997
/s/ THOMAS L. LEE
- -----------------------------------
Thomas L. Lee Director March 25, 1997
/s/ THOMAS M. LINDEN
- -----------------------------------
Thomas M. Linden Director March 25, 1997
/s/ GEORGIA R. NELSON
- -----------------------------------
Georgia R. Nelson Director March 25, 1997
/s/ STUART T. PEELER
- ----------------------------------- Director March 25, 1997
Stuart T. Peeler
</TABLE>
43
<PAGE>
[COMPOSITE CONFORMED COPY]
================================================================================
EXHIBIT 10.4
CalMat Co.
$115,000,000
7.19% Series A Senior Notes due 2003
7.45% Series B Senior Notes due 2006
7.53% Series C Senior Notes due 2008
7.66% Series D Senior Notes due 2011
---------------
NOTE PURCHASE AGREEMENT
---------------
Dated as of December 18, 1996
================================================================================
[Exhibits 4.4(a), 4.4(b) and 4.4(c) are photocopies of the opinions as
delivered.]
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
1. AUTHORIZATION OF NOTES..................................................... 1
2. SALE AND PURCHASE OF NOTES................................................. 2
3. CLOSING.................................................................... 2
4. CONDITIONS TO CLOSING...................................................... 2
4.1. Representations and Warranties...................................... 2
4.2. Performance; No Default............................................. 3
4.3. Compliance Certificates............................................. 3
4.4. Opinions of Counsel................................................. 3
4.5. Purchase Permitted By Applicable Law, etc........................... 3
4.6. Sale of Other Notes................................................. 4
4.7. Payment of Special Counsel Fees..................................... 4
4.8. Private Placement Numbers........................................... 4
4.9. Changes in Corporate Structure...................................... 4
4.10. Proceedings and Documents........................................... 4
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................. 4
5.1. Organization; Power and Authority................................... 5
5.2. Authorization, etc.................................................. 5
5.3. Disclosure.......................................................... 5
5.4. Organization and Ownership of Shares of Subsidiaries; Affiliates.... 6
5.5. Financial Statements................................................ 6
5.6. Compliance with Laws, Other Instruments, etc........................ 7
5.7. Governmental Authorizations, etc.................................... 7
5.8. Litigation; Observance of Agreements, Statutes and Orders........... 7
5.9. Taxes............................................................... 8
5.10. Title to Property; Leases........................................... 8
5.11. Licenses, Permits, etc.............................................. 8
5.12. Compliance with ERISA............................................... 9
5.13. Private Offering by the Company..................................... 10
5.14. Use of Proceeds; Margin Regulations................................. 10
5.15. Existing Indebtedness; Future Liens................................. 10
5.16. Foreign Assets Control Regulations, etc............................. 11
5.17. Status under Certain Statutes....................................... 11
5.18. Environmental Matters............................................... 11
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
6. REPRESENTATIONS OF THE PURCHASER.................................... 12
6.1. Purchase for Investment...................................... 12
6.2. Source of Funds.............................................. 12
7. INFORMATION AS TO COMPANY........................................... 13
7.1. Financial and Business Information........................... 13
7.2. Officer's Certificate........................................ 16
7.3. Inspection................................................... 17
8. PREPAYMENT OF THE NOTES............................................. 17
8.1. Required Repayments.......................................... 17
8.2. Optional Prepayments with Make-Whole Amount.................. 18
8.3. Allocation of Partial Prepayments............................ 19
8.4. Special Prepayment Offers.................................... 19
8.5. Maturity; Surrender, etc..................................... 20
8.6. Purchase of Notes............................................ 20
8.7. Make-Whole Amount............................................ 21
9. AFFIRMATIVE COVENANTS............................................... 22
9.1. Compliance with Law.......................................... 22
9.2. Insurance.................................................... 22
9.3. Maintenance of Properties.................................... 23
9.4. Payment of Taxes and Claims.................................. 23
9.5. Corporate Existence, etc..................................... 23
9.6. Ranking...................................................... 23
10.NEGATIVE COVENANTS.................................................. 24
10.1. Transactions with Affiliates................................. 24
10.2. Merger, Consolidation, etc................................... 24
10.3. Senior Funded Indebtedness................................... 25
10.4. Total Funded Indebtedness.................................... 25
10.5. Net Worth.................................................... 25
10.6. Subsidiary Indebtedness...................................... 25
10.7. Liens........................................................ 25
10.8. Interest Coverage............................................ 28
10.9. Sale of Assets............................................... 28
10.10. Lines of Business............................................ 29
11.EVENTS OF DEFAULT................................................... 29
12.REMEDIES ON DEFAULT, ETC............................................ 32
12.1. Acceleration................................................. 32
12.2. Other Remedies............................................... 32
12.3. Rescission................................................... 33
12.4. No Waivers or Election of Remedies, Expenses, etc............ 33
</TABLE>
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<TABLE>
<S> <C>
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES...................... 33
13.1. Registration of Notes...................................... 33
13.2. Transfer and Exchange of Notes............................. 34
13.3. Replacement of Notes....................................... 34
14. PAYMENTS ON NOTES.................................................. 35
14.1. Place of Payment........................................... 35
14.2. Home Office Payment........................................ 35
15. EXPENSES, ETC...................................................... 35
15.1. Transaction Expenses....................................... 35
15.2. Survival................................................... 36
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
AGREEMENT.......................................................... 36
17. AMENDMENT AND WAIVER............................................... 36
17.1. Requirements............................................... 36
17.2. Solicitation of Holders of Notes........................... 36
17.3. Binding Effect, etc........................................ 37
17.4. Notes held by Company, etc................................. 37
18. NOTICES............................................................ 37
19. REPRODUCTION OF DOCUMENTS.......................................... 38
20. CONFIDENTIAL INFORMATION........................................... 38
21. SUBSTITUTION OF PURCHASER.......................................... 39
22. MISCELLANEOUS...................................................... 39
22.1. Successors and Assigns..................................... 39
22.2. Payments Due on Non-Business Days.......................... 40
22.3. Severability............................................... 40
22.4. Construction............................................... 40
22.5. Counterparts............................................... 40
22.6. Governing Law.............................................. 40
</TABLE>
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<TABLE>
<S> <C>
SCHEDULE A -- INFORMATION RELATING TO PURCHASERS
SCHEDULE B -- DEFINED TERMS
SCHEDULE 4.9 -- Changes in Corporate Structure
SCHEDULE 5.3 -- Disclosure Materials
SCHEDULE 5.4 -- Subsidiaries of the Company and
Ownership of Subsidiary Stock
SCHEDULE 5.5 -- Financial Statements
SCHEDULE 5.8 -- Certain Litigation
SCHEDULE 5.9 -- Taxes
SCHEDULE 5.11 -- Patents, etc.
SCHEDULE 5.14 -- Use of Proceeds
SCHEDULE 5.15 -- Existing Indebtedness
EXHIBIT 1-A -- Form of 7.19% Series A Senior Note due 2003
EXHIBIT 1-B -- Form of 7.45% Series B Senior Note due 2006
EXHIBIT 1-C -- Form of 7.53% Series C Senior Note due 2008
EXHIBIT 1-D -- Form of 7.66% Series D Senior Note due 2011
EXHIBIT 4.4(a) -- Form of Opinion of Special Counsel for the
Company
EXHIBIT 4.4(b) -- Form of Opinion of Paul Stanford, Esq.
EXHIBIT 4.4(c) -- Form of Opinion of Special Counsel
for the Purchasers
</TABLE>
iv
<PAGE>
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
7.19% Series A Senior Notes due 2003
7.45% Series B Senior Notes due 2006
7.53% Series C Senior Notes due 2008
7.66% Series D Senior Notes due 2011
As of December 18, 1996
TO EACH OF THE PURCHASERS LISTED IN
THE ATTACHED SCHEDULE A:
Ladies and Gentlemen:
CalMat Co., a Delaware corporation (the "COMPANY"), agrees with you as
follows:
1. AUTHORIZATION OF NOTES.
The Company will authorize the issue and sale, in four series, of
$115,000,000 aggregate principal amount of its senior notes, of which
$35,000,000 aggregate principal amount shall be its 7.19% Series A Senior Notes
due 2003 (the "SERIES A NOTES"), $32,000,000 aggregate principal amount shall be
its 7.45% Series B Senior Notes due 2006 (the "SERIES B NOTES"), $33,000,000
aggregate principal amount shall be its 7.53% Series C Senior Notes due 2008
(the "SERIES C NOTES") and $15,000,000 aggregate principal amount shall be its
7.66% Series D Senior Notes due 2011 (the "SERIES D NOTES"). As used herein, the
term "NOTES" includes all notes originally issued pursuant to this Agreement and
the Other Agreements (as hereinafter defined) and any notes issued in
substitution therefor pursuant to Section 13 of this Agreement or said Other
Agreements. The Series A Notes, the Series B Notes, the Series C Notes and the
Series D Notes shall be substantially in the respective forms set out in Exhibit
1-A, 1-B, 1-C and 1-D, with such changes therefrom, if any, as may be approved
by you and the Company. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are, unless
otherwise specified, to a Schedule or an Exhibit attached to this Agreement.
1
<PAGE>
2. SALE AND PURCHASE OF NOTES.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company, at the
Closing provided for in Section 3, Notes of the respective series and in the
principal amount specified opposite your name in Schedule A at the purchase
price of 100% of the principal amount thereof. Contemporaneously with entering
into this Agreement, the Company is entering into separate Note Purchase
Agreements (the "OTHER AGREEMENTS") identical with this Agreement with each of
the other purchasers named in Schedule A (the "OTHER PURCHASERS"), providing for
the sale at such Closing to each of the Other Purchasers of Notes of the
respective series and in the principal amount specified opposite its name in
Schedule A. Your obligation hereunder and the obligations of the Other
Purchasers under the Other Agreements are several and not joint obligations and
you shall have no obligation under any Other Agreement and no liability to any
Person for the performance or non-performance by any Other Purchaser thereunder.
3. CLOSING.
The sale and purchase of the Notes to be purchased by you and the
Other Purchasers shall occur at the offices of Milbank, Tweed, Hadley & McCloy,
One Chase Manhattan Plaza, New York, New York 10005, at 10:00 a.m., New York
City time, at a closing (the "CLOSING") on December 18, 1996. At the Closing
the Company will deliver to you the Notes to be purchased by you in the form of
a single Note for each series to be so purchased by you (or such greater number
of Notes in denominations of at least $500,000 as you may request) dated the
date of the Closing and registered in your name (or in the name of your
nominee), against delivery by you to the Company or its order of immediately
available funds in the amount of the purchase price therefor by wire transfer of
immediately available funds for the account of the Company to account number
12577-00731 at Bank of America N.T. & S.A., Concord, California, ABA No. 121-
000-358. If at the Closing the Company shall fail to tender such Notes to you
as provided above in this Section 3, or any of the conditions specified in
Section 4 shall not have been fulfilled to your satisfaction, you shall, at your
election, be relieved of all further obligations under this Agreement, without
thereby waiving any rights you may have by reason of such failure or such
nonfulfillment.
4. CONDITIONS TO CLOSING.
Your obligation to purchase and pay for the Notes to be sold to you at
the Closing is subject to the fulfillment to your satisfaction, prior to or at
the Closing, of the following conditions:
4.1. REPRESENTATIONS AND WARRANTIES.
The representations and warranties of the Company in this Agreement
shall be correct when made and at the time of the Closing.
2
<PAGE>
4.2. PERFORMANCE; NO DEFAULT.
The Company shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing and after giving effect to the issue and sale
of the Notes (and the application of the proceeds thereof as contemplated by
Schedule 5.14) no Default or Event of Default shall have occurred and be
continuing. Neither the Company nor any Subsidiary shall have entered into any
transaction since the date of the Memorandum that would have been prohibited by
Section 10.1 hereof had such Section applied since such date.
4.3. COMPLIANCE CERTIFICATES.
(a) Officer's Certificate. The Company shall have delivered to you an
---------------------
Officer's Certificate, dated the date of the Closing, certifying that the
conditions specified in Sections 4.1, 4.2 and 4.9 have been fulfilled.
(b) Secretary's Certificate. The Company shall have delivered to you
-----------------------
a certificate certifying as to the resolutions attached thereto and other
corporate proceedings relating to the authorization, execution and delivery of
the Notes, this Agreement and the Other Agreements.
4.4. OPINIONS OF COUNSEL.
You shall have received opinions in form and substance satisfactory to
you, dated the date of the Closing (a) from Cravath, Swaine & Moore, special
-
counsel for the Company, covering the matters set forth in Exhibit 4.4(a) and
covering such other matters incident to the transactions contemplated hereby as
you or your counsel may reasonably request (and the Company hereby instructs its
counsel to deliver such opinion to you), (b) from Paul Stanford, Esq., general
-
counsel for the Company, substantially in the form set forth in Exhibit 4.4(b),
and covering such other matters incident to such transactions as you may
reasonably request and (c) from Milbank, Tweed, Hadley & McCloy, your special
-
counsel in connection with such transactions, substantially in the form set
forth in Exhibit 4.4(c) and covering such other matters incident to such
transactions as you may reasonably request.
4.5. PURCHASE PERMITTED BY APPLICABLE LAW, ETC.
On the date of the Closing your purchase of Notes shall (i) be
-
permitted by the laws and regulations of each jurisdiction to which you are
subject, without recourse to provisions (such as Section 1405(a)(8) of the New
York Insurance Law) permitting limited investments by insurance companies
without restriction as to the character of the particular investment, (ii) not
--
violate any applicable law or regulation (including, without limitation,
Regulation G, T or X of the Board of Governors of the Federal Reserve System)
and (iii) not subject you to any tax, penalty or liability under or pursuant to
---
any applicable law or regulation, which law or regulation was not in effect on
the date hereof. If requested by you, you shall have received an
3
<PAGE>
Officer's Certificate certifying as to such matters of fact as you may
reasonably specify to enable you to determine whether such purchase is so
permitted.
4.6. SALE OF OTHER NOTES.
Contemporaneously with the Closing the Company shall sell to the Other
Purchasers and the Other Purchasers shall purchase the Notes to be purchased by
them at the Closing as specified in Schedule A.
4.7. PAYMENT OF SPECIAL COUNSEL FEES.
Without limiting the provisions of Section 15.1, the Company shall
have paid on or before the Closing the reasonable fees, charges and
disbursements of your special counsel referred to in Section 4.4 to the extent
reflected in a statement in reasonable detail of such counsel rendered to the
Company at least one Business Day prior to the Closing.
4.8. PRIVATE PLACEMENT NUMBERS.
Private Placement numbers issued by Standard & Poor's CUSIP Service
Bureau (in cooperation with the Securities Valuation Office of the National
Association of Insurance Commissioners) shall have been obtained for each
series of Notes.
4.9. CHANGES IN CORPORATE STRUCTURE.
Except as specified in Schedule 4.9, the Company shall not have
changed its jurisdiction of incorporation or been a party to any merger or
consolidation and shall not have succeeded to all or any substantial part of the
liabilities of any other entity, at any time following the date of the most
recent financial statements referred to in Schedule 5.5.
4.10. PROCEEDINGS AND DOCUMENTS.
All corporate and other proceedings in connection with the
transactions contemplated by this Agreement and all documents and instruments
incident to such transactions shall be satisfactory to you and your special
counsel, and you and your special counsel shall have received all such
counterpart originals or certified or other copies of such documents as you or
they may reasonably request.
4
<PAGE>
5. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
5.1. ORGANIZATION; POWER AND AUTHORITY.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of its jurisdiction of incorporation, and is duly
qualified as a foreign corporation and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. The Company has the corporate power and authority to own or
hold under lease the properties it purports to own or hold under lease, to
transact the business it transacts and proposes to transact, to execute and
deliver this Agreement and the Other Agreements and the Notes and to perform the
provisions hereof and thereof.
5.2. AUTHORIZATION, ETC.
This Agreement and the Other Agreements and the Notes have been duly
authorized by all necessary corporate action on the part of the Company, and
this Agreement constitutes, and upon execution and delivery thereof each Note
will constitute, a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except as such
enforceability may be limited by (i) applicable bankruptcy, insolvency,
-
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
--
whether such enforceability is considered in a proceeding in equity or at law).
5.3. DISCLOSURE.
The Company, through its agent, Merrill Lynch, Pierce, Fenner & Smith
Incorporated, has delivered to you and each Other Purchaser a copy of a Private
Placement Memorandum, dated October 1996 (the "MEMORANDUM"), relating to the
transactions contemplated hereby. The Memorandum fairly describes, in all
material respects, the general nature of the business and principal operations
of the Company and its Subsidiaries. Except as disclosed in Schedule 5.3, this
Agreement, the Memorandum, the documents, certificates or other writings
delivered to you by or on behalf of the Company in connection with the
transactions contemplated hereby and the financial statements listed in Schedule
5.5, taken as a whole, do not contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein not
misleading in light of the circumstances under which they were made. Except as
disclosed in the Memorandum or as expressly described in Schedule 5.3, or in one
of the documents, certificates or other writings identified therein, or in the
financial statements listed in Schedule 5.5, since December 31, 1995, there has
been no change in the financial condition, operations, business, properties or
prospects of the Company
5
<PAGE>
or any Subsidiary except changes that individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect. There is no fact known
to the Company that could reasonably be expected to have a Material Adverse
Effect that has not been set forth herein or in the Memorandum or in the other
documents, certificates and other writings delivered to you by or on behalf of
the Company specifically for use in connection with the transactions
contemplated hereby.
5.4. ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES; AFFILIATES.
(a) Schedule 5.4 contains (except as noted therein) complete and
correct lists (i) of the Company's Subsidiaries, showing, as to each Subsidiary,
-
the correct name thereof, the jurisdiction of its organization, and the
percentage of shares of each class of its capital stock or similar equity
interests outstanding owned by the Company and each other Subsidiary, (ii) of
--
the Company's Affiliates, other than Subsidiaries, and (iii) of the Company's
---
directors and senior officers.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 as being owned by the Company
and its Subsidiaries have been validly issued, are fully paid and nonassessable
and are owned by the Company or another Subsidiary free and clear of any Lien
(except as otherwise disclosed in Schedule 5.4).
(c) Each Subsidiary identified in Schedule 5.4 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Subsidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is a party to, or otherwise subject to any legal
restriction or any agreement (other than the agreements listed on Schedule 5.4
and customary limitations imposed by corporate law statutes) restricting the
ability of such Subsidiary to pay dividends out of profits or make any other
similar distributions of profits to the Company or any of its Subsidiaries that
owns outstanding shares of capital stock or similar equity interests of such
Subsidiary.
5.5. FINANCIAL STATEMENTS.
The Company has delivered to each Purchaser copies of the financial
statements of the Company and its Subsidiaries listed on Schedule 5.5. All of
said financial statements (including in each case the related schedules and
notes) fairly present in all material respects the consolidated financial
position of the Company and its Subsidiaries as of the respective dates
6
<PAGE>
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments).
5.6. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.
The execution, delivery and performance by the Company of this
Agreement and the Notes will not (except to the extent expressly set forth in
the opinion of Paul Stanford, Esq. delivered pursuant to Section 4.4(b)) (i)
-
contravene, result in any breach of, or constitute a default under, or result in
the creation of any Lien in respect of any property of the Company or any
Subsidiary under, any indenture, mortgage, deed of trust, loan, purchase or
credit agreement, lease, corporate charter or by-laws, or any other agreement or
instrument to which the Company or any Subsidiary is bound or by which the
Company or any Subsidiary or any of their respective properties may be bound or
affected, (ii) conflict with or result in a breach of any of the terms,
--
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company or any Subsidiary
or (iii) violate any provision of any statute or other rule or regulation of any
---
Governmental Authority applicable to the Company or any Subsidiary.
5.7. GOVERNMENTAL AUTHORIZATIONS, ETC.
No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement or the
Notes.
5.8. LITIGATION; OBSERVANCE OF AGREEMENTS, STATUTES AND ORDERS.
(a) Except as disclosed in Schedule 5.8, there are no actions, suits
or proceedings pending or, to the knowledge of the Company, threatened against
or affecting the Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before or by any
Governmental Authority that, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Company nor any Subsidiary is in default under any
term of any agreement or instrument to which it is a party or by which it is
bound, or any order, judgment, decree or ruling of any court, arbitrator or
Governmental Authority or is in violation of any applicable law, ordinance, rule
or regulation (including without limitation Environmental Laws) of any
Governmental Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
7
<PAGE>
5.9. TAXES.
The Company and its Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (i) the amount of which is not
-
individually or in the aggregate Material or (ii) the amount, applicability or
--
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect except as disclosed in Schedule 5.9.
The charges, accruals and reserves on the books of the Company and its
Subsidiaries in respect of Federal, state or other taxes for all fiscal periods
are adequate. The Federal income tax liabilities of the Company and its
Subsidiaries have been determined by the Internal Revenue Service and paid for
all fiscal years up to and including the fiscal year ended December 31, 1985.
5.10. TITLE TO PROPERTY; LEASES.
The Company and its Subsidiaries have good and sufficient title to
their respective properties that individually or in the aggregate are Material,
including all such properties reflected in the most recent audited balance sheet
referred to in Section 5.5 or purported to have been acquired by the Company or
any Subsidiary after said date (except as sold or otherwise disposed of in the
ordinary course of business), in each case free and clear of Liens prohibited by
this Agreement. All leases that individually or in the aggregate are Material
are valid and subsisting and are in full force and effect in all material
respects.
5.11. LICENSES, PERMITS, ETC.
Except as disclosed in Schedule 5.11,
(a) the Company and its Subsidiaries own or possess all licenses,
permits, franchises, authorizations, patents, copyrights, service marks,
trademarks and trade names, or rights thereto, that individually or in the
aggregate are Material, without known conflict with the rights of others;
(b) to the best knowledge of the Company, no product of the Company
infringes in any material respect any license, permit, franchise,
authorization, patent, copyright, service mark, trademark, trade name or
other right owned by any other Person; and
(c) to the best knowledge of the Company, there is no Material
violation by any Person of any right of the Company or any of its
Subsidiaries with respect to any patent,
8
<PAGE>
copyright, service mark, trademark, trade name or other right owned or used
by the Company or any of its Subsidiaries.
5.12. COMPLIANCE WITH ERISA.
(a) The Company and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Company nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in section 3 of ERISA), and no event, transaction or condition
has occurred or exists that could reasonably be expected to result in the
incurrence of any such liability by the Company or any ERISA Affiliate, or in
the imposition of any Lien on any of the rights, properties or assets of the
Company or any ERISA Affiliate, in either case pursuant to Title I or IV of
ERISA or to such penalty or excise tax provisions or to section 401(a)(29) or
412 of the Code, other than such liabilities or Liens as would not be
individually or in the aggregate Material.
(b) The present value of the aggregate benefit liabilities under each
of the Plans (other than Multiemployer Plans), determined as of the end of such
Plan's most recently ended plan year on the basis of the actuarial assumptions
specified for funding purposes in such Plan's most recent actuarial valuation
report, did not exceed the aggregate current value of the assets of such Plan
allocable to such benefit liabilities by more than $500,000 in the case of any
single Plan and by more than $500,000 in the aggregate for all Plans. The term
"BENEFIT LIABILITIES" has the meaning specified in section 4001 of ERISA and the
terms "CURRENT VALUE" and "PRESENT VALUE" have the meaning specified in section
3 of ERISA.
(c) The Company and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected postretirement benefit obligation (determined as of
the last day of the Company's most recently ended fiscal year in accordance with
Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Company and its Subsidiaries is substantially as set forth in
the footnotes to the financial statements in the Company's 1995 Annual Report.
(e) The execution and delivery of this Agreement and the issuance and
sale of the Notes hereunder will not involve any transaction that is subject to
the prohibitions of section 406 of ERISA or in connection with which a tax could
be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code. The representation
by the Company in the first sentence of this Section 5.12(e) is made in reliance
upon and subject to the accuracy of your
9
<PAGE>
representation in Section 6.2 as to the sources of the funds used to pay the
purchase price of the Notes to be purchased by you.
5.13. PRIVATE OFFERING BY THE COMPANY.
Neither the Company nor anyone acting on its behalf has offered the
Notes or any similar securities for sale to, or solicited any offer to buy any
of the same from, or otherwise approached or negotiated in respect thereof with,
any person other than you, the Other Purchasers and not more than 150 other
Institutional Investors, each of which has been offered the Notes at a private
sale for investment. Neither the Company nor anyone acting on its behalf has
taken, or will take, any action that would subject the issuance or sale of the
Notes to the registration requirements of Section 5 of the Securities Act.
5.14. USE OF PROCEEDS; MARGIN REGULATIONS.
The Company will apply the proceeds of the sale of the Notes as set
forth in Schedule 5.14. No part of the proceeds from the sale of the Notes
hereunder will be used, directly or indirectly, for the purpose of buying or
carrying any margin stock within the meaning of Regulation G of the Board of
Governors of the Federal Reserve System (12 CFR 207), or for the purpose of
buying or carrying or trading in any securities under such circumstances as to
involve the Company in a violation of Regulation X of said Board (12 CFR 224) or
to involve any broker or dealer in a violation of Regulation T of said Board (12
CFR 220). Margin stock does not constitute more than 25% of the value of the
consolidated assets of the Company and its Subsidiaries and the Company does not
have any present intention that margin stock will constitute more than 25% of
the value of such assets. As used in this Section, the terms "MARGIN STOCK" and
"PURPOSE OF BUYING OR CARRYING" shall have the meanings assigned to them in said
Regulation G.
5.15. EXISTING INDEBTEDNESS; FUTURE LIENS.
(a) Except as described therein, Schedule 5.15 sets forth a complete
and correct list of all outstanding Indebtedness of the Company and its
Subsidiaries as of September 30, 1996, since which date there has been no
Material change in the amounts, interest rates, sinking funds, instalment
payments or maturities of the Indebtedness of the Company or its Subsidiaries.
Neither the Company nor any Subsidiary is in default and no waiver of default is
currently in effect, in the payment of any principal or interest on any
Indebtedness of the Company or such Subsidiary and no event or condition exists
with respect to any Indebtedness of the Company or any Subsidiary that would
permit (or that with notice or the lapse of time, or both, would permit) one or
more Persons to cause such Indebtedness to become due and payable before its
stated maturity or before its regularly scheduled dates of payment.
(b) Except as disclosed in Schedule 5.15, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the
happening of a
10
<PAGE>
contingency or otherwise) any of its property, whether now owned or hereafter
acquired, to be subject to a Lien not permitted by Section 10.7.
5.16. FOREIGN ASSETS CONTROL REGULATIONS, ETC.
Neither the sale of the Notes by the Company hereunder nor its use of
the proceeds thereof will violate the Trading with the Enemy Act, as amended, or
any of the foreign assets control regulations of the United States Treasury
Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
5.17. STATUS UNDER CERTAIN STATUTES.
Neither the Company nor any Subsidiary is subject to regulation under
the Investment Company Act of 1940, as amended, the Public Utility Holding
Company Act of 1935, as amended, the Interstate Commerce Act, as amended, or the
Federal Power Act, as amended.
5.18. ENVIRONMENTAL MATTERS.
Neither the Company nor any Subsidiary has knowledge of any claim or
has received any notice of any claim, and no proceeding has been instituted
raising any claim against the Company or any of its Subsidiaries or any of their
respective real properties now or formerly owned, leased or operated by any of
them or other assets, alleging any damage to the environment or violation of any
Environmental Laws, except, in each case, such as could not reasonably be
expected to result in a Material Adverse Effect. Except as otherwise disclosed
to you in writing (including in the annual reports included in the Memorandum),
(a) neither the Company nor any Subsidiary has knowledge of any
facts which would give rise to any claim, public or private, of violation
of Environmental Laws or damage to the environment emanating from,
occurring on or in any way related to real properties now or formerly
owned, leased or operated by any of them or to other assets or their use,
except, in each case, such as could not reasonably be expected to result in
a Material Adverse Effect;
(b) neither the Company nor any of its Subsidiaries has stored
any Hazardous Materials on real properties now or formerly owned, leased or
operated by any of them and has not disposed of any Hazardous Materials in
a manner contrary to any Environmental Laws in each case in any manner that
could reasonably be expected to result in a Material Adverse Effect; and
(c) all buildings on all real properties now owned, leased or
operated by the Company or any of its Subsidiaries are in compliance with
applicable Environmental Laws, except where failure to comply could not
reasonably be expected to result in a Material Adverse Effect.
11
<PAGE>
6. REPRESENTATIONS OF THE PURCHASER.
6.1. PURCHASE FOR INVESTMENT.
You represent that you are purchasing the Notes for your own account
or for one or more separate accounts maintained by you or for the account of one
or more pension or trust funds and not with a view to the distribution thereof
as such term is used under Section 2(11) of the Securities Act, provided that
--------
the disposition of your or their property shall at all times be within your or
their control. You understand that the Notes have not been registered under the
Securities Act or the laws of any State or other jurisdiction and may be resold
or otherwise disposed of by you only if registered pursuant to the provisions of
the Securities Act or if an exemption from registration is available, except
under circumstances where neither such registration nor such an exemption is
required by law, and that the Company is not required under the Securities Act
or the laws of any State or other jurisdiction to register the Notes and the
Company does not contemplate registration of the Notes.
6.2. SOURCE OF FUNDS.
You represent that at least one of the following statements is an
accurate representation as to each source of funds (a "SOURCE") to be used by
you to pay the purchase price of the Notes to be purchased by you hereunder:
(a) if you are an insurance company, the Source is an "insurance
company general account" (as the term is defined in Prohibited Transaction
Exemption ("PTE") 95-60 (issued July 12, 1995)) in respect of which the
reserves and liabilities (as defined by the annual statement for life
insurance companies approved by the National Association of Insurance
Commissioners (the "NAIC ANNUAL STATEMENT")) for the general account
contract(s) held by or on behalf of any employee benefit plan together with
the amount of the reserves and liabilities for the general account
contract(s) held by or on behalf of any other employee benefit plans
maintained by the same employer (or affiliate thereof as defined in PTE 95-
60) or by the same employee organization in the general account do not
exceed 10% of the total reserves and liabilities of the general account
(exclusive of separate account liabilities) plus surplus as set forth in
the NAIC Annual Statement filed with your state of domicile; or
(b) if you are an insurance company, the Source is a separate account
that is maintained solely in connection with your fixed contractual
obligations under which the amounts payable, or credited, to any employee
benefit plan (or its related trust) that has any interest in such separate
account (or any participant or beneficiary of such plan (including any
annuitant)) are not affected in any manner by the investment performance of
the separate account; or
(c) the Source is either (i) an insurance company pooled separate
account, within the meaning of PTE 90-1 (issued January 29, 1990), or (ii)
a bank collective investment
12
<PAGE>
fund, within the meaning of the PTE 91-38 (issued July 12, 1991) and,
except as you have disclosed to the Company in writing pursuant to this
paragraph (c), no employee benefit plan or group of plans maintained by the
same employer or employee organization beneficially owns more than 10% of
all assets allocated to such pooled separate account or collective
investment fund; or
(d) the Source constitutes assets of an "investment fund" (within the
meaning of Part V of the QPAM Exemption) managed by a "qualified
professional asset manager" or "QPAM" (within the meaning of Part V of the
QPAM Exemption), no employee benefit plan's assets that are included in
such investment fund, when combined with the assets of all other employee
benefit plans established or maintained by the same employer or by an
affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
such employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (i) the identity
-
of such QPAM and (ii) the names of all employee benefit plans whose assets
--
are included in such in vestment fund have been disclosed to the Company in
writing pursuant to this paragraph (d); or
(e) the Source is a governmental plan; or
(f) the Source is one or more employee benefit plans, or a separate
account or trust fund comprised of one or more employee benefit plans, each
of which has been identified to the Company in writing pursuant to this
paragraph (f); or
(g) the Source does not include assets of any employee benefit plan,
other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms "EMPLOYEE BENEFIT PLAN", "SEPARATE
ACCOUNT" and "GOVERNMENTAL PLAN" shall have the respective meanings assigned to
such terms in Section 3 of ERISA.
7. INFORMATION AS TO COMPANY.
7.1. FINANCIAL AND BUSINESS INFORMATION.
The Company shall deliver to each holder of Notes that is an
Institutional Investor:
(a) Quarterly Statements -- within 60 days after the end of each
--------------------
quarterly fiscal period in each fiscal year of the Company (other than the
last quarterly fiscal period of each such fiscal year), duplicate copies
of,
13
<PAGE>
(i) a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated statements of operations, stockholders' equity
and cash flows of the Company and its Subsidiaries, for such quarter
and (in the case of the second and third quarters) for the portion of
the fiscal year ending with such quarter,
setting forth in each case in comparative form the figures for the corresponding
periods in the previous fiscal year, all in reasonable detail, prepared in
accordance with GAAP applicable to quarterly financial statements generally, and
certified by a Senior Financial Officer as fairly presenting, in all material
respects, the financial position of the companies being reported on and their
results of operations and cash flows, subject to changes resulting from year-end
adjustments, provided that delivery within the time period specified above of
--------
copies of the Company's Quarterly Report on Form 10-Q prepared in compliance
with the requirements therefor and filed with the Securities and Exchange
Commission shall be deemed to satisfy the requirements of this Section 7.1(a);
(b) Annual Statements -- within 100 days after the end of each fiscal
-----------------
year of the Company, duplicate copies of,
(i) a consolidated balance sheet of the Company and its
Subsidiaries, as at the end of such year, and
(ii) consolidated statements of operations, income and changes in
stockholders' equity and cash flows of the Company and its
Subsidiaries, for such year,
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied
(A) by an opinion thereon of independent certified public
accountants of recognized national standing, which opinion shall state
that such financial state ments present fairly, in all material
respects, the financial position of the companies being reported upon
and their results of operations and cash flows and have been prepared
in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in
accordance with generally accepted auditing standards, and that such
audit provides a reasonable basis for such opinion in the
circumstances, and
(B) a certificate of such accountants stating that they have
reviewed this Agreement and stating further whether, in making their
audit, they have become aware of any condition or event that then
constitutes a Default or an Event of Default, and, if they are aware
that any such condition or event then exists,
14
<PAGE>
specifying the nature and period of the existence thereof (it being
understood that such accountants shall not be liable, directly or
indirectly, for any failure to obtain knowledge of any Default or
Event of Default unless such accountants should have obtained
knowledge thereof in making an audit in accordance with generally
accepted auditing standards or did not make such an audit),
provided that the delivery within the time period specified above of the
--------
Company's Annual Report on Form 10-K for such fiscal year (together with
the Company's annual report to shareholders, if any, prepared pursuant to
Rule 14a-3 under the Exchange Act) prepared in accordance with the
requirements therefor and filed with the Securities and Exchange
Commission, together with the accountant's certificate described in clause
(B) above, shall be deemed to satisfy the requirements of this Section
7.1(b);
(c) SEC and Other Reports -- promptly upon their becoming available,
---------------------
one copy of (i) each financial statement, report, notice or proxy statement
-
sent by the Company or any Subsidiary to public securities holders
generally, and (ii) each regular or periodic report, each registration
--
statement (without exhibits except as expressly requested by such holder),
and each prospectus and all amendments thereto filed by the Company or any
Subsidiary with the Securities and Exchange Commission and of all press
releases and other statements made available generally by the Company or
any Subsidiary to the public concerning developments that are Material;
(d) Notice of Default or Event of Default -- promptly, and in any
-------------------------------------
event within five Business Days after a Responsible Officer becoming aware
of the existence of any Default or Event of Default or that any Person has
given any notice or taken any action with respect to a claimed default
hereunder or that any Person has given any notice or taken any action with
respect to a claimed default of the type referred to in Section 11(f), a
written notice specifying the nature and period of existence thereof and
what action the Company is taking or proposes to take with respect thereto;
(e) ERISA Matters -- promptly, and in any event within five Business
-------------
Days after a Responsible Officer becoming aware of any of the following, a
written notice setting forth the nature thereof and the action, if any,
that the Company or an ERISA Affiliate proposes to take with respect
thereto:
(i) with respect to any Plan, any reportable event, as defined
in sec tion 4043(b) of ERISA and the regulations thereunder, for which
notice thereof has not been waived pursuant to such regulations as in
effect on the date hereof; or
(ii) the taking by the PBGC of steps to institute, or the
threatening by the PBGC of the institution of, proceedings under
section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the re ceipt by the Company or any
ERISA Affiliate of a notice from a Multiemployer
15
<PAGE>
Plan that such action has been taken by the PBGC with respect to such
Multi employer Plan; or
(iii) any event, transaction or condition that could result in
the incurrence of any liability by the Company or any ERISA Affiliate
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans, or in the
imposition of any Lien on any of the rights, properties or assets of
the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA
or such penalty or excise tax provisions, if such liability or Lien,
taken together with any other such liabilities or Liens then existing,
could reasonably be expected to have a Material Adverse Effect;
(f) Notices from Governmental Authority -- promptly, and in any event
-----------------------------------
within 30 days of receipt thereof, copies of any notice to the Company or
any Subsidiary from any Federal or state Governmental Authority relating to
any order, ruling, statute or other law or regulation that could reasonably
be expected to have a Material Adverse Effect; and
(g) Requested Information -- with reasonable promptness, such other
---------------------
data and information relating to the business, operations, affairs,
financial condition, assets or properties of the Company or any of its
Subsidiaries or relating to the ability of the Company to perform its
obligations hereunder and under the Notes as from time to time may be
reasonably requested by any such holder of Notes.
7.2. OFFICER'S CERTIFICATE.
Each set of financial statements delivered to a holder of Notes
pursuant to Section 7.1(a) or Section 7.1(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(a) Covenant Compliance -- the information (including detailed
-------------------
calculations) required in order to establish whether the Company was in
compliance with the requirements of Section 10.3 through Section 10.9
hereof, inclusive, during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section, where applicable, the calculations of the maximum or minimum
amount, ratio or percentage, as the case may be, permissible under the
terms of such Sections as at the end of such period, and the calculation of
the amount, ratio or percentage in existence as at the end of such period);
and
(b) Event of Default -- a statement that such officer has reviewed the
----------------
relevant terms hereof and has made, or caused to be made, under his or her
supervision, a review of the transactions and conditions of the Company and
its Subsidiaries from the beginning of the quarterly or annual period
covered by the statements then being furnished to the date of the
certificate and that such review shall not have disclosed the existence
during
16
<PAGE>
such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists
(including, without limitation, any such event or condition resulting from
the failure of the Company or any Subsidiary to comply with any
Environmental Law), specifying the nature and period of existence thereof
and what action the Company shall have taken or proposes to take with
respect thereto.
7.3. INSPECTION.
The Company shall permit the representatives of each holder of Notes
that is an Institutional Investor:
(a) No Default -- if no Default or Event of Default then exists, at
----------
the expense of such holder and upon reasonable prior notice to the Company,
to visit the principal executive office of the Company during the Company's
regular business hours, to discuss the affairs, finances and accounts of
the Company and its Subsidiaries with the Company's officers, and (with the
consent of the Company, which consent will not be unreasonably withheld)
its independent public accountants, and (with the consent of the Company,
which consent will not be unreasonably withheld) to visit the other offices
and properties of the Company and each Subsidiary, all at such reasonable
times and as often as may be reason ably requested in writing (and subject
to the confidentiality provisions of Section 20); and
(b) Default -- if a Default or Event of Default then exists, at the
-------
expense of the Company and upon at least 48 hours prior notice to the
Company, to visit and inspect any of the offices or properties of the
Company or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts
with their respective officers and independent public accountants (and by
this provision the Company authorizes said accountants to discuss the
affairs, finances and accounts of the Company and its Subsidiaries), all at
such times and as often as may be requested (and subject to the
confidentiality provisions of Section 20).
8. PREPAYMENT OF THE NOTES.
8.1. REQUIRED REPAYMENTS.
As provided therein, the entire unpaid principal amount of the Series
A Notes, Series B Notes, Series C Notes and Series D Notes shall be due and
payable on December 15, 2003, December 15, 2006, December 15, 2008 and December
15, 2011, respectively.
17
<PAGE>
8.2 OPTIONAL PREPAYMENTS WITH MAKE-WHOLE AMOUNT.
(a) The Company may, at its option, upon notice as provided below,
prepay at any time all, or from time to time any part of, the Notes, in an
aggregate principal amount of not less than $10,000,000 in the case of a partial
prepayment, at 100% of the principal amount so prepaid, plus the applicable
Make-Whole Amounts determined for the prepayment date with respect to such
principal amount. The Company will give each holder of Notes to be so prepaid
written notice (a "PREPAYMENT NOTICE") of each optional prepayment under this
Section 8.2(a) not less than 30 days and not more than 60 days prior to the date
fixed for such prepayment (the "OPTIONAL PREPAYMENT DATE"). Each Prepayment
Notice shall specify (i) the Optional Prepayment Date, (ii) the aggregate
- --
principal amount of the Notes to be prepaid on the Optional Prepayment Date (the
"PREPAYMENT AMOUNT"), (iii) the aggregate principal amount of the Notes of each
---
series to be prepaid on the Optional Prepayment Date, (iv) the principal amount
--
of each Note held by such holder to be prepaid (determined in accordance with
Sections 8.2(b) and 8.3) and (v) the interest to be paid on the Optional
-
Prepayment Date with respect to such principal amount being prepaid and, if the
Company is required to offer to prepay additional Notes as provided below, shall
specify the additional information described in Section 8.2(b), and in any case
shall be accompanied by a certificate of a Senior Financial Officer as to the
estimated Make-Whole Amounts due in connection with such prepayment (calculated
as if the date of such notice were the date of the prepayment), setting forth
the details of such computation. Two Business Days prior to such prepayment,
the Company shall deliver to each holder of Notes a certificate of a Senior
Financial Officer specifying the calculation of such Make-Whole Amounts as of
the specified prepayment date. In the case of each partial prepayment of the
Notes pursuant to this Section 8.2(a), the Company shall prepay the same
percentage of the unpaid principal amount of Notes of each series on the same
terms or, if the Company shall propose to prepay a greater percentage of Notes
of any series or prepay Notes of one or more series but less than all series
(any such series that would be so prepaid in a greater proportion being herein
referred to as the "PREPAYMENT SERIES"), the Company shall offer to prepay Notes
of each other Series as provided in Section 8.2(b).
(b) If the Company is required to offer to prepay Notes of any
additional series in accordance with the last sentence of Section 8.2(a), the
Company will give the Prepayment Notice specified in Section 8.2(a) to each
holder of Notes, and such Prepayment Notice shall (i) specify, in addition to
-
the matters specified in Section 8.2(a), (x) the Optional Response Date (as
-
defined below), (y) the principal amount of Notes (the "APPLICABLE AMOUNT") held
-
by such holder that would be prepaid if the Prepayment Amount were applied to
prepay the same percentage of the unpaid principal amount of Notes of each
series (determined in accordance with Section 8.3) and (z) the interest that
-
would be paid on the Optional Prepayment Date with respect to such principal
amount and (ii) with respect to each holder of Notes that would not be prepaid
--
pursuant to Section 8.2(a) but for the obligation of the Company to make the
offer referred to therein (each such holder, an "APPLICABLE HOLDER"), offer to
prepay the Applicable Amount of Notes held by such Applicable Holder on the
Optional Prepayment Date. Each Applicable Holder shall notify the Company of
such holder's acceptance or rejection of such offer by giving written notice of
such acceptance or rejection to the Company on a date
18
<PAGE>
(the "OPTIONAL RESPONSE DATE") at least 15 days prior to the Optional Prepayment
Date, and the Company shall prepay on the Optional Prepayment Date the
Applicable Amount of Notes held by each Applicable Holder who has accepted such
offer in accordance with this Section 8.2(b) at a price in respect of each Note
held by such holder equal to the applicable portion of such Note, together with
interest accrued thereon to the Optional Prepayment Date, plus an amount equal
to the applicable Make-Whole Amount with respect to such Note; provided,
--------
however, that the failure by any Applicable Holder to respond to such offer in
writing on or before the Optional Response Date shall be deemed to be an
acceptance of such offer.
(c) If on the Optional Response Date specified in Section 8.2(b) any
Applicable Holder shall have rejected an offer to prepay Notes as provided
therein, the Company may apply an amount equal to the Applicable Amount of Notes
held by such Applicable Holder to prepay Notes of a Prepayment Series on the
Optional Prepayment Date, at 100% of the principal amount so prepaid (determined
in accordance with Section 8.3), plus the applicable Make-Whole Amounts
determined for the Optional Prepayment Date with respect to such principal
amount. The Company will give each holder of Notes of such Prepayment Series to
be so prepaid written notice of such prepayment not less than 10 days prior to
the Optional Prepayment Date, and such notice shall specify the applicable
information described in Section 8.2(a).
(d) Notwithstanding anything to the contrary in this Section 8.2 or
in Section 8.5, if the Company is required to offer to prepay Notes of any
additional series in accordance with the last sentence of Section 8.2(a), the
Company may, upon notice as provided below, not earlier than the related
Optional Response Date and not later than twelve days prior to the related
Optional Prepayment Date, cancel the prepayment of all (but not less than all)
Notes of all series that would be required to be prepaid on such Optional
Prepayment Date. The Company will give each holder of Notes written notice of
such cancellation referring specifically to this Section 8.2(d) and, upon the
giving of such notice, no prepayment of Notes shall be made on such Optional
Prepayment Date pursuant to this Section 8.2.
8.3. ALLOCATION OF PARTIAL PREPAYMENTS.
In the case of each partial prepayment of the Notes pursuant to
Section 8.2 (other than any prepayment pursuant to the second sentence of
Section 8.2(b)), the principal amount of the Notes of each series to be prepaid
shall be allocated among all of the Notes of such series at the time outstanding
in proportion, as nearly as practicable, to the respective unpaid principal
amounts thereof not theretofore called for prepayment.
8.4. SPECIAL PREPAYMENT OFFERS.
If the Company is required to offer to prepay Notes in accordance with
Section 10.7(j) or 10.9(d), the Company will give written notice thereof to the
holders of all outstanding Notes, which notice shall (a) refer specifically to
this Section 8.4 and describe in reasonable detail the circumstances giving rise
to such obligation to offer to prepay Notes, (b) specify the ratable portion of
each Note required to be so offered to be prepaid pursuant to Section 10.7(j)
19
<PAGE>
or 10.9(d), as applicable, (c) specify the Special Prepayment Date and the
Special Response Date (as respectively defined below) in respect thereof and (d)
offer to prepay such ratable portion of each Note (together with interest
accrued thereon to the date fixed for such prepayment, plus the applicable Make-
Whole Amount with respect to such Note) on the date therein specified (the
"SPECIAL PREPAYMENT DATE"), which shall be not less than 30 nor more than 60
days after the date of the giving of such notice. Each holder of a Note shall
notify the Company of such holder's acceptance or rejection of such offer by
giving written notice of such acceptance or rejection to the Company on a date
(the "SPECIAL RESPONSE DATE") at least ten days prior to the Special Prepayment
Date, and the Company shall prepay on the Special Prepayment Date such ratable
portion of all of the Notes held by the holders who have accepted such offer in
accordance with this Section 8.4 at a price in respect of each Note held by such
holder equal to such ratable portion of such Note, together with interest
accrued thereon to the Special Prepayment Date, plus an amount equal to the
applicable Make-Whole Amount with respect to such Note; provided, however, that
--------
the failure by a holder of any Note to respond to such offer in writing on or
before the Special Response Date shall be deemed to be an acceptance of such
offer. Any notice given by the Company pursuant to this Section 8.4 shall be
accompanied by a certificate of a Senior Financial Officer as to the estimated
Make-Whole Amounts due in connection with such prepayment (calculated as if the
date of such notice were the date of the prepayment), setting forth the details
of such computation. Two Business Days prior to such prepayment, the Company
shall deliver to each holder of Notes which has accepted the offer of prepayment
a certificate of a Senior Financial Officer specifying the calculation of such
Make-Whole Amounts as of the specified prepayment date.
8.5. MATURITY; SURRENDER, ETC.
In the case of each prepayment of Notes pursuant to this Section 8,
the principal amount of each Note to be prepaid shall mature and become due and
payable on the date fixed for such prepayment, together with interest on such
principal amount accrued to such date and the applicable Make-Whole Amount, if
any. From and after such date, unless the Company shall fail to pay such
principal amount when so due and payable, together with the interest and Make-
Whole Amounts, if any, as aforesaid, interest on such principal amount shall
cease to accrue. Any Note paid or prepaid in full shall be surrendered to the
Company and cancelled and shall not be reissued, and no Note shall be issued in
lieu of any prepaid principal amount of any Note.
8.6. PURCHASE OF NOTES.
The Company will not and will not permit any Affiliate to purchase,
redeem, prepay or otherwise acquire, directly or indirectly, any of the
outstanding Notes except upon the payment or prepayment of the Notes in
accordance with the terms of this Agreement and the Notes. The Company will
promptly cancel all Notes acquired by it or any Affiliate pursuant to any
payment, prepayment or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange for any such
Notes.
20
<PAGE>
8.7. MAKE-WHOLE AMOUNT.
The term "MAKE-WHOLE AMOUNT" means, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Remaining
Scheduled Payments with respect to the Called Principal of such Note over the
amount of such Called Principal, provided that the Make-Whole Amount may in no
--------
event be less than zero. For the purposes of determining the Make-Whole Amount,
the following terms have the following meanings:
"CALLED PRINCIPAL" means, with respect to any Note, the principal of
such Note that is to be prepaid pursuant to Section 8.2 or 8.4 or has
become or is declared to be immedi ately due and payable pursuant to
Section 12.1, as the context requires.
"DISCOUNTED VALUE" means, with respect to the Called Principal of any
Note, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due
dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor
(applied on the same periodic basis as that on which interest on the Notes
is payable) equal to the Reinvestment Yield with respect to such Called
Principal.
"REINVESTMENT YIELD" means, with respect to the Called Principal of
any Note, 0.50% over the yield to maturity implied by (i) the yields
-
reported, as of 10:00 A.M. (New York City time) on the second Business Day
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678" on the Telerate Access Service (or such
other display as may replace Page 678 on Telerate Access Service) for
actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date,
or (ii) if such yields are not reported as of such time or the yields
--
reported as of such time are not ascertainable, the Treasury Constant
Maturity Series Yields reported, for the latest day for which such yields
have been so reported as of the second Business Day preceding the
Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity
equal to the Remaining Average Life of such Called Principal as of such
Settlement Date. Such implied yield will be determined, if necessary, by
(a) convert ing U.S. Treasury bill quotations to bond-equivalent yields in
--
accordance with accepted financial practice and (b) interpolating linearly
-
between (1) the actively traded U.S. Treasury security with a maturity
-
closest to and greater than the Remaining Average Life and (2) the actively
-
traded U.S. Treasury security with a maturity closest to and less than the
Remaining Average Life.
"REMAINING AVERAGE LIFE" means, with respect to any Called Principal,
the number of years (calculated to the nearest one-twelfth year) obtained
by dividing (i) such Called Principal into (ii) the sum of the products
- --
obtained by multiplying (a) the principal component of each Remaining
-
Scheduled Payment with respect to such Called Principal by (b) the number
-
of years (calculated to the nearest one-twelfth year) that will elapse
21
<PAGE>
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"REMAINING SCHEDULED PAYMENTS" means, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date
--------
on which interest payments are due to be made under the terms of the Notes,
then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and
required to be paid on such Settlement Date pursuant to Section 8.2, 8.4 or
12.1.
"SETTLEMENT DATE" means, with respect to the Called Principal of any
Note, the date on which such Called Principal is to be prepaid pursuant to
Section 8.2 or 8.4 or has become or is declared to be immediately due and
payable pursuant to Section 12.1, as the context requires.
9. AFFIRMATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
9.1. COMPLIANCE WITH LAW.
The Company will and will cause each of its Subsidiaries to comply
with all laws, ordinances or governmental rules or regulations to which each of
them is subject, including, without limitation, Environmental Laws, and will
obtain and maintain in effect all licenses, certifi cates, permits, franchises
and other governmental authorizations necessary to the ownership of their
respective properties or to the conduct of their respective businesses, in each
case to the extent necessary to ensure that non-compliance with such laws,
ordinances or governmental rules or regulations or failures to obtain or
maintain in effect such licenses, certificates, permits, franchises and other
governmental authorizations could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.
9.2. INSURANCE.
The Company will and will cause each of its Subsidiaries to maintain,
with financially sound and reputable insurers, insurance with respect to their
respective properties and businesses against such casualties and contingencies,
of such types, on such terms and in such amounts (including deductibles, co-
insurance and self-insurance, if adequate reserves are maintained with respect
thereto) as is customary in the case of entities of established reputations
engaged in the same or a similar business and similarly situated.
22
<PAGE>
9.3. MAINTENANCE OF PROPERTIES.
The Company will and will cause each of its Subsidiaries to maintain
and keep, or cause to be maintained and kept, their respective properties in
good repair, working order and condition (other than ordinary wear and tear), so
that the business carried on in connection therewith may be properly conducted
at all times, provided that this Section shall not prevent the Company or any
--------
Subsidiary from discontinuing the operation and the maintenance of any of its
properties if such discontinuance is desirable in the conduct of its business
and the Company has concluded that such discontinuance could not, individually
or in the aggregate, reasonably be expected to have a Material Adverse Effect.
9.4. PAYMENT OF TAXES AND CLAIMS.
The Company will and will cause each of its Subsidiaries to file all
tax returns required to be filed in any jurisdiction and to pay and discharge
all taxes shown to be due and payable on such returns and all other taxes,
assessments, governmental charges, or levies imposed on them or any of their
properties, assets, income or franchises, to the extent such taxes and
assessments have become due and payable and before they have become delinquent,
and all claims for which sums have become due and payable that have or might
become a Lien on properties or assets of the Company or any Subsidiary, provided
--------
that neither the Company nor any Subsidiary need pay any such tax or assessment
or claims if (i) the amount, applicability or validity thereof is contested by
-
the Company or such Subsidiary on a timely basis in good faith and in
appropriate proceedings, and the Company or a Subsidiary has established
adequate reserves therefor in accor dance with GAAP on the books of the Company
or such Subsidiary or (ii) the nonpayment of all such taxes, assessments and
--
claims in the aggregate could not reasonably be expected to have a Material
Adverse Effect.
9.5. CORPORATE EXISTENCE, ETC.
The Company will at all times preserve and keep in full force and
effect its corporate existence. Subject to Sections 10.2 and 10.9, the Company
will at all times preserve and keep in full force and effect the corporate
existence of each of its Subsidiaries (unless merged into the Company or a
Subsidiary) and all rights and franchises of the Company and its Subsidiaries
unless, in the good faith judgment of the Company, the termination of or failure
to preserve and keep in full force and effect such corporate existence, right or
franchise could not, individually or in the aggregate, have a Material Adverse
Effect.
9.6. RANKING.
The Company will ensure that at all times all liabilities of the
Company under the Notes will rank in right of payment either pari passu or
----------
senior to all other Indebtedness of the Company except for Indebtedness which is
preferred as a result of being secured as permitted by this Agreement (but then
only to the extent of such security).
23
<PAGE>
10. NEGATIVE COVENANTS.
The Company covenants that so long as any of the Notes are
outstanding:
10.1. TRANSACTIONS WITH AFFILIATES.
The Company will not and will not permit any Subsidiary to enter into
directly or indirectly any transaction or Material group of related transactions
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any service) with any Affiliate
(other than the Company or another Subsidiary), except in the ordinary course
and pursuant to the reasonable requirements of the Company's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable arm's-
length transaction with a Person not an Affiliate.
10.2. MERGER, CONSOLIDATION, ETC.
The Company shall not consolidate with or merge with any other
corporation or convey, transfer or lease substantially all of its assets in a
single transaction or series of transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Company as an entirety, as the case
may be, shall be a solvent corporation organized and existing under the
laws of the United States or any State thereof (including the District of
Columbia), and, if the Company is not such successor corporation, (i) such
-
successor corporation shall have executed and delivered to each holder of
any Notes its assumption of the due and punctual performance and observance
of each covenant and condition of this Agreement, the Other Agreements and
the Notes and (ii) the Company shall have caused to be delivered to each
--
holder of any Notes an opinion of nationally recognized independent
counsel, or other independent counsel reasonably satisfactory to the
Required Holders, to the effect that all agreements or instruments
effecting such assumption are enforceable in accordance with their terms
and comply with the terms hereof; and
(b) immediately prior to and after giving effect to such transaction,
no Default or Event of Default shall have occurred and be continuing.
No such conveyance, transfer or lease of substantially all of the assets of the
Company shall have the effect of releasing the Company or any successor
corporation that shall theretofore have become such in the manner prescribed in
this Section 10.2 from its liability under this Agreement or the Notes.
24
<PAGE>
10.3. SENIOR FUNDED INDEBTEDNESS.
The Company will not at any time permit the ratio of Consolidated
Senior Funded Indebtedness to Consolidated Total Capitalization to exceed 0.45
to 1.00.
10.4. TOTAL FUNDED INDEBTEDNESS.
The Company will not at any time permit the ratio of Consolidated
Total Funded Indebtedness to Consolidated Total Capitalization to exceed 0.55 to
1.00.
10.5. NET WORTH.
The Company will not at any time permit Consolidated Net Worth to be
less than the sum of (i) $215,000,000 plus (ii) an amount equal to the sum of
25% of the Consolidated Net Income for the semi-annual financial period of the
Company ended December 31, 1996 and each subsequent completed fiscal year of the
Company (but only if the Consolidated Net Income for such financial period or
fiscal year is a positive number).
10.6. SUBSIDIARY INDEBTEDNESS.
The Company will not at any time permit any of its Subsidiaries to
create, assume, incur or guarantee or otherwise become liable in respect of any
Indebtedness other than:
(a) unsecured Indebtedness outstanding on the date hereof as
specified in Schedule 5.15, and any extension, renewal or replacement
thereof but only if the principal amount of such Indebtedness immediately
prior thereto is not increased;
(b) Indebtedness of a Person which becomes a Subsidiary after the
date of the Closing which is outstanding at the time such Person so becomes
a Subsidiary (but which was not incurred in anticipation thereof), and any
extension, renewal or replacement thereof but only if the principal amount
of such Indebtedness immediately prior thereto is not increased; and
(c) unsecured Indebtedness not otherwise permitted by Subsection (a)
or (b) above, provided that the sum (without duplication) of (i) the
aggregate unpaid principal amount of all Indebtedness of all Subsidiaries
outstanding pursuant to this Subsection (c) and (ii) the aggregate unpaid
principal amount of all Indebtedness secured by Liens pursuant to Section
10.7(l) shall not at the time of incurrence thereof exceed 20% of
Consolidated Net Worth.
10.7. LIENS.
The Company will not, and will not permit any of its Subsidiaries to,
create, assume, incur or suffer to exist any Lien upon or with respect to any
property or assets now
25
<PAGE>
owned or hereafter acquired by the Company or any such Subsidiary, unless the
Notes are contemporaneously secured equally and ratably with any and all other
obligations and Indebtedness secured by such Lien pursuant to documentation
reasonably satisfactory to the Required Holders and provided that, if requested
by the Required Holders, the holders of the Notes shall have been provided with
an opinion of counsel reasonably satisfactory to the Required Holders to the
effect that such documentation is enforceable in accordance with its terms and
complies with the requirements of this Section 10.7, excluding, however, from
the operation of this Section:
(a) Liens for taxes, assessments or governmental charges or claims
not yet due and payable;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Persons and other Liens imposed by
law incurred in any case in the ordinary course of business for amounts not
yet delinquent or being contested in good faith;
(c) Liens, deposits, standby letters of credit, surety bonds,
pledges, or pledge of assets (i) incurred, made or given as security for
the performance of any contract, tender, statutory obligation, lease or
other undertaking not directly or indirectly related to the borrowing of
money or the securing of Indebtedness and incurred, made or given in the
ordinary course of business, or (ii) with, or for the benefit of, any
governmental agency, which Lien, deposit, standby letter of credit, surety
bond pledge, or pledge of assets is required or permitted to qualify the
Company to conduct business, maintain self-insurance, or to obtain the
benefit of any law pertaining to workers' compensation, unemployment
insurance, pensions, social security or similar matters;
(d) any attachment, Lien, deposit, pledge, or pledge of assets with
any surety company or clerk of any court in connection with any litigation
or other legal proceeding, or in escrow as collateral in connection with or
in lieu of any bond on appeal from any judgment or decree against the
Company or any Subsidiary in connection with any litigation or other legal
proceeding, or in connection with other proceedings or actions at law or in
equity by or against the Company or any Subsidiary, so long as any such
attachment or Lien is effectively stayed while the underlying claims are
being contested in good faith and by appropriate proceedings and with
respect to which the Company or any such Subsidiary has established
adequate reserves in accordance with GAAP;
(e) Liens, easements, rights of way, servitudes or zoning or building
restrictions and other minor encumbrances on real property which are not
incurred in connection with the incurrence of Indebtedness and which do not
in the aggregate materially interfere with or impair the operation of such
property for the purposes for which it is or may reasonably be expected to
be used;
26
<PAGE>
(f) Liens in existence on the date of the Closing and listed in
Schedule 5.15 and any extension, renewal or replacement of any such Lien
provided that the principal amount of Indebtedness secured thereby
immediately prior thereto is not increased and such Lien does not extend to
or cover any other property of the Company or any Subsidiary;
(g) Liens on real estate, equipment, or other physical property used
in the conduct of the Company's ordinary course of business, acquired after
the date of Closing in the ordinary course of business, which Liens are
created at the time of the acquisition of such property or within 270 days
thereafter, to secure all or part of the Indebtedness incurred to purchase,
finance or refinance the purchase price of such real estate, equipment, or
other physical property encumbered by such Lien, provided that (i) the
-
aggregate principal amount of Indebtedness secured by any such Lien in
respect of any such real estate, equipment or other property does not
exceed the fair market value of such real estate, equipment or other
property, (ii) the aggregate unpaid principal amount of Indebtedness
--
secured by Liens pursuant to this Subsection (g) shall not at any time
exceed 50% of the aggregate purchase price of all real estate, equipment
and other physical property acquired by the Company or any Subsidiary after
the date of this Agreement in the ordinary course of business and used in
the conduct of the Company's ordinary course of business and (iii) no such
---
Lien extends to or covers any other property of the Company or any
Subsidiary;
(h) Liens on assets and property acquired by the Company or any
Subsidiary after the date of the Closing, provided that any such Lien
existed at the time the respective assets and properties were acquired and
was not created in anticipation thereof and does not extend to or cover any
other assets or property of the Company or any Subsidiary;
(i) Liens on assets of the Company or any Subsidiary which assets are
acquired in connection with, or result from the Company's or such
Subsidiary's participation in, any project or development of the Company or
such Subsidiary in order to secure the financing of such assets or such
project on a basis that is non-recourse to the Company or such Subsidiary;
provided that (i) such Liens shall be confined solely to such assets as are
--------
so acquired by the Company or such Subsidiary and (ii) the principal amount
of Indebtedness secured by such Liens shall not exceed the cost of
acquisition, lease or development of such assets;
(j) Liens incurred in connection with the sale-lease-back of assets
or real property acquired after the date of the Closing by the Company or
any Subsidiary, provided that (i) any such sale-lease-back transaction is
entered into no more than 270 days after the acquisition of such asset or
real property and (ii) the proceeds from any such sale-lease-back
transaction are applied within 270 days of the receipt of such proceeds to
(x) the acquisition by the Company or any Subsidiary of assets or property
that are to be used in the operating businesses of the Company and its
Subsidiaries or (y) the repayment of
27
<PAGE>
any Indebtedness of the Company, provided that in connection with any such
--------
repayment of Indebtedness (other than any repayment of Indebtedness up to a
principal amount of $30,000,000 during any period of twelve consecutive
calendar months), the Company shall offer to prepay the Notes pro rata with
--- ----
all other such Indebtedness then being repaid in accordance with Section
8.4, such pro rata portion of the Notes to be calculated by multiplying
--- ----
(i) the aggregate principal amount of the Notes then outstanding by (ii) a
fraction, the numerator of which is the aggregate principal amount of
Indebtedness so to be repaid and the denominator of which is the aggregate
principal amount of Indebtedness of the Company then outstanding;
(k) banker's liens and rights of offset in the holders of
Indebtedness of the Company or any Subsidiary or monies deposited by the
Company or any Subsidiary with such holders of Indebtedness in the ordinary
course of business of the Company or any such Subsidiary; and
(l) Liens incurred by the Company or any Subsidiary in addition to
those described in Subsections (a) through (k) above, provided that the sum
(without duplication) of (i) the aggregate unpaid principal amount of all
Indebtedness secured by Liens pursuant to this Subsection (l) and (ii) the
aggregate unpaid principal amount of all Indebtedness of Subsidiaries
outstanding pursuant to Section 10.6(c) shall not at the time of incurrence
thereof exceed 20% of Consolidated Net Worth.
10.8. INTEREST COVERAGE.
The Company will not at any time permit the Interest Coverage Ratio to
be less than 1.3 to 1.0.
10.9. SALE OF ASSETS.
The Company will not, and will not permit any of its Subsidiaries to,
directly or indirectly, sell, lease, assign, transfer or otherwise dispose of
(collectively, a "DISPOSITION") any of its properties or assets (including any
capital stock of any Subsidiary or other Person) unless after giving effect to
such proposed Disposition the aggregate book value (at the time of the
Disposition thereof) of all properties and assets that were the subject of a
Disposition during the period (x) of 365 consecutive days ending on the date on
which such proposed Disposition is to occur, does not exceed 15% of Consolidated
Total Assets as at the end of the fiscal year of the Company immediately
preceding such date and (y) from the date of the Closing to the date on which
such proposed Disposition is to occur, does not exceed 40% of Consolidated Total
Assets as at the end of such year; provided that the following Dispositions
shall not be taken into account for purposes of either such calculation under
this Section 10.9:
(a) any Disposition pursuant to Section 10.2;
28
<PAGE>
(b) any Disposition of inventory or other products held for sale in
the ordinary course of business of the Company and its Subsidiaries;
(c) any Disposition of assets that are reasonably determined by the
Company to be obsolete, worn-out or surplus in the ordinary course of
business of the Company and its Subsidiaries; and
(d) any other Disposition if the Company or any Subsidiary shall have
within 270 days of such Disposition applied the proceeds of such
Disposition to
(i) the acquisition by the Company or any Subsidiary of assets
or property that are to be used in the operating businesses of the
Company and its Subsidiaries, or
(ii) the repayment of any Indebtedness of the Company, provided
--------
that in connection with any such repayment of Indebtedness (other than
any repayment of Indebtedness up to a principal amount of $30,000,000
during any period of twelve consecutive calendar months) the Company
shall offer to prepay the Notes pro rata with all other such
--- ----
Indebtedness then being repaid in accordance with Section 8.4, such
pro rata portion of the Notes to be calculated by multiplying (i) the
--- ----
aggregate principal amount of the Notes then outstanding by (ii) a
fraction, the numerator of which is the aggregate principal amount of
Indebtedness so to be repaid and the denominator of which is the
aggregate principal amount of Indebtedness of the Company then
outstanding;
provided, that, in the case of clause (d)(ii), no Default or Event of
--------
Default shall have occurred and be continuing at the time of such
Disposition or at the time of such application.
10.10. LINES OF BUSINESS.
The Company will not, and will not permit any of its Subsidiaries to,
engage in any business if, as a result, the general nature of the business in
which the Company and its Subsidiaries, taken as a whole, would then be engaged
would be substantially changed from the general nature of the business in which
the Company and its Subsidiaries, taken as a whole, are engaged as described in
the Memorandum.
11. EVENTS OF DEFAULT.
An "EVENT OF DEFAULT" shall exist if any of the following conditions
or events shall occur and be continuing:
29
<PAGE>
(a) the Company defaults in the payment of any principal or Make-Whole
Amount, if any, on any Note when the same becomes due and payable, whether
at maturity or at a date fixed for prepayment or by declaration or
otherwise; or
(b) the Company defaults in the payment of any interest on any Note
for more than five Business Days after the same becomes due and payable; or
(c) the Company defaults in the performance of or compliance with any
term contained in Section 10.2 or 10.8; or
(d) the Company defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraph (a), (b)
or (c) of this Section 11) and such default is not remedied within 30 days
after the earlier of (i) a Responsible Offi cer obtaining actual knowledge
-
of such default and (ii) the Company receiving written notice of such
--
default from any holder of a Note (any such written notice to be identified
as a "notice of default" and to refer specifically to this paragraph (d) of
Section 11); or
(e) any representation or warranty made in writing by or on behalf of
the Company or by any officer of the Company in this Agreement or in any
writing furnished in connec tion with the transactions contemplated hereby
proves to have been false or incorrect in any material respect on the date
as of which made; or
(f) (i) the Company or any Subsidiary is in default (as principal or
-
as guarantor or other surety) in the payment of any principal of or premium
or make-whole amount or interest on any Indebtedness that is outstanding in
an aggregate principal amount of at least $12,000,000 and such default
shall have continued for five Business Days, or (ii) the Company or any
--
Subsidiary is in default in the performance of or compliance with any term
of any evidence of any Indebtedness in an aggregate outstanding principal
amount of at least $12,000,000 or of any mortgage, indenture or other
agreement relating thereto or any other condition exists, and as a
consequence of any such default or condition referred to in this clause
(ii) such Indebtedness has become, or has been declared, due and payable
--
before its stated maturity or before its regularly scheduled dates of
payment; or
(g) the Company or any Subsidiary (i) is generally not paying, or
-
admits in writing its inability to pay, its debts as they become due, (ii)
--
files, or consents by answer or other wise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition
in bankruptcy, for liquidation or to take advantage of any bankruptcy,
insolvency, reorganization, moratorium or other similar law of any
jurisdiction, (iii) makes an assignment for the benefit of its creditors,
---
(iv) consents to the appointment of a custodian, receiver, trustee or other
---
officer with similar powers with respect to it or with respect to any
substantial part of its property, (v) is adjudicated as
-
30
<PAGE>
insolvent or to be liquidated, or (vi) takes corporate action for the
--
purpose of any of the foregoing; or
(h) a court or Governmental Authority of competent jurisdiction
enters an order appointing, without consent by the Company or any of its
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a peti tion for
relief or reorganization or any other petition in bankruptcy or for
liquidation or to take advantage of any bankruptcy or insolvency law of any
jurisdiction, or ordering the dissolution, winding-up or liquidation of the
Company or any of its Subsidiaries, or any such petition shall be filed
against the Company or any of its Subsidiaries and such petition shall not
be dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money
aggregating in excess of $25,000,000 are rendered against one or more of
the Company and its Subsidiaries and which judgments are not, within 60
days after entry thereof, bonded, discharged or stayed pending appeal, or
are not discharged within 60 days after the expiration of such stay; or
(j) if (i) any Plan shall fail to satisfy the minimum funding
-
standards of ERISA or the Code for any plan year or part thereof or a
waiver of such standards or extension of any amortization period is sought
or granted under section 412 of the Code, (ii) a notice of intent to
--
terminate any Plan shall have been or is reasonably expected to be filed
with the PBGC or the PBGC shall have instituted proceedings under ERISA
section 4042 to terminate or appoint a trustee to administer any Plan or
the PBGC shall have notified the Company or any ERISA Affiliate that a Plan
may become a subject of any such proceedings, (iii) the aggregate "amount
---
of unfunded benefit liabilities" (within the meaning of section 4001(a)(18)
of ERISA) under all Plans, determined in accordance with Title IV of ERISA,
shall exceed $12,000,000, (iv) the Company or any ERISA Affiliate shall
--
have incurred or is reasonably expected to incur any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the Code
relating to employee benefit plans, (v) the Company or any ERISA Affiliate
-
withdraws from any Multiemployer Plan, or (vi) the Company or any
--
Subsidiary establishes or amends any employee welfare benefit plan that
provides post-employment welfare benefits in a manner that would increase
the liability of the Company or any Subsidiary thereunder; and any such
event or events described in clauses (i) through (vi) above, either
individually or together with any other such event or events, could
reasonably be expected to have a Material Adverse Effect.
As used in Section 11(j), the terms "EMPLOYEE BENEFIT PLAN" and "EMPLOYEE
WELFARE BENEFIT PLAN" shall have the respective meanings assigned to such terms
in Section 3 of ERISA.
31
<PAGE>
12. REMEDIES ON DEFAULT, ETC.
12.1. ACCELERATION.
(a) If an Event of Default with respect to the Company described in
paragraph (g) or (h) of Section 11 (other than an Event of Default described in
clause (i) of paragraph (g) or described in clause (vi) of paragraph (g) by
virtue of the fact that such clause encompasses clause (i) of paragraph (g)) has
occurred, all the Notes then outstanding shall automatically become immediately
due and payable.
(b) If any other Event of Default has occurred and is continuing, any
holder or holders of more than 50% in principal amount of the Notes at the time
outstanding may at any time at its or their option, by notice or notices to the
Company, declare all the Notes then outstanding to be immediately due and
payable.
(c) If any Event of Default described in paragraph (a) or (b) of
Section 11 has occurred and is continuing, any holder or holders of Notes at the
time outstanding affected by such Event of Default may at any time, at its or
their option, by notice or notices to the Company, declare all the Notes held by
it or them to be immediately due and payable.
Upon any Notes becoming due and payable under this Section 12.1,
whether automatically or by declaration, such Notes will forthwith mature and
the entire unpaid principal amount of such Notes, plus (x) all accrued and
-
unpaid interest thereon and (y) in the case of any Notes becoming due and
-
payable pursuant to paragraph (b) or (c) of this Section 12.1, the applicable
Make-Whole Amount determined in respect of such principal amount (to the full
extent permitted by applicable law), shall all be immediately due and payable,
in each and every case without presentment, demand, protest or further notice,
all of which are hereby waived. The Company acknowledges, and the parties
hereto agree, that each holder of a Note has the right to maintain its
investment in the Notes free from repayment by the Company (except as herein
specifically provided for) and that the provision for payment of the applicable
Make-Whole Amounts by the Company in the event that the Notes are prepaid or are
accelerated as a result of an Event of Default, is intended to provide
compensation for the deprivation of such right under such circumstances.
12.2. OTHER REMEDIES.
If any Default or Event of Default has occurred and is continuing, and
irrespective of whether any Notes have become or have been declared immediately
due and payable under Section 12.1, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise.
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<PAGE>
12.3. RESCISSION.
At any time within 90 days after any Notes have been declared due and
payable pursuant to paragraph (b) or (c) of Section 12.1, the holders of more
than 50% in principal amount of the Notes then outstanding, by written notice to
the Company, may rescind and annul any such declaration and its consequences if
(a) the Company has paid all overdue interest on the Notes, all principal of and
-
Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid
other than by reason of such declaration, and all interest on such overdue
principal and Make-Whole Amount, if any, and (to the extent permitted by
applicable law) any overdue interest in respect of the Notes, at the Default
Rate, (b) all Events of Default and Defaults, other than non-payment of amounts
-
that have become due solely by reason of such declaration, have been cured or
have been waived pursuant to Section 17, and (c) no judgment or decree has been
-
entered for the payment of any monies due pursuant hereto or to the Notes. No
rescission and annulment under this Section 12.3 will extend to or affect any
subsequent Event of Default or Default or impair any right consequent thereon.
12.4. NO WAIVERS OR ELECTION OF REMEDIES, EXPENSES, ETC.
No course of dealing and no delay on the part of any holder of any
Note in exercising any right, power or remedy shall operate as a waiver thereof
or otherwise prejudice such holder's rights, powers or remedies. No right,
power or remedy conferred by this Agreement or by any Note upon any holder
thereof shall be exclusive of any other right, power or remedy referred to
herein or therein or now or hereafter available at law, in equity, by statute or
otherwise. Without limiting the obligations of the Company under Section 15,
the Company will pay to the holder of each Note on demand such further amount as
shall be sufficient to cover all costs and expenses of such holder incurred in
any enforcement or collection under this Section 12, including, without
limitation, reasonable attorneys' fees, expenses and disbursements.
13. REGISTRATION; EXCHANGE; SUBSTITUTION OF NOTES.
13.1. REGISTRATION OF NOTES.
The Company shall keep at its principal executive office a register
for the registration and registration of transfers of Notes. The name and
address of each holder of one or more Notes, each transfer thereof and the name
and address of each transferee of one or more Notes shall be registered in such
register. Prior to due presentment for registration of transfer, the Person in
whose name any Note shall be registered shall be deemed and treated as the owner
and holder thereof for all purposes hereof, and the Company shall not be
affected by any notice or knowledge to the contrary. The Company shall give to
any holder of a Note that is an Institutional Investor promptly upon request
therefor, a complete and correct copy of the names and addresses of all
registered holders of Notes.
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<PAGE>
13.2. TRANSFER AND EXCHANGE OF NOTES.
Upon surrender of any Note at the principal executive office of the
Company for registration of transfer or exchange (and in the case of a surrender
for registration of transfer, duly endorsed or accompanied by a written
instrument of transfer duly executed by the registered holder of such Note or
his attorney duly authorized in writing and accompanied by the address for
notices of each transferee of such Note or part thereof), the Company shall
execute and deliver, at the Company's expense (except as provided below), one or
more new Notes (as requested by the holder thereof) of the same series in
exchange therefor, in an aggregate principal amount equal to the unpaid
principal amount of the surrendered Note. Each such new Note shall be payable
to such Person as such holder may request and shall be substantially in the form
of Exhibit 1-A, 1-B, 1-C or 1-D, as the case may be. Each such new Note shall
be dated and bear interest from the date to which interest shall have been paid
on the surrendered Note or dated the date of the surrendered Note if no interest
shall have been paid thereon. The Company may require payment of a sum
sufficient to cover any stamp tax or governmental charge imposed in respect of
any such transfer of Notes. Notes shall not be transferred in denominations of
less than $500,000, provided that if necessary to enable the registration of
--------
transfer by a holder of its entire holding of Notes, one Note may be in a
denomination of less than $500,000. Any transferee, by its acceptance of a Note
registered in its name (or the name of its nominee), shall be deemed to have
made the representation set forth in Section 6.2.
13.3. REPLACEMENT OF NOTES.
Upon receipt by the Company of evidence reasonably satisfactory to it
of the ownership of and the loss, theft, destruction or mutilation of any Note
(which evidence shall be, in the case of an Institutional Investor, notice from
such Institutional Investor of such ownership and such loss, theft, destruction
or mutilation), and
(a) in the case of loss, theft or destruction, of indemnity reasonably
satisfactory to it (provided that if the holder of such Note is, or is a
--------
nominee for, an original Purchaser or another holder of a Note with a
minimum net worth of at least $50,000,000 in excess of the principal amount
of such Notes, such Person's own unsecured agreement of indemnity shall be
deemed to be satisfactory), or
(b) in the case of mutilation, upon surrender and cancellation
thereof,
the Company at its own expense shall execute and deliver, in lieu thereof, a new
Note of the same series, dated and bearing interest from the date to which
interest shall have been paid on such lost, stolen, destroyed or mutilated Note
or dated the date of such lost, stolen, destroyed or mutilated Note if no
interest shall have been paid thereon.
34
<PAGE>
14. PAYMENTS ON NOTES.
14.1. PLACE OF PAYMENT.
Subject to Section 14.2, payments of principal, Make-Whole Amount, if
any, and interest becoming due and payable on the Notes shall be made in New
York, New York at the principal office of Morgan Guaranty Trust Company of New
York in such jurisdiction. The Company may at any time, by notice to each
holder of a Note, change the place of payment of the Notes so long as such place
of payment shall be either the principal office of the Company in such
jurisdiction or the principal office of a bank or trust company in such
jurisdiction.
14.2. HOME OFFICE PAYMENT.
So long as you or your nominee shall be the holder of any Note, and
not withstanding anything contained in Section 14.1 or in such Note to the
contrary, the Company will pay all sums becoming due on such Note for principal,
Make-Whole Amount, if any, and interest by the method and at the address
specified for such purpose below your name in Schedule A, or by such other
method or at such other address as you shall have from time to time specified to
the Company in writing for such purpose, without the presentation or surrender
of such Note or the making of any notation thereon, except that upon written
request of the Company made concurrently with or reasonably promptly after
payment or prepayment in full of any Note, you shall surrender such Note for
cancellation, reasonably promptly after any such request, to the Company at its
principal executive office or at the place of payment most recently designated
by the Company pursuant to Section 14.1. Prior to any sale or other disposition
of any Note held by you or your nominee you will, at your election, either
endorse thereon the amount of principal paid thereon and the last date to which
interest has been paid thereon or surrender such Note to the Company in exchange
for a new Note or Notes pursuant to Section 13.2. The Company will afford the
benefits of this Section 14.2 to any Institutional Investor that is the direct
or indirect transferee of any Note purchased by you under this Agreement and
that has made the same agreement relating to such Note as you have made in this
Section 14.2.
15. EXPENSES, ETC.
15.1. TRANSACTION EXPENSES.
Whether or not the transactions contemplated hereby are consummated,
the Company will pay all costs and expenses (including fees of a single
financial advisor and reasonable attorneys' fees of a single special counsel for
all Purchasers or all holders of Notes and, if reasonably required, local or
other counsel) incurred by you and each Other Purchaser or holder of a Note in
connection with such transactions and in connection with any amendments, waivers
or consents under or in respect of this Agreement or the Notes (whether or not
such amendment, waiver or consent becomes effective), including, without
limitation: (a) the costs and expenses incurred in enforcing or defending (or
-
determining whether or how to enforce or defend) any rights under this Agreement
or the Notes or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement or the Notes, or
by reason of being a holder of any Note, and (b) the costs and expenses,
-
including such single financial advisors' fees, incurred in connection with the
35
<PAGE>
insolvency or bankruptcy of the Company or any Subsidiary or in connection with
any work-out or restructuring of the transactions contemplated hereby and by the
Notes. The Company will pay, and will save you and each other holder of a Note
harmless from, all claims in respect of any fees, costs or expenses if any, of
brokers and finders (other than those retained by you).
15.2. SURVIVAL.
The obligations of the Company under this Section 15 will survive the
payment or transfer of any Note, the enforcement, amendment or waiver of any
provision of this Agreement or the Notes, and the termination of this Agreement.
16. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the Notes, the purchase or transfer
by you of any Note or portion thereof or interest therein and the payment of any
Note, and may be relied upon by any subsequent holder of a Note, regardless of
any investigation made at any time by or on behalf of you or any other holder of
a Note. All statements contained in any certificate or other instrument
delivered by or on behalf of the Company pursuant to this Agreement shall be
deemed representations and warranties of the Company under this Agreement.
Subject to the preceding sentence, this Agree ment and the Notes embody the
entire agreement and understanding between you and the Company and supersede all
prior agreements and understandings relating to the subject matter hereof.
17. AMENDMENT AND WAIVER.
17.1. REQUIREMENTS.
This Agreement and the Notes may be amended, and the observance of any
term hereof or of the Notes may be waived (either retroactively or
prospectively), with (and only with) the written consent of the Company and the
Required Holders, except that (a) no amendment or waiver of any of the
-
provisions of Section 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it
is used therein), will be effective as to you unless consented to by you in
writing, and (b) no such amendment or waiver may, without the written consent of
-
the holder of each Note at the time outstanding affected thereby, (i) subject to
-
the provisions of Section 12 relating to acceleration or rescission, change the
amount or time of any prepayment or payment of principal of, or reduce the rate
or change the time of payment or method of computation of interest or of the
Make-Whole Amounts on, the Notes, (ii) change the percentage of the principal
--
amount of the Notes the holders of which are required to consent to any such
amendment or waiver, or (iii) amend any of Sections 8, 11(a), 11(b), 12, 17 or
---
20.
17.2. SOLICITATION OF HOLDERS OF NOTES.
(a) Solicitation. The Company will provide each holder of the Notes
------------
(irrespective of the amount of Notes then owned by it) with sufficient
information, sufficiently far in advance of the date a decision is required, to
enable such holder to make an informed and
36
<PAGE>
considered decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions hereof or of the Notes. The Company will
deliver executed or true and correct copies of each amendment, waiver or consent
effected pursuant to the provisions of this Section 17 to each holder of
outstanding Notes promptly following the date on which it is executed and
delivered by, or receives the consent or approval of, the requisite holders of
Notes.
(b) Payment. The Company will not directly or indirectly pay or cause
-------
to be paid any remuneration, whether by way of supplemental or additional
interest, fee or otherwise, or grant any security, to any holder of Notes as
consideration for or as an inducement to the entering into by any holder of
Notes of any waiver or amendment of any of the terms and provisions hereof
unless such remuneration is concurrently paid, or security is concurrently
granted, on the same terms, ratably to each holder of Notes then outstanding
even if such holder did not consent to such waiver or amendment.
17.3. BINDING EFFECT, ETC.
Any amendment or waiver consented to as provided in this Section 17
applies equally to all holders of Notes and is binding upon them and upon each
future holder of any Note and upon the Company without regard to whether such
Note has been marked to indicate such amendment or waiver. No such amendment or
waiver will extend to or affect any obligation, covenant, agreement, Default or
Event of Default not expressly amended or waived or impair any right consequent
thereon. No course of dealing between the Company and the holder of any Note
nor any delay in exercising any rights hereunder or under any Note shall operate
as a waiver of any rights of any holder of such Note. As used herein, the term
"THIS AGREEMENT" and references thereto shall mean this Agreement as it may from
time to time be amended or supplemented.
17.4. NOTES HELD BY COMPANY, ETC.
Solely for the purpose of determining whether the holders of the
requisite percentage of the aggregate principal amount of Notes then outstanding
approved or consented to any amendment, waiver or consent to be given under this
Agreement or the Notes, or have directed the taking of any action provided
herein or in the Notes to be taken upon the direction of the holders of a
specified percentage of the aggregate principal amount of Notes then
outstanding, Notes directly or indirectly owned by the Company or any of its
Affiliates shall be deemed not to be outstanding.
18. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a) by telecopy if the sender on the same day sends a
-
confirming copy of such notice by a recognized overnight delivery service
(charges prepaid), or (b) by registered or certified mail with return receipt
-
requested (postage prepaid), or (c) by a recognized overnight delivery service
-
(with charges prepaid). Any such notice must be sent:
37
<PAGE>
(i) if to you or your nominee, to you or it at the address specified
for such com munications in Schedule A, or at such other address as you or
it shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such
address as such other holder shall have specified to the Company in
writing, or
(iii) if to the Company, to the Company at its address set forth at
the beginning hereof to the attention of Paul Stanford, General Counsel, or
at such other address as the Company shall have specified to the holder of
each Note in writing.
Notices under this Section 18 will be deemed given only when actually received.
19. REPRODUCTION OF DOCUMENTS.
This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers and modifications that may hereafter be
-
executed, (b) documents received by you at the Closing (except the Notes
-
themselves), and (c) financial statements, certificates and other information
-
previously or hereafter furnished to you, may be reproduced by you by any
photographic, photostatic, microfilm, microcard, miniature photographic or other
similar process and you may destroy any original document so reproduced. The
Company agrees and stipulates that, to the extent permitted by applicable law,
any such reproduction shall be admissible in evidence as the original itself in
any judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and any enlargement, facsimile or further reproduction of
such reproduction shall likewise be admissible in evidence. This Section 19
shall not prohibit the Company or any other holder of Notes from contesting any
such reproduction to the same extent that it could contest the original, or from
introducing evidence to demonstrate the inaccuracy of any such reproduction.
20. CONFIDENTIAL INFORMATION.
For the purposes of this Section 20, "CONFIDENTIAL INFORMATION" means
information delivered to you by or on behalf of the Company or any Subsidiary in
connection with the transactions contemplated by or otherwise pursuant to this
Agreement that is proprietary in nature and that was clearly marked or labeled
or otherwise adequately identified when received by you as being confidential
information of the Company or such Subsidiary, provided that such term does not
--------
include information that (a) was publicly known or otherwise known to you prior
-
to the time of such disclosure, (b) subsequently becomes publicly known through
-
no act or omission by you or any person acting on your behalf, (c) otherwise
-
becomes known to you other than through disclosure by the Company or any
Subsidiary or (d) constitutes financial statements delivered to you under
-
Section 7.1 that are otherwise publicly available. You will maintain the
confidentiality of such Confidential Information in accordance with procedures
adopted by you in good faith to protect confidential information of third
parties delivered to you, provided that you may deliver or disclose Confidential
--------
Information to (i) your directors, officers, employees, agents, attorneys and
-
affiliates (to the extent such disclosure reasonably relates to the
administration of the investment represented by your Notes), (ii) your financial
--
advisors and other
38
<PAGE>
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 20, (iii)
---
any other holder of any Note, (iv) any Institutional Investor to which you sell
--
or offer to sell such Note or any part thereof or any participation therein (if
such Person has agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 20), (v) any Person
-
from which you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 20), (vi) any federal, state or other
--
regulatory authority having jurisdiction over you, (vii) the National
---
Association of Insurance Commissioners or any similar organization, or any
nationally recognized rating agency that requires access to information about
your investment portfolio or (viii) any other Person to which such delivery or
----
disclosure may be necessary or appropriate (w) to effect compliance with any
-
law, rule, regulation or order applicable to you, (x) in response to any
-
subpoena or other legal process, (y) in connection with any litigation to which
-
you are a party or (z) if an Event of Default has occurred and is continuing,
-
to the extent you may reasonably determine such delivery and disclosure to be
necessary or appropriate in the enforcement or for the protection of the rights
and remedies under your Notes and this Agreement. Each holder of a Note, by its
acceptance of a Note, will be deemed to have agreed to be bound by and to be
entitled to the benefits of this Section 20 as though it were a party to this
Agreement. On reasonable request by the Company in connection with the delivery
to any holder of a Note of information required to be delivered to such holder
under this Agreement or requested by such holder (other than a holder that is a
party to this Agreement or its nominee), such holder will enter into an
agreement with the Company embodying the provisions of this Section 20.
21. SUBSTITUTION OF PURCHASER.
You shall have the right to substitute any one of your Affiliates as
the purchaser of the Notes that you have agreed to purchase hereunder, by
written notice to the Company, which notice shall be signed by both you and such
Affiliate, shall contain such Affiliate's agreement to be bound by this
Agreement and shall contain a confirmation by such Affiliate of the accuracy
with respect to it of the representations set forth in Section 6. Upon receipt
of such notice, wherever the word "you" is used in this Agreement (other than in
this Section 21), such word shall be deemed to refer to such Affiliate in lieu
of you. In the event that such Affiliate is so substituted as a purchaser
hereunder and such Affiliate thereafter transfers to you all of the Notes then
held by such Affiliate, upon receipt by the Company of notice of such transfer,
wherever the word "you" is used in this Agreement (other than in this Section
21), such word shall no longer be deemed to refer to such Affiliate, but shall
refer to you, and you shall have all the rights of an original holder of the
Notes under this Agreement.
22. MISCELLANEOUS.
22.1. SUCCESSORS AND ASSIGNS.
All covenants and other agreements contained in this Agreement by or
on behalf of any of the parties hereto bind and inure to the benefit of their
respective successors and assigns (including, without limitation, any subsequent
holder of a Note) whether so expressed or not.
39
<PAGE>
22.2. PAYMENTS DUE ON NON-BUSINESS DAYS.
Anything in this Agreement or the Notes to the contrary
notwithstanding, any payment of principal of or Make-whole Amount or interest on
any Note that is due on a date other than a Business Day shall be made on the
next succeeding Business Day without including the additional days elapsed in
the computation of the interest payable on such next succeeding Business Day.
22.3. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall (to the full extent permitted by law) not invalidate or
render unenforceable such provision in any other jurisdiction.
22.4. CONSTRUCTION.
Each covenant contained herein shall be construed (absent express
provision to the contrary) as being independent of each other covenant contained
herein, so that compliance with any one covenant shall not (absent such an
express contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by any
Person, or which such Person is prohibited from taking, such provision shall be
applicable whether such action is taken directly or indirectly by such Person.
22.5. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies hereof, each
signed by less than all, but together signed by all, of the parties hereto.
22.6. GOVERNING LAW.
This Agreement shall be construed and enforced in accordance with, and
the rights of the parties shall be governed by, the law of the State of New York
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
* * * * *
40
<PAGE>
If you are in agreement with the foregoing, please sign the form of agreement
on the accompanying counterpart of this Agreement and return it to the Company,
whereupon the foregoing shall become a binding agreement between you and the
Company.
Very truly yours,
CALMAT CO.
By /s/ H. James Gallagher
-----------------------------------------
Title: Executive Vice President, Finance,
Chief Financial Officer and
Treasurer
By /s/ Edward J. Kelley
-----------------------------------------
Title: Senior Vice President,
Corporate Development
The foregoing is hereby
agreed to as of the
date thereof.
[The forms of signature by each of the purchasers, as they appear in the
respective Note Purchase Agreements, are set forth below.]
CENTURY LIFE OF AMERICA
By: Century Investment Management Co.
By /s/ Joseph P. Young
----------------------------------
Name: Joseph P. Young
Title: Senior Investment Officer
CUNA MUTUAL INSURANCE SOCIETY
By: Century Investment Management Co.
By /s/ Joseph P. Young
----------------------------------
Name: Joseph P. Young
Title: Senior Investment Officer
41
<PAGE>
THE GREAT-WEST LIFE ASSURANCE COMPANY
By /s/ W.W. Lovatt
-------------------------------------------------
Name: W.W. Lovatt
Title: Vice President, Fixed Income Investments
By /s/ B.R. Allison
-------------------------------------------------
Name: B.R. Allison
Title: Manager, Bond Investments
GREAT-WEST LIFE & ANNUITY INSURANCE
COMPANY
By /s/ Julie Bock
-------------------------------------------------
Name: Julie Bock
Title: Assistant Vice President
By /s/ E.A. Marr
-------------------------------------------------
Name: E.A. Marr
Title: Assistant Vice President,
Private Placement Investments
GREAT AMERICAN INSURANCE COMPANY
By /s/ Ronald C. Hayes
-------------------------------------------------
Name: Ronald C. Hayes
Title: Assistant Vice President
THE SECURITY MUTUAL LIFE INSURANCE
COMPANY OF LINCOLN, NEBRASKA
By /s/ Kevin W. Hammond
-------------------------------------------------
Name: Kevin W. Hammond
Title: Vice President, Chief Investment Officer
IL ANNUITY AND INSURANCE COMPANY
By /s/ Gene E. Trueblood
-------------------------------------------------
Name: Gene E. Trueblood
Title: Treasurer
42
<PAGE>
SECURITY FIRST LIFE INSURANCE COMPANY
By /s/ R.J. Ritchie
-------------------------------------------------
Name: R.J. Ritchie
Title: Vice President, U.S. Fixed Income
By /s/ George Wu
-------------------------------------------------
Name: George Wu
Title: Analyst, U.S. Fixed Income
AMERITAS LIFE INSURANCE CORP.
By /s/ Patrick J. Henry
-------------------------------------------------
Name: Patrick J. Henry
Title: Vice President, Fixed Income Securities
MENNONITE MUTUAL AID ASSOCIATION
By /s/ Delmar King
-------------------------------------------------
Name: Delmar King
Title: Assistant Treasurer
By /s/ J.B. Miller
-------------------------------------------------
Name: J.B. Miller
Title: Vice President
PROVIDENT MUTUAL LIFE INSURANCE
COMPANY
By /s/ S.C. Lange
-------------------------------------------------
Name: S.C. Lange
Title: Vice President
NATIONAL GUARDIAN LIFE INSURANCE
COMPANY
By /s/ Robert A. Mucci
-------------------------------------------------
Name: Robert A. Mucci
Title: Assistant Vice President and Investment Officer
43
<PAGE>
STATE FARM LIFE INSURANCE COMPANY
By /s/ John Concklin
-------------------------------------------------
Name: John Concklin
Title: Investment Officer
By /s/ W. Thomas Gardner
-------------------------------------------------
Name: W. Thomas Gardner
Title: Investment Officer
RELIASTAR LIFE INSURANCE COMPANY
By /s/ James V. Wittich
-------------------------------------------------
Name: James V. Wittich
Title: Authorized Representative
NORTHERN LIFE INSURANCE COMPANY
By /s/ James V. Wittich
-------------------------------------------------
Name: James V. Wittich
Title: Assistant Treasurer
WOODMEN ACCIDENT AND LIFE COMPANY
By /s/ A.M. McCray
-------------------------------------------------
Name: A.M. McCray
Title: Vice President and Assistant Treasurer
ASSURITY LIFE INSURANCE COMPANY
By /s/ M.F. Wilder
-------------------------------------------------
Name: M.F. Wilder
Title: Senior Vice President and Treasurer
NEW YORK LIFE INSURANCE COMPANY
By /s/ David L. Bangs
-------------------------------------------------
Name: David L. Bangs
Title: Investment Vice President
44
<PAGE>
NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION
By /s/ Lydia S. Sangree
-------------------------------------------------
Name: Lydia S. Sangree
Title: Investment Vice President
SECURITY MUTUAL LIFE INSURANCE
COMPANY OF NEW YORK
By /s/ William W. Atkin
-------------------------------------------------
Name: William W. Atkin
Title: Executive Vice President and
Chief Financial Officer
NATIONAL LIFE INSURANCE COMPANY
By /s/ R. Scott Higgins
-------------------------------------------------
Name: R. Scott Higgins
Title: Vice President
THE MUTUAL LIFE INSURANCE COMPANY
OF NEW YORK
By /s/ Suzanne E. Walton
-------------------------------------------------
Name: Suzanne E. Walton
Title: Managing Director
45
<PAGE>
SCHEDULE A
This Schedule A shows the names and addresses of the Purchasers under the
foregoing Note and Guarantee Agreement and the respective principal amounts of
Notes of each series to be purchased by each.
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
AMERITAS LIFE INSURANCE CORP. B $5,000,000
</TABLE>
(1) All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
First Bank Nebraska, NA
ABA No. 104-000-029
Ameritas Life Insurance Corp.
Account No. 1-494-0070-0188
with sufficient information to identify the source and
application of such funds, including the PPN of the
issue.
(2) Address for all notices in respect of payment and all
other communications:
Ameritas Life Insurance Corp.
5900 "O" Street
Lincoln, NE 68510-2234
Attn: Finance Department
Telecopy No. (402) 467-6970
Tax ID No. 47-0098400
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- -------------------------------- ------ ----------------
<S> <C> <C>
CENTURY LIFE OF AMERICA B $3,000,000
C $2,000,000
</TABLE>
(Note registered in the name of Atwell & Co.)
(1) All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
The Chase Manhattan Bank, NA
BNF = Funds Pending-DNI/ABS
BBK = Chase Manhattan Bank/SSTO
Account No. 900-9-002206
A/C = 473-63300
ABA No. 021000021
with sufficient information to identify the source and
application of such funds, including CUSIP, payment
date, and principal, premium or interest on the
security.
(2) Address for all notices in respect of payments and
written confirmations of such wire transfers:
CUNA Mutual Group
Attn: Investment Accounting, GG-12
P.O. Box 391
Madison, WI 53701
(3) Address for all other communications:
CUNA Mutual Group
Securities Management Department
5910 Mineral Point Road
Madison, WI 53705
Attn: Private Placements
Telecopy No. (608) 238-2315
(4) Atwell Tax ID No. 13-6065575
2
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
CUNA MUTUAL INSURANCE SOCIETY B $2,000,000
</TABLE>
(Note registered in the name of Atwell & Co.)
(1) All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
The Chase Manhattan Bank, NA
BNF = Funds Pending-DNI/ABS
BBK = Chase Manhattan Bank/SSTO
Account No. 900-9-002206
A/C = 473-63300
ABA No. 021000021
with sufficient information to identify the source and
application of such funds, including CUSIP, payment
date, and principal, premium or interest on the
security.
(2) Address for all notices in respect of payments and
written confirmations of such wire transfers:
CUNA Mutual Group
Attn: Investment Accounting, GG-12
P.O. Box 391
Madison, WI 53701
(3) Address for all other communications:
CUNA Mutual Group
Securities Management Department
5910 Mineral Point Road
Madison, WI 53705
Attn: Private Placements
Telecopy No. (608) 238-2315
(4) Atwell Tax ID No. 13-6065575
3
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
THE GREAT-WEST LIFE A $3,000,000
ASSURANCE COMPANY
</TABLE>
(1) All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
Citibank NYC/Cust
ABA No. 021000089
Account No. 091595
Great-West Life Assurance Co. Bonds
U.S.
Special Instructions:
(1) security description (PPN#)
(2) allocation of payment between principal and interest, and
(3) confirmation of principal balance.
(2) All notices of payment in respect of the Notes and
written confirmation of each payment to:
Citibank, N.A.
Investor Services Division
Securities Processing Services
20 Exchange Place/Level C
New York, New York 10043
(3) Notice for other communications:
The Great-West Life Assurance Company
100 Osborne Street
Winnipeg, Manitoba
Canada R2C 3A5
Attn: Securities Accounting
Telecopy No. (204) 946-8849
pc: Great-West Life & Annuity Insurance Company
Investments Division
8515 East Orchard Road, 3T2
Englewood, Colorado 80111
4
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
GREAT-WEST LIFE & ANNUITY A $9,000,000
INSURANCE COMPANY
</TABLE>
(1) All payments on account of the Notes shall be made
by wire transfer of immediately available funds to:
ABA No. 091-000-019 NW MPLS/TRUST
CLEARING
Account No. 08-40-245
Attn: GWL Acct#12468800
Special Instructions:
(1) security description (PPN#)
(2) allocation of payment between principal and interest, and
(3) confirmation of principal balance.
(2) All notices of payment in respect of the Notes and
written confirmation of each payment to:
Norwest Bank Minnesota, N.A.
733 Marquette Ave., Investors Bldg., 5th Floor
Minneapolis, Minnesota 55479-0047
Attn: Income Collections
(3) Notice for other Communications/Financial
Statements, Trustee Reports, etc.:
Great-West Life & Annuity Insurance Company
8515 East Orchard Road,
3rd Floor Tower 2
Englewood, Colorado 80111
Attention: U.S. Private Placements
Fax: 303-689-6193
5
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
GREAT AMERICAN INSURANCE COMPANY A $6,000,000
</TABLE>
(Note to be registered in the name of Salkeld & Co.)
(1) All payments on account of the Notes shall be
made by wire transfer to:
ABA #021 001 033
Bankers Trust Company
Attn: 99-911-196
Credit Account: Great American Insurance
Company
Account #97960
REF: CalMat Company
(2) Address for all notices in respect of payment:
Bankers Trust Company
16 Wall Street 4th Floor
New York, New York 10005
Attn: George Flores
Telephone No.: (212) 618-2207
with a copy to:
Great American Insurance Company
c/o American Money Management Corporation
One East Fourth Street, Third Floor
Cincinnati, OH 45202
(3) Address for all other notices:
American Money Management Corporation
Attn: Bill Effler, Senior Vice President
One East Fourth Street, Third Floor
Cincinnati, OH 45202
Salkeld & Co. Tax ID No. 13-6065491
6
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
THE SECURITY MUTUAL LIFE INSURANCE A $2,000,000
COMPANY OF LINCOLN, NEBRASKA
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
National Bank of Commerce
13th & O Streets
Lincoln, NE
ABA No. 1040-0045
Credit: Security Mutual Life
A/C #40-797-624
(2) Address for all notices in respect of payment:
The Security Mutual Life Insurance Company of
Lincoln, Nebraska
Attn: Investment Department
200 Centennial Mall North (68508)
P.O. Box 82448
Lincoln, Nebraska 68501
Tax ID No. 47-0293990
7
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
IL ANNUITY AND INSURANCE COMPANY B $2,000,000
</TABLE>
(1) All principal and interest payments on the Notes
shall be made by wire transfer of immediately
available funds to:
The Bank of New York
New York, New York 10286
BNF: IOC 566
ABA No. 021000018
For credit to: IL Annuity and Insurance Company
Account #177832
with sufficient information to identify
payment as to principal and interest, issue
identification and PPN #.
(2) Address for all notices in respect of payment:
IL Annuity and Insurance Company #177832.
c/o The Bank of New York
Attn: P&I Department
P.O. Box 19266
Newark, New Jersey 07195
(3) Address for all other communications:
IL Annuity and Insurance Company
P.O. Box 1230
Indianapolis, Indiana 46206-1230
Attn: Securities Department
Telecopy No. (317) 927-3363
Tax ID No. 35-1935680
8
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- -------------------------------- ------ ----------------
<S> <C> <C>
SECURITY FIRST LIFE INSURANCE A $2,000,000
COMPANY B $2,000,000
C $2,000,000
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
Bank of New York
1 Wall Street
New York, NY 10286
Account Name: Security First Group
Corporate Bond Account
Account No. 328175
ABA No. 021000018
with sufficient information to identify
the source and application of such funds,
including the PPN of the issue.
(2) Address for all notices in respect of payment and
all other communications:
Security First Life Insurance Company
c/o London Life Insurance Company
255 Dufferin Avenue
London, Ontario
N6A 4K1 Canada
Attn: Manager U.S. Fixed Income
(Private Placements)
Securities Department
Telephone No.: (519) 432-5281
Telecopy No.: (519) 342-7447
Security First Life Insurance
Tax ID No. 540696644
9
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
MENNONITE MUTUAL AID ASSOCIATION B $1,000,000
</TABLE>
(Bond registered in the name of Agen & Co.)
(1) All payments on account of the Bonds shall
be made by wire transfer of immediately
available funds to:
Fifth Third Bank
ABA #042000314
for Mennonite Mutual Aid Association
For Account Number 010032624500
Attn: Helen Seibert
with sufficient information to identify the
source and application of such funds
including the PPN of the issue.
(2) Address for all notices in respect of payment:
Helen Seibert
Fifth Third Bank
38 Fountain Square Plaza
Cincinnati, OH 45263
Phone 513-579-5467
Fax 513-579-5444
(3) Address for all other communications:
Delmar King
Mennonite Mutual Aid Association
1110 North Main Street
P.O. Box 483
Goshen, IN 46527-0483
Phone 219-533-9511
Fax 219-534-4381
Telecopy No. (612) 671-1943
Tax ID No. 35-6059333
10
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- -------------------------------- ---------- ----------------
<S> <C> <C>
PROVIDENT MUTUAL LIFE A $1,500,000
INSURANCE COMPANY A $1,500,000
A $2,000,000
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available funds to:
PNC Bank
Broad and Chestnut Streets
Philadelphia, PN 19101
ABA No. 031-000-053
For credit to Provident
Mutual Life Insurance Company
Account No. 85-2000-4909
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment:
Provident Mutual Life Insurance Company
P.O. Box 1713
Valley Forge, PA 19482-1717
Attn: Treasurer
Telecopy No. (610) 407-1322
(3) Address for all other communications:
Provident Mutual Life Insurance Company
1205 Westlakes Drive
Berwyn, PA 19312-2405
Attn: Treasurer
Telecopy No. (610) 407-1322
Tax ID No. 23-099-045-0
11
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
NATIONAL GUARDIAN LIFE A $3,000,000
INSURANCE COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
Firstar Bank Madison
P.O. Box 7900
Madison, WI 53707
ABA No. 075900465
For Credit to: National Guardian Life Insurance
Account No. 311 700 397
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment:
National Guardian Life Insurance Company
Two East Gilman Street
P.O. Box 1191
Attn: Investment Department
Madison, WI 53701-1191
(3) Address for all other communications:
National Guardian Life Insurance Company
Two East Gilman Street
P.O. Box 1191
Attn: Investment Department
Madison, WI 53701-1191
Telecopy No. (608) 257-1318
Tax ID No. 39-049-3780
12
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
STATE FARM LIFE INSURANCE A $5,000,000
COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
BK of NYC
ABA No. 021000018
IOC 111063
For credit to:
State Farm Life Insurance Company
Account No. 342924
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices:
State Farm Life Insurance Company
Investment Dept. E-10
One State Farm Plaza
Bloomington, Illinois 61710
Fax No. 309-766-7423
Tax ID No. 37-0533090
(3) Send confirms to:
State Farm Life Insurance Company
Investment Accounting Dept. D-2
One State Farm Plaza
Bloomington, Illinois 61710
Fax No. 309-766-7423
13
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
RELIASTAR LIFE INSURANCE B $5,000,000
COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
First National Bank N.A./Mpls
601 2nd Avenue S.
ABA No. 091000022
Account #1102-4001-4461
Attn: Securities Accounting
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue, Coupon & Maturity.
(2) Address for all communications:
Reliastar Investment Research, Inc.
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2147
Ref: Steve Nelson
Fax: (612) 372-5368
Tax ID No. 41-0451140
14
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
NORTHERN LIFE INSURANCE B $10,000,000
COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
First National Bank N.A./Mpls
601 2nd Avenue S.
ABA No. 091000022
Account #1602-3237-6105
Attn: Securities Accounting
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue, Coupon & Maturity.
(2) Address for all communications:
Reliastar Investment Research, Inc.
100 Washington Avenue South
Suite 800
Minneapolis, MN 55401-2147
Ref: Steve Nelson
Fax: (612) 372-5368
Tax ID No. 41-1295933
15
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
WOODMEN ACCIDENT AND B $1,500,000
LIFE COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of Federal funds (identifying
each payment as principal, premium or interest) to:
First Bank Nebraska
13 and M Streets
Lincoln, Nebraska 68508
ABA No. 1040 000 29
For credit to
Woodmen Accident and Life Company's
General Fund
Account No. 1-494-0092-9092
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment and
all communications:
Woodmen Accident and Life Company
P.O. Box 82288
Lincoln, Nebraska 68501
Attn: Securities Division
(3) Address for overnight courier shall be addressed as
follows:
Woodmen Accident and Life Company
1526 K Street
Lincoln, Nebraska 68508
Attn: Securities Division
Telephone No. (402) 437-4313
Telecopy No. (402) 437-4392
Tax ID No. 47-03392200
16
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
ASSURITY LIFE INSURANCE B $500,000
COMPANY
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of Federal funds (identifying
each payment as principal, premium or interest) to:
Norwest Bank
ABA No. 104 000058
For credit to:
Assurity Life Insurance Company
Account No. 8180010137
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment and
all communications:
Assurity Life Insurance Company
1526 K Street
Lincoln, Nebraska 68508
Attn: Investment Operations
(3) Address for overnight courier and bond delivery shall be addressed as
follows:
Assurity Life Insurance Company
1526 K Street
Lincoln, Nebraska 68508
Attn: Investment Operations
Telephone No. (402) 437-4313
Telecopy No. (402) 437-4392
Tax ID No. 38-1843471
17
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
NEW YORK LIFE INSURANCE C $16,000,000
COMPANY
</TABLE>
(1) All payments on account of the Notes shall be made by wire transfer of
immediately available funds to:
Morgan Guaranty Trust Company of
New York
New York, NY 10015
ABA No. 021-000-238
For credit to the account of New York Life
Insurance Company
Account No. 810-00-000
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Treasury Department
Securities Income
Section, Room 209
Telecopy No. (212) 447-4160
(3) Address for all other communications:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Investment Department
Private Finance Group
Room 206
Telecopy No. (212) 447-4122
18
<PAGE>
with copies of any notices regarding defaults or
Events of Default under the operative documents
to:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Office of the General Counsel
Investment Section,
Room 1104
Telecopy No. (212) 576-8340
Tax ID No. 13-5582869
19
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
NEW YORK LIFE INSURANCE AND C $5,000,000
ANNUITY CORPORATION
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
Chase Manhattan Bank
New York, NY
ABA No. 021-000-021
For credit to the account of New York Life
Insurance and Annuity Corporation
Account No. 008-0-57001
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment:
New York Life Insurance and Annuity
Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Treasury Department
Securities Income
Section, Room 209
Telecopy No. (212) 447-4160
(3) Address for all other communications:
New York Life Insurance and Annuity
Corporation
c/o New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Investment Department
Private Finance Group
Room 206
Telecopy No. (212) 447-4122
20
<PAGE>
with copies of any notices regarding defaults or
Events of Default under the operative documents to:
New York Life Insurance Company
51 Madison Avenue
New York, NY 10010-1603
Attn: Office of the General Counsel
Investment Section,
Room 1104
Telecopy No. (212) 576-8340
Tax ID No. 13-3044743
21
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
SECURITY MUTUAL LIFE INSURANCE C $2,000,000
COMPANY OF NEW YORK
</TABLE>
(1) All payments on or in respect of the Notes to be by
bank wire transfer of Federal or other immediately
available funds (identifying each payment as
"CalMat Co. Note due 2008, PPN
number _______, payment due date and application
as among principal, premium or interest") to:
The Chase Manhattan Bank
New York, New York
ABA No. 021-000-021
ChaseNYC/CTR/
BNF = Income Processing Account
#9009000200
OBI = CalMat Co.
For credit to the account of:
Security Mutual Life Insurance Company of
New York
Account #G05831
With advice of such payments to be addressed to:
Security Mutual Life Insurance Company of
New York
100 Court Street
P.O. Box 1625
Binghamton, NY 13902
with duplicate notice to:
The Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 5
Bowling Green Station
New York, NY 10275-0072
Attn: Security Mutual Private Placements
22
<PAGE>
(2) All other notices and communications to be
addressed to:
Security Mutual Life Insurance Company of
New York
100 Court Street
P.O. Box 1625
Binghamton, NY 13902
with duplicate notice to:
The Chase Manhattan Bank, N.A.
Private Placement Servicing
P.O. Box 5
Bowling Green Station
New York, NY 10275-0072
Attn: Security Mutual Private Placements
(3) Tax ID No. 15-0442730
23
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
NATIONAL LIFE INSURANCE COMPANY C $6,000,000
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
Chase Manhattan Bank, N.A.
One Chase Manhattan Plaza
New York, NY 10081
ABA No. 021000021
Account No. 910-4-017752
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment and
all other communications:
National Life Insurance Company
National Life Drive
Montpelier, VT 05604
Attn: Private Placements
Telephone No. (802) 223-9324
Telecopy No. (802) 223-9329
Tax ID No. 03-0144090
24
<PAGE>
<TABLE>
<CAPTION>
Name and Address of Purchaser Series Principal Amount
- ----------------------------- ------ ----------------
<S> <C> <C>
THE MUTUAL LIFE INSURANCE D $15,000,000
COMPANY OF NEW YORK
</TABLE>
(1) All payments on account of the Notes shall be
made by wire transfer of immediately available
funds to:
The Chase Manhattan Bank
ABA No. 021000021
For credit to :
The Mutual Life Insurance Company
of New York
Account No. 321-023803
with sufficient information to identify the source
and application of such funds, including the PPN of
the issue.
(2) Address for all notices in respect of payment:
Glenpointe Marketing & Operations
Center-MONY
Glenpointe Center West
500 Frank W. Burr Blvd.
Teaneck, NJ 07666-6888
Attn: Securities Custody
Telecopy No. (201) 907-6979
(3) Address for all other communications:
The Mutual Life Insurance Company
of New York
1740 Broadway
New York, NY 10019
Attn: MONY Capital Management Unit
Telecopy No. (212) 708-2491
Tax ID No. 13-1632487
25
<PAGE>
SCHEDULE B
DEFINED TERMS
-------------
As used herein, the following terms have the respective meanings set forth
below or set forth in the Section hereof following such term:
"AFFILIATE" means, at any time, and with respect to any Person, (a) any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (b) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the man agement and policies of a Person,
whether through the ownership of voting securities, by con tract or otherwise.
Unless the context otherwise clearly requires, any reference to an "Affiliate"
is a reference to an Affiliate of the Company.
"BUSINESS DAY" means (a) for the purposes of Section 8.7 only, any day
-
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
-
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in New York, New York or Los Angeles, California
are required or authorized to be closed.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CLOSING" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" means CalMat Co., a Delaware corporation, and any successor
thereto pursuant to Section 10.2.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED INCOME AVAILABLE FOR INTEREST CHARGES" means, with respect to
any period, Consolidated Net Income for such period adjusted as follows: (i) by
subtracting all amounts included therein on account of (x) extraordinary gains
(determined in accordance with GAAP) and (y) any equity interest of the Company
in the unremitted earnings of any Person other than a Subsidiary; and (ii) by
adding back all amounts deducted in the computation thereof on account of (x)
extraordinary losses (determined in accordance with GAAP), (y) Interest Charges
and (z) taxes imposed on or measured by income or excess profits.
"CONSOLIDATED NET INCOME" means, with respect to any period, the
consolidated net income (or loss) of the Company and its Subsidiaries for such
period (taken as a cumulative whole) as determined in accordance with GAAP.
<PAGE>
"CONSOLIDATED NET WORTH" means, at any time, the sum of (i) the par value
of the capital stock of the Company (excluding treasury and unissued stock),
(ii) the amount of the paid-in capital and retained earnings of the Company and
its Subsidiaries and (iii) minority interests in the stock of Subsidiaries, in
each case as such amounts would be shown on a consolidated balance sheet of the
Company and its Subsidiaries as of such time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED INDEBTEDNESS" means, at any time, all
Consolidated Total Funded Indebtedness at such time which is not Subordinated
Indebtedness.
"CONSOLIDATED TOTAL ASSETS" means, at any time, the total assets of the
Company and its Subsidiaries at such time determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum of (i)
Consolidated Net Worth and (ii) Consolidated Total Funded Indebtedness at such
time.
"CONSOLIDATED TOTAL FUNDED INDEBTEDNESS" means, at any time, all Funded
Indebtedness of the Company and its Subsidiaries at such time determined on a
consolidated basis in accordance with GAAP.
"DEFAULT" means an event or condition the occurrence or existence of which
would, with the lapse of time or the giving of notice or both, become an Event
of Default.
"DEFAULT RATE" means that rate of interest that is the greater of (i) 2%
-
per annum above the rate of interest stated in clause (a) of the first paragraph
of the Notes or (ii) 2% over the Prime Rate.
--
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or governmental
restrictions relating to pollution and the protection of the environment or the
release of any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions and discharges to
waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
2
<PAGE>
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FUNDED INDEBTEDNESS" of any Person means all Indebtedness of such Person
which by its terms or by the terms of any instrument or agreement relating
thereto matures, or which is otherwise payable or unpaid, one year or more from,
or is directly or indirectly renewable or extendible at the option of the
obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof (including in any event the
current maturities of any such Indebtedness).
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any State or other political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Subsidiary conducts
all or any part of its business, or which asserts jurisdiction over any
properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government.
"GUARANTY" means, with respect to any Person, any obligation (except the
endorsement in the ordinary course of business of negotiable instruments for
deposit or collec tion) of such Person guaranteeing or in effect guaranteeing
any indebtedness, dividend or other obligation of any other Person in any
manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
3
<PAGE>
(a) to purchase such indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
-
indebtedness or obligation, or (ii) to maintain any working capital or other
--
balance sheet condition or any income statement condition of any other Person
or otherwise to advance or make available funds for the purchase or payment of
such indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for
the purpose of assuring the owner of such indebtedness or obligation of the
ability of any other Person to make payment of the indebtedness or obligation;
or
(d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption obligations in
respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
4
<PAGE>
(c) all liabilities appearing on its balance sheet in accordance with GAAP
in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function (excluding reimbursement obligations in respect of
undrawn standby letters of credit issued as collateral, surety bonds,
performance bonds and similar items) issued or accepted for its account by
banks and other financial institutions (whether or not representing
obligations for borrowed money); and
(f) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (e) hereof.
Indebtedness of any Person shall include all obligations of such Person of the
character described in clauses (a) through (f) to the extent such Person remains
legally liable in respect thereof notwithstanding that any such obligation is
deemed to be extinguished under GAAP.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note, (b)
- -
any holder of a Note holding more than 5% of the aggregate principal amount of
the Notes then outstanding, and (c) any bank, trust company, savings and loan
-
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTEREST CHARGES" means, with respect to any period, all interest and fee
expense paid or accrued by the Company and its Subsidiaries during such period
in respect of all Indebtedness of the Company and its Subsidiaries (including
the imputed interest in respect of Capital Leases), determined on a consolidated
basis in accordance with GAAP.
"INTEREST COVERAGE RATIO" means, at any time, the ratio of (x) Consolidated
Income Available for Interest Charges for the period of four consecutive fiscal
quarters of the Company ending on, or most recently ended prior to, such time to
(y) Interest Charges for such four-quarter period.
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person
5
<PAGE>
(including in the case of stock, stockholder agreements, voting trust agreements
and all similar arrangements).
"MAKE-WHOLE AMOUNT" is defined in Section 8.7.
"MATERIAL" means material in relation to the business, operations, affairs,
financial con dition, assets, properties, or prospects of the Company and its
Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
-
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsid iaries taken as a whole, or (b) the ability of the
-
Company to perform its obligations under this Agreement and the Notes, or (c)
-
the validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as such
term is defined in section 4001(a)(3) of ERISA).
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial Officer
or of any other officer of the Company whose responsibilities extend to the
subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, partnership, corporation, limited liability
company, association, trust, unincorporated organization, or a government or
agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) that is or, within the preceding five years, has been established or
maintained, or to which contributions are or, within the preceding five years,
have been made or required to be
6
<PAGE>
made, by the Company or any ERISA Affiliate or with respect to which the Company
or any ERISA Affiliate may have any liability.
"PREFERRED STOCK" means any class of capital stock of a corporation that is
preferred over any other class of capital stock of such corporation as to the
payment of dividends or the payment of any amount upon liquidation or
dissolution of such corporation.
"PRIME RATE" means the "Prime Rate" quoted in The Wall Street Journal under
-----------------------
the caption "Money Rates" from time to time (or, if The Wall Street Journal
-----------------------
shall no longer be published or shall no longer quote such rate, any comparable
publication mutually agreed upon by the Required Holders and the Company which
so quotes such rate).
"PROPERTY" or "PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, choate or
inchoate.
"QPAM EXEMPTION" means Prohibited Transaction Class Exemption 84-14 issued
by the United States Department of Labor.
"REQUIRED HOLDERS" means, at any time, the holders of more than 50% in
principal amount of the Notes at the time outstanding (exclusive of Notes then
owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time to
time.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or comptroller of the Company.
"SUBORDINATED INDEBTEDNESS" means any Indebtedness of the Company which is
subordinate in right of payment to the Notes and other Indebtedness of the
Company.
"SUBSIDIARY" means, as to any Person, any corporation, association or other
business entity in which such Person or one or more of its Subsidiaries or such
Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or
7
<PAGE>
more of its Subsidiaries or such Person and one or more of its Subsidiaries
(unless such partnership or joint venture can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"Subsidiary" is a reference to a Subsidiary of the Company.
"WHOLLY-OWNED SUBSIDIARY" means, at any time, any Subsidiary one hundred
percent (100%) of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Subsidiaries at such time.
8
<PAGE>
SCHEDULE 4.9
Change in Corporate Structure or Jurisdiction
[As of the Closing Date, the Company has not changed its jurisdiction of
incorporation or been party to any merger or consolidation and shall not have
succeeded to all or any substantial part of the liabilities of any other
entity, at any time following the date of the most recent financial statements
referred to in Schedule 5.5.]
<PAGE>
SCHEDULE 5.
Disclosure of Information
The Company has received a shareholder resolution and supporting
statement for inclusion in the Company's proxy statement and presentation at the
Company's annual shareholder's meeting pursuant to Rule 14a-8 under the Exchange
Act. The resolution recommends that the Board of Directors immediately engage
the services of a nationally recognized investment banker to explore all
alternatives to enhance the value of the Company. The resolution states that
these alternatives should include, but not be limited to, the possible sale,
merger or other transaction involving the Company. Passage of this resolution
and any subsequent action taken by the Board of Directors in response to such
passage could change the Company's prospects.
<PAGE>
SCHEDULE 5.4
BOARD OF DIRECTORS OF CALMAT CO.
- -------------------------------
Argue, John C.
Brown, Arthur
Conger, Harry M.
Dezember, Rayburn S.
Gerstell, A. Frederick
Grant, Jr., Richard A.
Heyler, Grover R.
Huston, William T.
Jenkins, William
Landry, Edward A.
Lee, Thomas L.
Linden, Thomas M.
Peeler, Stuart T.
OFFICERS OF CALMAT CO.
- ---------------------
A. Frederick Gerstell Chairman of the Board and Chief Executive Officer
R. Bruce Rieser President and Chief Operating Officer
Scott J Wilcott Executive Vice President, Law and Property
Paul Stanford Executive Vice President, General Counsel and Secretary
H. James Gallagher Executive Vice President, Finance, Chief Financial
Officer & Treasurer
Earl G. Anderson, Jr. Executive Vice President, Construction Materials
Edward J. Kelly Senior Vice President, Corporate Development
Carlos S. Hernandez Vice President, Asphalt Marketing and Promotions
Norman A. Dangelo Vice President, Management Information Systems
Scedule 5.4, Page 1
<PAGE>
Gene R. Block Vice President, Legislative Affairs
Mason O. Dickerson Vice President, Human Resources
Brian W. Ferris Assistant General Counsel and Assistant Secretary
Brent L. Stumme Vice President, Controller
Christine A. McVeigh Assistant Secretary
Daniel C. Parker Assistant Treasurer
Richard S. Yamashita Assistant Treasurer
ACTIVE SUBSIDIARIES OF CALMAT CO.
- ---------------------------------
(All subsidiaries listed below are 100% owned by CalMat Co., or one of its
wholly-owned subsidiaries, and incorporated in California unless otherwise
indicated.)
Allied Concrete & Materials Co. (Arizona)
Allied Concrete, Inc. (Arizona) (Subsidiary of Allied Concrete & Materials Co.)
CalMat Co. of Arizona (Arizona)
CalMat Co. of New Mexico (New Mexico)
CalMat Land Co.
CalMat Leasing Co. (Arizona)
CalMat of Central California
CalMat Properties Co.
CC Plaza Co. (Subsidiary of CalMat Properties Co.)
Mission Valley Development Co. (Subsidiary of CalMat Properties Co.)
River Vista Development Co. (Subsidiary of CalMat Properties Co.)
Kirst Construction Co., Inc.
Azusa Rock, Inc. (Subsidiary of Kirst Construction Co., Inc.)
Palomar Transit Mix Co.
Reliance Land Co.
Reliance Transport Co.
Rio Norte Este Co.
River Bend Corp.
Sanger Rock and Sand
Sloan Canyon Sand Co.
Schedule 5.4, Page 2
<PAGE>
Triangle Rock Products, Inc.
Western Environmental Contracting, Inc.
Western Thermal Soils Co.
INACTIVE SUBSIDIARIES OF CALMAT CO.
- -----------------------------------
(All subsidiaries listed below are 100% owned by CalMat Co., or one of its
wholly-owned subsidiaries, and incorporated in California unless otherwise
indicated.)
Albuquerque Gravel Products Co. (New Mexico)
Bakersfield Ready Mix, Inc.
California Materials Company
Conrock Co.
Conrock Property Development Corp.
Consolidated Rock Products Co.
Industrial Asphalt, Inc.
Moreno Valley Sand & Gravel, Inc.
Oceanside Ready Mix Co.
Rio Vista Hotel Co. (Subsidiary of CalMat Properties Co.)
Sweetwater Aggregates Co.
JOINT VENTURES OF CALMAT CO.
- ----------------------------
Avenida Encinas Associates
CC Plaza Co. (50%)
Rio Norte Este Co. (50%)
Plaza Associates
CC Plaza Co. (50%)
Rio Norte Este Co. (50%)
Sweetwater Aggregates
CalMat Co. (90%)
Richard Lang (5%)
Juan Alonso (5%)
Schedule 5.4, Page 3
<PAGE>
SCHEDULE 5.5
Financial Statements provided to Purchasers
a) 1994 CalMat Co. Annual Report (included in Memorandum)
b) 1995 CalMat Co. Annual Report (included in Memorandum)
c) Securities and Exchange Commission Form lOQ for the period ended June
30, 1996. (included in Memorandum)
d) Securities and Exchange Commission Form lOQ for the period ended
September 30, 1996. (included with this Schedule 5.5)
<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 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 1-7035
CALMAT CO.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-0645790
------------------------------ -----------------
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
3200 San Fernando Road, Los Angeles, California 90065
- --------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code (213) 258-2777
--------------
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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
YES [ ] NO [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
23,240,312 shares of Common Stock were outstanding at November 11, 1996.
-1-
<PAGE>
CALMAT CO.
INDEX
-----
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Consolidated Balance Sheets:
September 30, 1996 and December 31, 1995 3
(b) Consolidated Statements of Operations:
For the Three and Nine Months Ended September 30, 1996 and 1995 4
(c) Consolidated Statements of Cash Flow:
For the Nine Months Ended September 30, 1996 and 1995 5
(d) Notes to the Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
-2-
<PAGE>
CALMAT CO.
CONSOLIDATED BALANCE SHEETS
(amounts in thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 853 $ -
Trade accounts receivable, less allowance
for discounts and doubtful accounts
($5,700 in 1996 and $4,570 in 1995) 69,400 62,274
Inventories 13,798 11,705
Prepaid expenses and other 4,227 3,265
Deferred income taxes 9,361 9,361
Installment notes receivable-current portion 398 7,217
-------- ---------
Total current assets 98,037 93,822
Installment notes receivable and other assets 20,151 20,670
Investment in and advances to affiliates 1,293 1,236
Costs in excess of net assets of business acquired, net 50,833 52,102
Property, plant and equipment, at cost:
Land and deposits 188,030 166,995
Buildings, machinery and equipment 493,947 465,631
Construction in progress 32,604 40,082
-------- ---------
714,581 672,708
Less: Accumulated depreciation and depletion (294,386) (281,008)
-------- ---------
Property, plant and equipment, net 420,195 391,700
-------- ---------
Total assets $590,509 $ 559,530
======== =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 25,137 $ 23,753
Accrued liabilities 37,323 32,687
Notes and bonds payable - current portion 8,848 110
Income taxes payable 3,421 1,403
Dividends payable 2,325 2,318
-------- ---------
Total current liabilities 77,054 60,271
Notes and bonds payable - long term portion 94,773 84,321
Other liabilities and deferred credits 31,540 30,670
Deferred income taxes 52,980 53,119
-------- ---------
Total liabilities 256,347 228,381
-------- ---------
Stockholders' Equity:
Common stock 23,237 23,182
Additional paid-in capital 41,472 40,588
Retained earnings 269,453 267,379
-------- ---------
Total stockholders' equity 334,162 331,149
-------- ---------
Total liabilities and stockholders' equity $590,509 $ 559,530
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues:
Net sales and operating revenues $114,978 $100,254 $300,542 $267,108
Gains on sales of real estate 832 0 2,632 3,828
Other income 750 608 2,724 2,927
-------- -------- -------- --------
116,560 100,862 305,898 273,863
-------- -------- -------- --------
Costs and expenses:
Cost of products sold and operating expenses 96,573 86,161 257,379 233,358
Selling, general and administrative expenses 9,208 8,314 28,532 26,451
Interest expense 1,668 847 3,945 1,829
Other expense 516 437 1,346 1,752
Special charge 0 0 0 2,000
-------- -------- -------- --------
107,965 95,759 291,202 265,390
-------- -------- -------- --------
Income before taxes 8,595 5,103 14,696 8,473
Federal and state income taxes 3,401 1,888 5,658 3,135
-------- -------- -------- --------
Net income $ 5,194 $ 3,215 $ 9,038 $ 5,338
======== ======== ======== ========
Per Share Data:
Net income $ 0.22 $ 0.14 $ 0.39 $ 0.23
======== ======== ======== ========
Weighted average shares outstanding 23,252 23,184 23,236 23,179
======== ======== ======== ========
Cash dividends per share $ 0.10 $ 0.10 $ 0.30 $ 0.30
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
CALMAT CO.
CONSOLIDATED STATEMENTS OF CASH FLOW
(unaudited, amounts in thousands)
<TABLE>
<CAPTION>
Nine months ended
September 30,
1996 1995
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 9,038 $ 5,338
Depreciation, cost depletion and amortization 23,309 23,008
Other (4,649) 2,202
-------- --------
Cash provided by operating activities 27,698 30,548
-------- --------
INVESTING ACTIVITIES:
Purchase of property, plant and equipment (50,323) (42,895)
Proceeds from sale of real estate 2,827 18,114
Acquisition of business, net, of cash acquired 0 (11,682)
Other 7,162 (4,582)
-------- --------
Cash used for investing activities (40,334) (41,045)
-------- --------
FINANCING ACTIVITIES:
Notes payable to banks 19,250 15,750
Principal payments on notes and bonds payable (60) (30)
Payment of cash dividends (6,960) (6,947)
Other 1,259 800
-------- --------
Cash provided by financing activities 13,489 9,573
-------- --------
Increase/(decrease) in cash and cash equivalents 853 (924)
Balance, beginning of period 0 2,139
-------- --------
Balance, end of period $ 853 $ 1,215
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
CALMAT CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. In the opinion of management, information furnished herein reflects all
adjustments necessary for a fair presentation of the financial position and
results of operations for the interim periods. There have been no changes in
the significant accounting policies as discussed in Note 1 of Notes to
Financial Statements contained in the Company's 1995 Annual Report on Form
10-K.
2. Earnings per common equivalent share (common shares adjusted for dilutive
effect of common stock options) have been computed by dividing net income
for each period by the weighted-average equivalent shares of common stock
outstanding.
3. Included in cash at September 30, 1996 was $0.9 million of proceeds from the
sale of real estate held in trust for potential tax-deferred real estate
exchanges.
4. Certain prior year amounts have been restated to conform to the current
year's presentation.
-6-
<PAGE>
CALMAT CO.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
- -------------------------------------------------------------------------------
of Operations
- -------------
Results of Operations
- ---------------------
The Company reported net income of $5.2 million, or $0.22 per share, for the
third quarter of 1996, compared with $3.2 million, or $0.14 per share, for the
prior year's third quarter. Net income was $9.0 million, or $0.39 per share, for
the nine months ended September 30, 1996, compared with net income of $5.3
million, or $0.23 per share, for the comparable period in 1995. The nine-month
period in 1995 includes a special charge of $1.2 million, after-tax, or $0.05
per share, related to a consolidation of certain Construction Materials
operations.
Business segment information for the three and nine months ended September 30,
1996 and 1995 is as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
--------- ---------- -------- --------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Revenues:
Construction Materials $109,448 $ 95,099 $284,077 $252,468
Properties - Operations 5,530 5,155 16,465 14,640
Properties - Real Estate Sales 832 0 2,632 3,828
Corporate and other 750 608 2,724 2,927
-------- -------- -------- --------
$116,560 $100,862 $305,898 $273,863
======== ======== ======== ========
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
--------- ---------- -------- --------
(unaudited, amounts in thousands)
<S> <C> <C> <C> <C>
Income before income taxes:
Construction Materials $ 9,743 $ 5,713 $ 16,990 $ 9,020
Properties - Operations 2,658 2,274 7,486 5,817
Properties - Real Estate Sales 832 0 2,632 3,828
Corporate and other (2,927) (2,503) (8,962) (8,170)
Interest expense (1,668) (847) (3,945) (1,829)
Other income (expense) (43) 466 495 1,807
Special charge (a) 0 0 0 (2,000)
-------- -------- -------- --------
$ 8,595 $ 5,103 $ 14,696 $ 8,473
======== ======== ======== ========
</TABLE>
(a) Charge related to a consolidation of certain Construction Materials
operations.
Income before income taxes by segment represents total revenues less direct
operating expenses, segment selling, general and administrative expenses and
certain allocated corporate general and administrative expenses. Corporate and
other includes corporate administrative expenses and support expenses not
allocated to business segments. Other income (expense) includes interest income,
gains/losses on sale of fixed assets and other miscellaneous items.
-7-
<PAGE>
CALMAT CO.
Construction Materials Division
- -------------------------------
Sales volumes are shown below.
<TABLE>
<CAPTION>
Amounts in Thousands (unaudited) Three Months Ended Nine Months Ended
- -------------------- September 30, September 30,
1996 1995 1996 1995
------ ------ ------ ------
<S> <C> <C> <C> <C>
Aggregates:
Tons sold to outside customers 4,589 3,889 12,164 9,493
Tons used in ready mixed concrete 767 800 2,331 2,158
Tons used in asphalt 1,573 1,272 3,801 3,483
----- ----- ------ ------
6,929 5,961 18,296 15,134
===== ===== ====== ======
Tons of hot-mix asphalt sold 2,297 1,968 5,448 5,338
===== ===== ====== ======
Yards of ready mixed concrete sold 630 597 1,800 1,626
===== ===== ====== ======
</TABLE>
Revenues in the Construction Materials Division were $109.4 million in the third
quarter of 1996, up $14.3 million, or 15% compared with the corresponding 1995
period, and $284.1 million in the first nine months of 1996, up $31.6 million,
or 13% compared with the same period in 1995. The revenue increase for the
current quarter and nine-month period was due to higher unit sales volumes for
aggregates, ready mixed concrete and asphalt and higher average selling prices
for aggregates and ready mixed concrete.
The Division's pre-tax income from operations was $9.7 million in the most
recent quarter compared with $5.7 million in the year earlier period. The year
earlier quarter included $2.1 million of incremental out-of-pocket costs
incurred in connection with an organized labor strike which affected the
Company's Los Angeles area operations. The improved results reflected higher
earnings from aggregates and ready mixed concrete operations. Sales volumes
increased 16% for aggregates and 6% for ready mixed concrete, and average
selling prices increased 5% for aggregates and 3% for ready mixed concrete. Unit
production costs increased 3% for aggregates operations. Asphalt results
declined during the current quarter, despite a 17% increase in sales volumes as
weak prices and increasing costs caused a significant decline in gross profit
margins. Asphalt unit production costs increased 5% of which approximately 30%
was the result of higher liquid asphalt costs. Aggregates and asphalt sales
volumes in the third quarter of 1995 were negatively impacted by the Los Angeles
area organized labor strike.
The Division's pre-tax income from operations for the first nine months was
$17.0 million compared with $9.0 million in the 1995 period, which included $2.1
million of incremental out-of-pocket costs incurred as a result of the Los
Angeles area organized labor strike. The improved earnings largely stem from the
Company's aggregates operations which had 21% higher sales volumes, 2% higher
average selling prices and 2% lower unit production costs. Aggregates sales
volumes increased because of higher demand in most of the Company's markets and
the adverse effect of the Los Angeles area organized labor strike on 1995
volumes. Also contributing to the improved earnings were the Company's ready
mixed concrete operations where sales volumes increased 11% and average selling
prices increased 2%. Partially offsetting the improved results were lower
earnings from asphalt operations, caused by weak prices and 6% higher unit
production costs, of which 40% was the result of increased costs of liquid
asphalt.
Although the California economy has begun to show signs of improvement, the
southern California economy, where the Company has significant operations, has
clearly lagged the rest of the state. Construction activity generally remains
sluggish in most of the Company's California markets. The Company's asphalt
operations in particular have been hurt by a lack of highway and street work.
-8-
<PAGE>
CALMAT CO.
Properties Division
- -------------------
Revenues in the Properties Division, excluding gains on sales of real estate,
were $5.5 million in the third quarter of 1996, up $0.3 million from revenues of
$5.2 million in the corresponding 1995 period, and $16.5 million in the first
nine months of 1996, up $1.9 million from $14.6 million in the first nine months
of 1995. The increase in the nine-month period is primarily due to increased
revenues from landfill operations.
The Division's pre-tax income from operations increased to $3.5 million for the
third quarter of 1996 compared with $2.3 million in the prior year's third
quarter. The current quarter includes $0.8 million of gains from real estate
sales compared with no gains in the prior year's quarter. Excluding real estate
gains, pre-tax income from operations increased $0.4 million as improved results
in developed and undeveloped properties more than offset a slight decline in
landfill operations.
The Division's pre-tax income from operations increased to $10.1 million in the
first nine months of 1996 compared with $9.6 million in the prior period. Gains
from real estate sales of $2.6 million are included in 1996 versus gains of $3.8
million in 1995. Excluding real estate gains, pre-tax income from operations
increased $1.7 million. All segments of the division delivered improved
results, with landfill operations accounting for the largest share.
Liquidity and Capital Resources
- -------------------------------
Cash and cash equivalents amounted to $0.9 million at September 30, 1996
compared with $0.0 million at December 31, 1995. Cash provided by operating
activities was $27.7 million for the nine months ended September 30, 1996. Cash
used for investing activities was $40.3 million, including $50.3 million for the
purchase of property, plant, and equipment, offset by a decrease of installments
receivable of $6.4 million, and proceeds from the sales of real estate of $2.8
million. Cash provided by financing activities was $13.5 million, including a
$19.2 million net increase in debt, partially offset by cash dividends. Working
capital totaled $21.0 million at September 30, 1996, down from $33.6 million at
December 31, 1995. The primary reason for the decrease in working capital was
the classification of $8.7 million of debt to "Current liabilities" based on
scheduled maturities. Current ratios were 1.3 and 1.6 at September 30, 1996 and
December 31, 1995, respectively.
Total consolidated long-term and short-term borrowings at September 30, 1996 and
December 31, 1995 were $103.6 million and $84.4 million, respectively. Debt as
a percent of total capitalization was 23.7% and 20.3%, at September 30, 1996 and
December 31, 1995, respectively.
-9-
<PAGE>
CALMAT CO.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ----------------------------------------
(a) Exhibit 27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended September 30,
1996.
-10-
<PAGE>
CALMAT CO.
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, Registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
CALMAT CO.
----------------------------------
(Registrant)
Date: November 12, 1996 By: /s/ R. Bruce Rieser
----------------------------------
R. Bruce Rieser
President
and Chief Operating Officer
Date: November 12, 1996 By: /s/ Edward J. Kelly
----------------------------------
Edward J. Kelly
Senior Vice President, Treasurer
and Chief Accounting Officer
-12-
<PAGE>
SCHEDULE 5.8
Disclosure of Litigation
None
<PAGE>
Schedule 5.9
Taxes
In 1990, Onoda California, Inc., ("Onoda") and the Company consummated
a transaction whereby the Company distributed to Onoda all of its shares of
stock in California Portland Cement Company ("CPC") in exchange for certain
shares of stock of the Company that were then held by Onoda. In addition, prior
to 1990, certain other related transactions were accomplished, including the
Company's contribution of certain assets to CPC and CPC's distribution of all of
its shares of stock in one of its subsidiaries to the Company (along with the
Company's distribution of the CPC stock to Onoda, the "Onoda Transactions"). The
Onoda Transactions were reported as tax-free transactions for federal income tax
purposes. Based on an analysis of the tax law in effect at the time of the Onoda
Transactions, the Company believes that this treatment of the Onoda Transactions
is correct, and has not established financial statement reserves for this
matter. The Internal Revenue Service (the "IRS") audit of the 1990 tax year is
now in progress. There can be no assurance that the IRS will not challenge the
Company's position regarding the proper tax treatment of the Onoda Transactions.
If the IRS does challenge the Company's position and is ultimately successful in
denying the Company's treatment of the Onoda Transactions, the resulting tax
liability would have a Material Adverse Effect.
<PAGE>
SCHEDULE 5.11
Licenses, Permits, etc.
None.
<PAGE>
SCHEDULE 5.14
USE OF PROCEEDS
(in Thousands)
<TABLE>
<CAPTION>
BEFORE AFTER
FUNDING ADJUSTMENTS FUNDING
-------- ----------- --------
<S> <C> <C> <C>
Cash and cash equivalents 0 12,200 12,20O
DEBT
Notes payable to banks (66,000) 66,000 0
Existing senior notes (35,000) 35,000 0
Senior notes covered by this agreement (115,000) (115,000)
Municipal improvement bond (1,371) (1,371)
-------- -------- --------
TOTAL DEBT (102,371) (14,000) (116,371)
CLOSING EXPENSES
Interest existing senior notes 1,003
Make-whole existing senior notes 220
Interest notes payable to banks 74
Merrill Lynch Fee 403
Legal Fees 100
-----
TOTAL CLOSING EXPENSES 1,800
</TABLE>
<PAGE>
SCHEDULE 5.15
EXISTING INDEBTEDNESS
CALMAT CO. AND SUBSIDIARIES
(in Thousands)
<TABLE>
<S> <C>
INDEBTEDNESS
Notes payable to banks $ 67,250
Senior notes 35,000
Capital Leases* 454
Municipal improvement bonds** 1,371
--------
TOTAL INDEBTEDNESS $104,075
========
* CAPITAL LEASES
Azusa Rock 365
CalMat New Mexico 89
-------
TOTAL CAPITAL LEASES 454
** MUNICIPAL IMPROVEMENT BONDS
</TABLE>
<TABLE>
<CAPTION>
DESCRIPTION PRINCIPAL RATE COLLATERAL
<S> <C> <C> <C>
Rio Vista Lots 2-4 & 7 21 5.5% - 7.7% Lien on Property for amount of taxes
Rio Vista West (FSDRIP) Lots A&B 1350 6.5% - 7.7% Lien on Property for amount of taxes
------
$1,371
</TABLE>
LIENS NOT PERMITTED UNDER SECTION 10.7
None
<PAGE>
EXHIBIT 1-A
[FORM OF NOTE]
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. [_____] [Date]
$[_______] PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [______________________], or registered
assigns, the principal sum of [______________________________] DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of December 18,
1996 (as from time to time amended, the "Note Purchase Agreements"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
-
Section 20 of the Note Purchase Agreements and (ii) to have made the
--
representation set forth in Section 6.2 of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
CALMAT CO.
By_________________________
Title:
By_________________________
Title:
2
<PAGE>
EXHIBIT 1-B
[FORM OF NOTE]
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. [_____] [Date]
$[_______] PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [______________________], or registered
assigns, the principal sum of [______________________________] DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2006, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.45% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.45% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of December 18,
1996 (as from time to time amended, the "Note Purchase Agreements"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
-
Section 20 of the Note Purchase Agreements and (ii) to have made the
--
representation set forth in Section 6.2 of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
CALMAT CO.
By_________________________
Title:
By_________________________
Title:
2
<PAGE>
EXHIBIT 1-C
[FORM OF NOTE]
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. [_____] [Date]
$[_______] PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [______________________], or registered
assigns, the principal sum of [______________________________] DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2008, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.53% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.53% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of December 18,
1996 (as from time to time amended, the "Note Purchase Agreements"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
-
Section 20 of the Note Purchase Agreements and (ii) to have made the
--
representation set forth in Section 6.2 of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
CALMAT CO.
By_________________________
Title:
By_________________________
Title:
2
<PAGE>
EXHIBIT 1-D
[FORM OF NOTE]
CALMAT CO.
7.66% SERIES D SENIOR NOTE DUE DECEMBER 15, 2011
No. [_____] [Date]
$[_______] PPN 131271 C* 7
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to [______________________], or registered
assigns, the principal sum of [______________________________] DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2011, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.66% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.66% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the "Notes")
issued pursuant to separate Note Purchase Agreements, dated as of December 18,
1996 (as from time to time amended, the "Note Purchase Agreements"), between the
Company and the respective Purchasers named therein and is entitled to the
benefits thereof. Each holder of this Note will be deemed, by its acceptance
hereof, (i) to have agreed to the confidentiality provisions set forth in
-
Section 20 of the Note Purchase Agreements and (ii) to have made the
--
representation set forth in Section 6.2 of the Note Purchase Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to time
in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements, occurs
and is continuing, the principal of this Note may be declared or otherwise
become due and payable in the manner, at the price (including any applicable
Make-Whole Amount) and with the effect provided in the Note Purchase Agreements.
This Note shall be construed and enforced in accordance with the laws of
the State of New York.
CALMAT CO.
By_________________________
Title:
By_________________________
Title:
2
<PAGE>
EXHIBIT 4.4(a)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE COMPANY
Matters To Be Covered In
Opinion of Special Counsel To the Company
-----------------------------------------
1. Each of the Company and its Subsidiaries being duly incorporated,
validly existing and in good standing and having requisite corporate power and
authority to issue and sell the Notes and to execute and deliver the documents.
2. Each of the Company and its Subsidiaries being duly qualified and in
good standing as a foreign corporation in appropriate jurisdictions.
3. Due authorization and execution of the documents and such documents
being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other agreements.
5. All consents required to issue and sell the Notes and to execute and
deliver the documents having been obtained.
6. No litigation questioning validity of documents.
7. The Notes not requiring registration under the Securities Act of 1933,
as amended; no need to qualify an indenture under the Trust Indenture Act of
1939, as amended.
8. No violation of Regulations G, T or X of the Federal Reserve Board.
9. Company not an "investment company", or a company "controlled" by an
"investment company", under the Investment Company Act of 1940, as amended.
<PAGE>
EXHIBIT 4.4(b)
FORM OF OPINION OF SPECIAL COUNSEL
TO THE PURCHASERS
[TO COME]
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-1 December 18, 1996
$3,000,000 PNN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to THE GREAT-WEST LIFE ASSURANCE COMPANY, or
registered assigns, the principal sum of THREE MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements .
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-2 December 18, 1996
$9,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned CALMAT CO. (herein called the
"Company), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,
or registered assigns, the principal sum of NINE MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-3 December 18, 1996
$6,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to SALKELD & CO., or registered assigns, the
principal sum of SIX MILLION DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2003, with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
-
7.19% per annum from the date hereof, payable semiannually, on the 15th day of
June and December in each year, commencing with June 15 or December 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.19% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-4 December 18, 1996
$2,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to THE SECURITY MUTUAL LIFE INSURANCE COMPANY
OF LINCOLN, NEBRASKA, or registered assigns, the principal sum of TWO MILLION
DOLLARS (or so much thereof as shall not have been prepaid) on December 15,
2003, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.19% per annum from
-
the date hereof, payable semiannually, on the 15th day of June and December in
each year, commencing with June 15 or December 15 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b)
-
to the extent permitted by law, on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in
- --
said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-5 December 18, 1996
$2,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to SECURITY FIRST LIFE INSURANCE COMPANY,
or registered assigns, the principal sum of TWO MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-6 December 18, 1996
$1,500,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to PROVIDENT MUTUAL LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS (or so much thereof as shall not have been prepaid) on December 15,
2003, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.19% per annum from
-
the date hereof, payable semiannually, on the 15th day of June and December in
each year, commencing with June 15 or December 15 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
-
the extent permitted by law, on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in
- --
said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-7 December 18, 1996
$1,500,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to PROVIDENT MUTUAL LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS (or so much thereof as shall not have been prepaid) on December 15,
2003, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.19% per annum from
-
the date hereof, payable semiannually, on the 15th day of June and December in
each year, commencing with June 15 or December 15 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
-
the extent permitted by law, on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in
- --
said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
-----------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
-----------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-8 December 18, 1996
$2,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to PROVIDENT MUTUAL LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TWO MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2003, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
-
thereof at the rate of 7.19% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.19% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
-----------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
-----------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-9 December 18, 1996
$3,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to NATIONAL GUARDIAN LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of THREE MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
-----------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
-----------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.19% SERIES A SENIOR NOTE DUE DECEMBER 15, 2003
No. A-10 December 18, 1996
$5,000,000 PPN 131271 A# 5
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to STATE FARM LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2003, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.19% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.19% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-1 December 18, 1996
$5,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to AMERITAS LIFE INSURANCE CORP., or registered
assigns, the principal sum of FIVE MILLION DOLLARS (or so much thereof as shall
not have been prepaid) on December 15, 2006, with interest (computed on the
basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
-
thereof at the rate of 7.45% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.45% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-2 December 18, 1996
$3,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ATWELL & CO., or registered assigns, the
principal sum of THREE MILLION DOLLARS (or so much thereof as shall not have
been prepaid) on December 15, 2006, with interest (computed on the basis of a
360-day year of twelve 30-day months) (a) on the unpaid balance thereof at the
-
rate of 7.45% per annum from the date hereof, payable semiannually, on the 15th
day of June and December in each year, commencing with June 15 or December 15
next succeeding the date hereof, until the principal hereof shall have become
due and payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.45% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note in a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-3 December 18, 1996
$2,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ATWELL & CO., or registered assigns, the
principal sum of TWO MILLION DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2006, with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
-
7.45% per annum from the date hereof, payable semiannually, on the 15th day of
June and December in each year, commencing with June 15 or December 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.45% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /a/ Edward J. Kelly
--------------------------------
Title: Senior Vice President,
Corporate Development
- 2 -
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-4 December 18, 1996
$2,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to IL ANNUITY AND INSURANCE COMPANY, or
registered assigns, the principal sum of TWO MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2006, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
-
thereof at the rate of 7.45% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.45% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-5 December 18, 1996
$2,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to SECURITY FIRST LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TWO MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2006, with interest (computed
on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid
-
balance thereof at the rate of 7.45% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.45% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-6 December 18, 1996
$1,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to AGEN & CO., or registered assigns, the
principal sum of ONE MILLION DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2006, with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
-
7.45% per annum from the date hereof, payable semiannually, on the 15th day of
June and December in each year, commencing with June 15 or December 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.45% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-7 December 18, 1996
$5,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to RELIASTAR LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2006, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.45% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.45% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance thereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-8 December 18, 1996
$10,000,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to NORTHERN LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TEN MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2006, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
-
thereof at the rate of 7.45% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.45% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-9 December 18, 1996
$1,500,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to WOODMAN ACCIDENT AND LIFE COMPANY, or
registered assigns, the principal sum of ONE MILLION FIVE HUNDRED THOUSAND
DOLLARS (or so much thereof as shall not have been prepaid) on December 15,
2006, with interest (computed on the basis of a 360-day year of twelve 30-day
months) (a) on the unpaid balance thereof at the rate of 7.45% per annum from
-
the date hereof, payable semiannually, on the 15th day of June and December in
each year, commencing with June 15 or December 15 next succeeding the date
hereof, until the principal hereof shall have become due and payable, and (b) to
-
the extent permitted by law, on any overdue payment (including any overdue
prepayment) of principal, any overdue payment of interest and any overdue
payment of any Make-Whole Amount (as defined in the Note Purchase Agreements
referred to below), payable semiannually as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the greater of (i) 9.45% or (ii) 2% over the Prime Rate (as defined in
- --
said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.45% SERIES B SENIOR NOTE DUE DECEMBER 15, 2006
No. B-10 December 18, 1996
$500,000 PPN 131271 B* 8
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ASSURITY LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of FIVE HUNDRED THOUSAND DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2006, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.45% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.45% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and in continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-1 December 18, 1996
$2,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to ATWELL & CO., or registered assigns, the
principal sum of TWO MILLION DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2008, with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
-
7.53% per annum from the date hereof, payable semiannually, on the 15th day of
June and December in each year, commencing with June 15 or December 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.53% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements .
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-2 December 18, 1996
$2,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to SECURITY FIRST LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of TWO MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2008, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.53% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.53% or (ii) 2% over the Prime Rate (as defined in said Note
- --
Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-3 December 18, 1996
$16,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to NEW YORK LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of SIXTEEN MILLION DOLLARS (or so much
thereof as shall not have been prepaid) on December 15, 2008, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.53% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.53% or (ii) 2% over the Prime Rate (as defined in said Note
- --
Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-4 December 18, 1996
$5,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to NEW YORK LIFE INSURANCE AND ANNUITY
CORPORATION, or registered assigns, the principal sum of FIVE MILLION DOLLARS
(or so much thereof as shall not have been prepaid) on December 15, 2008, with
interest (computed on the basis of a 360-day year of twelve 30-day months) (a)
-
on the unpaid balance thereof at the rate of 7.53% per annum from the date
hereof, payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.53% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-5 December 18, 1996
$2,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to CUDD & CO, or registered assigns, the
principal sum of TWO MILLION DOLLARS (or so much thereof as shall not have been
prepaid) on December 15, 2008, with interest (computed on the basis of a 360-day
year of twelve 30-day months) (a) on the unpaid balance thereof at the rate of
-
7.53% per annum from the date hereof, payable semiannually, on the 15th day of
June and December in each year, commencing with June 15 or December 15 next
succeeding the date hereof, until the principal hereof shall have become due and
payable, and (b) to the extent permitted by law, on any overdue payment
-
(including any overdue prepayment) of principal, any overdue payment of interest
and any overdue payment of any Make-Whole Amount (as defined in the Note
Purchase Agreements referred to below), payable semiannually as aforesaid (or,
at the option of the registered holder hereof, on demand), at a rate per annum
from time to time equal to the greater of (i) 9.53% or (ii) 2% over the Prime
- --
Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.53% SERIES C SENIOR NOTE DUE DECEMBER 15, 2008
No. C-6 December 18, 1996
$6,000,000 PPN 131271 B@ 6
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to NATIONAL LIFE INSURANCE COMPANY, or
registered assigns, the principal sum of SIX MILLION DOLLARS (or so much thereof
as shall not have been prepaid) on December 15, 2008, with interest (computed on
the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance
-
thereof at the rate of 7.53% per annum from the date hereof, payable
semiannually, on the 15th day of June and December in each year, commencing with
June 15 or December 15 next succeeding the date hereof, until the principal
hereof shall have become due and payable, and (b) to the extent permitted by
-
law, on any overdue payment (including any overdue prepayment) of principal, any
overdue payment of interest and any overdue payment of any Make-Whole Amount (as
defined in the Note Purchase Agreements referred to below), payable semiannually
as aforesaid (or, at the option of the registered holder hereof, on demand), at
a rate per annum from time to time equal to the greater of (i) 9.53% or (ii) 2%
- --
over the Prime Rate (as defined in said Note Purchase Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreements, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ Edward J. Kelly
--------------------------------------------
Title: Senior Vice President,
Corporate Development
-2-
<PAGE>
CALMAT CO.
7.66% SERIES D SENIOR NOTE DUE DECEMBER 15, 2011
No. D-1 December 18, 1996
$15,000,000 PPN 131271 C* 7
FOR VALUE RECEIVED, the undersigned, CALMAT CO. (herein called the
"Company"), a corporation organized and existing under the laws of the State of
Delaware, hereby promises to pay to THE MUTUAL LIFE INSURANCE COMPANY OF NEW
YORK, or registered assigns, the principal sum of FIFTEEN MILLION DOLLARS (or so
much thereof as shall not have been prepaid) on December 15, 2011, with interest
(computed on the basis of a 360-day year of twelve 30-day months) (a) on the
-
unpaid balance thereof at the rate of 7.66% per annum from the date hereof,
payable semiannually, on the 15th day of June and December in each year,
commencing with June 15 or December 15 next succeeding the date hereof, until
the principal hereof shall have become due and payable, and (b) to the extent
-
permitted by law, on any overdue payment (including any overdue prepayment) of
principal, any overdue payment of interest and any overdue payment of any Make-
Whole Amount (as defined in the Note Purchase Agreements referred to below),
payable semiannually as aforesaid (or, at the option of the registered holder
hereof, on demand), at a rate per annum from time to time equal to the greater
of (i) 9.66% or (ii) 2% over the Prime Rate (as defined in said Note Purchase
- --
Agreements).
Payments of principal of, interest on and any Make-Whole Amount with
respect to this Note are to be made in lawful money of the United States of
America at the principal office of Morgan Guaranty Trust Company of New York in
New York, New York or at such other place as the Company shall have designated
by written notice to the holder of this Note as provided in the Note Purchase
Agreements referred to below.
This Note is one of a series of Senior Notes (herein called the
"Notes") issued pursuant to separate Note Purchase Agreements, dated as of
December 18, 1996 (as from time to time amended, the "Note Purchase
Agreements"), between the Company and the respective Purchasers named therein
and is entitled to the benefits thereof. Each holder of this Note will be
deemed, by its acceptance hereof, (i) to have agreed to the confidentiality
-
provisions set forth in Section 20 of the Note Purchase Agreements and (ii) to
--
have made the representation set forth in Section 6.2 of the Note Purchase
Agreements.
<PAGE>
This Note is a registered Note and, as provided in the Note Purchase
Agreements, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note of the same series for a like principal amount will be
issued to, and registered in the name of, the transferee. Prior to due
presentment for registration of transfer, the Company may treat the person in
whose name this Note is registered as the owner hereof for the purpose of
receiving payment and for all other purposes, and the Company will not be
affected by any notice to the contrary.
This Note is subject to optional prepayment, in whole or from time to
time in part, at the times and on the terms specified in the Note Purchase
Agreement, but not otherwise.
If an Event of Default, as defined in the Note Purchase Agreements,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price (including any
applicable Make-Whole Amount) and with the effect provided in the Note Purchase
Agreements.
This Note shall be construed and enforced in accordance with the laws
of the State of New York.
CALMAT CO.
By /s/ H. James Gallagher
--------------------------------------------
Title: Executive Vice President, Finance
Chief Financial Officer and Treasurer
By /s/ A.J. Kelly
--------------------------------------------
Title: Senior Vice President
Corporate Development
-2-
<PAGE>
CERTIFICATE OF INCORPORATION
OF
CALMAT CO.
<PAGE>
PAGE 1
STATE OF DELAWARE
[SEAL OF THE STATE OF DELAWARE]
OFFICE OF SECRETARY OF STATE
--------------
I, MICHAEL RATCHFORD, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO
HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
AMENDMENT OF "CALMAT CO." FILED IN THIS OFFICE ON THE TWENTIETH DAY OF MAY, A.D.
1992, AT 9 O'CLOCK A.M.
* * * * * * * *
/s/ Michael Ratchford
[SEAL OF THE DEPARTMENT OF STATE ------------------------
DELAWARE] SECRETARY OF STATE
AUTHENTICATION: *3456740
DATE: 05/20/92
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
CalMat Co., a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of CalMat Co.,
resolutions were duly adopted setting forth a proposed amendment of the
Certificate of Incorporation of said corporation, declaring said amendment to be
advisable and calling a meeting of the stockholders of said corporation for
consideration thereof. The resolution setting forth the proposed amendment is as
follows:
RESOLVED, That the Certificate of Incorporation of
this corporation be amended by adding a new Article numbered
"ELEVENTH"; said Article shall be and read in full as
follows:
(a) The Company shall not engage in any transaction
constituting "greenmail" as defined in subparagraph (b),
below.
(b) For the purposes of this Article ELEVENTH,
"greenmail" means "any consideration transferred by the
Company (or any person acting in concert with the Company) to
directly or indirectly acquire stock of the Company from any
stockholder if:
(1) such stockholder held such stock (as determined
under Internal Revenue Code Section 1223 as in effect on
November 14, 1989) for less than 2 years before entering
into the agreement to make the transfer,
<PAGE>
(2) at some time during the 2-year period ending on
the date of such acquisition:
(a) such stockholder,
(b) any person acting in concert with such
stockholder, or
(c) any person who is related to such stockholder
or person described in subparagraph (b), made or
threatened to make a public tender offer for stock of
the Company, and
(3) such acquisition is pursuant to an offer which
was not made on the same terms to all stockholders."
(c) For purposes of this Article ELEVENTH:
(1) the term "public tender offer" means any offer to
purchase or otherwise acquire stock or assets in the
Company if such offer was or would be required to be
filed or registered with any federal or state agency
regulating securities;
(2) a person is related to another person if the
relationship between such persons would result in the
disallowance of losses under IRC Section 267 or 707(b)
(as in effect on November 14, 1989); and
(3) payments made in connection with, or in
transactions related to, an acquisition of stock shall be
treated as paid in such an acquisition.
(d) The Board of Directors shall have the power to
determine, for the purposes of this Article ELEVENTH, on the
basis of information available to the Board of Directors,
whether Article ELEVENTH is applicable to any transaction,
and such determination shall be made in good faith and be
conclusive and binding for all purposes of this Article
ELEVENTH.
<PAGE>
SECOND: That thereafter, pursuant to resolution of its Board of
Directors, a special meeting of the stockholders of said corporation was duly
called and held, upon notice in accordance with Section 222 of the General
Corporation Law of the State of Delaware at which meeting the necessary number
of shares as required by statute were voted in favor of the amendment.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 242 of the General Corporation Law of the State of
Delaware.
FOURTH: That the capital of said corporation shall not be reduced under
or by reason of said amendment.
IN WITNESS WHEREOF, said CalMat Co. has caused this certificate to be
signed by A. Frederick Gerstell, its President, and Paul Stanford, its
Secretary, this first day of May 1992.
By: /s/ A. F. Gerstell
---------------------------------------
President
Attest: /s/ Paul Stanford
---------------------------------------
Secretary
<PAGE>
[SEAL OF THE STATE OF DELAWARE]
STATE
OF
DELAWARE
OFFICE OF SECRETARY OF STATE
I, Michael Harkins, Secretary of State of the State of Delaware,
do hereby certify that the attached is a true and correct copy of
Certificate of Amendment
--------------------------------------------------
filed in this office on April 30, 1987
-----------------------------------------
/s/ Michael Harkins
-----------------------------------
Michael Harkins, Secretary of State
[SEAL OF THE DEPARTMENT OF STATE BY: /s/ H. Davis
OF DELAWARE] -----------------------------------
DATE: May 24, 1990
-----------------------------------
Form 130
<PAGE>
CERTIFICATE OF AMENDMENT
OF
RESTATED CERTIFICATE OF
INCORPORATION
OF
CALMAT CO.
It is hereby certified that:
1. The Restated Certificate of Incorporation of the corporation is
hereby amended by:
a. striking out Article FOURTH thereof and substituting
in lieu of said Article the following new Article:
"FOURTH: (A) The total number of shares of all classes
of capital stock which this corporation shall have
authority to issue is One Hundred and Five Million
(105,000,000) shares, of which One Hundred Million
(100,000,000) shares shall be Common Stock, par value
One Dollar ($1.00) per share, and Five Million
(5,000,000) shares shall be Preferred Stock, par value
One Dollar ($1.00) per share.
"(B) The Board of Directors is expressly authorized
at any time, and from time to time, to provide for the
issuance of shares of Preferred Stock in one or more
series, with such voting powers, full or limited, or
without voting powers, and with such designations,
preferences and relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in
the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not
stated and expressed in this Certificate of
Incorporation, or any amendment thereto, including (but
without limiting the generality of the foregoing) the
following:
"(1) The designation of and number of shares
constituting such series;
<PAGE>
"(2) The dividend rate of such series, the
conditions and dates upon which such dividends shall
be payable, the preference or relation which such
dividends shall bear to the dividends payable on any
other class or classes or of any other class of
capital stock or series thereof and whether such
dividends shall be cumulative or noncumulative;
"(3) Whether the shares of such series shall be
subject to redemption by the corporation, and, if
made subject to such redemption, the times, prices
and other terms and conditions of such redemption;
"(4) The terms and amount of any sinking fund
provided for the purchase or redemption of the shares
of such series;
"(5) Whether or not the shares of such series
shall be convertible into or exchangeable for shares
of any other class or classes or of any other series
of any class or classes of capital stock of this
corporation, and, if provision be made for conversion
or exchange, the time, prices, rates, adjustments,
and other terms and conditions of such conversion or
exchange;
"(6) Whether or not the shares of such series
shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms and
conditions of such voting rights;
"(7) The restrictions, if any, on the issue or
reissue of any additional Preferred Stock; and
"(8) The rights of the holders of the shares of
such series upon the dissolution of, or upon the
distribution of assets of, the corporation.
2
<PAGE>
"(C) At all elections of directors of this
corporation, each holder of Common Stock of this
corporation shall be entitled to as many votes as
shall equal the number of votes which, except for
provisions of this Section (C), he would be entitled
to cast for the election of directors with respect to
his shares of Common Stock multiplied by the number
of directors to be elected, and he may cast all of
such votes for a single director or may distribute
such votes among the number of directors to be voted
for, or for any two or more of them as he may see
fit.
"(D) The Board of Directors may issue additional
capital stock of the corporation, option rights or
other securities having conversion or option rights
without first offering them to the stockholders of
any class.
"(E) The corporation shall make, not less than
once annually, periodic reports to its security
holders, which reports shall include profit and loss
statements and balance sheets prepared in accordance
with sound business and accounting practice."
b. adding as totally new articles Articles NINTH and
TENTH which read in full as follows:
"NINTH: A director of the corporation shall under
no circumstances be personally 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 the law, (iii) under Section 174
of the General Corporation Law of the State of
Delaware, or (iv) for any transaction from which the
director derived an improper personal benefit.
"TENTH: The corporation shall indemnify each
officer and director of the corporation to the
fullest extent allowed by law, except as otherwise
provided in the corporation's By-laws."
3
<PAGE>
2. The amendments of the Restated Certificate of Incorporation herein
certified have been duly adopted in accordance with the provisions of Sections
222 and 242 of the General Corporation Law of the State of Delaware.
Signed and attested to on April 27, 1987.
/s/ A. Frederick Gerstell
----------------------------------------
A. Frederick Gerstell
President
Attest
/s/ Scott J. Wilcott
- -------------------------------------
Scott J. Wilcott
Secretary
STATE OF CALIFORNIA )
) SS.:
COUNTY OF LOS ANGELES )
BE IT REMEMBERED that, on April 27, 1987, before me, a Notary Public
duly authorized by law to take acknowledgement of deeds, personally came A.
Frederick Gerstell, President of CalMat Co., who duly signed the foregoing
instrument before and acknowledged that such signing is the act and deed of said
corporation, and that the facts stated therein are true.
GIVEN under my hand on April 27, 1987.
--------
[NOTARY SEAL /s/ Faye A. Barnes
----------------------------------------
OF FAYE A. BARNES] Notary Public
4
<PAGE>
[SEAL OF THE
STATE OF DELAWARE]
STATE
OF
DELAWARE
OFFICE OF SECRETARY OF STATE
I, Michael Harkins, Secretary of State of
the State of Delaware, do hereby certify
that the attached is a true and correct
copy of Restated Certificate of
-----------------------
Incorporation filed in this office on
-------------
June 27, 1984
-------------
[SEAL OF THE /s/ Michael Harkins
DEPARTMENT OF ---------------------------------------
STATE OF DELAWARE] Michael Harkins, Secretary of State
BY: /s/ H. Davis
-----------------------------------
DATE: May 24, 1990
---------------------------------
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF
CONROCK CO.
(Originally incorporated incorporated under the name
"Consolidated Rock Products Co." on January 28, 1929)
CONROCK CO. a corporation organized and existing under and by virtue of
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST: That at a meeting of the Board of Directors of Conrock Co.,
resolutions were duly adopted setting forth proposed amendments to the Restated
Certificate of Incorporation of said corporation and declaring said amendments
advisable and directing that the amendments be considered at a Special Meeting
of Shareholders called by the corporation. The Resolutions setting forth the
proposed amendments are as follows:
"RESOLVED that Article FIRST of the Restated Certificate
of Incorporation of this corporation shall be amended to
read in full as follows:
FIRST: the name of the corporation is CalMat Co.
RESOLVED, that Article FOURTH of the Restated
Certificate of Incorporation of this corporation shall be
amended to read in full as follows:
FOURTH: (A) The total number of shares of all classes
of capital stock which this corporation shall have
authority to issue is Fifty-Five Million (55,000,000)
shares of which Fifty Million (50,000,000) shares shall
be Common Stock, par value One Dollar ($1.00) per share, and Five
Million (5,000,000) shares shall be Preferred Stock, par
value One Dollar ($1.00) per share.
<PAGE>
B) The Board of Directors is expressly authorized at
any time, and from time to time, to provide for the
issuance of shares of Preferred Stock in one or more
series, with such voting powers, full or limited, or
without voting powers, and with such designations,
preferences and relative, participating, optional or
other special rights, and qualifications, limitations or
restrictions thereof, as shall be stated and expressed in
the resolution or resolutions providing for the issue
thereof adopted by the Board of Directors, and as are not
stated and expressed in this Certificate of
Incorporation, or any amendment thereto, including (but
without limiting the generality of the foregoing) the
following:
(1) The designation of and number of shares
constituting such series;
(2) The dividend rate of such series, the conditions
and dates upon which such dividends shall be payable,
the preference or relation which such dividends shall
bear to the dividends payable on any other class or
of any other class of capital stock or series thereof
and whether such dividends shall be cumulative or
noncumulative;
(3) Whether the shares of such series shall be
subject to redemption by the corporation, and, if
made subject to such redemption, the times, prices
and other terms and conditions of such redemption;
(4) The terms and amount of any sinking fund provided
for the
2
<PAGE>
purchase or redemption of the shares of such series;
(5) Whether or not the shares of such series shall be
convertible into or exchangeable for shares of any
other class or classes or of any other series of any
class or classes of capital stock of this corporation,
and, if provision be made for conversion or exchange,
the times, prices, rates, adjustments, and other terms
and conditions of such conversion or exchange;
(6) Whether or not the shares of such series shall
have voting rights, in addition to the voting rights
provided by law, and, if so, the terms and conditions
of such voting rights;
(7) The restrictions, if any, on the issue or reissue
of any additional Preferred Stock; and
(8) The rights of the holders of the shares of such
series upon the dissolution of, or upon the
distribution of assets of, the corporation.
(C) At all elections of directors of this corporation,
each holder of Common Stock of its corporation shall be
entitled to as many votes as shall equal the number of
votes which, except for provisions of this Section (C),
he would be entitled to cast for the election of
directors with respect to his shares of Common Stock
multiplied by the number of directors to be elected, and
he may cast all of such votes for a single director or
may distribute such votes among the number of directors
to be voted for, or for any two or more of them as he may
see fit.
3
<PAGE>
(D) The Board of Directors may issue additional capital
stock of the corporation, option rights or other
securities having conversion or option rights without
first offering them to the stockholders of any class.
(E) The corporation shall make, not less than once
annually, periodic reports to its security holders, which
reports shall include profit and loss statements and
balance sheets prepared in accordance with sound business
and accounting practice."
SECOND: That at a meeting of the Board of Directors of Conrock Co. a
resolution was duly adopted setting forth a proposed Restated Certificate of
Incorporation of said corporation (including said proposed amendments),
declaring said Restated Certificate of Incorporation to be advisable to said
corporation and its shareholders and proposing said Restated Certificate of
Incorporation for approval at the Special Meeting of Shareholders called by said
corporation. The resolution setting forth the Restated Certificate of
Incorporation is as follows:
"RESOLVED, subject to shareholder approval of the
Combination, that the Restated Certificate of
Incorporation of this corporation be, and the same hereby
is, amended to read in its entirety as set forth in the
Restated Certificate of Incorporation of this corporation
attached as Exhibit A hereto."
THIRD: That pursuant to a resolution of its Board of Directors, the
Special Meeting of Shareholders of said corporation was duly called and held,
upon notice and accordance with Section 222 of the General Corporation Law of
the State of Delaware, at which meeting the necessary number of shares as
required by statute were voted in favor of the Restated Certificate of
Incorporation, including said amendments, set forth in Exhibit A hereto.
FOURTH: That the Restated Certificate of Incorporation of said
corporation, including said amendments, was duly adopted in accordance with the
provisions of Sections 242 and 245 of the General Corporation Law of the State
of Delaware.
4
<PAGE>
IN WITNESS WHEREOF, Conrock Co. has caused this Restated Certificate of
Incorporation to be signed by William Jenkins, its President, and attested by
Scott J Wilcott, its Secretary, this 27 day of June, 1984.
--
CONROCK CO.
By /s/ William Jenkins
-----------------------------------
William Jenkins
President
Attest:
/s/ Scott J Wilcott
- -------------------------------------
Scott J Wilcott
Secretary
<PAGE>
RESTATED CERTIFICATE OF INCORPORATION
OF CONROCK CO.
(originally incorporated under the name
"Consolidated Rock Products Co."
on January 28, 1929)
FIRST: The name of the corporation is CalMat Co..
SECOND: The address of its registered office in the State of Delaware
is 306 South State St. in the City of Dover, County of Kent. The name of its
registered agent at such address is the United States Corporation Company.
THIRD: The purpose of the corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of Delaware.
FOURTH: (A) The total number of shares of all classes of capital stock
which this corporation shall have authority to issue is Fifty-Five Million
(55,000,000) shares of which Fifty Million (50,000,000) shares shall be Common
Stock, par value One Dollar ($1.00) per share, and Five Million (5,000,000)
shares shall be Preferred Stock, par value One Dollar ($1.00) per share.
(B) The Board of Directors is expressly authorized at any time, and from
time to time, to provide for the issuance of shares of Preferred Stock in one or
more series, with such voting powers, full or limited, or without voting powers,
and with such designations, preferences and relative, participating, optional or
other special rights, and qualifications, limitations or restrictions thereof,
as shall be stated and expressed in the resolution or resolutions providing
for the issue thereof adopted by the Board of Directors, and as are not stated
and expressed in this Certificate of Incorporation, or any amendment thereto,
including (but without limiting the generality of the foregoing) the following:
(1) The designation of and number of shares constituting such
series;
(2) The dividend rate of such series, the conditions and dates upon
which such dividends shall be payable, the preference or relation which
such dividends shall bear to the dividends payable on any other class or
classes or of any other class of capital stock or series thereof and
whether such dividends shall be cumulative or noncumulative;
(3) Whether the shares of such series shall be subject to redemption
by the corporation, and, if made subject to such redemption, the times,
prices and other terms and conditions of such redemption;
(4) The terms and amount of any sinking fund provided for the
purchase or redemption of the shares of such series;
(5) Whether or not the shares of such series shall be convertible
into or exchangeable for shares of any other class or classes or of any
other series of any class or classes of capital stock of this
corporation, and, if provision be made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
such conversion or exchange;
(6) Whether or not the shares of such series shall have voting
rights, in addition to the voting rights provided by law, and, if so,
the terms and conditions of such voting rights;
(7) The restrictions, if any, on the issue or reissue of any
additional Preferred Stock; and
(8) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, the corporation.
Exhibit A
<PAGE>
(C) At all elections of directors of this corporation, each holder of
Common Stock of this corporation shall be entitled to as many votes as shall
equal the number of votes which, except for provisions of this Section (C), he
would be entitled to cast for the election of directors with respect to his
shares of Common Stock multiplied by the number of directors to be elected, and
he may cast all of such votes for a single director or may distribute such votes
among the number of directors to be voted for, or for any two or more of them as
he may see fit.
(D) The Board of Directors may issue additional capital stock of the
corporation, option rights or other securities having conversion or option
rights without first offering them to the stockholders of any class.
(E) The corporation shall make, not less than once annually, periodic
reports to its security holders, which reports shall include profit and loss
statements and balance sheets prepared in accordance with sound business and
accounting practice.
FIFTH: The corporation is to have perpetual existence.
SIXTH: All of the powers of this corporation, insofar as the same may be
lawfully vested by this Certificate of Incorporation in the Board of Directors,
are hereby conferred upon the Board of Directors of this corporation. In
furtherance and not in limitation of that power, the Board of Directors shall
have the power to make, adopt, alter, amend and repeal from time to time by-laws
of this corporation, subject to the right of the shareholders entitled to vote
with respect thereto to alter and repeal by-laws made by the Board of Directors.
SEVENTH: This 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, unless such right is
specifically qualified in this Certificate of Incorporation or any amendments
thereto, and all rights conferred upon stockholders herein are granted subject
to this reservation.
EIGHTH: (A) The affirmative vote of the holders of not less than 60% of the
outstanding shares of capital stock of this corporation, which shall include the
affirmative vote of at least 50% of the outstanding shares of capital stock held
by shareholders other than the "related person" (as hereinafter defined), shall
be required for the approval or authorization of any "business combination" (as
hereinafter defined) of this corporation with any related person; provided,
however, that such 60% voting requirement shall not be applicable if:
(1) The business combination was approved by the Board of Directors of
the corporation either (a) prior to the acquisition by such related person
of the beneficial ownership of 5% or more of the outstanding shares of the
capital stock of the corporation, or (b) after such acquisition, but only
so long as such related person has sought and obtained the unanimous
approval by the Board of Directors of such acquisition of more than 5% of
the capital stock prior to such acquisition being consummated; or
(2) The business combination is solely between this corporation and
another corporation, 50% or more of the voting stock of which is owned by
this corporation and none of which is owned by a related person; provided
that each shareholder of this corporation receives the same type of
consideration in such transaction in proportion to his stockholdings.
(B) For the purposes of this Article EIGHTH:
(1) The term "business combination" shall mean (a) any merger,
reorganization or consolidation of this corporation with or into a related
person, (b) any sale, lease, exchange, transfer or other disposition,
including without limitation, a mortgage or any other security device, of
all or any substantial part of the assets of this corporation (including
without limitation, any voting securities of a subsidiary) or of a
subsidiary, to a related person, (c) any merger or consolidation of a
related person with or into this corporation or subsidiary of this
corporation, and (d) any sale, lease, exchange, transfer or other
disposition of all or any substantial part of the assets of a related
person to this corporation or a subsidiary of this corporation.
(2) The term "related person" shall mean and include any individual,
corporation, partnership or other person or entity which, together with
their "affiliates" and "associates" (defined below),
<PAGE>
"beneficially" owns (as this term is defined in Rule 13d-3 of the General
Rules and Regulations under the Securities Exchange Act of 1934), in the
aggregate, five percent (5%) or more of the outstanding shares of the
capital stock of this corporation, and any "affiliate" or "associate" (as
those terms are defined in Rule 12b-2 under the Securities Exchange Act of
1934) of any such individual, corporation, partnership of other person or
entity.
(3) The term "substantial part of the assets" shall mean assets
having fair market value or book value, whichever is greater, equal to 25%
or more of the total assets as reflected on a balance sheet of the
corporation as of a date no earlier than forty-five (45) days prior to any
acquisition of such assets.
(4) Without limitation, any shares of capital stock of this
corporation which any related person has the right to acquire pursuant to
any agreement, or upon exercise of conversion rights, warrants or options,
or otherwise, shall be deemed beneficially owned by such related person.
(C) The provisions set forth in this Article EIGHTH may not be repealed or
amended in any respect, unless such action is approved by the affirmative vote
of the holders of not less than 60% of the outstanding shares of capital stock
of this corporation; provided, however, that if there is a related person (as
defined herein), such 60% vote must include the affirmative vote of at least 50%
of the outstanding shares of capital stock held by shareholders other than the
related person.
<PAGE>
State of Delaware
PAGE 1
Office of the Secretary of State
--------------------------------
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THAT "CALMAT CO." IS DULY INCORPORATED UNDER THE LAWS OF THE STATE OF
DELAWARE AND IS IN GOOD STANDING AND HAS A LEGAL CORPORATE EXISTENCE NOT HAVING
BEEN CANCELLED OR DISSOLVED SO FAR AS THE RECORDS OF THIS OFFICE SHOW AND IS
DULY AUTHORIZED TO TRANSACT BUSINESS.
THE FOLLOWING DOCUMENTS HAVE BEEN FILED:
CERTIFICATE OF INCORPORATION, FILED THE TWENTY-EIGHTH DAY OF JANUARY, A.D.
1929, AT 9 O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, FILED THE FIRST DAY OF MARCH, A.D. 1929, AT 9
O'CLOCK A.M.
CERTIFICATE OF REDUCTION, FILED THE FIRST DAY OF OCTOBER, A.D. 1931, AT 9
O'CLOCK A.M.
CERTIFICATE OF RETIREMENT, FILED THE THIRTIETH DAY OF APRIL, 1932, AT 9
O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, FILED THE TWENTY-NINTH DAY OF MAY, A.D. 1944, AT 9
O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, FILED THE THIRTEENTH DAY OF AUGUST, A.D. 1956, AT
10 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE FIRST DAY OF JULY, A.D.
[SEAL OF THE /s/ Edward J. Freel
SECRETARY'S ---------------------------------------
OFFICE OF Edward J. Freel, Secretary of State
DELAWARE]
AUTHENTICATION: 8217401
DATE: 12-03-96
<PAGE>
State of Delaware
PAGE 2
Office of the Secretary of State
--------------------------------
1959, AT 10 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE SEVENTH DAY OF APRIL,
A.D. 1966, AT 10 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE SECOND DAY OF SEPTEMBER,
A.D. 1966, AT 10 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-NINTH DAY OF
SEPTEMBER, A.D. 1966, AT 10 O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, CHANGING ITS NAME FROM
"CONSOLIDATED ROCK PRODUCTS CO." TO "CONROCK CO.", FILED THE
TWENTY-FIRST DAY OF APRIL, A.D. 1972, AT 9 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-SEVENTH DAY OF
DECEMBER, A.D. 1972, AT 1 O'CLOCK P.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-SEVENTH DAY OF
DECEMBER, A.D. 1972, AT 1 O'CLOCK P.M.
CERTIFICATE OF OWNERSHIP, FILED THE TENTH DAY OF MARCH, A.D.
1975, AT 9 O'CLOCK A.M.
CERTIFICATE OF REDUCTION, FILED THE EIGHTEENTH DAY OF
DECEMBER, A.D. 1978, AT 9 O'CLOCK A.M.
CERTIFICATE OF REDUCTION, FILED THE TWENTY-NINTH DAY OF
APRIL, A.D. 1980, AT 9 O'CLOCK A.M.
[SEAL OF THE /s/ Edward J. Freel
SECRETARY'S ---------------------------------------
OFFICE OF DELAWARE] Edward J. Freel, Secretary of State
AUTHENTICATION: 8217401
DATE: 12-03-96
<PAGE>
State of Delaware
PAGE 3
Office of the Secretary of State
--------------------------------
RESTATED CERTIFICATE, FILED THE TWENTY-NINTH DAY OF APRIL, A.D. 1980, AT
9:05 O'CLOCK A.M.
CERTIFICATE OF REDUCTION, FILED THE FOURTH DAY OF JUNE, A.D. 1981, AT
9 O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, FILED THE TWENTY-EIGHTH DAY OF APRIL, A.D. 1983,
AT 9 O'CLOCK A.M.
RESTATED CERTIFICATE, CHANGING ITS NAME FROM "CONROCK CO." TO "CALMAT CO.",
FILED THE TWENTY-SEVENTH DAY OF JUNE, A.D. 1984, AT 3:15 O'CLOCK P.M.
CERTIFICATE OF AMENDMENT, FILED THE THIRTIETH DAY OF APRIL, A.D. 1987, AT
9 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-THIRD DAY OF DECEMBER, A.D. 1991,
AT 9 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-THIRD DAY OF DECEMBER, A.D. 1991,
AT 9:01 O'CLOCK A.M.
CERTIFICATE OF OWNERSHIP, FILED THE TWENTY-THIRD DAY OF DECEMBER, A.D. 1991,
AT 9:02 O'CLOCK A.M.
CERTIFICATE OF AMENDMENT, FILED THE TWENTIETH DAY OF MAY, A.D. 1992, AT
9 O'CLOCK A.M.
AND I DO HEREBY FURTHER CERTIFY THAT THE AFORESAID
[SEAL OF THE /s/ Edward J. Freel
SECRETARY'S OFFICE ---------------------------------------
OF DELAWARE] Edward J. Freel, Secretary of State
AUTHENTICATION: 8217401
DATE: 12-03-96
<PAGE>
State of Delaware
PAGE 4
Office of the Secretary of State
--------------------------------
CERTIFICATES ARE THE ONLY CERTIFICATES ON RECORD OF THE AFORESAID CORPORATION.
AND I DO HEREBY FURTHER CERTIFY THAT THE ANNUAL REPORTS HAVE BEEN FILED TO
DATE.
AND I DO HEREBY FURTHER CERTIFY THAT THE FRANCHISE TAXES HAVE BEEN PAID TO
DATE.
[SEAL OF THE /s/ Edward J. Freel
SECRETARY'S OFFICE ---------------------------------------
OF DELAWARE] Edward J. Freel, Secretary of State
AUTHENTICATION: 8217401
DATE: 12-03-96
<PAGE>
CALMAT CO.
SECRETARY'S CERTIFICATE
I, CHRISTINE McVEIGH, Assistant Secretary of CalMat Co. (the
"Company"), a Delaware corporation, do hereby certify as follows:
1. The below-named persons have been duly elected or appointed, have
duly qualified, and on November 26, 1996, were, and at all subsequent times to
and including the date hereof have been, officers of the Company, holding the
respective positions or offices set forth below opposite their names, and the
signatures set forth below opposite their names are their genuine signatures:
<TABLE>
<CAPTION>
<S> <C> <C>
Name Office Signature
---- ------ ---------
A. Frederick Gerstell Chairman of the Board and /s/ A. Frederick Gerstell
Chief Executive Officer --------------------------
R. Bruce Rieser President and Chief Operating /s/ R. Bruce Rieser
Officer --------------------------
Paul Stanford Executive Vice President, /s/ Paul Stanford
General Counsel end Secretary --------------------------
H. James Gallagher Executive Vice President,
Finance, Chief Financial Officer /s/ H. James Gallagher
and Treasurer --------------------------
Edward J. Kelly Senior Vice President, /s/ Edward J. Kelly
Corporate Development --------------------------
Brent L. Stumme Vice President, /s/ Brent L. Stumme
Corporate Controller --------------------------
Daniel C. Parker Assistant Treasurer /s/ Daniel C. Parker
--------------------------
Richard S. Yamashita Assistant Treasurer /s/ Richard S. Yamashita
--------------------------
</TABLE>
<PAGE>
2. There has been no amendment to the Certificate of Incorporation of
the Company since December 3, 1996, and, to the best of my knowledge, there is
no proceeding for the dissolution or liquidation of the Company or threatening
its existence, and the Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware.
3. Attached hereto as Annex A is a true and correct copy of the By-
Laws of the Company in effect on August 27, 1996, and at all subsequent times to
and including the date hereof.
4. Attached hereto as Annex B are true and correct copies of
resolutions duly adopted at meetings of the Board of Directors of the Company
duly called and held on August 27, 1996, and October 22, 1996, at each of which
meetings a quorum was present and acting throughout, and said resolutions have
not been in any way modified, amended, annulled, rescinded or revoked and are
still in full force and effect. The terms and conditions of the Note Purchase
Agreement and the Notes referred to in said resolutions as submitted to the
Board of Directors are substantially the terms and conditions contained in the
documents to be executed as of the date hereof.
WITNESS my hand and the seal of the Company this 18 day of December,
--
1996.
/s/ Christine McVeigh
----------------------------------------
Christine McVeigh
Assistant Secretary
[Seal]
2
<PAGE>
CERTIFICATION
I, PAUL STANFORD, Executive Vice President, General Counsel and
Secretary of CalMat Co., do hereby certify that Christine McVeigh has been duly
elected or appointed, has duly qualified, and on this day is the Assistant
Secretary of said corporation, and that the signature above is her genuine
signature.
WITNESS my hand this 18th day of December, 1996.
/s/ Paul Stanford
-------------------------------------
Paul Stanford
Executive Vice President
General Counsel and Secretary
3
<PAGE>
TABLE OF CONTENTS
BY-LAWS OF
CALMAT CO.
<TABLE>
<S> <C>
ARTICLE I
OFFICES.................................................................. 1
Section 1. Registered Office..................................... 1
Section 2. Other Offices......................................... 1
ARTICLE II
MEETINGS OF STOCKHOLDERS................................................. 1
Section 1. Place of Meetings..................................... 1
Section 2. Annual Meeting of Stockholders........................ 1
Section 3. Quorum, Adjourned Meetings and Notice Thereof......... 2
Section 4. Voting................................................ 2
Section 5. Proxies............................................... 3
Section 6. Special Meetings...................................... 3
Section 7. Notice of Stockholder's Meetings...................... 4
Section 8. Maintenance and Inspection of Stockholder List........ 4
ARTICLE III
DIRECTORS................................................................ 5
Section 1. Number and Qualification of Directors................. 5
Section 2. Vacancies............................................. 5
Section 3. Powers................................................ 6
Section 4. Place of Directors' Meeting........................... 6
Section 5. Regular Meetings...................................... 6
Section 6. Special Meetings...................................... 6
Section 7. Quorum................................................ 7
Section 8. Action Without Meeting................................ 7
Section 9. Telephone Conferences................................. 7
Section 10. Committees of Directors............................... 7
Section 11. Minutes of Committee Meetings......................... 8
Section 12. Compensation of Directors............................. 8
ARTICLE IV
OFFICERS................................................................. 9
Section 1. Officers.............................................. 9
Section 2. Election of Officers.................................. 9
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Section 3. Subordinate Officers.................................. 10
Section 4. Compensation of Officers.............................. 10
Section 5. Term of Office; Removal and Vacancies................. 10
Section 6. Chairman of the Board................................. 10
Section 7. President............................................. 10
Section 8. Vice-Chairman of the Board............................ 11
Section 9. Vice-Presidents....................................... 11
Section 10. Secretary............................................. 11
Section 11. Assistant Secretary................................... 12
Section 12. Treasurer............................................. 12
Section 13. Assistant Treasurer................................... 12
ARTICLE V
CERTIFICATES OF STOCK.................................................... 13
Section 1. Certificates and Uncertificated Stock................. 13
Section 2. Signatures on Certificates............................ 13
Section 3. Statement of Stock Rights, Preferences, Privileges.... 14
Section 4. Lost Certificates..................................... 14
Section 5. Transfer of Stock..................................... 15
Section 6. Fixing Record Date.................................... 15
Section 7. Registered Stockholders............................... 16
ARTICLE VI
GENERAL PROVISIONS....................................................... 16
Section 1. Dividends............................................. 16
Section 2. Payment of Dividends; Directors' Duties............... 16
Section 3. Checks................................................ 16
Section 4. Fiscal Year........................................... 17
Section 5. Corporate seal........................................ 17
Section 6. Manner of Giving Notice............................... 17
Section 7. Waiver of Notice...................................... 17
Section 8. Annual Statement...................................... 17
ARTICLE VII
INDEMNIFICATION.......................................................... 18
Section 1. Right of Indemnification.............................. 18
Section 2. Advance of Costs...................................... 18
Section 3. Procedure for Indemnification......................... 18
Section 4. Other Rights.......................................... 19
Section 5. Insurance............................................. 20
Section 6. Definitions........................................... 20
Section 7. Savings Clause........................................ 21
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C>
ARTICLE VIII
AMENDMENTS............................................................... 22
Section 1. Amendments by Directors or Stockholders............... 22
</TABLE>
iii
<PAGE>
BY-LAWS
OF
CALMAT CO.
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be at
the office of the United States Corporation Company, at 306 South State Street,
in the City of Dover, in the County of Kent, State of Delaware.
Section 2. Other Offices. The Corporation may also have an
office in the City of Los Angeles, State of California and also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. Place of Meetings. All meetings of the stockholders
shall be held in the City of Los Angeles, State of California, at such place as
may be fixed from time to time by the Board of Directors, or at such other place
either within or without the State of Delaware as shall be designated from time
to time by the Board of Directors and stated in the notice of the meeting.
Section 2. Annual Meeting of Stockholders. An annual meeting of
stockholders shall be held on the fourth Wednesday in April in each year, if not
a legal holiday, and if a legal holiday, then on the next legal business day
following, at 10:00 a.m., or at such
<PAGE>
other date and time as may be determined from time to time by resolution adopted
by the Board of Directors. At each annual meeting, directors shall be elected
and any other proper business may be transacted.
Section 3. Quorum, Adjourned Meetings and Notice Thereof. A
majority of the stock issued and outstanding and entitled to vote at any meeting
of stockholders, the holders of which are present in person or represented by
proxy, shall constitute a quorum for the transaction of business except as
otherwise provided by law, by the Certificate of Incorporation, or by these By-
Laws. A quorum, once established, shall not be broken by the withdrawal of
enough votes to leave less than a quorum, and the votes present may continue to
transact business until adjournment. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, a majority of the
voting stock represented in person or by proxy may adjourn the meeting from time
to time, without notice other than announcement at the meeting, until a quorum
shall be present or represented. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. If the adjournment is
for more than thirty days, or if after the adjournment a new record date is
fixed for the adjourned meeting, a notice of the adjourned meeting shall be
given to each stockholder of record entitled to vote thereat.
Section 4. Voting. When a quorum is present at any meeting, the
vote of the holders of a majority of the stock having voting power present in
person or represented by proxy shall decide any question brought before such
meeting, unless the question is one upon which by express provision of the
statutes, or the Certificate of Incorporation, or these By-Laws,
2
<PAGE>
a different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 5. Proxies. At each meeting of the stockholders, each
stockholder having the right to vote may vote in person or may authorize another
person or persons to act for him by proxy appointed by an instrument in writing
subscribed by such stockholder and bearing a date not more than three years
prior to said meeting, unless said instrument provides for a longer period. All
proxies must be filed with the Secretary of the Corporation at the beginning of
each meeting in order to be counted in any vote at the meeting. Except as
provided by the Certificate of Incorporation and these By-Laws, each stockholder
shall have one vote for each share of stock having voting power, registered in
his name on the books of the Corporation on the record date set by the Board of
Directors as provided in Article V, Section 6 hereof. At all elections of
directors of this Corporation, each holder of Common Stock of this Corporation
shall be entitled to as many votes as shall equal the number of votes which,
except for this Section 5, he would be entitled to cast for the election of
directors with respect to his shares of Common Stock multiplied by the number of
directors to be elected, and he may cast all of such votes for a single director
or may distribute them among the number to be voted for, or for any two or more
of them as he may see fit. All elections shall be had and all questions decided
by a plurality vote.
Section 6. Special Meetings. Special meetings of the
stockholders, for any purpose, or purposes, unless otherwise prescribed by
statute or by the Certificate of Incorporation, may be called by the Chairman of
the Board or the President or the Secretary and shall be called by the Chairman
of the Board or the President or the Secretary at the request in
3
<PAGE>
writing of a majority of the Board of Directors, or at the request in writing of
stockholders owning a majority of the entire capital stock of the Corporation
issued and outstanding, and entitled to vote. Such request shall state the
purpose or purposes of the proposed meeting. Business transacted at any special
meeting of stockholders shall be limited to the purposes stated in the notice.
Section 7. Notice of Stockholder's Meetings. Whenever
stockholders are required or permitted to take any action at a meeting, a
written notice of the meeting shall be given. Such notice shall state the
place, date and hour of the meeting, and, in the case of a special meeting, the
purpose or purposes for which the meeting is called. The written notice of a
meeting shall be given to each stockholder entitled to vote at such meeting not
less than ten nor more than sixty days before the date of the meeting, except
that written notice of any special meeting shall be given to each stockholder
entitled to vote at such meeting not less than two weeks before the date of the
meeting. If mailed, notice is given when deposited in the United States mail,
postage prepaid, directed to the stockholder at his address as it appears on the
records of the Corporation.
Section 8. Maintenance and Inspection of Stockholder List. The
officer who has charge of the stock ledger of the Corporation shall prepare and
make, at least ten days before every meeting of 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 place within the
4
<PAGE>
city where the meeting is to be held, which place shall be specified in the
notice of the 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.
ARTICLE III
DIRECTORS
Section 1. Number and Qualification of Directors. The number of
directors which shall constitute the whole Board shall be not less than eleven
nor more than fifteen, the exact number to be determined by the Board. The
directors need not be stockholders. The directors shall be elected at the
annual meeting of the stockholders, except as provided in Section 2 of this
Article, and each director elected shall hold office until his successor is
elected and qualified or until the earlier of his death, resignation, retirement
or removal. No person over the age of 70 years shall be nominated or elected a
director, directors shall not stand for re-election upon attainment of age 70,
except those over the age of 70 years and serving as directors at the time of
adoption of this By-Law amendment.
Section 2. Vacancies. Vacancies on the Board of Directors by
reason of death, resignation, retirement, disqualification, removal from office,
or otherwise, and newly created directorships resulting from any increase in the
authorized number of directors may be filled by a majority of the directors then
in office, although less than a quorum, or by a sole remaining director. The
director so chosen shall hold office until the next annual election of directors
and until their successors are duly elected and shall qualify, unless sooner
displaced.
5
<PAGE>
If there are no directors in office, then an election of directors
may be held in the manner provided by statute.
Section 3. Powers. The property and business of the Corporation
shall be managed by or under the direction of its Board of Directors. In
addition to the powers and authorities by these By-Laws expressly conferred upon
them, the Board may exercise all such powers of the Corporation and do all such
lawful acts and things as are not by statute or by the Certificate of
Incorporation or by these By-Laws directed or required to be exercised or done
by the stockholders.
Section 4. Place of Directors' Meeting. The directors may hold
their meetings and have one or more offices, and keep the books of the
Corporation outside of the State of Delaware.
Section 5. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice on the fourth Tuesday of each month at
10:00 o'clock a.m., at 3200 San Fernando Road, Los Angeles, California, or at
such time and place as shall from time to time be determined by the Board.
Section 6. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the President on forty-
eight hours' notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the Chairman of the Board or the
President or the Secretary in like manner and on like notice on the written
request of a majority of the directors unless the Board consists of only one
director, in which case special meetings shall be called by the President or
Secretary in like manner or on like notice on the written request of the sole
director.
6
<PAGE>
Section 7. Quorum. At all meetings of the Board of Directors a
majority of the authorized number of directors shall be necessary and sufficient
to constitute a quorum for the transaction of business, and the vote of a
majority of the directors present at any meeting at which there is a quorum,
shall be the act of the Board of Directors, except as may be otherwise
specifically provided by statute, by the Certificate of Incorporation or by
these By-Laws. If a quorum shall not be present at any meeting of the Board of
Directors, the directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present. If only one director is authorized, such sole director shall
constitute a quorum.
Section 8. Action Without Meeting. Unless otherwise restricted
by the Certificate of Incorporation or these By-Laws, any action required or
permitted to be taken at any meeting of the Board of Directors or of any
committee thereof may be taken without a meeting, if all members of the Board or
committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the Board or committee.
Section 9. Telephone Conferences. Unless otherwise restricted by
the Certificate of Incorporation or these By-Laws, members of the Board of
Directors, or any committee designated by the Board of Directors, may
participate in a meeting of the Board of Directors, or any committee, by means
of conference telephone or similar communications equipment by means of which
all persons participating in the meeting can hear each other, and such
participation in a meeting shall constitute presence in person at such meeting.
Section 10. Committees of Directors. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate one or more
committees, each
7
<PAGE>
such committee to consist of one or more of the directors of the Corporation.
The Board may designate one or more directors as alternate members of any
committee, who may replace any absent or disqualified member at any meeting of
the committee. In the absence or disqualification of a member of a committee,
the member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absent or disqualified member. Any such committee, to the extent
provided in the resolution of the Board of Directors, shall have and may
exercise all the powers and authority of the Board of Directors in the
management of the business and affairs of the Corporation, and may authorize the
seal of the Corporation to be affixed to all papers which may require it; but no
such committee shall have the power or authority in reference to amending the
Certificate of Incorporation (except as permitted by Section 141 of the Delaware
General Corporation Law and as authorized by resolution), 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, or amending the By-Laws of the Corporation; and,
unless the resolution or the Certificate of Incorporation expressly so provides,
no such committee shall have the power or authority to declare a dividend, to
authorize the issuance of stock or to adopt a certificate of ownership and
merger.
Section 11. Minutes of Committee Meetings. Each committee shall
keep regular minutes of its meetings and report the same to the Board of
Directors when required.
Section 12. Compensation of Directors. Unless otherwise
restricted by the Certificate of Incorporation or these By-Laws, the Board of
Directors shall have the authority
8
<PAGE>
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the Board of Directors and may be paid
a fixed sum for attendance at each meeting of the Board of Directors or a stated
salary as director. No such payment shall preclude any director from serving the
Corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of this Corporation shall be
chosen by the Board of Directors and shall include a Chairman of the Board, a
President, a Vice-President, a Secretary and a Treasurer. The Corporation may
also have, at the discretion of the Board of Directors, such other officers as
are desired, including a Vice-Chairman of the Board, additional Vice-Presidents,
and one or more Assistant Secretaries and Assistant Treasurers. In the event
there are two or more Vice Presidents, then one or more may be designated as
Executive Vice President, Senior Vice-President or other similar or dissimilar
title. At the time of the election of officers, the directors may by resolution
determine the order of their rank. All officers shall hold office at the
pleasure of the Board of Directors. No officer, except the Chairman of the
Board and Chief Executive Officer, need be a member of the Board of Directors.
Any number of offices may be held by the same person.
Section 2. Election of Officers. The Board of Directors, at its
first meeting after each annual meeting of stockholders, shall choose the
officers of the Corporation.
9
<PAGE>
Section 3. Subordinate Officers. The Board of Directors may
appoint such other 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 from time to time by the Board.
Section 4. Compensation of Officers. The salaries of all
officers and agents of the Corporation shall be fixed by the Board of Directors.
Section 5. Term of Office; Removal and Vacancies. The officers of
the Corporation shall hold office until their successors are chosen and qualify
in their stead. Any officer elected or appointed by the Board of Directors may
be removed at any time by the affirmative vote of a majority of the Board of
Directors. If the office of any officer or officers becomes vacant for any
reason, the vacancy shall be filled by the Board of Directors.
Section 6. Chairman of the Board. The Chairman of the Board
shall be the Chief Executive Officer of the Corporation. He shall preside at
all meetings of the Board of Directors and shall be Chairman of the Executive
Committee. As Chief Executive Officer, he shall, subject to the general control
of the Board of Directors, have general supervision, direction, and control of
the business and affairs of the Corporation. He shall preside at all meetings
of stockholders and the Board of Directors. He shall be ex officio a member of
all other committees and shall have the general powers and duties of management
usually vested in the office of the Chief Executive Officer, together with such
other powers and duties as may be prescribed by the Board of Directors or these
By-laws.
Section 7. President. The President shall be the Chief Operating
Officer of the Corporation. As such, he shall, subject to the general control
of the Chairman of the Board and Chief Executive Officer, have general
supervision, direction, and control of the routine and
10
<PAGE>
ordinary business and operations of the Corporation, and shall exercise and
perform such other powers and duties as may be prescribed by the Board of
Directors or these By-laws. He shall, in the absence of the Chairman of the
Board, preside at all meetings of stockholders.
Section 8. Vice-Chairman of the Board. The Vice-Chairman of the
Board shall, in the absence of the Chairman of the Board and of the President,
preside at meetings of the stockholders and, in the absence of the Chairman,
preside at meetings of the Board of Directors, and shall have such other powers
and duties as may be prescribed by the Board of Directors.
Section 9. Vice-Presidents. In the absence of the President, the
Vice-Presidents in order of their rank as fixed by the Board of Directors, or if
not ranked, the Vice-President designated by the Board of Directors, shall
perform all the duties of the President except those specifically assigned to
the Vice-Chairman by the Board of Directors or these By-Laws, and when so acting
shall have all the powers of and be subject to all the restrictions upon the
President. The Vice-Presidents shall have such other duties as from time to
time may be prescribed for them, respectively, by the Board of Directors.
Section 10. Secretary. The Secretary shall attend all sessions of
the Board of Directors 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; and
shall perform like duties for the standing committees when required by the Board
of Directors. He shall give, or cause to be given, notice of all meetings of
the stockholders and of the Board of Directors, and shall perform such other
duties as may be prescribed by the Board of Directors or these By-laws. He
shall keep in safe custody the seal of the Corporation, and when authorized by
the Board, affix the same to any instrument requiring it, and when so affixed it
shall be attested by his signature or by the
11
<PAGE>
signature of an Assistant Secretary. The Board of Directors may give general
authority to any other officer to affix the seal of the Corporation and to
attest the affixing by his signature.
Section 11. Assistant Secretary. The Assistant Secretary or, if
there be more than one, the Assistant Secretaries in the order determined by the
Board of Directors, or if there be no such determination, the Assistant
Secretary designated by the Board of Directors, shall, in the absence or
disability of the Secretary, perform the duties and exercise the powers of the
Secretary and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
Section 12. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and 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 depositories as may be designated by the Board of
Directors. He shall disburse the funds of the Corporation as may be ordered by
the Board of Directors, taking proper vouchers for such disbursements.
Section 13. Assistant Treasurer. The Assistant Treasurer or, if
there shall be more than one, the Assistant Treasurers in the order determined
by the Board of Directors, or if there be no such determination, the Assistant
Treasurer designated by the Board of Directors, shall, in the absence or
disability of the Treasurer, perform the duties and exercise the powers of the
Treasurer and shall perform such other duties and have such other powers as the
Board of Directors may from time to time prescribe.
/ / /
12
<PAGE>
ARTICLE V
CERTIFICATES OF STOCK
Section 1. Certificates and Uncertificated Stock. The shares of
the Corporation shall be represented by certificates, provided that the Board of
Directors of the Corporation may provide by resolution or resolutions that some
or all of any or all classes or series of its stock shall be uncertificated
shares. Any such resolution shall not apply to shares represented by a
certificate until such certificate is surrendered to the Corporation.
Notwithstanding the adoption of such a resolution by the Board of Directors,
every holder of stock represented by certificates and upon request every holder
of uncertificated shares shall be entitled to have a certificate signed by, or
in the name of the Corporation by the Chairman of the Board or Vice-Chairman of
the Board of Directors, or the President or Vice-President, and by the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of such
Corporation representing the number of shares registered in certificate form.
Except as otherwise expressly provided by law, the rights and obligations of the
holders of uncertificated stock and the rights and obligations of the holders of
certificates representing stock of the same class and series shall be identical.
Section 2. Signatures on Certificates. Any or all the signatures
on the certificate may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate shall have ceased 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 is he were such officer, transfer agent or registrar at the date
of issue.
13
<PAGE>
Section 3. Statement of Stock Rights, Preferences, Privileges.
If the Corporation shall be authorized to issue more than one class of stock or
more than one series of any class, the powers, designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualification, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the Corporation shall issue to represent such class or series of stock, a
statement that the Corporation will furnish without charge to each stockholder
who so requests the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to this Section 3 or Sections 156, 202(a) or 218(a) of
the General Corporation Law of Delaware, or a statement that the corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative participating, optional or other special
rights of each class of stock or series thereof and the qualifications,
limitations or restrictions of such preferences and/or rights.
Section 4. Lost Certificates. The Board of Directors may direct
a new certificate of stock or uncertificated shares to be issued in place of any
certificate theretofore issued by the Corporation alleged to have been lost,
stolen or destroyed, upon the making of an
14
<PAGE>
affidavit of that fact by the person claiming the certificate of stock to be
lost, stolen or destroyed. When authorizing such issue of a new certificate of
stock or uncertificated shares, the Board of Directors may, in its discretion
and as a condition precedent to the issuance thereof, require the owner of such
lost, stolen or destroyed certificate of stock, or his legal representative, to
give the Corporation a bond in such sum sufficient to indemnify the Corporation
against any claim that may be made against the Corporation on account of the
alleged loss, theft or destruction of any such certificate or the issuance of
such new certificate or uncertificated shares.
Section 5. Transfer of Stock. Upon surrender to the Corporation,
or the transfer agent of the Corporation, of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignation or
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 6. Fixing Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote any meeting of the
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 of Directors may fix a
record date which shall not be more than sixty (60) days prior to any other
action. A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
15
<PAGE>
Section 7. 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 or interest in such share on the part of any other
person, whether or not it shall have express or other notice thereof, save as
expressly provided by the laws of the State of Delaware.
ARTICLE VI
GENERAL PROVISIONS
Sections 1. Dividends. Dividends upon the capital stock of the
Corporation, subject to the provisions of the Certificate of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property, or in
shares of the capital stock, subject to the provisions of the Certificate of
Incorporation.
Section 2. Payment of Dividends; Directors' Duties. Before
payment of any dividend there may be set aside out of any funds of the
Corporation available for dividends 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 purpose as the directors shall
think conducive to the interests of the Corporation, and the directors may
abolish any such reserve.
Section 3. Checks. All checks or demands for money and notes of
the Corporation shall be signed by such officer or officers as the Board of
Directors may from time to time designate.
16
<PAGE>
Section 4. Fiscal Year. The fiscal year of the Corporation shall
be the calendar year unless otherwise fixed by resolution of the Board of
Directors.
Section 5. Corporate Seal. The corporate seal shall have
inscribed thereon the name of the Corporation, the year of its organization and
the words "Corporate Seal, Delaware." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
Section 6. Manner of Giving Notice. Whenever, under the
provisions of the statutes or of the Certificate of Incorporation or of these
By-Laws, notice is required to be given to any director or stockholder, it shall
not be construed to mean personal notice, but such notice may be given in
writing, by mail, addressed to such director or stockholder, at his address as
it appears on the records of the Corporation, with postage thereon prepaid, and
such notice shall be deemed to be given at the time when the same shall be
deposited in the United States mail. Notice to directors may also be given by
telegram.
Section 7. Waiver of Notice. Whenever any notice is required to
be given under the provisions of the statutes or of the Certificate of
Incorporation or of these By-laws, a waiver thereof in writing, signed by the
person or persons entitled to said notice, whether before or after the time
stated therein, shall be deemed equivalent thereto.
Section 8. Annual Statement. The Board of Directors shall
present at each annual meeting, and at any special meeting of the stockholders
when called for by vote of the stockholders, a full clear statement of the
business and condition of the Corporation.
/ / /
17
<PAGE>
ARTICLE VII
INDEMNIFICATION
Section 1. Right of Indemnification. To the maximum extent
permitted by the General Corporation Law of Delaware, the Corporation shall
indemnify each director and officer and may indemnify each employee or agent of
the Corporation against expenses, judgments, fines, settlements and other
amounts actually and reasonably incurred in connection with any action, suit or
proceeding arising by reason of the fact that any such person is or was a
director, officer, employee or agent 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.
Section 2. Advance of Costs. Expenses incurred by an officer or
director in defending a civil or criminal action, suit or proceeding shall be
paid by the Corporation in advance of the final disposition of such action, suit
or proceeding upon receipt of an undertaking by or on behalf of the 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 by the
Corporation as authorized in this Article. Such expenses incurred by other
employees and agents may be so paid upon such terms and conditions, if any, as
the Board of Directors deems appropriate. The Board of Directors may, in the
manner set forth above, and upon approval of such director, officer, employee or
agent of the Corporation, authorize the Corporation's counsel to represent such
person, in any action, suit or proceeding, whether or not the Corporation is a
party to such action, suit or proceeding.
Section 3. Procedure for Indemnification. Any indemnification or
advance of expenses hereunder shall be made promptly, and in any event within
sixty (60) days, upon
18
<PAGE>
the written request of the director or officer. The right to indemnification or
advances as granted by this Article shall be enforceable by the director or
officer in any court of competent jurisdiction, if the Corporation denies such
request, in whole or in part, or if no disposition thereof is made within sixty
(60) days. The director's or officer's expenses incurred in connection with
successfully establishing his right to indemnification, in whole or in part, in
any such action shall also be indemnified by the Corporation. It shall be a
defense to any such action (other than an action brought to enforce a claim for
the advance of expenses where the required undertaking, if any, has been
received by the Corporation) that the claimant has not met the standard of
conduct required by law, but the failure of the Corporation (including its Board
of Directors, its independent legal counsel, and its stockholders) to have made
a determination as to whether indemnification of the claimant is proper in the
circumstances because he has met the 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.
Section 4. Other Rights. The indemnification and advancement of
expenses provided by or granted pursuant to this Article shall not be deemed
exclusive of any other rights to which a person seeking indemnification may be
entitled under any law (common or statutory), agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding office. All rights to
indemnification under this Article shall be deemed to be a contract between the
Corporation and each director and officer who serves or served in such capacity
at any time while this Article is in effect, and any repeal or modification of
this Article or relevant provisions of the Delaware General Corporation Law or
any other applicable law shall not in any way diminish any rights
19
<PAGE>
to indemnification of such director or officer, or the obligations of the
Corporation arising hereunder prior to such modification or repeal.
Section 5. Insurance. The Corporation shall purchase and
maintain insurance on behalf of any person who is or was a director or officer
against any liability asserted against him and incurred by him or on his behalf
in such capacity or as a director, officer, employee or agent of another
Corporation, partnership, joint venture, trust or other enterprise, or arising
out of his status as such, whether or not the Corporation would have the power
to indemnify him against such liability under the provisions of this Article,
provided that such insurance is determined by the Board of Directors to be
available on acceptable terms.
Section 6. Definitions. For purposes of this Article:
a) service as a director, officer, employee or agent of any
Corporation, partnership, joint venture, trust or other enterprise controlled by
this Corporation shall be deemed to be service at the request of this
Corporation;
b) "the Corporation" shall include in addition to the resulting
Corporation, any constituent Corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent Corporation, or is or
was serving at the request of such constituent Corporation, as a director,
officer, employee or agent of another Corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article with respect to the resulting or surviving Corporation as he
would have with respect to such constituent Corporation if its separate
existence had continued;
20
<PAGE>
c) "other enterprise" shall include employee benefit plans;
references to "fines" shall include any excise taxes assessed on a person with
respect to an employee benefit plan; and references to "serving at the request
of the Corporation" shall include any service as a director, officer, employee
or agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee or agent with respect to an employee benefit
plan, its participants, or beneficiaries;
d) the indemnification and advancement of expenses provided by, or
granted pursuant to this Article shall, unless otherwise provided when
authorized or ratified, 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 a person;
e) "expenses" shall include all costs, charges and attorneys' fees;
and
f) "action, suit or proceeding" shall include any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative, and any appeal therefrom.
Section 7. Savings Clause. If this Article or any portion hereof
shall be invalidated on any ground by any court of competent jurisdiction, then
the Corporation shall nevertheless indemnify each director, officer, employee
and agent of the Corporation as to expenses, judgments, fines and amounts paid
in settlement with respect to any action, suit or proceeding to the full extent
permitted by any applicable portion of this Article that shall not have been
invalidated and to the full extent permitted by applicable law.
21
<PAGE>
ARTICLE VIII
AMENDMENTS
Section 1. Amendments by Directors or Stockholders. These By-
Laws may be altered, amended or repealed or new By-Laws may be adopted by the
stockholders or by the Board of Directors, when such power is conferred upon the
Board of Directors by the Certificate of Incorporation, at any regular meeting
of the stockholders or of the Board of Directors or at any special meeting of
the stockholders or of the Board of Directors if notice of such alteration,
amendment, repeal or adoption of new By-Laws be contained in the notice of such
special meeting. If the power to adopt, amend or repeal By-Laws is conferred
upon the Board of Directors by the Certificate of Incorporation, it shall not
divest or limit the power of the stockholders to adopt, amend or repeal By-Laws.
22
<PAGE>
ANNEX B
RESOLUTION
RESOLVED, That the report of the Finance Committee of this Board (the
"Committee"), as presented by its Chairman at this meeting, be and is hereby
approved;
RESOLVED FURTHER, That the Committee's recommendation to convert the
Company's current debt structure to new financing by a private placement, in an
amount from $75 million to $100 million, be and is hereby approved;
RESOLVED FURTHER, That the officers of this Corporation be and are hereby
authorized, empowered, and directed to enter into private placement on behalf of
this Corporation, from such banks or trust companies as they may in their
judgment determine, for such period and on such terms as may to them in their
discretion seem advisable, and to execute such papers or documents as may be
necessary in order to effect said placement; and
RESOLVED FURTHER, That the officers of this Corporation be and are hereby
authorized to engage the services of Merrill Lynch as agent for the purpose of
said private placement, and to make and enter into such agreements or other
contracts with said agent as they may deem necessary and proper in carrying out
the authority hereby granted.
<PAGE>
RESOLUTION
RESOLVED, That the report of the Finance Committee of this Board (the
"Committee"), as presented by its Chairman at this meeting, be and is hereby
approved;
RESOLVED FURTHER, That the Committee's recommendation to convert the
Company's current debt structure to new financing by a private placement in the
amount of $115 million, increased from the $75 million to $100 million amount
approved by this Board at its meeting held on August 27, 1996, and consistent
with the terms set forth on Exhibit "A" hereto, be and is hereby approved;
RESOLVED FURTHER, That the Chief Executive Officer, President, Executive
Vice Presidents, Senior Vice President, Secretary or Treasurer (each, an
"Authorized Signatory" and as a whole, the "Authorized Signatories") be, and
each of them hereby is, authorized to execute the Purchase Agreements, in the
name and on behalf of the Company and under its corporate seal or otherwise,
with such changes therein as such Authorized Signatory, as evidenced by such
Authorized Signatory's execution thereof, shall deem necessary or desirable;
RESOLVED FURTHER, That, prior to (and following) the execution and delivery
of the Purchase Agreements, the officers of the Company, be, and each of them
hereby is, authorized and directed to take all such other actions and to execute
and deliver all such other documents as they deem necessary or advisable to
carry out the full intent and purposes of the foregoing resolutions; and
RESOLVED FURTHER, That any reference in these resolutions to the officers
of the Company shall be interpreted to mean any one or more of the officers of
the Company as elected by the Board of Directors from time to time.
<PAGE>
Exhibit A
1996 Financing Plan - Update October 21, 1996
Principal Terms - Private Placement
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Covenant Description
- ----------------------------------------------------------------------------------------
<S> <C>
Limitation on Senior Indebtedness Ratio of Senior Debt to Total Capitalization
cannot exceed 45%
- ----------------------------------------------------------------------------------------
Limitation on Total Indebtedness Ratio of Total Debt to Total Capitalization
cannot exceed 55%
- ----------------------------------------------------------------------------------------
Minimum Consolidated Net Worth Consolidated Net Worth must be maintained at
or above $215 MM + 25% of Consolidated Net
Income measured annually on a cumulative
basis from Dec. 31, 1997.
- ----------------------------------------------------------------------------------------
Limitation on Liens "Basket" for non-permitted Liens set at 20% of
Consolidated Net Worth
- ----------------------------------------------------------------------------------------
Limitation on Subsidiary Debt except for existing subsidiary debt and
intercompany debt, will be included in lien
"basket" of 20% on Consolidated Net Worth
- ----------------------------------------------------------------------------------------
Minimum Interest Coverage Ratio must equal or exceed 1.30 (Interest
Expense = reported interest only)
- ----------------------------------------------------------------------------------------
Restriction on Asset Sales For proceeds not reinvested or earmarked to
repay indebtedness within 270 days, cannot
exceed 15% of Consolidated Total Assets in any
12 month period, and 40% of Consolidated
Total Assets on a cumulative basis.
- ----------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
Committed
October 21, 1996
-----------------------------------------------
Tranche Spread*
- ----------------------------------------------------------------------------------------
<S> <C>
7 year (due 2003) + 80
- ----------------------------------------------------------------------------------------
10 year (due 2006) + 90
- ----------------------------------------------------------------------------------------
12 year (due 2008) + 95
- ----------------------------------------------------------------------------------------
15 year (due 2011) +103
- ----------------------------------------------------------------------------------------
</TABLE>
* Spreads are committed. Total rate will be set Tuesday, October 22, 1996 and be
based on market Treasury rates at that time.
<PAGE>
CALMAT CO.
OFFICER'S CERTIFICATE
I, EDWARD J. KELLY, Senior Vice President, Corporate Development of
CalMat Co. (the "Company"), do hereby certify as follows:
1. I am familiar with the terms of the several Note Purchase Agreements
dated as of December 18, 1996 (the "Note Purchase Agreement") entered into by
CalMat Co. (the "Company") with the purchasers listed in Schedule A thereto (the
"Purchasers"), providing, among other things, for the issuance and sale by the
Company to the Purchasers of $115,000,000 aggregate principal amount of its
senior notes, of which $35,000,000 aggregate principal amount shall be its 7.19%
Series A Senior Notes due 2003, $32,000,000 aggregate principal amount shall be
its 7.45% Series B Senior Notes due 2006, $33,000,000 aggregate principal amount
shall be its 7.53% Series C Senior Notes due 2008 and $15,000,000 aggregate
principal amount shall be its 7.66% Series D Senior Notes due 2011. All terms
used herein and not otherwise defined herein are used herein as used or defined
in the Note Purchase Agreement.
2. As to matters herein below set forth, I have either personal knowledge
or have obtained information from officers or employees in whom I have
confidence and whose duties require them to have a personal knowledge thereof,
and I make this certificate pursuant to the provisions of the Note Purchase
Agreement with the intent that this certificate shall be relied upon by the
Purchasers as a basis for the consummation of the transactions contemplated by
the Note Purchase Agreement.
<PAGE>
3. All representations and warranties of the Company contained in
the Note Purchase Agreement are true on and as of the date hereof with the same
effect as though such representations and warranties had been made on and as of
the date hereof.
4. The Company has performed and complied with all agreements and
conditions on its part required to be performed or complied with under the Note
Purchase Agreement on or prior to the date hereof, provided, however, that for
-------- -------
the purpose of calculating Consolidated Income Available for Interest Charges as
defined on Schedule B to the Note Purchase Agreements, the $45.0 million of
special charges taken by the Company in 1995 related to the adoption of
Statement of Financial Accounting Standards No. 121 have been treated as
extraordinary losses.
5. After giving effect to the issue and sale of the Notes (and the
application of the proceeds thereof as contemplated by Schedule 5.14 to the
Note Purchase Agreement), no Default or Event of Default has occurred and is
continuing.
6. Neither the Company nor any Subsidiary has entered into any
transaction since the date of the Memorandum referred to in Section 5.3 to the
Note Purchase Agreement that would have been prohibited by Section 10.1 of the
Note Purchase Agreement had such Section applied since such date.
7. Since the date of the most recent financial statements referred
to in Schedule 5.5 of the Note Purchase Agreement, the Company has not changed
its jurisdiction of
<PAGE>
incorporation or been a party to any merger or consolidation and has not
succeeded to all or any substantial part of the liabilities of any other entity.
WITNESS my hand this 18th day of December, 1996.
/s/ Edward J. Kelly
------------------------------------
Edward J. Kelly,
Senior Vice President,
Corporate Development
<PAGE>
[LETTERHEAD OF CRAVATH, SWAINE & MOORE]
December 18, 1996
CalMat Co.
----------
7.19% Series A Senior Notes due 2003
------------------------------------
7.45% Series B Senior Notes due 2006
------------------------------------
7.53% Series C Senior Notes due 2008
------------------------------------
7.66% Series D Senior Notes due 2011 (collectively, the "Notes")
------------------------------------ -----
Ladies and Gentlemen:
We have acted as special counsel to CalMat Co., a Delaware
corporation (the "Company") in connection with those certain Note
-------
Purchase Agreements dated as of December 18, 1996, (each, a Purchase
--------
Agreement" and collectively, the "Purchase Agreements") among the
--------- -------------------
Company and those Purchasers listed on Schedule A to the Purchase
Agreements (the "Purchasers") and the issuance and sale of the Notes.
----------
This opinion is rendered to you pursuant to Section 4.4(a) of the
Purchase Agreements. Capitalized terms used but not defined herein
have the meanings assigned to them in the Purchase Agreements.
In that connection, we have examined the Purchase Agreements, the
Notes and originals, or copies certified or otherwise identified to
our satisfaction, of such documents, corporate records and other
instruments as we have deemed necessary or appropriate for purposes of
this opinion. We have relied, with respect to certain factual
matters, on the representations and warranties of the Company and the
Purchasers, as the case may be, contained in the Purchase Agreements
and upon the certificates of the Company, or the Purchasers, or their
officers, or of public officials.
<PAGE>
2
In rendering our opinion, we have assumed the due authorization,
execution and delivery of the Purchase Agreements by the Purchasers and
compliance by the Company and the Purchasers with the terms of the Purchase
Agreements. We have also assumed the legal capacity of all natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents submitted to us as certified
or photostatic copies and the authenticity of the originals of such copies.
Based on the foregoing and subject to the qualifications and
limitations contained herein, we are of opinion as follows:
1. Based solely on a good standing certificate from the Secretary of
State of the State of Delaware, the Company is a corporation validly existing
and in good standing under the laws of Delaware; the Company has all requisite
corporate power and authority to own, lease and operate its properties and to
conduct its business as described in the Private Placement Memorandum.
2. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreements and
the Notes and the Purchase Agreements and the Notes have been duly authorized,
executed and delivered by the Company.
3. Each Purchase Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, subject to
the qualifications and limitations contained herein.
4. The Notes constitute valid and binding obligations of the
Company, enforceable in accordance with their terms, subject to the
qualifications and limitations contained herein.
5. Assuming (i) the accuracy of, and compliance with, the
representations, warranties and covenants of the Company in Section 5.13 of the
Purchase Agreements and (ii) the accuracy of, and compliance with, the
representations, warranties and covenants of the Purchasers in Section 6.1 of
the Purchase Agreements, no registration of the Notes under the Securities Act
and no qualification of an indenture under the 1939 Trust Indenture Act with
respect thereto, is required in connection with the offer, sale and delivery of
<PAGE>
3
the Notes in the manner contemplated by the Purchase Agreements and the Private
Placement Memorandum.
6. No consent, approval, authorization, order, registration or
qualification of or with any court or governmental agency or body in the United
States of America or in the State of New York is required for the consummation
by the Company of the transactions contemplated by the Purchase Agreements nor
will the execution, delivery and performance of the Purchase Agreements conflict
with, or result in a violation of any of the terms or provisions of, any
existing applicable United States Federal or New York State law, rule or
regulation.
7. The execution and delivery of the Purchase Agreements and the
issuance and delivery of the Notes by the Company, the consummation by the
Company of the transactions contemplated in the Purchase Agreements and
compliance by the Company with the terms of the Purchase Agreements do not and
will not result in any violation of the Certificate of Incorporation or by-laws
of the Company and do not and will not conflict with, or result in a breach of
any of the terms or provisions of, or constitute a default under any existing
applicable United States Federal statute or regulation or statute or regulation
of the States of New York or Delaware.
8. Neither the issue and sale of the Notes nor the use of the
proceeds from the sale thereof violate or will result in a violation of
Regulations G, T or X of the Board of Governors of the Federal Reserve System.
9. The Company is neither an "investment company", nor a company
"controlled" by any "investment company", within the meaning of the Investment
Company Act of 1940, as amended.
The opinions expressed above are subject to the following
qualifications and limitations:
(a) The enforceability of each agreement and security is subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other similar laws relating to or affecting creditor's rights
generally from time to time in effect and to general principles of equity
(including, without limitation, concepts of materiality, reasonableness, good
faith and fair dealing), regardless of whether considered in a proceeding in
equity or at law;
<PAGE>
4
(b) insofar as provisions contained in any agreement or security
provide for indemnification or contribution, the enforceability thereof may be
limited by public policy considerations;
(c) the availability of a decree for specific performance or an
injunction is subject to the discretion of the court requested to issue any such
decree or injunction; and
(d) no opinion is expressed as to the effect of the laws of any
jurisdiction other than the State of New York where any person may be located
or where enforcement of any agreement or security may be sought that limits the
rates of interest legally chargeable or collectible.
We are admitted to practice only in the State of New York, and we
express no opinion as to matters governed by any laws other than the laws of the
State of New York, the General Corporation Law of the State of Delaware and the
Federal laws of the United States of America.
This opinion is rendered only to you and is solely for your benefit in
connection with the above transactions. This opinion may not be relied upon by
any other person or for any other purpose or used, circulated, quoted or
otherwise referred to for any other purpose except that any Purchaser may
provide a copy hereof to any permitted transferee of any Note.
Very truly yours,
/s/ Cravath, Swaine & Moore
To the Purchasers
listed on Schedule A
to the Purchase Agreements
<PAGE>
[LETTERHEAD OF CALMAT CO] [CALMAT LOGO]
December 18, 1996
CalMat Co.
----------
7.19% Series A Senior Notes due 2003
------------------------------------
7.45% Series B Senior Notes due 2006
------------------------------------
7.53% Series C Senior Notes due 2008
------------------------------------
7.66% Series D Senior Notes due 2011
------------------------------------
(collectively, the "Notes")
-----
Ladies and Gentlemen:
As General Counsel for CalMat Co., a Delaware corporation (the "Company")
and the wholly owned subsidiaries listed on Schedule I hereto (the
"Subsidiaries"), I am familiar with the issuance and sale by the Company of the
Notes pursuant to those certain Note Purchase Agreements dated as of December
18, 1996, (each, a "Purchase Agreement") among the Company and those Purchasers
listed in Schedule A to the Purchase Agreements (the "Purchasers"). This opinion
is rendered to you pursuant to Section 4.4 of the Purchase Agreements.
Capitalized terms used but not defined herein have the meanings assigned to them
in the Purchase Agreements.
In that connection, I have examined originals, or copies certified or
otherwise identified to my satisfaction, of such documents, corporate records
and other instruments as I have deemed necessary or appropriate for purposes of
this opinion including (a) the Purchase Agreements, (b) the Articles of
Incorporation of the Company, (c) the By-Laws of the Company and (d) resolutions
adopted by the Company's Board of Directors on August 27 and October 22, 1996.
In rendering this opinion, I have assumed the due authorization, execution
and delivery of the Purchase Agreements by the Purchasers and compliance by the
Purchasers with the terms of the Purchase Agreements. I have also assumed the
legal capacity of all natural persons, the genuineness of all signatures (other
than those of officers of the Company), and the authenticity of the originals of
such copies.
Based on the foregoing and subject to the qualifications and limitations
contained herein, I am of opinion as follows:
1. The Company is a corporation duly incorporated, validly existing and
in good standing under the laws of Delaware, and the Company has all requisite
corporate power and
<PAGE>
December 18, 1996
Page 2 [CALMAT LOGO]
authority to own, lease and operate its properties and to conduct its business
as described in the Private Placement Memorandum.
2. The Subsidiaries are corporations duly incorporated, validly existing
and in good standing under the laws of the states in which they are
incorporated.
3. The Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Purchase Agreements and
the Notes, and the Purchase Agreements and the Notes have been duly authorized,
executed and delivered by the Company.
4. The Company and the Subsidiaries are qualified to do business in each
jurisdiction in which a failure to be so qualified could reasonably be expected
to have a Material Adverse Effect and qualified as foreign corporations and in
good standing under the laws of each jurisdiction where their ownership, lease
or operation of property or the conduct of their businesses requires such
qualification, other than for such jurisdictions where the failure to so qualify
would not have a Material Adverse Effect. The jurisdictions in which the Company
and the Subsidiaries are qualified to do business are set forth on Schedule I
hereto.
5. The execution and delivery of the Purchase Agreements and the issuance
and delivery of the Notes by the Company, the consummation by the Company of the
transactions contemplated in the Purchase Agreements and compliance by the
Company with the terms of the Purchase Agreements do not and will not conflict
with, violate, or constitute a default under (a) the Certificate of
Incorporation, by-laws, or other constitutive documents of the Company or any
Subsidiary, (b) any Material contract or agreement of the Company (except as set
forth on Schedule II hereto), or (c) any requirement of law to which the
Company, the Subsidiaries or any of their respective properties are subject.
6. Any consent, waiver, approval or other authorization of any
nongovernmental Person required for the execution and delivery by the Company
and the Subsidiaries of the Purchase Agreements and the issuance and sale of the
Notes by the Company have been obtained by the Company.
7. There are no judicial, administrative, arbitral or other actions,
suits or proceedings pending, or, to my knowledge, threatened against or
affecting either the Company or the Subsidiaries or any Properties or rights of
any of them which seek to enjoin, or otherwise prevent the consummation of, the
transactions contemplated in the Purchase Agreements in any court or before any
arbitrator of any kind or before or by any Governmental Authority.
I am admitted to the State Bar of California. In addition, I am generally
familiar with the General Corporation Law as in effect in the State of Delaware
and have made such investigation
<PAGE>
December 18, 1996
Page 3 [CALMAT LOGO]
thereof as I deemed necessary for the purpose of rendering the opinions
expressed herein. This opinion is limited to the present laws of the
aforementioned jurisdictions and the United States of America, to present
judicial interpretations thereof and to the facts as they exist at the date
hereof. I assume no obligation to revise or supplement this opinion should the
present laws of such jurisdictions be changed by legislative action, judicial
decision or otherwise. This opinion is rendered as of the date hereof, and I
express no opinion as to, and disclaim any undertaking or obligation to update
this opinion in respect of, changes or circumstances or events which occur
subsequent to this date.
My opinion with respect to the status of Subsidiaries incorporated in
Arizona is given in reliance on the opinion of Mark Reardon, Esq., Regional
Counsel to the Company and a member of the State Bar of Arizona, and on
certificates of good standing obtained from the Arizona Corporation Commission.
My opinion with respect to the status of CalMat of New Mexico is given solely in
reliance on a certificate of good standing obtained from the New Mexico State
Corporation Commission.
This opinion is rendered only to you and is solely for your benefit in
connection with the above transactions. This opinion may not be relied upon by
any other person, other than Cravath, Swaine & Moore, who may rely upon this
opinion in connection with the Purchase Agreements, or for any other purpose or
used, circulated, quoted or otherwise referred to for any other purpose, except
that any Purchaser may provide a copy hereof to any transferee of any Note.
Very truly yours,
/s/ Paul Stanford
Paul Stanford
PS/cek
Attachment
<PAGE>
SCHEDULE I
LIST OF JURISDICTIONS
CALMAT CO. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Corporation State of Incorporation State(s) of Qualification
- ----------- ---------------------- -------------------------
<S> <C> <C>
CalMat Co. (active) Delaware Arizona
California
New Mexico
Texas
CalMat Co. (inactive) Nevada
</TABLE>
ACTIVE SUBSIDIARIES OF CALMAT CO. (Delaware)
<TABLE>
<S> <C> <C>
Allied Concrete & Materials Co. Arizona
Allied Concrete, Inc. (Subsidiary of Arizona
Allied Concrete & Materials Co.)
CalMat Co. of Arizona Arizona California
CalMat Co. of New Mexico New Mexico
CalMat Land Co. California Arizona
CalMat Leasing Co. Arizona
CalMat of Central California California
CalMat Properties Co. California Arizona
CC Plaza Co. (Subsidiary of California
CalMat Properties Co.)
Mission Valley Development Co. California
(Subsidiary of CalMat Properties
Co.)
River Vista Development Co. California
(Subsidiary of CalMat Properties
Co.)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Corporation State of Incorporation State(s) of Qualification
- ----------- ---------------------- -------------------------
<S> <C> <C>
Kirst Construction Co., Inc. California Arizona
Azusa Rock, Inc. (Subsidiary of California
Kirst Construction Co., Inc.)
Palomar Transit Mix Co. California
Reliance Land Co. California
Reliance Transport Co. California
Rio Norte Este Co. California
River Bend Corp. California
Sanger Rock and Sand California
Sloan Canyon Sand Co. California
Triangle Rock Products, Inc. California
Western Environmental Contracting, California
Inc.
Western Thermal Soils Co. California Arizona
<CAPTION>
INACTIVE SUBSIDIARIES OF CALMAT CO. (Delaware)
- ----------------------------------------------
<S> <C> <C>
Albuquerque Gravel Products Co. New Mexico
Bakersfield Ready Mix, Inc. California
California Materials Company California
Conrock Co. California
Conrock Property Development California
Corp.
Consolidated Rock Products Co. California
</TABLE>
Schedule I, Page 2
<PAGE>
<TABLE>
<CAPTION>
Corporation State of Incorporation State(s) of Qualification
- ----------- ---------------------- -------------------------
<S> <C> <C>
Industrial Asphalt, Inc. California Arizona
Nevada
Moreno Valley Sand & Gravel, Inc. California
Oceanside Ready Mix Co. California
Rio Vista Hotel Co. (Subsidiary of California
CalMat Properties Co.)
Sweetwater Aggregates Co. California
</TABLE>
Schedule I, Page 3
<PAGE>
Schedule II
Upon consummation of the sale of the Notes and prior to the application of
proceeds described in Schedule 5.14 ("Use of Proceeds") of the Purchase
Agreements, the Company will be in violation of Section 7.1A ("Limitations on
Consolidated Total Liabilities and Indebtedness of Subsidiaries") of the Note
Purchase Agreement dated July 23, 1993, as amended, between the Company and
Metropolitan Life Insurance Company, its Affiliates, Subsidiaries and Separate
Accounts.
<PAGE>
[LETTERHEAD OF MILBANK, TWEED, HADLEY & McCLOY]
December 18, 1996
Re: CalMat Co.
$115,000,000 Senior Notes
To the several Purchasers
listed in Schedule A to the
within-mentioned Note
Purchase Agreements
Ladies and Gentlemen:
We have acted as your special counsel in connection with the issuance
by CalMat Co. (the "Company") of its (a) 7.19% Series A Senior Notes due 2003 in
-------
an aggregate principal amount of $35,000,000, (b) 7.45% Series B Senior Notes
due 2006 in an aggregate principal amount of $32,000,000, (c) 7.53% Series C
Senior Notes due 2008 in an aggregate principal amount of $33,000,000 and (d)
7.66% Series D Senior Notes due 2011 in an aggregate principal amount of
$15,000,000 (collectively, the "Notes"), and the purchases by you pursuant to
-----
the several Note Purchase Agreements (the "Note Purchase Agreements") dated as
------------------------
of December 18, 1996 made by you with the Company of Notes in the respective
series and aggregate principal amounts set forth in Schedule A to the Note
Purchase Agreements. All capitalized terms used herein without definition shall
have the meanings ascribed thereto in the Note Purchase Agreements.
We have examined such corporate records of the Company, agreements and
other instruments, certificates of public officials and of officers and
representatives of the Company, and such other documents, as we have deemed
necessary in connection with the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures, the authenticity
of documents submitted to us as originals and the conformity with the authentic
originals of all documents submitted to us as copies. As to questions of fact
material to such opinions we have, when relevant facts were not independently
established, relied upon the representations set forth in the Note Purchase
<PAGE>
2
Agreements and upon certifications by officers or other representatives of the
Company.
In addition, we attended the closing held today at our office at which you
purchased and made payment for Notes in the respective series and aggregate
principal amounts to be purchased by you, all in accordance with the Note
Purchase Agreements.
Based upon the foregoing and subject to the qualifications, limitations and
assumptions set forth below, and having regard for legal considerations that we
deem relevant, we render you our opinion pursuant to Section 4.4 of the Note
Purchase Agreements as follows:
1. The Company is a validly existing corporation in good standing under
the laws of the State of Delaware and has the corporate power to execute and
deliver the Note Purchase Agreements and the Notes and to perform its
obligations thereunder.
2. The Note Purchase Agreements have been duly authorized, executed and
delivered by the Company and constitute the legal, valid and binding agreements
of the Company, enforceable against the Company in accordance with their terms.
3. The Notes being purchased by you today have been duly authorized,
executed and delivered by the Company and constitute legal, valid and
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
4. No consent, approval or authorization of, or registration, filing or
declaration with, any New York State or United States Federal Governmental Body
is required for the validity of the execution and delivery or for the
performance by the Company of the Note Purchase Agreements or said Notes.
5. It was not necessary in connection with the offering, sale and
delivery of said Notes, under the circumstances contemplated by the Note
Purchase Agreements to register said Notes under the Securities Act of 1933, as
amended, or to qualify an indenture in respect of the Notes under the Trust
Indenture Act of 1939, as amended.
6. The consummation of the transactions contemplated by the Note Purchase
Agreements and the performance of the terms and provisions thereof and of the
Notes do not contravene, result in any breach of, or constitute a default under
the certificate of incorporation or by-laws of the Company.
7. The opinion of Cravath, Swaine & Moore, counsel for the Company, dated
today and delivered to you pursuant to Section 4.4 of the Note Purchase
Agreements, is
<PAGE>
3
satisfactory to us in form and scope and we believe that you are justified
in relying thereon.
The opinions expressed above as to the enforceability of any agreement
or instrument in accordance with its terms are subject to the exceptions that
such enforceability may be limited by (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally and (ii) general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).
We wish to point out that provisions of the Note Purchase Agreements
that permit you or any other holder of a Note to take action or make
determinations or to benefit from indemnities or similar undertakings of the
Company may be subject to a requirement that such action be taken or such
determinations be made, and that any action or inaction by any of you or any
other holder of a Note that may give rise to a request for payment under such an
undertaking be taken or not taken, on a reasonable basis and in good faith.
We are members of the bar of the State of New York and do not herein
express any opinion as to any matters governed by any laws other than Federal
laws of the United States of America, the laws of the State of New York and the
General Corporation Law of the State of Delaware.
Very truly yours,
/s/ Milhoul, Tweed, Hadly, McCloy
DAS/TDB
<PAGE>
December 18, 1996
To the Purchasers named in Schedule A to
the Note Purchase Agreements referred to
below.
Ladies and Gentlemen:
Reference is hereby made to the several Note Purchase agreements dated as of
December 18, 1996 (the "Note Purchase Agreement") between CalMat Co. (the
"Company") and the purchasers listed in Schedule A thereto (the "Purchasers").
We deliver herewith to Milbank, Tweed, Hadley & Mcloy on your behalf our 7.19%
Series A Senior Notes due 2003 in an aggregate principal amount of $35,000,000,
7.45% Series B Senior Notes due 2006 in an aggregate principal amount of
$32,000,000, 7.53% Series C Senior Notes due 2008 in an aggregate principal
amount of $33,000,000, and 7.66% Series D Senior Notes due 2011 in an aggregate
principal amount of $15,000,000, such Notes being issued to the Purchasers in
the respective principal amounts and registered in their respective names as set
forth in Schedule A to the Note Purchase Agreement, and each dated the date
hereof and in the applicable form set forth in Exhibit 1 to the Note Purchase
Agreement.
We hereby acknowledge receipt from you of immediately available funds in the
amount of the purchase price of said Notes in accordance with Section 3 of the
Note Purchase Agreement.
Very truly yours,
CalMat Co.
/s/ Edward J. Kelly
Edward J. Kelly
Senior Vice President,
Corporate Development
Receipt from the Company of the Notes
referred to in the foregoing letter is
hereby acknowledged
By /s/ Signature Appears Here
----------------------------------------
Milbank, Tweed, Hadley & McCloy
Authorized Representative
Date: December 18, 1996
<PAGE>
CUSIP SERVICE BUREAU
- ----------------------------------------------------------------
STANDARD & POOR'S, a division of The McGraw-Hill Companies, Inc.
25 Broadway, New York, NY 10004
December 12, 1996
Mr. A. JOSEPH WARBURTON
MILBANK TWEED HADLEY AND MCCLOY
1 CHASE MANHATTAN PLAZA
NEW YORK, NY 10005-1413
Mr. WARBURTON:
This is in response to your request for the assignment of a Private Placement
Number (PPN) to:
ISSUER: CALMAT CO
<TABLE>
<CAPTION>
CUSIP DESCRIPTION RATE MATURITY
<S> <C> <C> <C>
131271 A# 5 SER A SR NT - DUE DEC 2003 7.190%
131271 B* 8 SER B SR NT - DUE DEC 2006 7.450%
131271 B@ 6 SER C SR NT - DUE DEC 2008 7.530%
131271 C* 7 SER D SR NT - DUE DEC 2011 7.660%
</TABLE>
Please call me at (212) 208-8010 or fax me at (212) 412-0402 with any questions.
Sincerely yours,
Patricia Sullivan
Operations Supervisor
Private Placement Unit
The assignment of a CUSIP number to a particular security by Standard
& Poor's is not intended by Standard & Poor's to be, and should not be construed
as, an endorsement of such security, a recommendation to purchase, sell or hold
such security or an opinion as to the legal validity of such security.
CUSIP Trademark of the committee on Uniform Security Identification
Procedures. The American Bankers Association.
<PAGE>
Exhibit 10.19
[LETTERHEAD OF CALMAT CO]
December 15, 1996
Mr.H. James Gallagher
2416 Paseo Del Mar
Palos Verdes Estates, CA 92714
Dear Jim:
The purpose of this letter is to amend the letter agreement dated August
10, 1993 ("Severance Agreement"), which provides for severance benefits in the
event of termination of your employment without cause.
The third paragraph of Section XI of the Severance Agreement is hereby
amended to read in full as follows:
"In the event that CalMat at any time chooses to exercise its right to
terminate you without cause, you will be paid two years' base salary, less
legally required deductions and withholdings, as severance pay. In
addition, CalMat will waive payment of costs of continued health coverage
under COBRA for two years. These will be the only payments to which you
will be entitled in the event of termination without cause."
As so amended, the Severance Agreement shall remain in full force and
effect.
Very truly yours,
/s/ A. FREDERICK GERSTELL
A. Frederick Gerstell
Agreed:
/s/ H. JAMES GALLAGHER
- ----------------------
H. James Gallagher
<PAGE>
EXHIBIT 10.20
AGREEMENT
This Agreement ("Agreement") is effective as of December 15, 1996, between
CALMAT CO., a Delaware corporation (hereinafter called "Company") and H. JAMES
GALLAGHER (hereinafter called "Executive").
RECITALS
A. The Executive presently serves as Executive Vice President-Finance and
Chief Financial Officer of the Company.
B. In the event the Company becomes subject to any proposed or threatened
change in control, it is imperative that the Company and the Board of Directors
be able to rely upon Executive's advice as to the best interests of the Company
and its stockholders without concern that the Executive might be distracted by
the personal uncertainties and risks created by such a proposal or threat.
C. In the event the Company receives any such proposal or threat,
Executive may, in addition to Executive's regular duties, be called upon to
assist in the assessment of such matters, advise management and the Board of
Directors as to whether such proposals or other matters would be in the best
interests of the Company and its stockholders, and to take such other actions as
the Board of Directors might determine to be appropriate.
D. Accordingly, the Management Development and Compensation Committee
(the "Compensation Committee") has authorized the Company to enter into this
Agreement with Executive to assure the Company that it will have the continued
dedication of Executive and the availability of Executive's advice and counsel,
notwithstanding the possibility, threat or occurrence of an effort to take over
control of the Company, and to induce Executive to remain in the employ of the
Company.
1
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the promises
and conditions herein contained, it is agreed that the following terms of
employment which are set forth in this Agreement shall take effect automatically
without any further action by the Company, Board of Directors or Compensation
Committee on the day preceding any change in Control of the Company (as defined
in Section 3.4 below), but such terms of employment shall have no force or
effect unless a Change in Control occurs.
This Agreement shall remain in effect unless otherwise terminated by
resolution of the Compensation Committee or the Board of Directors.
Notwithstanding the foregoing, in no event shall this Agreement terminate within
three (3) years after a Change in Control of the Company without the written
consent of Executive. It is the Company's intention to provide to Executive the
benefits set forth herein if the Company is subject to any Change in Control and
the other applicable conditions of this Agreement are satisfied. The Company
shall notify Executive in writing at least three (3) years prior to the
effective date of termination if the Compensation Committee or Board of
Directors determines to terminate this Agreement.
Unless this Agreement is terminated as provided above, the following terms
of employment which are set forth in this Agreement shall become effective on
the day preceding any Change in Control of the Company.
Until the terms of employment set forth in this Agreement become effective,
the letter agreement with respect to severance benefits in the event of
termination without cause dated August 10, 1993, previously entered into by the
Company and Executive, as such agreement may be amended from time to time
(hereinafter referred to as the "Severance Agreement") shall remain in effect.
The Severance Agreement shall terminate upon a Change in Control of the Company
and thereafter shall have no further force or effect. In no event shall the
amounts and benefits under the Severance Agreement and this Agreement be
additive to one another.
2
<PAGE>
ARTICLE I
EMPLOYMENT
Section 1.1: Position, Duties and Responsibilities of Executive
--------------------------------------------------
The Company shall employ the Executive as Executive Vice President-Finance
and Chief Financial Officer. In such position, the Executive shall have at least
such responsibilities and powers as set forth in Article IV, Section 7 of the
Bylaws of the Company in effect on the date hereof. During his employment
hereunder, the Executive shall devote his full energies, interest, abilities and
productive time during normal business hours to the performance of this
Agreement and shall, without the Company's prior written consent in each
instance, refrain from rendering services of any kind to others for compensation
or which would materially interfere with the performance of his duties under
this Agreement. Notwithstanding the foregoing, the Executive may serve as a
director of other companies with the consent of the Company's Board of
Directors.
Section 1.2: Term of Employment
------------------
(a) The Executive shall be employed for a term commencing on the day
preceding any Change in Control of the Company, and ending upon such termination
date as is set forth in a written notice given by either party terminating this
Agreement, provided that such termination date will occur not less than three
years subsequent to the date upon which such notice is given. For example, this
Agreement could be terminated on the third anniversary of a Change in Control by
written notice given by either party on the date of the Change in Control.
(b) During the term of employment, this Agreement for the Executive's
employment shall not be subject to termination at the instance of the Company
for any reason except for Cause pursuant to Section 1.2(c). Except in the event
of termination of Executive's employment for Cause pursuant to Section 1.2(c),
the Executive's compensation and other benefits as provided herein shall
continue unabated during the full term of employment under this Agreement and
otherwise as provided herein; provided, however, that the Board of Directors of
the Company shall have the right,
3
<PAGE>
acting in accordance with the Bylaws of the Company, to remove the Executive
from office as Executive Vice President-Finance and Chief Financial Officer of
the Company in the event the Executive acts in any way which has a direct,
substantial and adverse effect upon the reputation or condition of the Company,
in which event the Executive may terminate his employment pursuant to Section
1.5. The Board of Directors of the Company may also terminate Executive's
employment for Cause pursuant to Section 1.2(c).
(c) Notwithstanding any other provision of this Agreement, the Board of
Directors of the Company may terminate Executive's employment for Cause pursuant
to this Section 1.2(c). The Company shall have the right to terminate
Executive's employment with the Company for Cause (A) immediately upon written
notice from the Company, if the Board of Directors shall reasonably determine
that the conduct on cause specified in such notice is not curable, or (B) upon
thirty days' written notice from the Company, if the Board of Directors shall
determine that the conduct or cause specified in such notice is curable, unless
the Executive has commenced to cure the conduct or cause specified in such
notice within 10 days following the date of such notice and has completed the
cure within 30 days following the date of such notice.
For the purposes of this Agreement, "Cause" means: (i) willful malfeasance
or gross negligence by Executive in the performance of his duties under this
Agreement, (ii) any act of fraud, insubordination or other conduct by Executive
which demonstrates gross unfitness for service, or (iii) Executive's conviction
(or entry of a plea of guilty, nolo contendere or the equivalent) for any crime
involving moral turpitude, dishonesty or breach of trust or any felony which is
punishable by imprisonment in the jurisdiction involved.
If the Executive's employment is terminated for Cause, the Company will pay
Executive his annual base salary and continue to provide the benefits described
in Section 3.2 through the date of termination and thereafter will have no
further obligations under this Agreement.
4
<PAGE>
Section 1.3: Termination of Agreement Upon Disability of Executive
-----------------------------------------------------
If at the end of any calendar month the Executive is and has, for six (6)
full months, continuously been unable, due to mental or physical illness or
injury, to perform his duties under this Agreement in his normal and regular
manner, this Agreement shall be terminated subject to the provisions of Section
3.1.
Section 1.4: Termination of Agreement Upon Death of Executive
------------------------------------------------
If the Executive dies, this Agreement shall be terminated on the last day
of the calendar month of his death.
Section 1.5: Termination of Employment by the Executive
------------------------------------------
If, without the Executive's express written consent, the Company (i)
significantly reduces the importance of the functions, duties, responsibilities
or authority of the Executive, (ii) reduces the Executive's compensation or
benefits, or (iii) relocates the principal executive office of the Company to a
location outside of Los Angeles County or reassigns the Executive to a location
other than the principal executive office of the Company (except for required
travel on the Company's business to an extent substantially consistent with the
Executive's travel obligations existing on the date of this Agreement), then the
Executive may inform the Company that such action by the Company constitutes
constructive notification under Section 1.2 that this Agreement will be
terminated three years thereafter. After any such constructive notice or actual
notice to the Executive of the termination of this Agreement pursuant to Section
1.2 other than for Cause, the Executive may at any time terminate his employment
with the Company. In the event of such a termination of employment by the
Executive, the Company shall within 72 hours after such termination make a
payment to the Executive of the lump-sum value (without any present-value
discount or adjustment for inflation) of the salary and benefits that would have
been provided to the Executive for the period from the date of such termination
until the date which is three years from the date of such constructive or actual
notice, and the Executive shall be free to seek and obtain other employment
5
<PAGE>
or arrangements for the rendition of personal services with or to others,
notwithstanding the provisions of Section 1.1, and without a reduction of his
compensation and benefits hereunder.
ARTICLE II
COMPENSATION
Section 2.1: Salary
------
The Company shall pay a salary to the Executive for the term hereof at the
minimum rate which was in effect on the day preceding the Change in Control of
the Company. During the term hereof, the Executive's salary may be increased by
the Company's Board of Directors, in which event this Agreement shall be deemed
amended to reflect such increases.
Section 2.2: Travel and Entertainment Expense
--------------------------------
The Company shall reimburse the Executive for reasonable travel and
entertainment expenses incurred in behalf of the Company in the performance of
his duties hereunder.
ARTICLE III
OTHER BENEFITS
Section 3.1: Payments on Account of Disability of Executive
----------------------------------------------
If this Agreement is terminated under Section 1.3 after a Change in Control
of the Company, the Company shall continue to pay to the Executive on account of
his disability the biweekly or semimonthly salary installments under Section 2.1
at the salary rate in effect on the date of said termination (subject to
adjustment pursuant to Section 3.3) and to provide him with benefits as
described in Section 3.2, until three years after the Executive is given notice
of such termination; provided, however, that in the event of the Executive's
death such monthly installments as shall be
6
<PAGE>
payable hereunder shall terminate. The payments made hereunder will be reduced
by any disability benefits paid to Executive under disability plans or insurance
provided by the Company.
Section 3.2: Participation in Other Company Benefits
---------------------------------------
In addition to the benefits provided in this Agreement the Executive shall
throughout the term hereof (prior to death) be entitled to and shall receive all
other benefits generally available to other executives of the Company, including
(without limitation) benefits under the Company's medical, health, disability,
death benefit, profit sharing and bonus and other incentive compensation plans
(other than stock option plans). The Executive shall be entitled to receive
benefits which are at least as great in scope and amount as those which he
received immediately prior to the Change in Control. The Executive shall also be
entitled to benefits under the Company's Supplemental Executive Retirement Plan
("SERP"), whether or not the SERP is available to other executives. If the
Executive's employment is terminated after a Change in Control pursuant to
Section 1.2(b), Section 1.3 or Section 1.5: (i) the amount the Executive
otherwise would have received as bonus payments for the period after the
termination shall be determined assuming that he would be entitled to an annual
bonus or bonuses at an annual rate at least equal to the average of his annual
bonuses for the preceding two years, and that he would be entitled to receive a
pro-rata portion of such amount for any period shorter than a full calendar
year; (ii) the amount of the profit sharing plan contributions otherwise made on
behalf of the Executive shall be determined assuming that the level of Company
contributions to the plan would equal the average of such levels for the
preceding two years; (iii) the payment for the value of welfare benefits shall
be based on the current cost of such coverage to the Company and shall take into
account the Executive's entitlement to participate in the Company's welfare
benefit plans for retirees (if he would have qualified for such participation
assuming he had an additional three years of service); (iv) the amount to which
the Executive would otherwise be entitled under the SERP shall be determined (A)
based on his age at the date he would otherwise have terminated employment, (B)
taking into account the years of vesting service and the salary and bonuses he
would have earned through such date based on his salary rate in effect at his
actual termination date and assuming that he would be entitled to bonuses as
provided in (i) above, increased using the 6.5% compensation scale assumption
adopted by the SERP for funding the SERP trusts, (C) deeming the amount of the
Executive's Employer Contribution Benefit (as defined in the
7
<PAGE>
SERP) to include the amount in (ii) above, (D) assuming payments of SERP
benefits would not have commenced prior to the date the Executive would
otherwise have terminated employment, and (E) permitting the Executive to elect
to receive (without a penalty) a lump sum payment upon his termination of
employment which is the Actuarial Equivalent (as defined in the SERP) of the
lump sum payment which would have been payable to Executive (if he made a timely
election to receive a lump sum payment) on the date he would have otherwise
terminated employment; and (v) the Executive's vested interest under all Company
plans shall be determined assuming he had an additional three years of service.
Section 3.3: Cost of Living Adjustment
-------------------------
The biweekly or semimonthly payments to be paid to or on account of the
Executive in any year under Section 3.1 shall be increased on January 1 of each
year after Executive terminates employment (the "adjustment date") in the same
proportion as the proportional difference between the "Consumer Price Index for
Urban Wage Earners, Clerical Workers, all items (Los Angeles -Long Beach -
Anaheim areas)," published by the United States Department of Labor, Bureau of
Labor Statistics (the "CPI"), in effect on the adjustment date and the CPI in
effect on January of the year in which Executive terminates employment. Should
the Bureau of Labor Statistics discontinue publication of the CPI, or publish
the same less frequently, or alter the same in any manner, then the Company may
adopt a substitute index or substitute procedure which reasonably reflects and
monitors consumer prices. A decline in the CPI shall not serve as a basis for a
reduction in the biweekly or semimonthly payments to be paid to or on account of
the Executive.
Section 3.4: Stock Options
-------------
The Company shall amend all outstanding Stock Option Agreements with the
Executive to provide, and shall provide in future options under the Company's
Stock Option Plans or future stock option plans, that the Executive may
accelerate the exercisability of all options to acquire shares covered by such
Stock Option Agreements and by future agreements (i) on the termination of the
Executive's employment by the Company after a Change in Control of the Company
for any reason other than Cause (as such terms are defined in this Agreement) or
(ii) the occurrence of a "Change
8
<PAGE>
in Control of the Company." For the purposes of this Agreement, a "Change in
Control of the Company" or "Change in Control" shall be deemed to have occurred
if (i) 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 a
trustee or other fiduciary holding securities under an employee benefit of the
Company, is or becomes the "beneficial owner" (as defined in Rule l3d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company's then
outstanding securities regardless of whether or not the Board of Directors shall
have approved such Change in Control, (ii) the shareholders of the Company
approve (a) a merger or consolidation of the Company with any other corporation
regardless of which entity is the surviving company, other than a merger or
consolidation which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a plan of complete liquidation of the
Company or agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, or (iii) during any period of two
consecutive years, individuals who at the beginning of any such period
constitute the Directors of the Company cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Company's stockholders, of each new Director of the Company was approved by
a vote of at least a majority of such Directors of the Company then still in
office who were Directors of the Company at the beginning of any such period.
ARTICLE IV
GENERAL PROVISIONS
Section 4.1: Assignability of Agreement
--------------------------
The rights and duties of the parties hereunder shall not be assignable by
either party, except that this Agreement and all rights and obligations
hereunder shall be assigned by the Company and its express assumption in writing
required by any corporation or other business entity which succeeds
9
<PAGE>
to all or substantially all of the business of the Company through merger,
consolidation, corporate reorganization, or by acquisition of all or
substantially all of the assets of the Company.
Section 4.2: Integration
-----------
Except for the Severance Agreement and as provided in Sections 2.1 and 3.2
hereof, this Agreement contains the entire agreement between the parties and
supersedes all prior agreements, understandings, commitments and practices,
whether written or oral. No amendments to this Agreement may be made except by
a writing signed by both parties. This Agreement shall be construed according
to the laws of the State of California.
Section 4.3: Notices
-------
Any notice to the Company required or permitted hereunder shall be given in
writing to the Secretary of the Company either by personal service or by
registered mail, postage prepaid, addressed to the Company at its principal
place of business. Any such notice to the Executive shall be given in a like
manner and if mailed shall be addressed to the Executive at his home address
then shown in the files of the Company. For the purpose of determining
compliance with any time element herein, a notice shall be deemed given on the
postmarked date.
Section 4.4: Indemnification Provisions
--------------------------
The indemnification provisions set forth in Article VII of the Bylaws of
the Company in effect on the date hereof are hereby incorporated by reference as
a material term of this Agreement, constitute material consideration for the
Executive's agreement hereunder and will, as in effect on the date hereof,
continue to be a material term of this Agreement without regard to their future
amendment or repeal unless the Executive expressly agrees in writing to accept
such amendment or repeal as an amendment of this Agreement.
10
<PAGE>
Section 4.5: Additional Payments to the Executive
------------------------------------
In the event that any amounts or benefits which are paid to the Executive
by the Company or any other person or entity pursuant to this Agreement or any
deferred compensation plan or agreement, stock option plan or other plan,
agreement or arrangement are subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") or any similar
state tax provision, the Company shall pay the Executive an additional amount
(the "Gross-Up Payment") such that the net amount of the payments and benefits
retained by the Executive, after deduction of any excise tax thereon and any
interest payable with respect to such excise tax, and any federal and state
income tax and any excise tax upon the Gross-Up Payment, shall be equal to the
payments and benefits which the Executive would have received absent the
application of such excise tax. The Gross-Up Payment shall be paid to the
Executive upon the earlier of (i) the time at which the Company withholds such
excise tax from any payments to the Executive or (ii) 30 days after the
Executive notifies the Company that the Executive has filed a tax return which
takes the position that such excise tax is due and payable in reliance on a
written opinion of the Executive's tax counsel that it is more likely than not
that such excise tax is due and payable. If the Executive makes any payment
with respect to any such excise tax as a result of an adjustment to the
Executive's tax liability by any federal, state or local authority, the Company
will pay such Gross-Up Payment within 30 days after the Executive notifies the
Company of such payment. Without limiting the obligation of the Company
hereunder, the Executive agrees, in the event the Executive makes any payment
pursuant to the preceding sentence, to negotiate with the Company in good faith
with respect to procedures reasonably requested by the Company which would
afford the Company the ability to contest the imposition of such excise tax;
provided, however, that the Executive will not be required to afford the Company
any right to contest the applicability of any such excise tax to the extent that
the Executive reasonably determines that such contest is inconsistent with the
overall tax interests of the Executive. The Company agrees to hold in
confidence and not to disclose, without the Executive's prior written consent,
any information with regard to the Executive's tax position which the Company
obtains pursuant to this Section 4.5.
11
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Section 4.6: Right to Arbitrate
------------------
The Executive shall have the right, in addition to all other rights and
remedies in law or in equity, at his election, to seek arbitration in Los
Angeles County, California, under the Employment Dispute Resolution Rules of the
American Arbitration Association, in the event of any dispute concerning this
Agreement.
Section 4.7: Attorneys' and Accountants' Fees
--------------------------------
The Company shall pay to the Executive all legal and accounting expenses
and fees incurred by Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement after a Change in Control of the Company or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit under this
Agreement, without regard to whether the Executive prevails in obtaining or
enforcing such right or benefit. The Company shall pay to the Executive any
expenses and fees incurred in any such proceeding promptly after receipt by the
Company of a written notice by the Executive that he has incurred such fees or
expenses.
EXECUTED by the parties this 30th day of December, 1996.
H. JAMES GALLAGHER CALMAT CO.
"Executive" "Company"
/s/ H. JAMES GALLAGHER By /s/ A. FREDERICK GERSTELL
- ---------------------- ----------------------------
Chairman of the Board and
Chief Executive Officer
By /s/ PAUL STANFORD
-----------------
Secretary
12
<PAGE>
EXHIBIT 10.23
[LETTERHEAD OF CALMAT CO]
December 15, 1996
Mr. R. Bruce Rieser
1527 Ridge Street
Redlands, CA 92373
Dear Bruce:
The purpose of this letter is to amend the letter agreement dated January
20, 1995 ("Severance Agreement"), which provides for severance benefits in the
event of termination of your employment without cause.
The third paragraph of Section XI of the Severance Agreement is hereby
amended to read in full as follows:
"In the event that CalMat at any time chooses to exercise its right to
terminate you without cause, you will be paid two years' base salary, less
legally required deductions and withholdings, as severance pay. In
addition, CalMat will waive payment of costs of continued health coverage
under COBRA for two years. These will be the only payments to which you
will be entitled in the event of termination without cause."
As so amended, the Severance Agreement shall remain in full force and
effect.
Very truly yours,
/s/ A. FREDERICK GERSTELL
A. Frederick Gerstell
Agreed:
/s/ R. BRUCE RIESER
- -------------------
R. Bruce Rieser
<PAGE>
EXHIBIT 10.24
AGREEMENT
This Agreement ("Agreement") is effective as of December 15, 1996, between
CALMAT CO., a Delaware corporation (hereinafter called "Company") and R. BRUCE
RIESER (hereinafter called "Executive").
RECITALS
A. The Executive presently serves as President and Chief Operating
Officer of the Company.
B. In the event the Company becomes subject to any proposed or threatened
change in control, it is imperative that the Company and the Board of Directors
be able to rely upon Executive's advice as to the best interests of the Company
and its stockholders without concern that the Executive might be distracted by
the personal uncertainties and risks created by such a proposal or threat.
C. In the event the Company receives any such proposal or threat,
Executive may, in addition to Executive's regular duties, be called upon to
assist in the assessment of such matters, advise management and the Board of
Directors as to whether such proposals or other matters would be in the best
interests of the Company and its stockholders, and to take such other actions as
the Board of Directors might determine to be appropriate.
D. Accordingly, the Management Development and Compensation Committee
(the "Compensation Committee") has authorized the Company to enter into this
Agreement with Executive to assure the Company that it will have the continued
dedication of Executive and the availability of Executive's advice and counsel,
notwithstanding the possibility, threat or occurrence of an effort to take over
control of the Company, and to induce Executive to remain in the employ of the
Company.
1
<PAGE>
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the promises
and conditions herein contained, it is agreed that the following terms of
employment which are set forth in this Agreement shall take effect automatically
without any further action by the Company, Board of Directors or Compensation
Committee on the day preceding any change in Control of the Company (as defined
in Section 3.4 below), but such terms of employment shall have no force or
effect unless a Change in Control occurs.
This Agreement shall remain in effect unless otherwise terminated by
resolution of the Compensation Committee or the Board of Directors.
Notwithstanding the foregoing, in no event shall this Agreement terminate within
three (3) years after a Change in Control of the Company without the written
consent of Executive. It is the Company's intention to provide to Executive the
benefits set forth herein if the Company is subject to any Change in Control and
the other applicable conditions of this Agreement are satisfied. The Company
shall notify Executive in writing at least three (3) years prior to the
effective date of termination if the Compensation Committee or Board of
Directors determines to terminate this Agreement.
Unless this Agreement is terminated as provided above, the following terms
of employment which are set forth in this Agreement shall become effective on
the day preceding any Change in Control of the Company.
Until the terms of employment set forth in this Agreement become effective,
the letter agreement with respect to severance benefits in the event of
termination without cause dated January 20, 1995, previously entered into by the
Company and Executive, as such agreement may be amended from time to time
(hereinafter referred to as the "Severance Agreement") shall remain in effect.
The Severance Agreement shall terminate upon a Change in Control of the Company
and thereafter shall have no further force or effect. In no event shall the
amounts and benefits under the Severance Agreement and this Agreement be
additive to one another.
2
<PAGE>
ARTICLE I
EMPLOYMENT
Section 1.1: Position, Duties and Responsibilities of Executive
--------------------------------------------------
The Company shall employ the Executive as its President and Chief Operating
Officer. In such position, the Executive shall have at least such
responsibilities and powers as set forth in Article IV, Section 7 of the Bylaws
of the Company in effect on the date hereof. During his employment hereunder,
the Executive shall devote his full energies, interest, abilities and productive
time during normal business hours to the performance of this Agreement and
shall, without the Company's prior written consent in each instance, refrain
from rendering services of any kind to others for compensation or which would
materially interfere with the performance of his duties under this Agreement.
Notwithstanding the foregoing, the Executive may serve as a director of other
companies with the consent of the Company's Board of Directors.
Section 1.2: Term of Employment
------------------
(a) The Executive shall be employed for a term commencing on the day
preceding any Change in Control of the Company, and ending upon such termination
date as is set forth in a written notice given by either party terminating this
Agreement, provided that such termination date will occur not less than three
years subsequent to the date upon which such notice is given. For example, this
Agreement could be terminated on the third anniversary of a Change in Control by
written notice given by either party on the date of the Change in Control.
(b) During the term of employment, this Agreement for the Executive's
employment shall not be subject to termination at the instance of the Company
for any reason except for Cause pursuant to Section 1.2(c). Except in the event
of termination of Executive's employment for Cause pursuant to Section 1.2(c),
the Executive's compensation and other benefits as provided herein shall
continue unabated during the full term of employment under this Agreement and
otherwise as provided herein; provided, however, that the Board of Directors of
the Company shall have the right,
3
<PAGE>
acting in accordance with the Bylaws of the Company, to remove the Executive
from office as President and Chief Operating Officer of the Company in the event
the Executive acts in any way which has a direct, substantial and adverse effect
upon the reputation or condition of the Company, in which event the Executive
may terminate his employment pursuant to Section 1.5. The Board of Directors of
the Company may also terminate Executive's employment for Cause pursuant to
Section 1.2(c).
(c) Notwithstanding any other provision of this Agreement, the Board of
Directors of the Company may terminate Executive's employment for Cause pursuant
to this Section 1.2(c). The Company shall have the right to terminate
Executive's employment with the Company for Cause (A) immediately upon written
notice from the Company, if the Board of Directors shall reasonably determine
that the conduct on cause specified in such notice is not curable, or (B) upon
thirty days' written notice from the Company, if the Board of Directors shall
determine that the conduct or cause specified in such notice is curable, unless
the Executive has commenced to cure the conduct or cause specified in such
notice within 10 days following the date of such notice and has completed the
cure within 30 days following the date of such notice.
For the purposes of this Agreement, "Cause" means: (i) willful malfeasance
or gross negligence by Executive in the performance of his duties under this
Agreement, (ii) any act of fraud, insubordination or other conduct by Executive
which demonstrates gross unfitness for service, or (iii) Executive's conviction
(or entry of a plea of guilty, nolo contendere or the equivalent) for any crime
involving moral turpitude, dishonesty or breach of trust or any felony which is
punishable by imprisonment in the jurisdiction involved.
If the Executive's employment is terminated for Cause, the Company will pay
Executive his annual base salary and continue to provide the benefits described
in Section 3.2 through the date of termination and thereafter will have no
further obligations under this Agreement.
4
<PAGE>
Section 1.3: Termination of Agreement Upon Disability of Executive
-----------------------------------------------------
If at the end of any calendar month the Executive is and has, for six (6)
full months, continuously been unable, due to mental or physical illness or
injury, to perform his duties under this Agreement in his normal and regular
manner, this Agreement shall be terminated subject to the provisions of Section
3.1.
Section 1.4: Termination of Agreement Upon Death of Executive
------------------------------------------------
If the Executive dies, this Agreement shall be terminated on the last day
of the calendar month of his death.
Section 1.5: Termination of Employment by the Executive
------------------------------------------
If, without the Executive's express written consent, the Company (i)
significantly reduces the importance of the functions, duties, responsibilities
or authority of the Executive, (ii) reduces the Executive's compensation or
benefits, or (iii) relocates the principal executive office of the Company to a
location outside of Los Angeles County or reassigns the Executive to a location
other than the principal executive office of the Company (except for required
travel on the Company's business to an extent substantially consistent with the
Executive's travel obligations existing on the date of this Agreement), then the
Executive may inform the Company that such action by the Company constitutes
constructive notification under Section 1.2 that this Agreement will be
terminated three years thereafter. After any such constructive notice or actual
notice to the Executive of the termination of this Agreement pursuant to Section
1.2 other than for Cause, the Executive may at any time terminate his employment
with the Company. In the event of such a termination of employment by the
Executive, the Company shall within 72 hours after such termination make a
payment to the Executive of the lump-sum value (without any present-value
discount or adjustment for inflation) of the salary and benefits that would have
been provided to the Executive for the period from the date of such termination
until the date which is three years from the date of such constructive or actual
notice, and the Executive shall be free to seek and obtain other employment
5
<PAGE>
or arrangements for the rendition of personal services with or to others,
notwithstanding the provisions of Section 1.1, and without a reduction of his
compensation and benefits hereunder.
ARTICLE II
COMPENSATION
Section 2.1: Salary
------
The Company shall pay a salary to the Executive for the term hereof at the
minimum rate which was in effect on the day preceding the Change in Control of
the Company. During the term hereof, the Executive's salary may be increased by
the Company's Board of Directors, in which event this Agreement shall be deemed
amended to reflect such increases.
Section 2.2: Travel and Entertainment Expense
--------------------------------
The Company shall reimburse the Executive for reasonable travel and
entertainment expenses incurred in behalf of the Company in the performance of
his duties hereunder.
ARTICLE III
OTHER BENEFITS
Section 3.1: Payments on Account of Disability of Executive
----------------------------------------------
If this Agreement is terminated under Section 1.3 after a Change in Control
of the Company, the Company shall continue to pay to the Executive on account of
his disability the biweekly or semimonthly salary installments under Section 2.1
at the salary rate in effect on the date of said termination (subject to
adjustment pursuant to Section 3.3) and to provide him with benefits as
described in Section 3.2, until three years after the Executive is given notice
of such termination; provided, however, that in the event of the Executive's
death such monthly installments as shall be
6
<PAGE>
payable hereunder shall terminate. The payments made hereunder will be reduced
by any disability benefits paid to Executive under disability plans or insurance
provided by the Company.
Section 3.2: Participation in Other Company Benefits
---------------------------------------
In addition to the benefits provided in this Agreement the Executive shall
throughout the term hereof (prior to death) be entitled to and shall receive all
other benefits generally available to other executives of the Company, including
(without limitation) benefits under the Company's medical, health, disability,
death benefit, profit sharing and bonus and other incentive compensation plans
(other than stock option plans). The Executive shall be entitled to receive
benefits which are at least as great in scope and amount as those which he
received immediately prior to the Change in Control. The Executive shall also be
entitled to benefits under the Company's Supplemental Executive Retirement Plan
("SERP"), whether or not the SERP is available to other executives. If the
Executive's employment is terminated after a Change in Control pursuant to
Section 1.2(b), Section 1.3 or Section 1.5: (i) the amount the Executive
otherwise would have received as bonus payments for the period after the
termination shall be determined assuming that he would be entitled to an annual
bonus or bonuses at an annual rate at least equal to the average of his annual
bonuses for the preceding two years, or, in the event that the Executive has
been employed for less than two full calendar years, an amount equal to the
percentage of the Executive's salary as in effect on the date of termination
(the "bonus percentage") which is equal to the average bonus percentage received
by the three most highly compensated executives of the Company (excluding the
Chairman of the Board) during the two preceding years, and that he would be
entitled to receive a pro-rata portion of such amount for any period shorter
than a full calendar year; (ii) the amount of the profit sharing plan
contributions otherwise made on behalf of the Executive shall be determined
assuming that the level of Company contributions to the plan would equal the
average of such levels for the preceding two years, or, if contributions have
not been made for the two full preceding years because of the Executive's
ineligibility for such contributions because of not having the required length
of service, an amount equal to the average of the contributions for the last two
years which would have been made if the Executive had the required length of
service to be eligible for such contributions; (iii) the payment for the value
of welfare benefits shall be based on the current cost of such coverage to the
Company and shall take into account the Executive's entitlement to participate
in the Company's
7
<PAGE>
welfare benefit plans for retirees (if he would have qualified for such
participation assuming he had an additional three years of service); (iv) the
amount to which the Executive would otherwise be entitled under the SERP shall
be determined (A) based on his age at the date he would otherwise have
terminated employment, (B) taking into account the years of vesting service and
the salary and bonuses he would have earned through such date based on his
salary rate in effect at his actual termination date and assuming that he would
be entitled to bonuses as provided in (i) above, increased using the 6.5%
compensation scale assumption adopted by the SERP for funding the SERP trusts,
(C) deeming the amount of the Executive's Employer Contribution Benefit (as
defined in the SERP) to include the amount in (ii) above, (D) assuming payments
of SERP benefits would not have commenced prior to the date the Executive would
otherwise have terminated employment, and (E) permitting the Executive to elect
to receive (without a penalty) a lump sum payment upon his termination of
employment which is the Actuarial Equivalent (as defined in the SERP) of the
lump sum payment which would have been payable to Executive (if he made a timely
election to receive a lump sum payment) on the date he would have otherwise
terminated employment; and (v) the Executive's vested interest under all Company
plans shall be determined assuming he had an additional three years of service.
Section 3.3: Cost of Living Adjustment
-------------------------
The biweekly or semimonthly payments to be paid to or on account of the
Executive in any year under Section 3.1 shall be increased on January 1 of each
year after Executive terminates employment (the "adjustment date") in the same
proportion as the proportional difference between the "Consumer Price Index for
Urban Wage Earners, Clerical Workers, all items (Los Angeles - Long Beach -
Anaheim areas)," published by the United States Department of Labor, Bureau of
Labor Statistics (the "CPI"), in effect on the adjustment date and the CPI in
effect on January of the year in which Executive terminates employment. Should
the Bureau of Labor Statistics discontinue publication of the CPI, or publish
the same less frequently, or alter the same in any manner, then the Company may
adopt a substitute index or substitute procedure which reasonably reflects and
monitors consumer prices. A decline in the CPI shall not serve as a basis for a
reduction in the biweekly or semimonthly payments to be paid to or on account of
the Executive.
8
<PAGE>
Section 3.4: Stock Options
-------------
The Company shall amend all outstanding Stock Option Agreements with the
Executive to provide, and shall provide in future options under the Company's
Stock Option Plans or future stock option plans, that the Executive may
accelerate the exercisability of all options to acquire shares covered by such
Stock Option Agreements and by future agreements (i) on the termination of the
Executive's employment by the Company after a Change in Control of the Company
for any reason other than Cause (as such terms are defined in this Agreement) or
(ii) the occurrence of a "Change in Control of the Company." For the purposes
of this Agreement, a "Change in Control of the Company" or "Change in Control"
shall be deemed to have occurred if (i) 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 a trustee or other fiduciary holding securities
under an employee benefit of the Company, is or becomes the "beneficial owner"
(as defined in Rule l3d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing 50% or more of the combined voting power
of the Company's then outstanding securities regardless of whether or not the
Board of Directors shall have approved such Change in Control, (ii) the
shareholders of the Company approve (a) a merger or consolidation of the Company
with any other corporation regardless of which entity is the surviving company,
other than a merger or consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) more than 50% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation or (b) a plan of complete liquidation of the
Company or agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, or (iii) during any period of two
consecutive years, individuals who at the beginning of any such period
constitute the Directors of the Company cease for any reason to constitute at
least a majority thereof unless the election, or the nomination for election by
the Company's stockholders, of each new Director of the Company was approved by
a vote of at least a majority of such Directors of the Company then still in
office who were Directors of the Company at the beginning of any such period.
9
<PAGE>
ARTICLE IV
GENERAL PROVISIONS
Section 4.1: Assignability of Agreement
--------------------------
The rights and duties of the parties hereunder shall not be assignable by
either party, except that this Agreement and all rights and obligations
hereunder shall be assigned by the Company and its express assumption in writing
required by any corporation or other business entity which succeeds to all or
substantially all of the business of the Company through merger, consolidation,
corporate reorganization, or by acquisition of all or substantially all of the
assets of the Company.
Section 4.2: Integration
-----------
Except for the Severance Agreement and as provided in Sections 2.1 and 3.2
hereof, this Agreement contains the entire agreement between the parties and
supersedes all prior agreements, understandings, commitments and practices,
whether written or oral. No amendments to this Agreement may be made except by
a writing signed by both parties. This Agreement shall be construed according
to the laws of the State of California.
Section 4.3: Notices
-------
Any notice to the Company required or permitted hereunder shall be given in
writing to the Secretary of the Company either by personal service or by
registered mail, postage prepaid, addressed to the Company at its principal
place of business. Any such notice to the Executive shall be given in a like
manner and if mailed shall be addressed to the Executive at his home address
then shown in the files of the Company. For the purpose of determining
compliance with any time element herein, a notice shall be deemed given on the
postmarked date.
10
<PAGE>
Section 4.4: Indemnification Provisions
--------------------------
The indemnification provisions set forth in Article VII of the Bylaws of
the Company in effect on the date hereof are hereby incorporated by reference as
a material term of this Agreement, constitute material consideration for the
Executive's agreement hereunder and will, as in effect on the date hereof,
continue to be a material term of this Agreement without regard to their future
amendment or repeal unless the Executive expressly agrees in writing to accept
such amendment or repeal as an amendment of this Agreement.
Section 4.5: Additional Payments to the Executive
------------------------------------
In the event that any amounts or benefits which are paid to the Executive
by the Company or any other person or entity pursuant to this Agreement or any
deferred compensation plan or agreement, stock option plan or other plan,
agreement or arrangement are subject to the excise tax imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code") or any similar
state tax provision, the Company shall pay the Executive an additional amount
(the "Gross-Up Payment") such that the net amount of the payments and benefits
retained by the Executive, after deduction of any excise tax thereon and any
interest payable with respect to such excise tax, and any federal and state
income tax and any excise tax upon the Gross-Up Payment, shall be equal to the
payments and benefits which the Executive would have received absent the
application of such excise tax. The Gross-Up Payment shall be paid to the
Executive upon the earlier of (i) the time at which the Company withholds such
excise tax from any payments to the Executive or (ii) 30 days after the
Executive notifies the Company that the Executive has filed a tax return which
takes the position that such excise tax is due and payable in reliance on a
written opinion of the Executive's tax counsel that it is more likely than not
that such excise tax is due and payable. If the Executive makes any payment
with respect to any such excise tax as a result of an adjustment to the
Executive's tax liability by any federal, state or local authority, the Company
will pay such Gross-Up Payment within 30 days after the Executive notifies the
Company of such payment. Without limiting the obligation of the Company
hereunder, the Executive agrees, in the event the Executive makes any payment
pursuant to the preceding sentence, to negotiate with the Company in good faith
with respect to procedures reasonably requested by the Company which would
afford the Company the
11
<PAGE>
ability to contest the imposition of such excise tax; provided, however, that
the Executive will not be required to afford the Company any right to contest
the applicability of any such excise tax to the extent that the Executive
reasonably determines that such contest is inconsistent with the overall tax
interests of the Executive. The Company agrees to hold in confidence and not to
disclose, without the Executive's prior written consent, any information with
regard to the Executive's tax position which the Company obtains pursuant to
this Section 4.5.
Section 4.6: Right to Arbitrate
------------------
The Executive shall have the right, in addition to all other rights and
remedies in law or in equity, at his election, to seek arbitration in Los
Angeles County, California, under the Employment Dispute Resolution Rules of the
American Arbitration Association, in the event of any dispute concerning this
Agreement.
Section 4.7: Attorneys' and Accountants' Fees
--------------------------------
The Company shall pay to the Executive all legal and accounting expenses
and fees incurred by Executive in seeking to obtain or enforce any right or
benefit provided by this Agreement after a Change in Control of the Company or
in connection with any tax audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or benefit under this
Agreement, without regard to whether the Executive prevails in obtaining or
enforcing such right
12
<PAGE>
or benefit. The Company shall pay to the Executive any expenses and fees
incurred in any such proceeding promptly after receipt by the Company of a
written notice by the Executive that he has incurred such fees or expenses.
EXECUTED by the parties this 30th day of December, 1996.
R. BRUCE RIESER CALMAT CO.
"Executive" "Company"
/s/ R. BRUCE RIESER By: /s/ A. FREDERICK GERSTELL
- ------------------- --------------------------
Chairman of the Board and
Chief Executive Officer
By: /s/ PAUL STANFORD
------------------
Secretary
13
<PAGE>
EXHIBIT 10.29
SECOND AMENDED AND RESTATED
CALMAT CO.
DEFERRED COMPENSATION PLAN
Effective Date: December 1, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
Purpose................................................................................. 1
ARTICLE 1
Definitions........................................................................ 1
ARTICLE 2
Selection, Enrollment, Eligibility................................................. 9
2.1 Selection by Committee...................................................... 9
2.2 Enrollment Requirements..................................................... 9
2.3 Eligibility; Commencement of Participation.................................. 9
2.4 Termination of Participation and/or Deferrals............................... 9
ARTICLE 3
Deferral Commitments/Company Matching/Interest Crediting/Taxes..................... 10
3.1 Minimum Deferral............................................................ 10
3.2 Maximum Deferral............................................................ 10
3.3 Election to Defer; Effect of Election Form.................................. 11
3.4 Withholding of Annual Deferral Amounts...................................... 11
3.5 Annual Company Amount....................................................... 11
3.6 Vested Company Account...................................................... 12
3.7 Interest Crediting Prior to Distribution.................................... 13
3.8 Interest Crediting for Installment Distributions............................ 13
3.9 FICA, Withholding and Other Taxes........................................... 14
ARTICLE 4
Short-Term Payout; Unforeseeable Financial Emergencies; Withdrawal Election........ 14
4.1 Short-Term Payout........................................................... 14
4.2 Other Benefits Take Precedence Over Short-Term Payout....................... 14
4.3 Withdrawal Payout/Suspensions for Unforeseeable Financial Emergencies....... 14
4.4 Withdrawal Election......................................................... 15
ARTICLE 5
Retirement Benefit................................................................. 15
5.1 Retirement Benefit.......................................................... 15
5.2 Payment of Retirement Benefit............................................... 15
5.3 Death Prior to Completion of Retirement Benefit............................. 16
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
ARTICLE 6
Pre-Retirement Survivor Benefit................................................... 16
6.1 Pre-Retirement Survivor Benefit............................................ 16
6.2 Payment of Pre-Retirement Survivor Benefit................................. 16
ARTICLE 7
Termination Benefit............................................................... 17
7.1 Termination Benefit........................................................ 17
7.2 Payment of Termination Benefit............................................. 17
ARTICLE 8
Disability Waiver and Benefit..................................................... 17
8.1 Disability Waiver.......................................................... 17
8.2 Continued Eligibility; Disability Benefit.................................. 18
ARTICLE 9
Beneficiary Designation........................................................... 18
9.1 Beneficiary................................................................ 18
9.2 Beneficiary Designation; Change; Spousal Consent........................... 19
9.3 Acknowledgment............................................................. 19
9.4 No Beneficiary Designation................................................. 19
9.5 Doubt as to Beneficiary.................................................... 19
9.6 Discharge of Obligations................................................... 19
ARTICLE 10
Leave of Absence.................................................................. 20
10.1 Paid Leave of Absence...................................................... 20
10.2 Unpaid Leave of Absence.................................................... 20
ARTICLE 11
Termination, Amendment or Modification............................................ 20
11.1 Termination................................................................ 20
11.2 Amendment.................................................................. 21
11.3 Plan Agreement............................................................. 21
11.4 Interest Rate and Vesting in the Event of a Change in Control.............. 21
11.5 Effect of Payment.......................................................... 22
ARTICLE 12
Administration.................................................................... 22
12.1 Committee Duties........................................................... 22
12.2 Agents..................................................................... 22
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
12.3 Binding Effect of Decisions................................................. 22
12.4 Indemnity of Committee...................................................... 22
12.5 Employer Information........................................................ 23
ARTICLE 13
Other Benefits and Agreements...................................................... 23
13.1 Coordination with Other Benefits............................................. 23
ARTICLE 14
Claims Procedures.................................................................. 23
14.1 Presentation of Claim....................................................... 23
14.2 Notification of Decision.................................................... 23
14.3 Review of a Denied Claim.................................................... 24
14.4 Decision on Review.......................................................... 24
14.5 Legal Action................................................................ 25
ARTICLE 15
Trusts............................................................................. 25
15.1 Establishment of the Trusts................................................. 25
15.2 Interrelationship of the Plan and the Trusts................................ 25
15.3 Distributions From the Trusts............................................... 25
ARTICLE 16
Miscellaneous...................................................................... 25
16.1 Unsecured General Creditor.................................................. 25
16.2 Employer's Liability........................................................ 25
16.3 Nonassignability............................................................ 26
16.4 Not a Contract of Employment................................................ 26
16.5 Furnishing Information...................................................... 26
16.6 Terms....................................................................... 26
16.7 Captions.................................................................... 26
16.8 Governing Law............................................................... 27
16.9 Notice...................................................................... 27
16.10 Successors.................................................................. 27
16.11 Spouse's Interest........................................................... 27
16.12 Validity.................................................................... 27
16.13 Incompetent................................................................. 27
16.14 Court Order................................................................. 28
16.15 Distribution in the Event of Taxation....................................... 28
</TABLE>
-iii-
<PAGE>
SECOND AMENDED AND RESTATED
CALMAT CO.
DEFERRED COMPENSATION PLAN
Effective Date: December 1, 1996
PURPOSE
-------
The purpose of this Plan is to provide specified benefits to a select
group of management or highly compensated Employees who contribute materially to
the continued growth, development and future business success of CALMAT CO., a
Delaware corporation, and its subsidiaries, if any, that sponsor this Plan.
This Plan shall be unfunded for tax purposes and for purposes of Title I of
ERISA.
RECITALS
--------
A. The Company established a phantom 401(k) plan on April 1, 1987,
which was amended and restated as that certain "Non-Qualified Deferred
Compensation Plan for Selected Executives of CalMat Co." as of January 1, 1989,
which was, in turn, amended pursuant to that certain "First Amendment to
Nonqualified Deferred Compensation Plan for Selected Executives of CalMat Co."
dated April 2, 1993 (the "Original Deferred Compensation Plan")(the 1989 plan
with amendment is attached hereto as Exhibit A).
B. The Company desires to amend and restate the Original Deferred
Compensation Plan in its entirety in order to provide for additional benefits
and expanded coverage from that of the Original Deferred Compensation Plan.
NOW, THEREFORE the parties do hereby agree to amend and restate the
Original Deferred Compensation Plan to read as follows:
ARTICLE 1
DEFINITIONS
-----------
For purposes hereof, unless otherwise clearly apparent from the
context, the following phrases or terms shall have the following indicated
meanings:
-1-
<PAGE>
1.1 "Account Balance" shall mean, with respect to Participant, the sum of
(i) the Deferral Account plus (ii) the Vested Company Account. This
account shall be a bookkeeping entry only and shall be utilized solely
as a device for the measurement and determination of the amounts to be
paid to a Participant pursuant to this Plan.
1.2 "Annual Bonus" shall mean any cash compensation, other than Base
Annual Salary, relating to services performed during a Plan Year,
whether or not paid in such Plan Year, payable to a Participant as an
Employee under any Employer's annual bonus and/or incentive plans.
1.3 "Annual Company Amount" for any one Plan Year shall be the amount
determined in accordance with Section 3.5. Annual Company Amount
shall include the annual amounts credited to the Participant under
Section 1(b) of the Original Deferred Compensation Plan.
1.4 "Annual Deferral Amount" shall mean that portion of a Participant's
Base Annual Salary and/or Annual Bonus that a Participant elects to
have, and is deferred, in accordance with Article 3, for any one Plan
Year. In the event of a Participant's Retirement, Disability (if
deferrals cease in accordance with Section 8.1), death or a
Termination of Employment prior to the end of a Plan Year, such year's
Annual Deferral Amount shall be the actual amount withheld prior to
such event. Annual Deferral Amount shall include annual amounts
deferred under Section 1(a) of the Original Deferred Compensation
Plan.
1.5 "Base Annual Salary" shall mean the annual compensation relating to
services performed during any Plan Year, whether or not paid in such
Plan Year, excluding bonuses, commissions, overtime, relocation
expenses, incentive payments, non-monetary awards, fringe benefits,
retainers, directors fees and other fees, severance allowances, pay in
lieu of vacations, insurance premiums paid by an Employer, insurance
benefits paid to the Participant or his or her beneficiary, Employer
contributions to qualified or nonqualified plans, automobile and other
allowances paid to a Participant for employment services rendered
(whether or not such allowances are included in the Employee's gross
income). Base Annual Salary shall be calculated before reduction for
compensation voluntarily deferred or contributed by the Participant
pursuant to all qualified or non-qualified plans and shall be
calculated to include amounts not otherwise included in the
Participant's gross income under Code Sections 125, 402(e)(3), 402(h),
or 403(b) pursuant to plans established by any Employer; provided
however that all such amounts will be included in compensation only to
the extent that, had there been no such plan, the amount would have
been payable in cash to the Employee.
-2-
<PAGE>
1.6 "Beneficiary" shall mean one or more persons, trusts, estates or other
entities, designated in accordance with Article 9, that are entitled
to receive benefits under this Plan upon the death of a Participant.
1.7 "Beneficiary Designation Form" shall mean the form, established from
time to time by the Committee, that a Participant completes, signs and
returns to the Committee to designate one or more Beneficiaries.
1.8 "Board" shall mean the board of directors of the Company.
1.9 "Bonus Rate" shall mean, for a Plan Year, an interest rate, if any,
determined by the Committee, in its sole discretion, which rate shall
be determined and announced before the commencement of the Plan Year
for which the rate applies. This rate may be zero for any Plan Year.
1.1 "Change in Control" shall mean the first to occur of any of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)
of the Securities Exchange Act of 1934 ("Exchange Act")), other than a
trustee or other fiduciary holding securities under an employee
benefit plan of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of 25% or more of the Company's then outstanding voting securities
carrying the right to vote in elections of persons to the Board; or
(ii) during any period of two consecutive years, individuals who at
the beginning of such period constitute the Board and any new director
(other than a director elected or designated in connection with an
actual or threatened election contest relating to the election of the
directors of the Company, as such terms are used in Rule 14A-11 of
Regulation 14A under the Exchange Act) whose election by the Board or
nomination for election by the Company's stockholders was approved by
a vote of at least two-thirds of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved
(collectively, the "Incumbent Board"), cease for any reason to
constitute a majority thereof;
(iii) the holders of the securities of the Company entitled to vote
thereon approve (a) a merger or consolidation of the Company with any
other corporation regardless of which entity is the surviving company,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80%
of the voting
-3-
<PAGE>
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (b) a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets; or
(iv) any other event shall have occurred that would be required to
be reported in response to Item 6(e) (or any successor provision) of
Schedule 14A of Regulation 14A promulgated under the Exchange Act.
Notwithstanding the foregoing, the Incumbent Board shall have the
power, in its sole discretion, to determine that any transaction or
series of transactions that would otherwise be a Change in Control
under the foregoing clauses (i), (ii), (iii) or (iv), is not a Change
in Control for purposes of this Plan, and if, and only if, the
Incumbent Board makes such a determination prior to such Change in
Control, then for all purposes under this Plan such transaction or
series of transactions shall not be a Change in Control.
1.11 "Claimant" shall have the meaning set forth in Section 14.1.
1.12 "Code" shall mean the Internal Revenue Code of 1986, as may be amended
from time to time.
1.13 "Committee" shall mean the committee described in Article 12.
1.14 "Company" shall mean CalMat Co., a Delaware corporation.
1.15 "Company Account" shall mean the sum of all of a Participant's Annual
Company Amounts plus interest credited in accordance with all the
applicable interest crediting provisions of this Plan, less all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Company Account. This
account shall be a bookkeeping entry only and shall be utilized solely
as a device for the measurement and determination of the amounts to be
paid to the Participant pursuant to this Plan.
1.16 "Crediting Rate" shall mean, for each Plan Year after the Effective
Date other than the first Plan Year after the Effective Date, an
interest rate, stated as an annual rate, determined and announced by
the Committee before the Plan Year for which it is to be used that is
equal to the "Moody's Rate." The "Moody's Rate" for a Plan Year shall
be an interest rate, stated as an annual rate, that is published in
Moody's Bond Record under the heading of "Moody's Corporate Bond Yield
Averages -- Av. Corp" (or any successor to this published rate), for
the September prior to the
-4-
<PAGE>
commencement of the Plan Year for which the rate is to be used. For
the first Plan Year after the Effective Date, the Crediting Rate shall
continue to be the crediting rate being used under the Original
Deferred Compensation Plan.
1.17 "Deferral Account" shall mean the sum of all of a Participant's Annual
Deferral Amounts, plus interest credited in accordance with all the
applicable interest crediting provisions of this Plan, less all
distributions made to the Participant or his or her Beneficiary
pursuant to this Plan that relate to his or her Deferral Account. This
account shall be a bookkeeping entry only and shall be utilized solely
as a device for the measurement and determination of the amounts to be
paid to the Participant pursuant to this Plan.
1.18 "Deduction Limitation" shall mean the following described limitation
on a benefit that may otherwise be distributable pursuant to the
provisions of this Plan. Except as otherwise provided, this
limitation shall be applied to all distributions that are "subject to
the Deduction Limitation" under this Plan. If an Employer determines
in good faith prior to a Change in Control that there is a reasonable
likelihood that any compensation paid to a Participant for a taxable
year of the Employer would not be deductible by the Employer solely by
reason of the limitation under Code Section 162(m), then to the extent
deemed necessary by the Employer to ensure that the entire amount of
any distribution to the Participant pursuant to this Plan prior to the
Change in Control is deductible, the Employer may defer all or any
portion of a distribution under this Plan. Any amounts deferred
pursuant to this limitation shall be credited with interest in
accordance with Section 3.7 below, even if such amount is being paid
out in installments. The amounts so deferred and interest thereon
shall be distributed to the Participant or his or her Beneficiary (in
the event of the Participant's death) at the earliest possible date,
as determined by the Employer in good faith, on which the
deductibility of compensation paid or payable to the Participant for
the taxable year of the Employer during which the distribution is made
will not be limited by Section 162(m), or if earlier, the effective
date of a Change in Control. Notwithstanding anything to the contrary
in this Plan, the Deduction Limitation shall not apply to any
distributions made after a Change in Control.
1.19 "Disability" shall mean a period of disability during which a
Participant qualifies for disability benefits under the Participant's
Employer's group long-term disability plan, or, if a Participant does
not participate in such a plan, a period of disability during which
the Participant would have qualified for disability benefits under
such a plan had the Participant been a participant in such a plan. If
the Participant's Employer does not sponsor such a plan, or
discontinues to sponsor such a plan, Disability shall be determined by
the Committee in its reasonable discretion.
-5-
<PAGE>
1.20 "Disability Benefit" shall mean the benefit set forth in Article 8.
1.21 "Effective Date" shall mean the effective date of this Plan amendment
and restatement, which shall be December 1, 1996.
1.22 "Election Form" shall mean the form established from time to time by
the Committee that a Participant completes, signs and returns to the
Committee to make an election under the Plan.
1.23 "Employee" shall mean a person who is an employee of any Employer.
1.24 "Employer(s)" shall mean the Company and/or any of its subsidiaries
(now in existence or hereafter formed or acquired) that have been
selected by the Board to participate in the Plan and have adopted the
Plan.
1.25 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
1.26 "Hours of Service" shall mean the following:
(a) Each hour for which a Participant is paid or entitled to payment
by an Employer for the performance of services as an employee as
the term is defined in Code Section 3121(d);
(b) Each hour in or attributable to a period of time during which a
Participant performs no duties due to a vacation, holiday,
illness, incapacity (including disability), layoff, jury duty,
military duty or a leave of absence for which he is so paid or so
entitled to payment by an Employer; provided, however, that:
(i) no more than five hundred and one Hours of Service shall
be credited under this subsection (b) to a Participant on
account of any such period; and
(ii) no such hours shall be credited to a Participant if
attributable to payments made or due under a plan
maintained solely for the purpose of complying with
applicable workers' compensation, unemployment
compensation or disability insurance laws or to a payment
which solely reimburses the Participant for medical or
medically related expenses incurred by him;
-6-
<PAGE>
(c) Each hour for which a Participant is entitled to back pay,
irrespective of mitigation of damages, whether awarded or agreed
to by an Employer; and
(d) Each hour while on an unpaid leave pursuant to the Family and
Medical Leave Act of 1993 for which the Participant would have
been paid or entitled to payment by an Employer had he or she
been performing services.
Hours of Service under subsections (b) and (c) shall be calculated in
accordance with 29 C.F.R. (S)2530.20ob-2(b). Each Hour of Service
shall be attributed to the year or other computation period in which
it occurs except to the extent that the Employer, in accordance with
29 C.F.R. (S) 2530.200b-2(c), credits such Hour to another computation
period under a reasonable method consistently applied.
Hours of Service of a Participant shall be determined by the Committee
from reasonably accessible records by means of appropriate
calculations and approximations or, if such records are insufficient
to make an appropriate determination, by reasonable estimation.
1.27 "Master Trust" shall mean the trust established pursuant to that
certain Master Trust Agreement, dated as of December 1, 1996 between
the Company and Wachovia Bank of North Carolina N.A., as amended from
time to time.
1.28 "Participant" shall mean any Employee (i) who is selected to
participate in the Plan, (ii) who elects to participate in the Plan,
(iii) who signs a Plan Agreement, an Election Form and a Beneficiary
Designation Form, (iv) whose signed Plan Agreement, Election Form and
Beneficiary Designation Form are accepted by the Committee or the
Employer, and (v) whose Plan Agreement has not terminated. A spouse
or former spouse of a Participant shall not be treated as a
Participant in the Plan, even if he or she has an interest in the
Participant's benefits under the Plan under applicable law or as a
result of property settlements resulting from legal separation or
divorce.
1.29 "Plan" shall mean the Company's Second Amended and Restated Deferred
Compensation Plan, which shall be evidenced by this instrument and by
each Plan Agreement, as may be amended from time to time.
1.30 "Plan Agreement" shall mean a written agreement, as may be amended
from time to time, which is entered into by and between an Employer
and a Participant. The terms of any Plan Agreement may vary any of
the terms set forth in this Plan and such changes shall be binding on
the Employer and Participant if the Plan Agreement is signed by the
Participant and accepted by the Committee or his or her Employer. The
-7-
<PAGE>
Plan Agreement executed by a Participant and accepted by the Committee
or the Employer shall provide for the entire benefit to which such
Participant is entitled under the Plan; should there be more than one
Plan Agreement, the Plan Agreement bearing the latest date of
acceptance by the Committee or the Employer shall supersede all
previous Plan Agreements in their entirety and shall govern the
agreement between the parties.
1.31 "Plan Year" shall, for the first Plan Year after the Effective Date,
begin on December 1, 1996, and end on December 31, 1996. For each
Plan Year thereafter, the Plan year shall begin on January 1 of each
year and continue through December 31.
1.32 "Preferred Rate" shall mean, for each Plan Year, an interest rate that
is the sum of the Crediting Rate and the Bonus Rate for that Plan
Year.
1.33 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in
Article 6.
1.34 "Qualified Plan" shall mean The Thrift and Profit-Sharing Retirement
Plan and The Money Purchase Pension Plan For Employees of CalMat Co.
as amended and restated as of November 23, 1994 and subsequently
amended as recently as October 24, 1995, as amended from time to time.
1.35 "Retirement", "Retires" or "Retired" shall mean, with respect to an
Employee, severance from employment from all Employers for any reason
other than a leave of absence, death or Disability on or after age
fifty-five (55).
1.36 "Retirement Benefit" shall mean the benefit set forth in Article 5.
1.37 "Short-Term Payout" shall mean the payout set forth in Section 4.1.
1.38 "Termination Benefit" shall mean the benefit set forth in Article 7.
1.39 "Termination of Employment" shall mean the ceasing of employment with
all Employers, voluntarily or involuntarily, for any reason other than
Retirement, Disability, death or an authorized leave of absence.
1.40 "Trust(s)" shall mean (i) the Master Trust; and/or (ii) that certain
Trust Agreement between the Company and Wachovia Bank and Trust
Company dated March 1, 1991, as amended from time to time, as the case
may be.
1.41 "Unforeseeable Financial Emergency" shall mean an unanticipated
emergency that is caused by an event beyond the control of the
Participant that would result in severe
-8-
<PAGE>
financial hardship to the Participant resulting from (i) a sudden and
unexpected illness or accident of the Participant or a dependent of
the Participant, (ii) a loss of the Participant's property due to
casualty, or (iii) such other extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant, all as determined in the sole discretion of the
Committee.
1.42 "Vested Company Account" shall have the meaning set forth in Section
3.6.
1.41 "Years of Vesting Service" shall mean the total number of calendar
years in which a Participant has been employed by one or more
Employers and completed at least one thousand Hours of Service.
ARTICLE 2
SELECTION, ENROLLMENT, ELIGIBILITY
----------------------------------
2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to
----------------------
a select group of management and/or highly compensated Employees of
the Employers, as determined by the Committee in its sole discretion.
From that group, the Committee shall select, in its sole discretion,
Employees to participate in the Plan.
2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each
-----------------------
selected Employee shall complete, execute and return to the Committee,
within 30 days of selection, a Plan Agreement, an Election Form and a
Beneficiary Designation Form.
2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee
------------------------------------------
selected to participate in the Plan has met all enrollment
requirements set forth in this Plan and required by the Committee,
including returning all required documents to the Committee within 30
days of selection, that Employee shall commence participation in the
Plan on the first day of the month following the month in which the
Employee completes all enrollment requirements. If an Employee fails
to meet all such requirements within the required 30 day period, that
Employee shall not be eligible to participate in the Plan until the
first day of the Plan Year following the delivery to and acceptance by
the Committee of the required documents.
2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee
---------------------------------------------
determines in good faith that a Participant no longer qualifies as a
member of a select group of management or highly compensated
employees, as membership in such group is determined in accordance
with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee
shall have the right, in its sole discretion, to (i) terminate any
deferral election the Participant has made for the Plan Year in which
the Participant's
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<PAGE>
membership status changes, (ii) prevent the Participant from making
future deferral elections and/or (iii) immediately distribute the
Participant's then Account Balance as a Termination Benefit and
terminate the Participant's participation in the Plan. If the
Committee chooses not to terminate the Participant's participation in
the Plan, the Committee may, in its sole discretion, reinstate the
Participant to full Plan participation at such time in the future as
the Participant again becomes a member of the select group described
above.
ARTICLE 3
DEFERRAL COMMITMENTS/COMPANY MATCHING/INTEREST CREDITING/TAXES
--------------------------------------------------------------
3.1 MINIMUM DEFERRAL.
----------------
(a) MINIMUM. For each Plan Year, a Participant may elect to defer,
-------
as his or her Annual Deferral Amount, one or more of the
following forms of compensation in the following minimum amounts
for each deferral elected:
<TABLE>
<CAPTION>
Minimum
Deferral Amount
-------- ------
<S> <C>
Base Annual Salary $2,000
Annual Bonus $2,000
</TABLE>
If an election is made for less than stated minimum amounts, or
if no election is made, the amount deferred shall be zero.
Notwithstanding the above, no Participant shall be permitted to
defer Base Annual Salary under this Plan for the first Plan Year
after the Effective Date. Any deferrals under the Original
Deferred Compensation Plan that relate to Base Annual Salary
earned during the first Plan Year shall continue in accordance
the terms of the Original Deferred Compensation Plan.
(b) SHORT PLAN YEAR. If a Participant first becomes a Participant
---------------
after the first day of a Plan Year, or in the case of the first
Plan Year after the Effective Date, the minimum Base Annual
Salary deferral shall be an amount equal to the minimum set forth
above, multiplied by a fraction, the numerator of which is the
number of complete months remaining in the Plan Year and the
denominator of which is 12.
3.2 MAXIMUM DEFERRAL. Subject to Section 3.1(a) above, for each Plan
----------------
Year, a Participant may elect to defer, as his or her Annual Deferral
Amount, Base Annual
-10-
<PAGE>
Salary and/or Annual Bonus up to the following maximum percentages
for each deferral elected:
<TABLE>
<CAPTION>
Maximum
Deferral Amount
-------- ------
<S> <C>
Base Annual Salary 50%
Annual Bonus 100%
</TABLE>
3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM.
------------------------------------------
(a) FIRST PLAN YEAR. In connection with a Participant's
---------------
commencement of participation in the Plan and for the Plan Year
immediately after the Effective Date, the Participant shall make
an irrevocable deferral election for the Plan Year, along with
such other elections as the Committee deems necessary or
desirable under the Plan. For these elections to be valid, the
Election Form must be completed and signed by the Participant,
timely delivered to the Committee (in accordance with Section 2.3
above), and accepted by the Committee.
(b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an
---------------------
irrevocable deferral election for that Plan Year, and such other
elections as the Committee deems necessary or desirable under the
Plan, shall be made by timely delivering to the Committee, in
accordance with its rules and procedures, before the end of the
Plan Year preceding the Plan Year for which the election is made,
a new Election Form. If no Election Form is timely delivered for
a Plan Year, no Annual Deferral Amount shall be withheld for that
Plan Year.
3.4 WITHHOLDING OF ANNUAL DEFERRAL AMOUNTS. For each Plan Year, the Base
--------------------------------------
Annual Salary portion of the Annual Deferral Amount shall be withheld
in equal amounts from each regularly scheduled Base Annual Salary
payroll. The Annual Bonus portion of the Annual Deferral Amount shall
be withheld at the time the Annual Bonus is or otherwise would be paid
to the Participant.
3.5 ANNUAL COMPANY AMOUNT. A Participant's Annual Company Amount for any
---------------------
Plan Year shall be equal to the sum of the following:
(a) fifty percent (50%) of the lesser of: (i) the Participant's
Annual Deferral Amount for such Plan Year, or (ii) six percent
(6%) of the Participant's Base Annual Salary for such Plan Year
minus any amount the Participant elected
-11-
<PAGE>
to have contributed to the Company's 401(k) plan for the Plan
Year and on which the Participant received a Company match. In
the event the Participant did not receive a full 50% match under
the 401(k) plan, for purposes of the previous sentence, his or
her contribution shall be adjusted to the dollar amount that
would have been contributed had the Company match provided a full
50% match.
(b) the amount that would have been contributed to the Qualified
Company Contributions Account under the Qualified Plan for the
Plan Year but for (i) the limit on Compensation, (ii) the top-
heavy limits, or (iii) the limits on benefits and contributions,
in the Qualified Plan or the Code.
The Annual Company Amount shall be credited to the Participant's
Company Account as of the first day of the Plan Year following the
Plan Year to which it relates. Notwithstanding the above, if a
Participant is not employed by an Employer as of the last day of a
Plan Year, the Annual Company Amount for such Plan Year shall be zero.
3.6 VESTED COMPANY ACCOUNT. With respect to (i) the Retirement Benefit,
----------------------
if the Participant Retires on or after age sixty-two (62), (ii) the
Pre-Retirement Survivor Benefit, and (iii) the Disability Benefit, a
Participant's Company Account shall be 100% vested. With respect to
(x) the Retirement Benefit, if the Participant Retires before age
sixty-two (62), or (y) the Termination Benefit, except as provided in
Section 11.4, a Participant's Company Account shall vest on the basis
of the Participant's Years of Vesting Service at the time the
Participant Retires or experiences a Termination of Employment, in
accordance with the following schedule:
YEARS OF VESTING SERVICE AT DATE OF VESTED PERCENTAGE OF
RETIREMENT OR TERMINATION OF EMPLOYMENT COMPANY ACCOUNT
Less than 2 years 0%
2 years or more, but less than 3 10%
3 years or more, but less than 4 20%
4 years or more, but less than 5 40%
5 years or more, but less than 6 60%
6 years or more, but less than 7 80%
7 years or more 100%
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<PAGE>
3.7 INTEREST CREDITING PRIOR TO DISTRIBUTION. Prior to any distribution
----------------------------------------
of benefits under Articles 4, 5, 6, 7 or 8, interest shall be credited
and compounded annually on a Participant's Deferral Account as though
the Base Annual Salary for that Plan Year was withheld at the
beginning of the Plan Year or, in the case of the first year of Plan
participation, was withheld on the date that the Participant commenced
participation in the Plan and the Annual Bonus for that Plan Year was
withheld at the beginning of the Plan Year following the Plan Year to
which it relates; provided however, that interest credited on Annual
Deferral Amounts deferred before December 31, 1996 shall be credited
in accordance with the Original Deferred Compensation Plan through
December 31, 1996. Interest shall be credited and compounded annually
on a Participant's Company Account. The Annual Company Amount for a
Plan Year shall be added to the Company Account for purposes of
interest crediting as of the first day of the Plan Year following the
Plan Year to which it relates; provided however, that interest
credited on Annual Company Amounts credited to a Participant's Company
Account before the Effective Date shall be credited in accordance with
the Original Deferred Compensation Plan through December 31, 1996.
The rate of interest for crediting after December 31, 1996 shall be
the Preferred Rate, except as otherwise provided in this Plan, which
rate shall be treated as the nominal rate for crediting interest. The
rate of interest for crediting before December 31, 1996 shall be the
rate set forth in the Original Deferred Compensation Plan. In the
event of Retirement, Disability, death or Termination of Employment
prior to the end of a Plan Year, the basis for that year's interest
crediting will be a fraction of the full year's interest, based on the
number of full months that the Participant was employed with the
Employer during the Plan Year prior to the occurrence of such event.
If a distribution is made under this Plan, for purposes of crediting
interest up to the time of the distribution, the Participant's Account
Balance shall be reduced as of the first day of the month in which the
distribution is made.
3.8 INTEREST CREDITING FOR INSTALLMENT DISTRIBUTIONS. If a Participant's
------------------------------------------------
benefits under this Plan are to be paid in equal monthly installments,
such payments shall be determined by amortizing the Participant's
specified benefit over the number of months elected, using the
interest rate specified below and treating the first installment
payment as all principal and each subsequent installment payment,
first as interest accrued for the applicable installment period on the
unpaid Account Balance and second as a reduction in the Account
Balance. The interest rate to be used to calculate installment
payment amounts shall be a fixed interest rate that is determined by
averaging the Preferred Rates for the Plan Year in which installment
payments commence and the four (4) preceding Plan Years. This rate
shall be treated as the nominal rate for making such calculations. If
a Participant has completed fewer than five (5) Plan Years, this
average shall be determined using the Preferred Rates for the Plan
Years during which the Participant participated in the Plan.
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<PAGE>
3.9 FICA, WITHHOLDING AND OTHER TAXES. For each Plan Year in which an
---------------------------------
Annual Deferral Amount is being withheld or an Annual Company Amount
is credited to a Participant, the Participant's Employer(s) shall
withhold from that portion of the Participant's Base Annual Salary
and/or Annual Bonus that is not being deferred, in a manner determined
by the Employer(s), the Participant's share of FICA and other
employment taxes. If necessary, the Committee shall reduce the Annual
Deferral Amount in order to comply with this Section 3.9. In
addition, the Participant's Employer(s), or the Trust(s), shall
withhold from any payments made to a Participant under this Plan all
federal, state and local income, employment and other taxes required
to be withheld by the Employer(s), or the Trust(s), in connection with
such payments, in amounts and in a manner to be determined in the
reasonable discretion of the Employer(s) or the Trust(s).
ARTICLE 4
SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION
---------------------------------------------------------------------------
4.1 SHORT-TERM PAYOUT. In connection with each election to defer an
-----------------
Annual Deferral Amount, a Participant may elect to receive a future
"Short-Term Payout" from the Plan with respect to that Annual Deferral
Amount. Subject to the Deduction Limitation, the Short-Term Payout
shall be a lump sum payment in an amount that is equal to the Annual
Deferral Amount plus interest credited in the manner provided in
Section 3.7 above on that amount. Subject to the other terms and
conditions of this Plan, each Short-Term Payout elected shall be paid,
subject to the Deduction Limitation, within 60 days of the first day
of the Plan Year that is at least three calendar years after the last
day of the Plan Year to which the Annual Deferral Amount relates. By
way of example, if a Short-Term Payout is elected for amounts that are
deferred in the Plan Year commencing December 1, 1996, the Short-Term
Payout becomes payable within 60 days of January 1, 2000.
4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM PAYOUT. Should an
-----------------------------------------------------
event occur that triggers a benefit under Articles 5, 6, 7 or 8, any
Annual Deferral Amount, plus interest thereon, that is subject to a
Short-Term Payout election under Section 4.1 shall not be paid in
accordance with Section 4.1 but shall be paid in accordance with the
other applicable Article.
4.3 WITHDRAWAL PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES.
---------------------------------------------------------------------
If the Participant experiences an Unforeseeable Financial Emergency,
the Participant may petition the Committee to (i) suspend any
deferrals required to be made by a Participant and/or (ii) receive a
partial or full payout from the Plan. The payout shall not exceed the
lesser of the Participant's Account Balance, calculated as if such
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<PAGE>
Participant were receiving a Termination Benefit, or the amount
reasonably needed to satisfy the Unforeseeable Financial Emergency.
If, subject to the sole discretion of the Committee, the petition for
a suspension and/or payout is approved, suspension shall take effect
upon the date of approval and any payout shall be made within 60 days
of the date of approval. The payment of any amount under this Section
4.2 shall not be subject to the Deduction Limitation.
4.4 WITHDRAWAL ELECTION. A Participant may elect, at any time, to
-------------------
withdraw all of his or her Account Balance, less a withdrawal penalty
equal to 10% of such amount (the net amount shall be referred to as
the "Withdrawal Amount"). This election can be made at any time,
before or after Retirement, Disability, death or Termination of
Employment, and whether or not the Participant (or Beneficiary) is in
the process of being paid pursuant to an installment payment schedule.
In the event the election is made before Retirement, Disability, death
or Termination of Employment, a Participant's Account Balance shall be
calculated as if there had occurred a Termination of Employment as of
the day of the election, in the case of withdrawal before the
Participant would be considered to have Retired had he or she
terminated employment as of the day of the election, or as if the
Participant had Retired as of the day of the election, in the case of
withdrawal after the Participant would be considered to have Retired
had he or she terminated employment as of the day of the election. In
the case of Disability, the Account Balance shall be calculated in
accordance with Section 8.2, as if the Committee had deemed the
Participant to have terminated his or her employment. No partial
withdrawals of the Withdrawal Amount shall be allowed. The
Participant shall make this election by giving the Committee advance
written notice of the election in a form determined from time to time
by the Committee. The Participant shall be paid the Withdrawal Amount
within 60 days of his or her election. Once the Withdrawal Amount is
paid, the Participant's participation in the Plan shall terminate and
the Participant shall not be eligible to participate in the Plan in
the future. The payment of this Withdrawal Amount shall not be
subject to the Deduction Limitation.
ARTICLE 5
RETIREMENT BENEFIT
------------------
5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a
------------------
Participant who Retires shall receive, as a Retirement Benefit, his or
her Account Balance.
5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his
-----------------------------
or her commencement of participation in the Plan, shall elect on an
Election Form to receive the Retirement Benefit in a lump sum or in
equal monthly payments (the
-15-
<PAGE>
latter determined in accordance with Section 3.8 above) over a period
of 60, 120 or 180 months. The Participant may annually change his or
her election to an allowable alternative payout period by submitting a
new Election Form to the Committee, provided that any such Election
Form is submitted at least one year prior to the Participant's
Retirement. The Election Form most recently submitted to the
Committee shall govern the payout of the Retirement Benefit. If a
Participant does not make any election with respect to the payment of
the Retirement Benefit, such benefit shall be payable in a lump sum.
The lump sum payment shall be made, or installment payments shall
commence, no later than 60 days after the date the Participant
Retires. Any payment made shall be subject to the Deduction
Limitation.
5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant
-----------------------------------------------
dies after Retirement but before the Retirement Benefit is paid in
full, the Participant's unpaid Retirement Benefit payments shall
continue and shall be paid to the Participant's Beneficiary (a) over
the remaining number of months and in the same amounts as that benefit
would have been paid to the Participant had the Participant survived,
or (b) in a lump sum, if requested by the Beneficiary and allowed in
the sole discretion of the Committee, that is equal to the
Participant's unpaid remaining Account Balance.
ARTICLE 6
PRE-RETIREMENT SURVIVOR BENEFIT
-------------------------------
6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation,
-------------------------------
and except as provided in Section 6.3 below, the Participant's
Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to
the Participant's Account Balance if the Participant dies before he or
she Retires, experiences a Termination of Employment or suffers a
Disability.
6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant, in
------------------------------------------
connection with his or her commencement of participation in the Plan,
shall elect on an Election Form whether the Pre-Retirement Survivor
Benefit shall be received by his or her Beneficiary in a lump sum or
in equal monthly payments (the latter determined in accordance with
Section 3.8 above) over a period of 60, 120 or 180 months. The
Participant may annually change this election to an allowable
alternative payout period by submitting a new Election Form to the
Committee. The Election Form most recently submitted by the Committee
prior to the Participant's death shall govern the payout of the
Participant's Pre-Retirement Survivor Benefit. If a Participant does
not make any election with respect to the payment of the Pre-
Retirement Survivor Benefit, such benefit shall be paid in a lump sum.
Despite the foregoing, if the Participant's Account Balance at the
time of his or her death is less
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<PAGE>
than $25,000, payment of the Pre-Retirement Survivor Benefit may be
made, in the sole discretion of the Committee, in a lump sum or in
monthly installment payments that do not exceed five years in
duration. The lump sum payment shall be made, or installment payments
shall commence, no later than 60 days after the date the Committee is
provided with proof that is satisfactory to the Committee of the
Participant's death. Any payment made shall be subject to the
Deduction Limitation.
ARTICLE 7
TERMINATION BENEFIT
-------------------
7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation and Section
-------------------
11.4, the Participant shall receive a Termination Benefit, which shall
be equal to the Participant's Account Balance, with interest credited
in the manner provided in Section 3.7 above, but using the applicable
interest rate set forth in the following schedule for interest
credited after the Effective Date, if a Participant experiences a
Termination of Employment prior to his or her Retirement, death or
Disability:
COMPLETION OF YEARS OF VESTING SERVICE APPLICABLE RATE
Less than five years Crediting Rate
five years or more Preferred Rate
7.2 PAYMENT OF TERMINATION BENEFIT. The Termination Benefit shall be paid
------------------------------
in a lump sum within 60 days of the Termination of Employment. Any
payment made shall be subject to the Deduction Limitation.
ARTICLE 8
DISABILITY WAIVER AND BENEFIT
-----------------------------
8.1 DISABILITY WAIVER.
-----------------
(a) WAIVER OF DEFERRAL. A Participant who is determined by the
------------------
Committee to be suffering from a Disability shall be excused from
fulfilling that portion of the Annual Deferral Amount commitment
that would otherwise have been withheld from a Participant's Base
Annual Salary and/or Annual Bonus for the Plan Year during which
the Participant first suffers a Disability. During the period of
Disability, the Participant shall not be allowed to make any
additional deferral elections, but will continue to be considered
a Participant for all other purposes of this Plan.
-17-
<PAGE>
(b) RETURN TO WORK. If a Participant returns to employment with an
--------------
Employer after a Disability ceases, the Participant may elect to
defer an Annual Deferral Amount for the Plan Year following his
or her return to employment or service and for every Plan Year
thereafter while a Participant in the Plan; provided such
deferral elections are otherwise allowed and an Election Form is
delivered to and accepted by the Committee for each such election
in accordance with Section 3.3 above.
8.2 CONTINUED ELIGIBILITY; DISABILITY BENEFIT. A Participant suffering a
-----------------------------------------
Disability shall, for benefit purposes under this Plan, continue to be
considered to be employed and shall be eligible for the benefits
provided for in Articles 4, 5, 6 or 7 in accordance with the
provisions of those Articles. Notwithstanding the above, the Committee
shall have the right, in its reasonable discretion and for purposes of
this Plan only, and must in the case of a Participant who is otherwise
eligible to Retire, to deem the Participant to have terminated his or
her employment at any time (or in the case of a Participant who is
eligible to Retire, as soon as practicable) after such Participant is
determined to be permanently disabled (i) under the Participant
Employer's group long-term disability plan (or would have been
determined to be permanently disabled had he or she participated in
that plan), or (ii) if such a plan does not exist, by the Committee in
its sole discretion, in which case the Participant shall receive a
Disability Benefit equal to his or her Account Balance at the time of
the Committee's determination (calculated at the Preferred Rate even
if this would not be the case if Termination of Employment occurred as
of the date of the Committee's determination). The Disability Benefit
shall be paid in a lump sum within 60 days of the Committee's exercise
of such right; provided however, that should the Participant otherwise
have been eligible to Retire, he or she shall be paid in accordance
with Article 5. Any payment made shall be subject to the Deduction
Limitation.
ARTICLE 9
BENEFICIARY DESIGNATION
-----------------------
9.1 BENEFICIARY. Each Participant shall have the right, at any time, to
-----------
designate his or her Beneficiary(ies) (both primary as well as
contingent) to receive any benefits payable under the Plan to a
beneficiary upon the death of a Participant. The Beneficiary
designated under this Plan may be the same as or different from the
Beneficiary designation under any other plan of an Employer in which
the Participant participates.
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<PAGE>
9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall
------------------------------------------------
designate his or her Beneficiary by completing and signing the
Beneficiary Designation Form, and returning it to the Committee or its
designated agent. A Participant shall have the right to change a
Beneficiary by completing, signing and otherwise complying with the
terms of the Beneficiary Designation Form and the Committee's rules
and procedures, as in effect from time to time. If the Participant
names someone other than his or her spouse as a Beneficiary, a spousal
consent, in the form designated by the Committee, must be signed by
that Participant's spouse and returned to the Committee. Upon the
acceptance by the Committee of a new Beneficiary Designation Form, all
Beneficiary designations previously filed shall be cancelled. The
Committee shall be entitled to rely on the last Beneficiary
Designation Form filed by the Participant and accepted by the
Committee prior to his or her death.
9.3 ACKNOWLEDGMENT. No designation or change in designation of a
--------------
Beneficiary shall be effective until received, accepted and
acknowledged in writing by the Committee or its designated agent.
9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a
--------------------------
Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all
designated Beneficiaries predecease the Participant or die prior to
complete distribution of the Participant's benefits, then the
Participant's designated Beneficiary shall be deemed to be his or her
surviving spouse. If the Participant has no surviving spouse, the
benefits remaining under the Plan to be paid to a Beneficiary shall be
payable to the executor or personal representative of the
Participant's estate.
9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the
-----------------------
proper Beneficiary to receive payments pursuant to this Plan, the
Committee shall have the right, exercisable in its discretion, to
cause the Participant's Employer to withhold such payments until this
matter is resolved to the Committee's satisfaction.
9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a
------------------------
Beneficiary shall fully and completely discharge all Employers and the
Committee from all further obligations under this Plan with respect to
the Participant, and that Participant's Plan Agreement shall terminate
upon such full payment of benefits.
ARTICLE 10
LEAVE OF ABSENCE
----------------
10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the
---------------------
Participant's Employer for any reason to take a paid leave of absence
from the employment of the Employer,
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<PAGE>
the Participant shall continue to be considered employed by the
Employer and the Annual Deferral Amount shall continue to be withheld
during such paid leave of absence in accordance with Section 3.3.
10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the
-----------------------
Participant's Employer for any reason to take an unpaid leave of
absence from the employment of the Employer, the Participant shall
continue to be considered employed by the Employer and the Participant
shall be excused from making deferrals until the earlier of the date
the leave of absence expires or the Participant returns to a paid
employment status. Upon such expiration or return, deferrals shall
resume for the remaining portion of the Plan Year in which the
expiration or return occurs, based on the deferral election, if any,
made for that Plan Year. If no election was made for that Plan Year,
no deferral shall be withheld.
ARTICLE 11
TERMINATION, AMENDMENT OR MODIFICATION
--------------------------------------
11.1 TERMINATION. Each Employer reserves the right to terminate the Plan
-----------
at any time with respect to any or all of its participating Employees
by the actions its board of directors. Upon the termination of the
Plan with respect to any Employer, the Plan Agreements of the affected
Participants who are employed by that Employer shall terminate and
their Account Balances, determined as if they had experienced a
Termination of Employment on the date of Plan termination or, if Plan
termination occurs after the date upon which a Participant was
eligible to Retire, then with respect to that Participant as if he or
she had Retired on the date of Plan termination, shall be paid to the
Participants as follows: Prior to a Change in Control, if the Plan is
terminated with respect to all of its Participants, an Employer shall
have the right, in its sole discretion, and notwithstanding any
elections made by the Participant, to pay such benefits in a lump sum
or in monthly installments for up to sixty (60) months, with interest
credited during the installment period as provided in Section 3.8. If
the Plan is terminated with respect to less than all of its
Participants, an Employer shall be required to pay such benefits in a
lump sum. After a Change in Control, the Employer shall be required
to pay such benefits in a lump sum. The termination of the Plan shall
not adversely affect any Participant or Beneficiary who has become
entitled to the payment of any benefits under the Plan as of the date
of termination; provided however, that the Employer shall have the
right to accelerate installment payments by paying the present value
equivalent of such payments, using the "Federal short-term rate"
defined under Code Section 1274(d)(1)(A) (the "Short-term Applicable
Federal Rate") for the month in which the termination occurs as the
discount rate, in a lump sum or pursuant to a different payment
schedule
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<PAGE>
(provided that the present value of all payments that will have been
received by a Participant at any given point in time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under
the original payment schedule).
11.2 AMENDMENT. Any Employer may, at any time, amend or modify the Plan in
---------
whole or in part with respect to that Employer by the actions of its
board of directors or the Committee; provided, however, that no
amendment or modification shall be effective to decrease or restrict
the value of a Participant's Account Balance in existence at the time
the amendment or modification is made, calculated as if the
Participant had experienced a Termination of Employment as of the
effective date of the amendment or modification, or, if the amendment
or modification occurs after the date upon which the Participant was
eligible to Retire, the Participant had Retired as of the effective
date of the amendment or modification. (An amendment or modification
that changes available payment options before a Participant has become
entitled to the payment of benefits under the Plan shall not be
considered an amendment or modification that decreases or restricts
the value of a Participant's Account Balance for purposes of this
Section.) The amendment or modification of the Plan shall not affect
any Participant or Beneficiary who has become entitled to the payment
of benefits under the Plan as of the date of the amendment or
modification; provided, however, that the Employer shall have the
right to accelerate installment payments by paying the present value
equivalent of such payments, using the Short-term Applicable Federal
Rate for the month of the amendment or modification as the discount
rate, in a lump sum or pursuant to a different payment schedule
(provided that the present value of all payments that will have been
received by a Participant at any given point in time under the
different payment schedule shall equal or exceed the present value of
all payments that would have been received at that point in time under
the original payment schedule).
11.3 PLAN AGREEMENT. Despite the provisions of Sections 11.1 and 11.2
--------------
above, if a Participant's Plan Agreement contains benefits or
limitations that are not in this Plan document, the Employer may only
amend or terminate such provisions with the consent of the
Participant.
11.4 INTEREST RATE AND VESTING IN THE EVENT OF A CHANGE IN CONTROL. If a
-------------------------------------------------------------
Change in Control occurs, the applicable interest rate to be used in
determining a Participant's benefit in connection with a Termination
of Employment after the Change in Control, or a Plan termination,
amendment or modification under Sections 11.1 and 11.2, shall be the
Preferred Rate. However, the Short-term Applicable Federal Rate for
the applicable month shall continue to be used as the discount rate
for determining present value. In addition, if a Change in Control
occurs, a Participant's Company
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<PAGE>
Account shall become 100% vested for purposes of determining his or
her Termination Benefit, regardless of the number of Years of Vesting
Service he or she has completed.
11.5 EFFECT OF PAYMENT. The full payment of the applicable benefit under
-----------------
Section 4.4 or Articles 5, 6, 7 or 8 of the Plan shall completely
discharge all obligations to a Participant and his or her designated
Beneficiaries under this Plan and the Participant's Plan Agreement
shall terminate.
ARTICLE 12
ADMINISTRATION
--------------
12.1 COMMITTEE DUTIES. This Plan shall be administered by a Committee
----------------
which shall consist of the Board, or such committee as the Board shall
appoint. Members of the Committee may be Participants under this Plan.
The Committee shall also have the discretion and authority to (i)
make, amend, interpret, and enforce all appropriate rules and
regulations for the administration of this Plan and (ii) decide or
resolve any and all questions including interpretations of this Plan,
as may arise in connection with the Plan.
12.2 AGENTS. In the administration of this Plan, the Committee may, from
------
time to time, employ agents and delegate to them such administrative
duties as it sees fit (including acting through a duly appointed
representative) and may from time to time consult with counsel who may
be counsel to any Employer.
12.3 BINDING EFFECT OF DECISIONS. The decision or action of the Committee
---------------------------
with respect to any question arising out of or in connection with the
administration, interpretation and application of the Plan and the
rules and regulations promulgated hereunder shall be final and
conclusive and binding upon all persons having any interest in the
Plan.
12.4 INDEMNITY OF COMMITTEE. All Employers shall indemnify and hold
----------------------
harmless the members of the Committee against any and all claims,
losses, damages, expenses or liabilities arising from any action or
failure to act with respect to this Plan, except in the case of
willful misconduct by the Committee or any of its members.
12.5 EMPLOYER INFORMATION. To enable the Committee to perform its
--------------------
functions, each Employer shall supply full and timely information to
the Committee on all matters relating to the compensation of its
Participants, the date and circumstances of the Retirement,
Disability, death or Termination of Employment of its Participants,
and such other pertinent information as the Committee may reasonably
require.
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<PAGE>
ARTICLE 13
OTHER BENEFITS AND AGREEMENTS
-----------------------------
13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a
--------------------------------
Participant and Participant's Beneficiary under the Plan are in
addition to any other benefits available to such Participant under any
other plan or program for employees of the Participant's Employer.
The Plan shall supplement and shall not supersede, modify or amend any
other such plan or program except as may otherwise be expressly
provided.
ARTICLE 14
CLAIMS PROCEDURES
-----------------
14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased
---------------------
Participant (such Participant or Beneficiary being referred to below
as a "Claimant") may deliver to the Committee a written claim for a
determination with respect to the amounts distributable to such
Claimant from the Plan. If such a claim relates to the contents of a
notice received by the Claimant, the claim must be made within 90 days
after such notice was received by the Claimant. The claim must state
with particularity the determination desired by the Claimant. All
other claims must be made within one year of the date on which the
event that caused the claim to arise occurred. The claim must state
with particularity the determination desired by the Claimant.
14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's
------------------------
claim within a reasonable time, and shall notify the Claimant in
writing:
(a) that the Claimant's requested determination has been made, and
that the claim has been allowed in full; or
(b) that the Committee has reached a conclusion contrary, in whole or
in part, to the Claimant's requested determination, and such
notice must set forth in a manner calculated to be understood by
the Claimant:
(i) the specific reason(s) for the denial of the claim,
or any part of it;
(ii) specific reference(s) to pertinent provisions of
the Plan upon which such denial was based;
-23-
<PAGE>
(iii) a description of any additional material or
information necessary for the Claimant to perfect the
claim, and an explanation of why such material or
information is necessary; and
(iv) an explanation of the claim review procedure set
forth in Section 14.3 below.
14.3 REVIEW OF A DENIED CLAIM. Within 90 days after receiving a notice
------------------------
from the Committee that a claim has been denied, in whole or in part,
a Claimant (or the Claimant's duly authorized representative) may file
with the Committee a written request for a review of the denial of the
claim. Thereafter, but not later than 60 days after the review
procedure began, the Claimant (or the Claimant's duly authorized
representative):
(a) may review pertinent documents;
(b) may submit written comments or other documents; and/or
(c) may request a hearing, which the Committee, in its sole
discretion, may grant.
14.4 DECISION ON REVIEW. The Committee shall render its decision on review
------------------
promptly, and not later than 60 days after the filing of a written
request for review of the denial, unless a hearing is held or other
special circumstances require additional time, in which case the
Committee's decision must be rendered within 120 days after such date.
Such decision must be written in a manner calculated to be understood
by the Claimant, and it must contain:
(a) specific reasons for the decision;
(b) specific reference(s) to the pertinent Plan provisions upon which
the decision was based; and
(c) such other matters as the Committee deems relevant.
14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions
------------
of this Article 14 is a mandatory prerequisite to a Claimant's right
to commence any legal action with respect to any claim for benefits
under this Plan.
-24-
<PAGE>
ARTICLE 15
TRUSTS
------
15.1 ESTABLISHMENT OF THE TRUSTS. The Company has established or shall
---------------------------
establish the Trusts, and the Employers shall at least annually
transfer over to the Trusts such assets as the Employers determine, in
their reasonable discretion, are necessary to provide, on a present
value basis, for their respective future liabilities created with
respect to the all Annual Deferral Amounts and Annual Company Amounts
for all periods prior to the transfer, as well as the debits and
credits to the Participants' Account Balances for all periods prior to
the transfer.
15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUSTS. The provisions of the
--------------------------------------------
Plan and the Plan Agreement shall govern the rights of a Participant
to receive distributions pursuant to the Plan. The provisions of the
Trusts shall govern the rights of the Employers, Participants and the
creditors of the Employers to the assets transferred to the Trusts.
Each Employer shall at all times remain liable to carry out its
obligations under the Plan.
15.3 DISTRIBUTIONS FROM THE TRUSTS. Each Employer's obligations under the
-----------------------------
Plan may be satisfied with assets from the Trusts distributed pursuant
to the terms of the Trusts, and any such distribution shall reduce the
Employer's obligations under this Plan.
ARTICLE 16
MISCELLANEOUS
-------------
16.1 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries,
--------------------------
heirs, successors and assigns shall have no legal or equitable rights,
interests or claims in any property or assets of an Employer. For
purposes of the payment of benefits under this Plan, any and all of an
Employer's assets shall be, and remain, the general, unpledged
unrestricted assets of the Employer. An Employer's obligation under
the Plan shall be merely that of an unfunded and unsecured promise to
pay money in the future.
16.2 EMPLOYER'S LIABILITY. An Employer's liability for the payment of
--------------------
benefits shall be defined only by the Plan and the Plan Agreement, as
entered into between the Employer and a Participant. An Employer
shall have no obligation to a Participant under the Plan except as
expressly provided in the Plan and his or her Plan Agreement.
16.3 NONASSIGNABILITY. Neither a Participant nor any other person shall
----------------
have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber,
-25-
<PAGE>
transfer, hypothecate, alienate or convey in advance of actual
receipt, the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are expressly declared to be,
unassignable and non-transferable, except that the foregoing shall not
apply to any family support obligations set forth in a court order. No
part of the amounts payable shall, prior to actual payment, be subject
to seizure, attachment, garnishment or sequestration for the payment
of any debts, judgments, alimony or separate maintenance owed by a
Participant or any other person, nor be transferable by operation of
law in the event of a Participant's or any other person's bankruptcy
or insolvency.
16.4 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan
----------------------------
shall not be deemed to constitute a contract of employment between any
Employer and the Participant. Such employment is hereby acknowledged
to be an "at will" employment relationship that can be terminated at
any time for any reason, or no reason, with or without cause, and with
or without notice, unless expressly provided in a written employment
agreement. Nothing in this Plan shall be deemed to give a Participant
the right to be retained in the service of any Employer or to
interfere with the right of any Employer to discipline or discharge
the Participant at any time.
16.5 FURNISHING INFORMATION. A Participant or his or her Beneficiary will
----------------------
cooperate with the Committee by furnishing any and all information
requested by the Committee and take such other actions as may be
requested in order to facilitate the administration of the Plan and
the payments of benefits hereunder, including but not limited to
taking such physical examinations as the Committee may deem necessary.
16.6 TERMS. Whenever any words are used herein in the masculine, they
-----
shall be construed as though they were in the feminine in all cases
where they would so apply; and whenever any words are used herein in
the singular or in the plural, they shall be construed as though they
were used in the plural or the singular, as the case may be, in all
cases where they would so apply.
16.7 CAPTIONS. The captions of the articles, sections and paragraphs of
--------
this Plan are for convenience only and shall not control or affect the
meaning or construction of any of its provisions.
16.8 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be
-------------
construed and interpreted according to the internal laws of the State
of California without regard to its conflicts of laws principles.
-26-
<PAGE>
16.9 NOTICE. Any notice or filing required or permitted to be given to the
------
Committee under this Plan shall be sufficient if in writing and hand-
delivered, or sent by registered or certified mail, to the address
below:
Nonqualified Plans Committee
CalMat Co.
3200 San Fernando Road
Los Angeles, California 90065
Such notice shall be deemed given as of the date of delivery or, if
delivery is made by mail, as of the date shown on the postmark on the
receipt for registration or certification.
Any notice or filing required or permitted to be given to a
Participant under this Plan shall be sufficient if in writing and
hand-delivered, or sent by mail, to the last known address of the
Participant.
16.10 SUCCESSORS. The provisions of this Plan shall bind and inure to the
----------
benefit of the Participant's Employer and its successors and assigns
and the Participant and the Participant's designated Beneficiaries.
16.11 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse
-----------------
of a Participant who has predeceased the Participant shall
automatically pass to the Participant and shall not be transferable by
such spouse in any manner, including but not limited to such spouse's
will, nor shall such interest pass under the laws of intestate
succession.
16.12 VALIDITY. In case any provision of this Plan shall be illegal or
--------
invalid for any reason, said illegality or invalidly shall not affect
the remaining parts hereof, but this Plan shall be construed and
enforced as if such illegal or invalid provision had never been
inserted herein.
16.13 INCOMPETENT. If the Committee determines in its discretion that a
-----------
benefit under this Plan is to be paid to a minor, a person declared
incompetent or to a person incapable of handling the disposition of
that person's property, the Committee may direct payment of such
benefit to the guardian, legal representative or person having the
care and custody of such minor, incompetent or incapable person. The
Committee may require proof of minority, incompetency, incapacity or
guardianship, as it may deem appropriate prior to distribution of the
benefit. Any payment of a benefit shall be a payment for the account
of the Participant and the Participant's Beneficiary, as the case may
be, and shall be a complete discharge of any liability under the Plan
for such payment amount.
-27-
<PAGE>
16.14 COURT ORDER. The Committee is authorized to make any payments
-----------
directed by court order in any action in which the Plan or the
Committee has been named as a party. In addition, if a court
determines that a spouse or former spouse of a Participant has an
interest in the Plan as the result of a property settlement or
otherwise, the Committee, in its sole discretion, shall have the
right, notwithstanding any election made by a Participant, to
immediately distribute the spouse's or former spouse's interest in the
Plan to that spouse or former spouse.
16.15 DISTRIBUTION IN THE EVENT OF TAXATION.
-------------------------------------
(a) GENERAL. If, for any reason, all or any portion of a
-------
Participant's benefit under this Plan becomes taxable to the
Participant prior to receipt, a Participant may petition the
Committee before a Change in Control, or the trustee of the
applicable Trust after a Change in Control, for a distribution of
that portion of his or her benefit that has become taxable. Upon
the grant of such a petition, which grant shall not be
unreasonably withheld (and, after a Change in Control, shall be
granted), a Participant's Employer shall distribute to the
Participant immediately available funds in an amount equal to the
taxable portion of his or her benefit (which amount shall not
exceed a Participant's unpaid Account Balance under the Plan). If
the petition is granted, the tax liability distribution shall be
made within 90 days of the date when the Participant's petition
is granted. Such a distribution shall affect and reduce the
benefits to be paid under this Plan.
(b) MASTER TRUST. If the Master Trust terminates in accordance with
------------
Section 3.6(d) of the Master Trust and benefits are distributed
from the Master Trust to a Participant in accordance with that
Section, the Participant's benefits under this Plan shall be
reduced to the extent of such distributions.
-28-
<PAGE>
IN WITNESS WHEREOF, the Company has signed this Plan document as of
December 1, 1996.
"Company"
CALMAT CO., a Delaware
corporation
By: /s/ PAUL STANFORD
------------------------------------------------
Title: Executive Vice President, General Counsel
and Secretary
--------------------------------------------
-29-
<PAGE>
EXHIBIT A
---------
1989 PLAN, WITH FIRST AMENDMENT
-------------------------------
<PAGE>
EXHIBIT 21.1
CALMAT CO.
SUBSIDIARIES OF REGISTRANT
DECEMBER 31, 1996
<TABLE>
<CAPTION>
PERCENTAGE OF
STOCK OR
ORGANIZED UNDER INTEREST OWNED
NAME OF COMPANY THE LAWS OF BY REGISTRANT
- -----------------------------------------------------------------------
<S> <C> <C>
CalMat Co. of Arizona Arizona 100%
CalMat Co. of New Mexico New Mexico 100%
CalMat Co. of Central California California 100%
CalMat Land Co. California 100%
CalMat Properties Co. California 100%
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> DEC-31-1996
<CASH> 25,775
<SECURITIES> 0
<RECEIVABLES> 57,867
<ALLOWANCES> 5,309
<INVENTORY> 13,972
<CURRENT-ASSETS> 110,239
<PP&E> 710,599
<DEPRECIATION> (299,134)
<TOTAL-ASSETS> 600,716
<CURRENT-LIABILITIES> 57,537
<BONDS> 116,233
0
0
<COMMON> 23,240
<OTHER-SE> 308,952
<TOTAL-LIABILITY-AND-EQUITY> 600,716
<SALES> 399,083
<TOTAL-REVENUES> 407,895
<CGS> 347,163
<TOTAL-COSTS> 347,163
<OTHER-EXPENSES> 1,864
<LOSS-PROVISION> 1,722
<INTEREST-EXPENSE> 5,944
<INCOME-PRETAX> 15,178
<INCOME-TAX> 5,844
<INCOME-CONTINUING> 9,334
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,334
<EPS-PRIMARY> 0.40
<EPS-DILUTED> 0
</TABLE>
