FORM 10-Q
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
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 1-7833
CBI INDUSTRIES, INC.
Incorporated in Delaware IRS Identification Number: 36-3009343
Principal Executive Offices: 800 Jorie Boulevard
Oak Brook, Illinois 60521-2268
Telephone Number: (708) 572-7000
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
----- -----
The number of shares outstanding of a single class of common stock as of
June 30, 1994 - 37,887,617.
1 of 17
CBI INDUSTRIES, INC. AND SUBSIDIARIES
Table of Contents
PART I. FINANCIAL INFORMATION
Financial Statements: Page
Statements of Income
Six Months Ended June 30, 1994 and 1993.................... 3
Balance Sheets
June 30, 1994 and December 31, 1993........................ 4
Statements of Cash Flows
Six Months Ended June 30, 1994 and 1993.................... 5
Notes to Financial Statements............................... 6
Management's Discussion and Analysis of Operating
Performance and Financial Condition......................... 9
PART II. OTHER INFORMATION........................................... 14
SIGNATURE PAGE......................................................... 17
2
PART I - FINANCIAL INFORMATION
<TABLE>
CBI INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
<CAPTION>
Three Months Six Months
Thousands of dollars, except per share amounts Ended June 30, Ended June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Revenues
Contracting Services $208,532 $197,716 $383,016 $364,682
Industrial Gases 228,238 204,611 425,763 397,016
Investments 33,220 25,515 63,094 64,070
Total Revenues 469,990 427,842 871,873 825,768
Costs of Services and Products Sold
Contracting Services 177,809 175,424 325,316 325,892
Industrial Gases 155,245 142,669 295,738 279,465
Investments 26,852 21,109 51,061 54,313
Total Costs of Services and Products Sold 359,906 339,202 672,115 659,670
Gross Profit from Operations 110,084 88,640 199,758 166,098
Selling and Administrative Expense
Contracting Services 20,712 19,481 40,526 38,521
Industrial Gases 42,090 33,296 74,529 65,199
Investments 1,503 1,176 2,726 1,914
Corporate 5,424 5,163 10,190 9,561
Total Selling and Administrative Expense 69,729 59,116 127,971 115,195
Income from Operations 40,355 29,524 71,787 50,903
Interest Expense (9,656) (6,898) (17,802) (12,360)
Income before Income Taxes and Minority Interest 30,699 22,626 53,985 38,543
Provision for Income Taxes (14,200) (11,900) (25,700) (18,900)
Income before Minority Interest 16,499 10,726 28,285 19,643
Minority Interest in Income (2,928) (2,308) (5,041) (5,641)
Net Income 13,571 8,418 23,244 14,002
Dividends on Preferred Shares (1,507) (1,492) (3,008) (2,927)
Net Income to Common Shareholders $ 12,064 $ 6,926 $ 20,236 $ 11,075
Net Income per Common Share
Primary $ 0.32 $ 0.19 $ 0.54 $ 0.30
Fully Diluted $ 0.29 $ 0.17 $ 0.49 $ 0.28
Average Common Shares Outstanding (thousands)
Primary 37,791 37,068 37,736 36,971
Fully Diluted 43,198 42,456 43,143 42,359
Dividends on Common Shares
Amount $ 4,544 $ 4,432 $ 9,079 $ 8,854
Per Share $ 0.12 $ 0.12 $ 0.24 $ 0.24
<F1>
The accompanying notes are an integral part of these financial statements.
</TABLE>
3
<PAGE>
<TABLE>
CBI INDUSTRIES, INC. AND SUBSIDIARIES
BALANCE SHEETS
<CAPTION>
Thousands of dollars June 30, Dec. 31,
1994 1993
<S> <C> <C>
Current Assets
Cash $ 12,498 $ 6,224
Temporary Cash Investments 23,717 17,005
Accounts Receivable, less allowances
of 11,500 and 11,500 260,273 283,952
Contracts in Progress with Earned Revenues
exceeding related Progress Billings 71,453 61,823
Inventories 76,824 63,644
Other Current Assets 44,241 38,626
489,006 471,274
Other Assets
Notes Receivable 37,495 33,057
Real Estate Properties 26,877 26,721
Equity in and Advances to Unconsolidated Affiliates 47,381 65,506
Intangible Assets 74,670 78,278
Other Non-Current Assets 60,900 64,444
247,323 268,006
Property and Equipment 1,796,866 1,699,852
Accumulated Depreciation (609,102) (568,887)
1,187,764 1,130,965
Total Assets $ 1,924,093 $ 1,870,245
Current Liabilities
Notes Payable $ 52,981 $ 43,472
Current Maturities of Long-Term Debt 13,374 25,226
Accounts Payable 64,965 66,558
Dividends Payable 2,713 2,790
Accrued Liabilities 127,948 137,871
Contracts in Progress with Progress Billings
exceeding related Earned Revenues 54,556 52,198
Income Taxes Payable 20,634 16,955
337,171 345,070
Long-Term Debt and Other Liabilities
Long-Term Debt 665,039 607,579
Other Non-Current Liabilities 125,179 130,494
Deferred Income Taxes 37,572 42,867
Minority Interest in Subsidiaries 63,146 67,623
Shareholders' Investment
Preferred Stock
Series C 117,049 120,318
Unallocated ESOP Shares (1,828) (3,654)
Unamortized ESOP Debt (80,345) (83,584)
34,876 33,080
Common Stock
Common Stock 99,459 99,459
Additional Paid-in Capital 214,320 214,320
Retained Earnings 443,338 427,828
Unamortized Restricted Stock Awards (12,144) (8,498)
Unallocated ESOP Shares (465) (931)
Unamortized ESOP Debt (17,888) (18,609)
Cost of Reacquired Common Stock (38,676) (45,353)
Cumulative Translation Adjustment (26,834) (24,684)
661,110 643,532
Total Shareholders' Investment 695,986 676,612
Total Liabilities and Shareholders' Investment $ 1,924,093 $ 1,870,245
<F1>
The accompanying notes are an integral part of these financial statements
</TABLE>
4
<PAGE>
<TABLE>
CBI INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months
Thousands of dollars Ended June 30,
1994 1993
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $ 23,244 $ 14,002
Depreciation 50,783 47,749
74,027 61,751
Decrease/(Increase) in Accounts Receivable 29,493 (6,355)
(Increase) in Contracts in Progress, net (6,313) (1,055)
(Decrease) in Accounts Payable,
Accrued Liabilities and Income Taxes, net (13,044) (29,303)
(Decrease) in Deferred Income Taxes (3,974) (1,646)
Decrease in Undistributed Earnings
of Unconsolidated Affiliates 468 1,844
Other, net (4,800) (4,454)
Total Cash Flows from Operating Activities 75,857 20,782
Cash Flows from Capital Investment Activities
Purchase of Property and Equipment (122,367) (85,824)
Cost of Business Acquisitions, net of cash acquired - (19,151)
Disposition of Property and Equipment 12,323 6,273
Decrease/(Increase) in Other Assets, net 3,599 (1,764)
Other, net 5,311 4,131
Total Cash Flows from Capital Investment Activities (101,134) (96,335)
Cash Flows from Financing and Shareholder Activities
Issuance of Debt 75,476 116,960
Repayment of Debt (24,446) (25,083)
51,030 91,877
Sale of Common Stock 2,407 1,396
Purchase of Common Stock (1,899) (1,189)
Dividends Paid (13,275) (13,184)
Total Cash Flows from Financing and Shareholder Activities 38,263 78,900
Increase in Cash and Temporary Cash Investments $ 12,986 $ 3,347
The accompanying notes are an integral part of these financial statements.
</TABLE>
5
<PAGE>
CBI INDUSTRIES, INC. AND SUBSIDIARIES
Notes to Financial Statements
June 30, 1994
Thousands of dollars
(1) Additional Information
The consolidated financial statements included herein have been prepared
by CBI Industries, Inc. and Subsidiaries (CBI), without audit, pursuant
to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, have been condensed or omitted pursuant to such
rules and regulations, although CBI believes that the disclosures are
adequate to make the information presented not misleading. These
consolidated financial statements should be read in conjunction with the
consolidated financial statements and the notes thereto included in the
1993 annual report on Form 10-K of CBI.
In the opinion of CBI, all adjustments necessary to present fairly the
financial position of CBI as of June 30, 1994 and the results of its
operations and cash flows for the period then ended have been included.
The results of operations for such interim periods are not necessarily
indicative of the results for the full year.
(2) Inventories
Inventories by component and valuation method at June 30, 1994:
Raw materials and supplies $34,494
Work in process 6,251
Finished goods 36,079
-------
Total inventories $76,824
=======
Average cost method $54,239
First-in, first-out method 22,585
-------
Total inventories $76,824
=======
6
(3) Long-Term Debt
Summary of long-term debt at June 30, 1994:
Commercial Paper and Other Similar Borrowings with a weighted
average quarter-end interest rate of 4.6% $264,389
Senior ESOP Notes with a quarter-end interest rate of 8.354%,
maturing in 1994 through 2002 98,836
6-1/4% Notes due 2000, net of unamortized discount of $262 74,738
6-5/8% Notes due 2003, net of unamortized discount of $513 74,487
Variable Rate Secured Notes with a weighted average quarter-
end interest rate of 5.5%, maturing in 1994 through 2001 67,200
Variable Rate Unsecured Notes with a weighted average quarter-
end interest rate of 6.4%, maturing in 1994 through 1998 94,482
Other 4,281
--------
678,413
Less: current maturities (13,374)
--------
$665,039
========
Commercial paper and other similar borrowings, which would normally be
classified as current debt, have been classified as long-term debt since
this debt is supported by unused commitments under an existing $300,000
unsecured three-year extendible revolving credit agreement. The
agreement has a present termination date of December 31, 1996, which is
extendible annually for one additional year by mutual consent. Amounts
borrowed under the agreement may be repaid under certain options and a
commitment fee is payable on any unused portion.
Minimum annual principal payments of long-term debt are as follows:
July 1 through December 31, 1994 $ 7,844
Year ending December 31, 1995 17,051
Year ending December 31, 1996 292,050
Year ending December 31, 1997 25,268
Year ending December 31, 1998 25,368
Year ending December 31, 1999 89,508
After 1999 221,324
--------
$678,413
========
7
(4) Preferred Stock
Preferred stock - $1.00 par value; authorized - 20,000,000 shares.
Series A - No shares have been issued. 800,000 shares are reserved as
Series A Junior Participating Preferred Stock.
Series C - 3,612,642 shares are issued as Convertible Voting Preferred
Stock, Series C, at June 30, 1994 and 3,713,519 shares at December 31,
1993. The annual dividend is $2.27 per share.
(5) Common Stock
Common stock - $2.50 par value; authorized - 120,000,000 shares; issued
- 39,783,614 shares at June 30, 1994 and December 31, 1993.
Reacquired stock - The number of reacquired shares of common stock was
1,895,997 at June 30, 1994 and 2,273,761 at December 31, 1993.
(6) Employee Stock Ownership Plan (ESOP)
Unallocated ESOP shares - Shares received and purchased from the
transfer of the surplus assets from the terminated and restructured
defined benefit pension plans are reflected as unallocated ESOP shares.
These shares are being allocated to eligible employees over a period of
eight years ending in 1994. As of June 30, 1994, 65,051 common shares
and 100,936 Series C preferred shares are subject to future allocation.
Unamortized ESOP debt - The Senior ESOP Notes, which were issued in
1988, in an amount of $125,000, were initially offset by a like amount
of unamortized ESOP debt in shareholders' investment. As company
contributions plus the dividends on the shares held by the ESOP are used
to meet interest and principal payments on the loan over its 14-year
term, shares acquired with the loan proceeds are allocated to eligible
employees. As of June 30, 1994, 806,445 common shares and 2,057,544
Series C preferred shares are subject to future allocation.
8
Management's Discussion and Analysis
of Operating Performance and Financial Condition
The following discussion and analysis should be read in conjunction with the
consolidated financial statements and accompanying notes.
OPERATING PERFORMANCE
OVERVIEW. Consolidated net income for the second quarter ended June 30, 1994
was $13.6 million ($0.32 per common share) compared to $8.4 million ($0.19 per
common share) for the second quarter of 1993. For the six months ending June
30, 1994, CBI's consolidated net income was $23.2 million ($0.54 per common
share) compared to $14.0 million ($0.30 per common share) for the comparable
1993 period.
Revenues of $470.0 million for the quarter were $42.1 million (9.9%) greater
than the $427.9 million recorded in the second quarter of 1993. Approximately
half of the increase in revenues was attributable to the consolidation during
the quarter of certain Canadian industrial gas distributorships in which the
company owns the majority of shares. The remaining increase was due
principally to a 5.5% improvement in the revenues of the Contracting Services
segment. For the six months to date, revenues of $871.9 million were 5.6%
greater than in 1993.
Gross profit of $110.1 million (23.4% of revenues) in the second quarter of
1994 compared favorably to gross profit of $88.6 million (20.7% of revenues)
in 1993's second quarter. For the year to date 1994's gross profit of $199.8
million (22.9% of revenues) was 20% greater than the $166.1 million (20.1% of
revenues) of the previous year, reflecting both the increase in revenues and
improved margins in all three segments.
Selling and administrative expense increased $10.6 million from the second
quarter of 1993 to the current quarter, almost entirely due to the
consolidation of the Canadian distributorships. For the six months to date,
selling and administrative expense of $128.0 million for 1994 compared to
$115.2 million in 1993. Excluding the effect of the consolidation of the
Canadian distributorships, selling and administrative expenses for the year to
date have increased only 2.7%.
Income from operations of $40.4 million for the second quarter (8.6% of
revenues) was up 36.7% from the $29.5 million (6.9% of revenues) in the
comparable 1993 quarter. For the year to date, income from operations of
$71.8 million (8.2% of revenues) in 1994 exceeded the $50.9 million (6.2% of
revenues) recorded in 1993. Cash flow from operations for the quarter and year
to date was $78.7 million and $147.6 million, respectively, compared to $62.3
million and $109.8 million in 1993.
CBI's comparative operating performance (before interest and taxes) for the
second quarters of 1994 and 1993 and for the first six months of those years
is as follows (dollars in thousands):
Three Months Six Months
1994 1993 1994 1993
Revenues $469,990 $427,842 $871,873 $825,768
Costs 359,906 339,202 672,115 659,670
-------- -------- -------- --------
Gross profit 110,084 88,640 199,758 166,098
Gross profit-% 23.4% 20.7% 22.9% 20.1%
Selling and administrative 69,729 59,116 127,971 115,195
-------- -------- -------- --------
Income from operations 40,355 29,524 71,787 50,903
Income from operations-% 8.6% 6.9% 8.2% 6.2%
Depreciation 25,946 23,956 50,783 47,749
Other non-cash charges 12,427 8,826 25,019 11,130
-------- -------- -------- --------
Cash flow from operations $ 78,728 $ 62,306 $147,589 $109,782
======== ======== ======== ========
9
CONTRACTING SERVICES. The operating results of Chicago Bridge and Iron
Company for the three and six months ended June 30, 1994 and 1993 are as
follows (dollars in thousands):
Three Months Six Months
1994 1993 1994 1993
Revenues $208,532 $197,716 $383,016 $364,682
Costs 177,809 175,424 325,316 325,892
-------- -------- -------- --------
Gross profit 30,723 22,292 57,700 38,790
Gross profit-% 14.7% 11.3% 15.1% 10.6%
Selling and administrative 20,712 19,481 40,526 38,521
-------- -------- -------- --------
Income from operations $ 10,011 $ 2,811 $ 17,174 $ 269
Income from operations-% 4.8% 1.4% 4.5% 0.1%
======== ======== ======== ========
Revenues for the Contracting Services segment increased 5.5% in the second
quarter of 1994, as compared to the same quarter the year previous, and 5.0%
for the six months to date. Virtually all of the increase took place within
Chicago Bridge's international units as major contracts are being executed in
Southeast Asia and the Caribbean. Within the United States, revenues were
essentially constant between years.
Income from operations in both 1994 periods was up appreciably from the levels
of 1993, when reserves were established for losses on certain contracts and
for the closing of an Alabama fabrication facility.
New contract awards during the second quarter of 1994 amounted to $136.7
million, a 15.8% decline from the $162.4 million of new business recorded in
the second quarter of 1993. Approximately 80% of the decline between years
occurred in the United States as Chicago Bridge's major customers,
particularly in the United States, have been reluctant to commit to
significant changes in current operations in the face of unresolved
environmental requirements and uncertain economic conditions in some overseas
markets. An increase in the level of inquiries and bookings in recent weeks,
however, indicates that the volume of new orders may return to the underlying
levels achieved in the previous three quarters during the second half of 1994
and into 1995. New orders for the six-month period in 1994 were $358.7
million compared to $287.7 million in the same period in 1993. The backlog of
work to be executed in the future amounted to $384.5 million as of June 30,
1994, as compared to $424.9 million at December 31, 1993 and $253.3 million at
June 30, 1993.
10
INDUSTRIAL GASES. Liquid Carbonic's performance for the periods ending June
30, 1994 and 1993 is as follows (dollars in thousands):
Three Months Six Months
1994 1993 1994 1993
Revenues $228,238 $204,611 $425,763 $397,016
Costs 155,245 142,669 295,738 279,465
-------- -------- -------- --------
Gross profit 72,993 61,942 130,025 117,551
Gross profit-% 32.0% 30.3% 30.5% 29.6%
Selling and administrative 42,090 33,296 74,529 65,199
-------- -------- -------- --------
Income from operations $ 30,903 $ 28,646 $ 55,496 $ 52,352
Income from operations-% 13.5% 14.0% 13.0% 13.2%
======== ======== ======== ========
During the second quarter of 1994, Liquid Carbonic consolidated, for the first
time, certain Canadian distributorships in which the company owns a majority
of shares. While not affecting net income, the consolidation increased
revenues by $25.2 million, gross profit by $10.0 million and selling and
administrative expenses by $9.6 million.
Excluding the effect of this consolidation, revenues in the Industrial Gases
segment remained essentially level with those of the second quarter of 1993
and are up 1% for the year to date, due to a 5% increase in revenues outside
North America, including the results of two Polish atmospheric gas companies
acquired in the second quarter of 1993. The 1993 results included
approximately $5.1 million in the second quarter and $7.5 million for the six
month period of revenues in product lines since discontinued or sold.
Income from operations for the quarter increased 7.9% from 1993 to 1994 and
6.0% for the six months to date. Operating income and margins improved in the
United States in 1994's second quarter and for the year to date also, due to
the sale in early 1994 of lower-margined retail operations and to reduced
selling and administrative expenses in 1994 resulting from Liquid Carbonic's
ongoing restructuring program. Additional savings are expected to be realized
as the program proceeds.
Outside North America, income from operations and operating margins improved
slightly in the second quarter of 1994 compared to the comparable 1993
quarter, particularly in Brazil, Spain, Mexico and Thailand, but remained
modestly lower year to date because of Liquid Carbonic's recent expansion into
the precipitated calcium carbonate market, where margins are lower than in the
company's historical lines of business, and because of lower margins in
Argentina and Venezuela.
11
INVESTMENTS. The operating results of Statia Terminals and the contributions
from financial investments comprising the Investments segment for the periods
ending June 30, 1994 and 1993 is as follows (dollars in thousands):
Three Months Six Months
1994 1993 1994 1993
Revenues $33,220 $25,515 $63,094 $64,070
Costs 26,852 21,109 51,061 54,313
------- ------- ------- -------
Gross profit 6,368 4,406 12,033 9,757
Gross profit-% 19.2% 17.3% 19.1% 15.2%
Selling and administrative 1,503 1,176 2,726 1,914
------- ------- ------- -------
Income from operations $ 4,865 $ 3,230 $ 9,307 $ 7,843
Income from operations-% 14.6% 12.7% 14.8% 12.2%
======= ======= ======= =======
Revenues for the current quarter were up 30.2% over the comparable 1993
quarter as sales of petroleum products by Statia Terminals rose 72% and
storage fees increased 20%, principally due to the activation of a portion of
Statia's Point Tupper terminal in the latter part of 1993. Revenues from
other investments also increased, mainly due to the initiation of sales of
development sites at the company's Suffolk, Virginia, Harbourview property.
Revenues for the first half of 1994 were slightly below those of the
comparable period in 1993 because the first quarter of 1993 included large
sales of petroleum products. Excluding sales of petroleum products, revenues
for the Investments segment would have increased almost 20% in the first six
months.
Selling and administrative expenses increased for both the quarter and year to
date due in part to the opening of the Point Tupper terminal and in part to
the reclassification in 1994 of certain charges previously included in costs
of revenues. The terminal became fully operational during the quarter ended
June 30, 1994. During the second quarter and first half of 1994, while the
terminal was initiating operations, Point Tupper operated at a loss, but that
loss was more than offset by greater earnings in Statia's other operations and
on other investments within the segment. Subsequent to the end of the
quarter, Statia Point Tupper signed contracts for virtually all available
storage at its terminal and expects profitable operations for the remainder of
1994.
12
OTHER INCOME STATEMENT MATTERS. Interest expense for the second quarter and
first six months of 1994 amounted to $9.7 million and $17.8 million,
respectively, compared to $6.9 million and $12.4 million, respectively, in the
comparable 1993 periods, as a result of both higher debt levels and the
issuance of $75 million of long-term debt in each of March and July of 1993.
The estimated effective income tax rate for the first half of 1994 was 47.6%,
compared to 49.0% for the first half of 1993. CBI's effective income tax rate
continues to be higher than the statutory U.S. tax rate, however, because its
taxable domestic earnings remain low relative to earnings from its
international operations.
Fully diluted earnings per share, assuming the conversion of the company's
Series C Convertible Voting Preferred Stock as required by accounting
disclosure rules, was $0.29 for the second quarter of 1994 and $0.49 for the
year to date, compared to $0.17 and $0.28, respectively, in 1993.
FINANCIAL CONDITION
BALANCE SHEET. CBI's financial position and capital resources are adequate to
permit the financing of its operations. Cash and short-term investments
totalled $36.2 million at June 30, 1994, compared to $23.2 million at December
31, 1993. Working capital increased from $126.2 million at the end of 1993 to
$151.8 million. Total debt (notes payable plus current and non-current long-
term debt) increased from $676.3 million at December 31, 1993 to $731.4
million as a result of the company's ongoing program of capital investment
(see below). The ratio of total debt to total capitalization (total debt plus
shareholders' investment) was 51.2% at June 30, 1994, up from 50.0% at the end
of 1993 and 44.0% at June 30, 1993. With CBI's ESOP debt considered as
equity, which will occur as the common and preferred shares held by the ESOP
Trust are allocated to eligible employees, debt as a percent of capitalization
was 44.3% at June 30, 1994, compared to 42.4% at December 31, 1993 and 35.8%
at June 30, 1993.
CAPITAL EXPENDITURES. Expenditures for new plant and equipment in the second
quarter totalled $54.8 million and aggregate to $122.4 million for the year to
date. Of the total, $37.1 million in the second quarter and $83.4 million for
the first six months represent investments in increased capacity, principally
for Liquid Carbonic. The rate of investment is expected to decline over the
balance of the year. Capital expenditures in the first half of 1993 amounted
to $85.8 million.
13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Marathon/Texas City Litigation
On October 30, 1987, CBI Na-Con, Inc. ("CBI Na-Con") was working in the
Marathon Petroleum Company refinery in Texas City, Texas. While a lift
was being made by a crane supplied and operated by others, the crane
became unstable, causing the operator to drop the load on a hydrofluoric
acid tank which released part of its contents into the atmosphere. The
community surrounding the refinery was evacuated after the incident, and
a substantial number of persons evacuated sought medical attention.
CBI Na-Con has reached settlements with all but about 15 of the 4,300
(approximate) third-party plaintiffs who brought suit as a result of the
incident.
CBI Na-Con also is a defendant in a lawsuit brought in 1989 by Marathon
for damage to Marathon's property, lost profits and cost of repair. In
1993 the lawsuit was amended to include reimbursement for Marathon's
expenditures relating to the incident, including emergency response
costs, third party legal fees and claims payments. This lawsuit went to
trial in March, 1994, and, after a trial which lasted approximately four
weeks, a jury in Harris County, Texas returned a verdict against CBI
Na-Con. Judgment on the verdict in the amount of approximately
$31,500,000, which includes prejudgment interest, was entered on April
6, 1994, against CBI Na-Con. This judgment was revised to $33,500,000
on May 6, 1994, as a result of a different calculation of prejudgment
interest. The result in this case was totally unexpected by CBI Na-Con.
CBI Na-Con believes that pending the disposition of post trial motions,
it has good grounds to appeal the judgment based upon the trial court's
application of substantive and procedural law with respect to
liability, evidence and damages. CBI Na-Con, Inc. will vigorously
pursue its appeal of the judgment to the Texas Court of Appeals, but, as
with any litigation, the outcome is uncertain. Final resolution through
the appeals process could take two or more years.
After CBI's insurers declined to indemnify CBI for this incident based
on their interpretation of certain pollution exclusions contained in
CBI's insurance policies, CBI filed suit in Harris County, Texas against
its insurers seeking a court ruling that the policies covered the
incident. The Trial Court, on the insurers' preliminary motion,
sustained the insurers' position that coverage did not exist. The Texas
Court of Appeals reversed the Trial Court and found that CBI should be
allowed to proceed with its lawsuit and related discovery against the
insurers. The insurers immediately appealed the Court of Appeals
decision in CBI's favor to the Texas Supreme Court which has agreed to
hear the appeal. It is CBI's position that it was not the intent of the
pollution exclusions in the policies to exclude an incident of this
kind.
Because of the uncertain outcome of any appeal of the judgment and the
litigation concerning insurance coverage, the Company's assessment of
this matter is continuing. Upon resolution of the uncertainties
regarding this litigation, the company may ultimately establish
additional reserves or incur charges in excess of presently established
reserves. While such future charges or increased reserve levels could
have a material adverse impact on the Company's net income in the
periods in which they are recorded, management believes that any outcome
of this litigation will not have a material adverse effect on the
Company's consolidated financial position.
Antitrust Matters
A subsidiary of the company, Liquid Carbonic Industries Corporation
("Liquid Carbonic"), has been or is currently involved in civil
litigation and governmental proceedings relating to antitrust matters.
In this regard, since April 1992, several lawsuits have been filed
against Liquid Carbonic and various competitors. These cases have been
consolidated in the United States District Court for the Middle District
of Florida, Orlando Division. The lawsuits allege generally that,
beginning not later than 1968 and continuing through October, 1992,
defendants conspired to
14
Item 1. Legal Proceedings (Continued)
allocate customers, fix prices and rig bids for carbon dioxide in the
United States in violation of the antitrust laws. On April 19, 1993,
the court certified a class in the consolidated cases consisting of
direct purchasers of carbon dioxide from defendants in the continental
United States for the period from January 1, 1968, to and including
October 26, 1992.
Plaintiffs seek from defendants unspecified treble damages, civil
penalties, injunctive relief, costs and attorneys' fees. In addition,
suits have been brought against Liquid Carbonic and others under the
antitrust laws of the States of Alabama and California based upon the
foregoing allegations. The Company believes that the allegations made
against Liquid Carbonic in these lawsuits are without merit, and Liquid
Carbonic intends to defend itself vigorously. Liquid Carbonic and its
subsidiaries also from time to time furnish documents and witnesses in
connection with governmental investigations of alleged violations of the
antitrust laws. While the outcome of any particular lawsuit or
governmental investigation cannot be predicted with certainty, the
Company believes that these antitrust matters will not have a materially
adverse effect on its operations or financial condition.
Environmental Litigation
Chicago Bridge & Iron Company ("Chicago Bridge") was a minority
shareholder from 1934 to 1954 in a company which owned or operated at
various times several wood treating facilities at sites in the United
States, some of which are currently under investigation, monitoring or
remediation under various environmental laws. Chicago Bridge is
involved in litigation concerning environmental liabilities, which are
currently undeterminable, in connection with certain of those sites.
Chicago Bridge denies any liability for each site and believes that the
successors to the wood treating business are responsible for cost of
remediation of the sites. Chicago Bridge has reached settlements for
environmental clean-up at most of the sites. The Company believes that
any remaining potential liability will not have a materially adverse
effect on its operations or financial condition.
Other Litigation
In addition to the above lawsuits, CBI is a defendant in a number of
lawsuits arising from the conduct of its business. While it is
impossible at this time to determine with certainty the ultimate outcome
of this litigation, CBI's management believes that adequate provisions
have been made for probable losses with respect thereto as best as can
be determined at this time and that the ultimate outcome, after
provisions therefor, will not have a material adverse effect on the
financial position of CBI. The adequacy of reserves applicable to the
potential costs of being engaged in litigation and potential liabilities
resulting from litigation are reviewed as developments in the
litigation warrant.
Item 4. Submission of Matters to a Vote of Security Holders
(a) The Annual Meeting of Shareholders of CBI Industries, Inc. was
held on May 12, 1994. The matters voted upon at the Meeting are
described in (c) below.
(c) (i) To elect four directors to serve for a three year term
expiring in 1997.
Nominee Votes For Votes Withheld
Robert J. Daniels 33,434,941 331,576
John E. Jones 33,432,266 334,251
Edward J. Mooney, Jr. 33,458,590 307,927
Robert G. Wallace 33,453,354 313,163
15
Item 4. Submission of Matters to a Vote of Security Holders (Continued)
(ii) To amend the Company's Certificate of Incorporation to
permit the Company to enter into certain mergers without
shareholder approval.
Votes For - 29,954,595
Votes Against - 1,577,432
Votes Abstaining - 485,505
Broker Non-Votes - 1,748,985
(iii) To adopt the CBI 1994 Restricted Stock Award Plan.
Votes For - 31,780,575
Votes Against - 1,641,309
Votes Abstaining - 344,633
(iv) To adopt the CBI Industries, Inc. Officers' Bonus Plan.
Votes For - 30,552,240
Votes Against - 2,616,623
Votes Abstaining - 597,654
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. (i) Articles of Incorporation
As amended June 2, 1994.
11. Computation of Earnings per Common Share
(b) Reports on Form 8-K
A Form 8-K was filed under Item 5, Other Events and Item 7,
Financial Statements and Exhibits. The date of that report was
April 7, 1994.
16
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CBI INDUSTRIES, INC.
BY /s/ George L. Schueppert
___________________________
George L. Schueppert
Executive Vice President - Finance
and Chief Financial Officer
Date: August 15, 1994
17
CERTIFICATE OF INCORPORATION
OF
CBI INDUSTRIES, INC.
FIRST: Name. The name of the corporation is:
CBI INDUSTRIES, INC.
SECOND: Registered Agent. The address of the corporation's
registered office in the State of Delaware is 100 West Tenth
Street in the City of Wilmington, County of New Castle. The name
of the corporation's registered agent at such address is The
Corporation Trust Company.
THIRD: Purposes. 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: Authorized Capital. The total number of shares of
stock of all classes which the corporation shall have authority
to issue is Forty Million (40,000,000), of which Thirty Million
(30,000,000) shares shall be Common Stock, with a par value of
Two Dollars and Fifty Cents ($2.50) per share, and Ten Million
(10,000,000) shares shall be Preferred Stock, with a par value of
One Dollar ($1.00) per share.
The designations and the powers, preferences and rights, and
the qualifications, limitations or restrictions of the shares of
each class shall be as follows:
Part 1. Common Stock Provisions
1.1 Dividend rights. Subject to provisions of law and the
preferences of the Preferred Stock and of any other stock ranking
prior to the Common Stock as to dividends, the holders of the
Common Stock shall be entitled to receive dividends at such time
and in such amounts as may be determined by the board of
directors.
1.2 Voting rights. Except as provided by law and in or
pursuant to this Article FOURTH the holders of the Common Stock
shall have one vote for each share on each matter submitted to a
vote of the stockholders of the corporations. Except as
otherwise provided by law, by the certificate of incorporation or
by resolution or resolutions of the board of directors providing
for the issue of any series of Preferred Stock, the holders of
the Common Stock shall have sole voting power.
1.3 Liquidation rights. In the event of any liquidation,
dissolution or winding up of the corporation, whether voluntary
or involuntary (sometimes referred to as liquidation), after
payment or provision for payment of the debts and other
liabilities of the corporation and the preferential amounts to
which the holders of any stock ranking prior to the Common Stock
in the distribution of assets shall be entitled upon liquidation,
the holders of the Common Stock and the holders of any other
stock ranking on a parity with the Common Stock in the
distribution of assets upon liquidation shall be entitled to
share in the remaining assets of the corporation according to
their respective interests.
Part 2. Preferred Stock Provisions
2.1 Authority of the board of directors to issue in series.
The Preferred Stock may be issued from time to time in one or
more series. All shares of any one series of Preferred Stock
shall be identical except as to the dates of issue and the dates
from which dividends on shares of the series issued on different
dates shall cumulate (if cumulative). Subject to the certificate
of incorporation, authority is expressly granted to the board of
directors to authorize the issue of one or more series of
Preferred Stock, and to fix by resolution or resolutions
providing for the issue of each such series the voting powers,
designations, preferences and relative, participating, optional
or other special rights, and qualifications, limitations or
restrictions thereof, of such series, to the full extent now or
hereafter permitted by law, including but not limited to the
following:
(a) The number of shares of such series, which may
subsequently be increased (except as otherwise provided by the
resolution or resolutions of the board of directors providing for
the issue of such series) or decreased (to a number not less than
the number of such shares then outstanding) by resolution or
resolutions of the board of directors, and the distinctive
designation thereof;
(b) The dividend rights of such series, the
preferences, if any, over any other class or series of stock, or
of any other class or series of stock over such series, as to
dividends, the extent, if any, to which shares of such series
shall be entitled to participate in dividends with shares of any
other series or class of stock, whether dividends on shares of
such series shall be fully, partially or conditionally
cumulative, or a combination thereof, and any limitations,
restrictions or conditions on the payment of such dividends;
(c) The rights of such series, and the preferences, if
any, over any other class or series of stock, or of any other
class or series of stock over such series, in the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the corporation and the extent, if any, to which shares of any
such series shall be entitled to participate in such event with
any other series or class of stock;
(d) The time or times during which, the price or
prices at which, and the terms and conditions on which, the
shares of such series may be redeemed;
(e) The terms of any purchase, retirement or sinking
fund which may be provided for the shares of such series;
(f) The terms and conditions, if any, upon which the
shares of such series shall be convertible into or exchangeable
for shares of any other series, class or classes, or any other
securities, to the full extent now or hereafter permitted by law;
and
(g) The voting powers, if any, of such series in
addition to the voting powers provided by law.
2.2 Limitation on dividends. No holders of any series of
the Preferred Stock shall be entitled to receive any dividends
thereon other than those specifically provided for by the
certificate of incorporation or the resolution or resolutions of
the board of directors providing for the issue of such series of
Preferred Stock, nor shall any accumulated dividends on the
Preferred Stock bear any interest.
2.3 Limitation on liquidation distributions. In the event
of any liquidation, dissolution or winding up of the corporation,
whether voluntary or involuntary, the holders of Preferred Stock
of each series shall be entitled to receive only such amount or
amounts as shall have been fixed by the certificate of
incorporation or by the resolution or resolutions of the board of
directors providing for the issue of such series. A
consolidation or merger of the corporation with or into one or
more other corporations or a sale, lease or exchange of all or
substantially all of the assets of the corporation shall not be
deemed to be a voluntary or involuntary liquidation, dissolution
or winding up within the meaning of this part 2.
FIFTH: Incorporators. The names and mailing addresses of
the incorporators are:
Richard A. Barton Cordell J. Overgaard
800 Jorie Boulevard One First National Plaza
Oak Brook, Illinois 60521 52d Floor
Chicago, Illinois 60603
SIXTH: Directors. The number of directors of the
corporation shall be eleven until fixed by the by-laws, and
thereafter shall be the number from time to time stated in the
by-laws. The names of the persons who are to initially serve as
directors are as follows:
W.M. Freeman B.V. Moore
L.J. Harris R.L. Parker
J.T. Horton W.A. Pogue
J.E. Jones G.S. Trees
C.W Lake, Jr. C.A. Wooten
M.G. Mitchell
and the mailing address of each such person is:
c/o Chicago Bridge & Iron Company
800 Jorie Boulevard
Oak Brook, Illinois 60521
SEVENTH: Cumulative Voting. At all elections of directors
of the corporation, each holder of stock or of any class or
classes or of a series or series thereof shall be entitled to as
many votes as shall equal the number of votes which (except for
this provision as to cumulative voting) such holder would be
entitled to cast for the election of directors with respect to
such holder's shares of stock multiplied by the number of
directors to be elected by such holder, and such holder 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 such holder may see fit.
EIGHTH: By-Laws. In furtherance and not in limitation of
the powers conferred by statute, the board of directors is
expressly authorized to make, alter and repeal the by-laws of the
corporation. Adoption, amendment or repeal of the by-laws by the
stockholders of the corporation shall require the favorable vote
of the holders of at least two-thirds of the outstanding stock
entitled to vote thereon.
NINTH: No Pre-Emptive Rights. No holder of stock of any
class of the corporation nor of any security convertible into,
nor of any warrant, option or right to purchase, subscribe for or
otherwise acquire, stock of any class of the corporation, whether
now or hereafter authorized, shall, as such holder, have any pre-
emptive right whatsoever to purchase, subscribe for or otherwise
acquire, stock of any class of the corporation nor of any
security convertible into, nor of any warrant, option or right to
purchase, subscribe for or otherwise acquire, stock of any class
of the corporation, whether now or hereafter authorized.
TENTH: Merger, Consolidation, Dissolution, Sale of Assets,
Charter Amendment. The corporation shall not take any of the
following actions, except upon the affirmative vote of holders of
not less than two-thirds (2/3) of the outstanding stock of the
corporation entitled to vote and the affirmative vote of not less
than two-thirds (2/3) of each series of the outstanding shares of
Preferred Stock of the corporation entitled to vote as a class on
such issue:
(a) a merger or consolidation (except where this
corporation owns at least 90% of the voting securities of a
corporation which merges into this corporation);
(b) dissolution or liquidation;
(c) sale or other disposition of all or substantially
all of the assets of the corporation; or
(d) amendment of the certificate of incorporation.
ELEVENTH: Authority To Issue Stock. Except as otherwise
provided in the certificate of incorporation, the board of
directors shall have authority to authorize the issuance, from
time to time without any vote or other action by the
stockholders, of any or all shares of stock of the corporation of
any class or series at any time authorized, any securities
convertible into or exchangeable for any such shares so
authorized, and any warrant, option or right to purchase,
subscribe for or otherwise acquire, shares of stock of the
corporation of any class or series at any time authorized, in
each case to such persons and for such consideration and on such
terms as the board of directors from time to time in its
discretion lawfully may determine; provided, however, that the
consideration for the issuance of shares of stock of the
corporation having par value shall not be less than such par
value. Stock so issued, for which the consideration has been
paid to the corporation, shall be fully paid stock, and the
holders of such stock shall not be liable to any further call or
assessments thereon.
TWELFTH: Written Ballot Not Required. Election of
directors need not be by written ballot unless the by-laws of the
corporation so provide.
THIRTEENTH: Reservation. The corporation reserves the
right to amend, alter, change or repeal any provision contained
in this certificate of incorporation, in the manner now or
hereafter prescribed by statute, and all rights conferred upon
the stockholders herein are granted subject to this reservation.
/S/ Richard A. Barton
Richard A. Barton,
/S/ Cordell J. Overgaard
Cordell J. Overgaard, Incorporators
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
*****
CBI INDUSTRIES, INC., 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 CBI
Industries, Inc., the board directed that certain amendments to
the Certificate of Incorporation of said corporation be submitted
to the shareholders of said corporation and called a meeting of
the stockholders of said corporation for consideration thereof.
The proposed amendments are as follows:
The Certificate of Incorporation be amended by changing the first
paragraph of the Article numbered FOURTH so that, as amended said
paragraph of said Article shall read as follows:
FOURTH: Authorized Capital. The total number of shares of
stock of all classes which the corporation shall have authority
to issue is Sixty Million (60,000,000) of which Forty Million
(40,000,000) shares shall be Common stock, with a par value of
Two Dollars and Fifty Cents ($2.50) per share and Twenty Million
(20,000,000) shares shall be Preferred Stock, with a par value of
One Dollar ($1.00) per share.
The Certificate of Incorporation be amended by changing the
Article numbered SIXTH so that, as amended said Article shall
read as follows:
SIXTH: Directors. The number of directors shall be twelve
or such other number, not less than 9 nor more than 18, as may be
from time to time determined by the board of directors.
The directors elected at the Annual Meeting of
Stockholders in 1983 shall be divided by the board of
directors into three classes, as nearly equal in number as
possible, with the term of office of the first class to
expire at the 1984 Annual Meeting of Stockholders, the term
of office of the second class to expire at the 1985 Annual
Meeting of Stockholders and the term of office of the third
class to expire at the 1986 Annual Meeting of Stockholders.
After each Annual Meeting of Stockholders following such
initial classification, directors elected to succeed those
directors whose terms expire shall be elected for a term of
office to expire at the third succeeding Annual Meeting of
Stockholders after their election. Any director elected to a
particular term of office by the stockholders or directors
shall be eligible, upon resignation, to be elected to a
different class to facilitate the orderly application of the
corporation's retirement policy for directors.
The Certificate of Incorporation be amended by changing the
Article numbered TENTH so that, as amended said Article shall
read as follows:
TENTH: Merger, Consolidation, Dissolution, Sale of Assets,
Charter Amendment. Except as otherwise provided in this
Certificate of Incorporation, the corporation shall not take any
of the following actions, except upon the affirmative vote of
holders of not less than two-thirds (2/3) of the outstanding
Common Stock of the corporation entitled to vote and the
affirmative vote of not less than two-thirds (2/3) of each series
of the outstanding shares of Preferred Stock of the corporation
entitled to vote as a class on such issue, or, where the board of
directors has recommended such action, upon the affirmative vote
of holders of a majority of the outstanding Common Stock of the
corporation entitled to vote and the affirmative vote of a
majority of each series of the outstanding shares of Preferred
Stock of the corporation entitled to vote as a class on such
issue:
(a) a merger or consolidation (except where this
corporation owns at least 90% of the voting securities of a
corporation which merges into this corporation);
(b) dissolution or liquidation;
(c) sale or other disposition of all or substantially all
of the assets of the corporation; or
(d) amendment of the certificate of incorporation.
The Certificate of Incorporation be amended by repealing the
Article numbered SEVENTH so that, as repealed said Article shall
read as follows:
SEVENTH: Cumulative Voting. (Deleted)
The Certificate of incorporation be amended by adding Article
numbered FOURTEENTH so that, said Article shall read as follows:
FOURTEENTH: Stockholder Action. Any action required or
permitted to be taken by the stockholders of the corporation
shall be taken only at a duly called annual or special meeting.
Such action may not be taken by written consent of the
stockholders.
The Certificate of Incorporation be amended by adding Article
numbered FIFTEENTH so that, said Article shall read as follows:
FIFTEENTH: Business Combinations.
Part 1. Vote Required for Certain Business Combinations
1.1 Higher Vote for Certain Business Combinations. In
addition to any affirmative vote required by law or any other
Article of this Certificate of Incorporation, and except as
otherwise expressly provided in Part 2 of this Article FIFTEENTH:
(a) any merger or consolidation of the corporation or
any Subsidiary (as hereinafter defined) with (i) any Interested
Stockholder (as hereinafter defined) or (ii) any other
corporation (whether or not itself an Interested Stockholder)
which is, or after such merger or consolidation would be, an
Affiliate (as hereinafter defined) of an Interested Stockholder;
or
(b) any sale, lease, exchange, mortgage, pledge,
transfer or other disposition (in one transaction or a series of
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
corporation or any Subsidiary having an aggregate Fair Market
Value (as hereinafter defined) of $1,000,000 or more; or
(c) the issuance or transfer by the corporation or any
Subsidiary (in one transaction or a series of transactions) of
any securities of the corporation or any Subsidiary to any
Interested Stockholder or any Affiliate of any Interested
Stockholder in exchange for cash, securities or other property
(or a combination thereof) having an aggregate Fair Market Value
of $1,000,000 or more; or
(d) the adoption of any plan or proposal for the
liquidation or dissolution of the corporation proposed by or on
behalf of an Interested Stockholder or any Affiliate of any
Interested Stockholder, or
(e) any reclassification of securities (including any
reverse stock split), or recapitalization of the corporation, or
any merger or consolidation of the corporation with any of its
Subsidiaries or any other transaction (whether or not with or
into or otherwise involving an Interested Stockholder) which has
the effect, directly or indirectly, of increasing the
proportionate share of the outstanding shares of any class of
equity or convertible securities of the corporation or any
Subsidiary which is directly or indirectly owned by any
Interested Stockholder or any Affiliate of any Interested
Stockholder;
shall require the affirmative vote by the holders of at
least 80% of the then outstanding shares of Common Stock of the
corporation entitled to vote and the affirmative vote of at least
80% of each series of the outstanding shares of Preferred Stock
of the corporation entitled to vote as a class on such issue (the
"Voting Stock"). Such affirmative vote shall be required
notwithstanding the fact that no vote may be required, or that a
lesser percentage may be specified, by law or in any agreement
with any national securities exchange or otherwise.
1.2. Definition of "Business Combination". The term
"Business Combination" as used in this Article FIFTEENTH shall
mean any transaction which is referred to in any one or more of
clauses (a) through (e) of paragraph 1.1.
Part 2. When Higher Vote is Not Required
The provisions of Part 1 of this Article FIFTEENTH
shall not be applicable to any particular Business Combination,
and such Business Combination shall require only such affirmative
vote as is required by law and any other Article of this
Certificate of Incorporation, if all of the conditions specified
in either of the following paragraphs 2.1 and 2.2 are met:
2.1. Approval by Continuing Directors. The Business
Combination shall have been approved by a majority of the
Continuing Directors (as hereinafter defined).
2.2. Price and Procedure Requirements. All of the
following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair
Market Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received per
share by holders of Common Stock in such Business Combination
shall be at least equal to the higher of (i) the highest price
previously paid for any share of such Common Stock by any person
who is an Interested Stockholder at the time of the first public
announcement of the proposal of the Business Combination, or (ii)
the highest per share closing public market price within the two
year period immediately prior to the time of the first public
announcement of the proposal of the Business Combination for any
share of such Common Stock by the Interested Stockholder. The
price paid for any share of Common Stock shall be the amount of
cash plus the Fair Market Value of any other consideration paid
therefor, determined at the time of payment thereof.
(b) The consideration to be received by holders of a
particular class of outstanding Voting Stock (including Common
Stock) shall be in cash or in the same form as the Interested
Stockholder has previously paid for shares of such class of
Voting Stock. If the Interested Stockholder has paid for shares
of any class of Voting Stock with varying forms of consideration,
the form of consideration for such class of Voting Stock shall be
either cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired by it.
(c) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination: (i) there shall have been (1) no reduction
in the annual rate of dividends paid on the Common Stock (except
as necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Continuing Directors, and
(2) an increase in such annual rate of dividends as necessary to
reflect any reclassification (including any reverse stock split),
recapitalization, reorganization or any similar transaction which
has the effect of reducing the number of outstanding shares of
the Common Stock, unless the failure so to increase such annual
rate is approved by a majority of the Continuing Directors; and
(ii) such Interested Stockholder shall have not become the
beneficial owner of any additional shares of Voting Stock except
as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.
(d) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder), of any loans, advances,
guarantees, pledges or other financial assistance or any tax
credits or other tax advantages provided by the corporation,
whether in anticipation of or in connection with such Business
Combination or otherwise.
(e) A proxy or information statement describing the
proposed Business Combination and complying with the requirements
of the Securities Exchange Act of 1934 and the rules and
regulations thereunder (or any subsequent provisions replacing
such Act, rules or regulations) shall be mailed to all
stockholders of the Corporation at least 30 days prior to the
consummation of such Business Combination (whether or not such
proxy or information statement is required to be mailed pursuant
to such Act or subsequent provisions).
Part 3. Certain Definitions
For the purposes of this Article FIFTEENTH:
3.1. A "person" shall mean any individual, firm,
corporation or other entity.
3.2. "Interested Stockholder" shall mean any person
(other than the corporation or any Subsidiary) who or which:
(a) is the beneficial owner, directly or indirectly,
of more than 10% of the voting power of the outstanding Voting
Stock; or
(b) is an Affiliate of the corporation and at any time
within the two-year period immediately prior to the date in
question was the beneficial owner, directly or indirectly, of 10%
or more of the voting power of the then outstanding Voting Stock;
or
(c) is an assignee of or has otherwise succeeded to
any shares of Voting Stock which were at any time within the two-
year period immediately prior to the date in question
beneficially owned by any Interested Stockholder, if such
assignment or succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
3.3. A person shall be a "beneficial owner" of any Voting
Stock:
(a) which such person or any of its Affiliates or
Associates (as hereinafter defined) beneficially owns, directly
or indirectly; or
(b) which such person or any of its Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or upon
the exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to any
agreement, arrangement or understanding; or
(c) which are beneficially owned, directly or
indirectly, by any other person with which such person or any of
its Affiliates or Associates has any agreement, arrangement or
understanding for the purpose of acquiring, holding, voting or
disposing of any shares of Voting Stock.
3.4. For the purposes of determining whether a person
is an Interested Stockholder pursuant to paragraph 3.2, the
number of shares of Voting Stock deemed to be outstanding shall
include shares deemed owned through application of paragraph 3.3
but shall not include any other shares of Voting Stock which may
be issuable pursuant to any agreement, arrangement or
understanding, or upon exercise of conversion rights, warrants or
options, or otherwise.
3.5 "Affiliate" or "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act
of 1934, as in effect on January 1, 1983.
3.6. "Subsidiary" means any corporation of which more
than 48% of any class of equity security is owned, directly or
indirectly, by the corporation; provided, however, that for the
purposes of the definition of Interested Stockholder set forth in
paragraph 3.2, the term "Subsidiary" shall mean only a
corporation of which more than 48% of each class of equity
security is owned, directly or indirectly, by the corporation.
3.7. "Continuing Director" means any member of the
Board of Directors of the corporation (the "Board") who is
unaffiliated with the Interested Stockholder and was a member of
the Board prior to the time that the Interested Stockholder
became an Interested Stockholder, and any successor of a
Continuing Director who is unaffiliated with the Interested
Stockholder and is recommended to succeed a Continuing Director
by a majority of Continuing Directors then on the Board.
3.8 "Fair Market Value" means: (a) in the case of
stock, the highest closing sale price during the 30-day period
immediately preceding the date in question of a share of such
stock on the Composite Tape for New York Stock Exchange-Listed
Stocks or, if such stock is not quoted on the Composite Tape, on
the New York Stock Exchange, or, if such stock is not listed on
such Exchange, on the principal United States securities exchange
registered under the Securities Exchange Act of 1934 on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a
share of such stock during the 30-day period preceding the date
in question on the National Association of Securities Dealers,
Inc. Automated Quotations System or any system then in use, or if
no such quotations are available, the fair market value on the
date in question of a share of such stock as determined by the
Board in good faith; and (b) in the case of property other than
cash or stock, the fair market value of such property on the date
in question as determined by the Board in good faith.
3.9. In the event of any Business Combination in which
the corporation survives, the phrase "other consideration to be
received" as used in paragraphs 2.2(a) and (b) shall include the
shares of Common Stock and/or the shares of any other class of
outstanding Voting Stock retained by the holders of such shares.
Part 4. Directors' Duty to Determine Certain Facts
The directors of the corporation shall have the power
and duty to determine for the purpose of this Article FIFTEENTH,
on the basis of information known to them after reasonable
inquiry, (A) whether a person is an Interested Stockholder, (B)
the number of shares of Voting Stock beneficially owned by any
person, (C) whether a person is an Affiliate or Associate of
another, and (D) whether the assets which are the subject of any
Business Combination have, or the consideration to be received
for the issuance or transfer of securities by the corporation or
any Subsidiary in any Business Combination has, an aggregate Fair
Market Value of $1,000,000 or more.
Part 5. No Effect on Fiduciary Obligations of Interested
Stockholders
Nothing contained in this Article FIFTEENTH shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Part 6. Amendment, Repeal, Inconsistent Provisions
Notwithstanding any other provisions of this
Certificate of Incorporation or the By-Laws of the corporation
(and notwithstanding the fact that a lesser percentage may be
specified by law, this Certificate of Incorporation or the
By-Laws of the corporation), the affirmative vote of the holders
of 80% or more of the shares of the then outstanding Voting
Stock, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with, this
Article FIFTEENTH of this Certificate of Incorporation.
SECOND: That at the annual general meeting of stockholders of
said corporation 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 and the Certificate of Incorporation 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 CBI Industries, Inc., has caused
its corporate seal to be hereunto affixed and this certificate to
be signed by WILLIAM A. POGUE, its President and DONALD H.
CRAIGMILE, its Secretary, this 21st day of April, 1983.
By: /S/ W.A. Pogue
President
CORPORATE SEAL
ATTEST:
By: /S/ D.H. Craigmile
Secretary
<PAGE>
CERTIFICATE OF CHANGE OF ADDRESS OF
REGISTERED OFFICE AND OF REGISTERED AGENT
PURSUANT TO SECTION 134 OF TITLE 8 OF THE DELAWARE CODE
To:DEPARTMENT OF STATE
Division of Corporations
Townsend Building
Federal Street
Dover, Delaware 19903
Pursuant to the provisions of Section 134 of Title 8 of the
Delaware Code, the undersigned Agent for service of process, in
order to change the address of the registered office of the
corporation for which it is registered agent, hereby certifies
that:
1. The name of the agent is: The Corporation Trust
Company
2. The address of the old registered office was:
100 West Tenth Street
Wilmington, Delaware 19801
3. The address to which the registered office is to be
changed is:
Corporation Trust Center
1209 Orange Street
Wilmington, Delaware 19801
The new address will be effective on July 30, 1984.
4. The names of the corporations represented by said agent
are set forth on the list annexed to this certificate and made a
part hereof by reference.
IN WITNESS WHEREOF, said agent has caused this certificate
to be signed on its behalf by its Vice-President and Assistant
Secretary this 25th day of July, 1984.
THE CORPORATION TRUST COMPANY
(name of Registered Agent)
By: /S/ THE CORPORATION TRUST COMPANY
(Vice-President)
ATTEST:
/S/ THE CORPORATION TRUST COMPANY
(Assistant Secretary)
<PAGE>
CERTIFICATE OF CORRECTION OF
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
CBI INDUSTRIES, INC, a corporation organized and existing under
and by virtue of the General Corporation Law of the State of
Delaware,
DOES HEREBY CERTIFY:
FIRST: The name of the corporation is CBI Industries, Inc.
SECOND: That a Certificate of Amendment to the Certificate of
Incorporation of CBI Industries, Inc. was filed by the Secretary
of State of Delaware on April 26, 1983, and recorded in the
office of the Recorder of Deeds of New Castle County on August
30, 1983, and that said certificate requires correction as
permitted by subsection (f) of Section 103 of the General
Corporation Law of the State of Delaware.
THIRD: The inaccuracy of said certificate to be corrected is
as follows: The Certificate of Amendment of the Certificate of
Incorporation stated that the Certificate of Incorporation was
amended to authorize the issuance of Sixty Million (60,000,000)
shares of stock of all classes, of which Forty Million
(40,000,000) shares shall be Common Stock, with a par value of
Two Dollars and Fifty Cents ($2.50) per share, however the
shareholders of the corporation approved an amendment to the
Certificate of Incorporation authorizing the corporation to issue
Eighty Million (80,000,000) shares of stock of all classes of
which Sixty Million (60,000,000) shares shall be Common Stock,
with a par value of Two Dollars and Fifty Cents ($2.50) per
share.
FOURTH: That the Certificate of Amendment to the Certificate of
Incorporation is corrected in part to read as follows:
The Certificate of Incorporation be amended by changing the
first paragraph of the Article numbered FOURTH so that, as
amended said paragraph of said Article shall read as follows:
FOURTH: Authorized Capital. The total number of
shares of Stock of all classes which the corporation shall have
authority to issue is Eighty Million (80,000,000) of which Sixty
Million (60,000,000) shares shall be Common Stock, with a par
value of Two Dollars and Fifty Cents ($2.50) per share and Twenty
Million (20,000,000) shares shall be Preferred Stock, with a par
value of One Dollar ($1.00) per share.
IN WITNESS WHEREOF, said CBI Industries, Inc., has caused this
certificate to be signed by JOHN E. JONES, its Executive
Vice-President and attested by DONALD H. CRAIGMILE, its
Secretary, this 28th day of August, 1984.
BY: /S/ John E. Jones
Executive Vice-President
[Corporate Seal]
ATTEST:
BY: /S/ D.H. Craigmile
Secretary
<PAGE>
CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
CBI INDUSTRIES, INC.
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
We, William A. Pogue, Chairman of the Board, President and
Chief Executive Officer, and Donald H. Craigmile, Secretary, of
CBI Industries, Inc.. a corporation organized and existing under
the General Corporation Law of the State of Delaware (the
"Corporation"), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of
Directors by the Certificate of Incorporation of the Corporation,
the Board of Directors on March 4, 1986, adopted the following
resolution creating a series of six hundred thousand (600,000)
shares of Preferred Stock designated as Series A Junior
Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board
of Directors of the Corporation in accordance with the provisions
of its Certificate of Incorporation, a series of Preferred Stock
of the Corporation be and it hereby is created, and that the
designation and amount thereof and the voting powers, preferences
and relative, participating, optional or other special rights of
the shares of such series, and the qualifications, limitations or
restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such
series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such
series shall be 600,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series
A Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of March, June, September and
December in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a
share or fraction of a share of Series A Junior Participating
Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $10.00 or (b) subject to the
provision for adjustment hereinafter set forth, 100 times the
aggregate per share amount of all cash dividends, and 100 times
the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on
the Common Stock, $2.50 par value per share, of the Corporation
(the "Common Stock") since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series A Junior Participating Preferred
Stock. In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of
Series A Junior Participating Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Junior Participating Preferred Stock
as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided that, in
the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $10.00 per share on the Series A Junior
Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior
to the record date for the first Quarterly Dividend Payment Date,
in which case dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date of issue is
a Quarterly Dividend Payment Date or is a date after the record
date for the determination of holders of shares of Series A
Junior Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall be no more than 30 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series
A Junior Participating Preferred Stock shall have the following
voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Junior Participating Preferred
Stock shall entitle the holder thereof to 100 votes on all
matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of
Common Stock; or effect a subdivision or combination of the
outstanding shares of Common Stock (by reclassification or
otherwise) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event
shall be adjusted by multiplying such number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein or by law, the
holders of shares of Series A Junior Participating Preferred
Stock and the holders of shares of Common Stock shall vote
together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Series A Junior
Participating Preferred Stock shall be in arrears in an amount
equal to six (6) quarterly dividends thereon, the occurrence of
such contingency shall mark the beginning of a period (herein
called a "default period") which shall extend until such time
when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on
all shares of Series A Junior Participating Preferred Stock then
outstanding shall have been declared and paid or set apart for
payment. During each default period, the holders of Preferred
Stock, voting as a class, irrespective of Series, shall have the
right to elect two (2)Directors.
(ii) During any default period, such voting right of
the holders of Series A Junior Participating Preferred Stock may
be exercised initially at a special meeting called pursuant to
subparagraph (iii) of this Section 3(C) or at any annual meeting
of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the
right of the holders of any other series of Preferred Stock, if
any, to increase, in certain cases, the authorized number of
Directors shall be exercised unless the holders of ten percent
(10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the
holders of Common Stock shall not affect the exercise by the
holders of Preferred Stock of such voting right. At any meeting
at which the holders of Preferred Stock shall exercise such
voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to
fill such vacancies, if any, in the Board of Directors as may
then exist up to two (2) Directors or, if such right is exercised
at an annual meeting to elect two (2) Directors. If the number
which may be so elected at any special meeting does not amount to
the required number, the holders of the Preferred Stock shall
have the right, subject to the limitation on number of directors
set forth in the Certificate of Incorporation of the Corporation,
to make such increase in the number of Directors as shall be
necessary to permit the election by them of the required number.
After the holders of the Preferred Stock shall have exercised
their right to elect Directors in any default period and during
the continuance of such period, the number of Directors shall not
be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of
any equity securities ranking senior to or pari passu with the
Series A Junior Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall,
during an existing default period, have previously exercised
their right to elect Directors, the Board of Directors may order,
or any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series, may request,
the calling of a special meeting of the holders of Preferred
Stock, which meeting shall thereupon be called by the Chairman of
the Board, the Vice Chairman of the Board, the President, a
Vice-President or the Secretary of the Corporation. Notice of
such meeting and of any annual meeting at which holders of
Preferred Stock are entitled to vote pursuant to this paragraph
(C)(iii) shall be given to each holder of record of Preferred
Stock by mailing a copy of such notice to him at his last address
as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and
not later than 60 days after such order or request; or in default
of the calling of such meeting within 60 days after such order or
request, such meeting may be called on similar notice by any
stockholder or stockholders owning in the aggregate not less than
10% of the total number of shares of Preferred Stock outstanding.
Notwithstanding the provisions of this paragraph (C)(iii), no
such special meeting shall be called during the period within 60
days immediately preceding the date fixed for the next annual
meeting of the stockholders.
(iv) In any default period the holders of Common
Stock, and other classes of stock of the Corporation if
applicable, shall continue to be entitled to elect the whole
number of Directors until the holders of Preferred Stock shall
have exercised their right to elect two (2) Directors voting as a
class, after the exercise of which right (x) the Directors so
elected by the holders of Preferred Stock shall continue in
office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y)
any vacancy in the Board of Directors may (except as provided in
paragraph (C)(ii) of this Section 3) be filled by vote of a
majority of the remaining Directors theretofore elected by the
holders of the class of stock which elected the Director whose
office shall have become vacant. References in this paragraph
(C) to Directors elected by the holders of a particular class of
Stock shall include Directors elected by such Directors to fill
vacancies as provided in clause (y) of the foregoing sentence.
(v) Immediately upon the expiration of a default
period, (x) the right of the holders of Preferred Stock as a
class to elect Directors shall cease, (y) the term of any
Directors elected by the holders of Preferred Stock as a class
shall terminate, and (z) the number of Directors shall be such
number as may be provided for in the certificate of incorporation
or by-laws irrespective of any increase made pursuant to the
provisions of paragraph (C)(ii)of this Section 3 (such number
being subject, however, to change thereafter in any manner
provided by law or in the certificate of incorporation or
by-laws). Any vacancies in the Board of Directors effected by
the provisions of clauses (y) and (z) in the preceding sentence
may be filled by a majority of the remaining Directors.
(D) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which
the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred Stock, provided that
the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares of
any stock of the Corporation ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the
Series A Junior Participating Preferred Stock; or
(iv) purchase or otherwise acquire for consideration
any shares of Series A Junior Participating Preferred Stock, or
any shares of stock ranking on a parity with the Series A Junior
Participating Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined
by the Board of Directors) to all holders of such shares upon
such terms as the Board of Directors, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, shall determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be
retired and cancelled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized
but unissued shares of Preferred Stock and may be reissued as
part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to
the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon
any voluntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders of
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders
of shares of Series A Junior Participating Preferred Stock shall
have received $75 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment, provided that the holders
of shares of Series A Junior Participating Preferred Stock shall
be entitled to receive an aggregate amount per share, subject to
the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders
of Common Stock, or (2) to the holders of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution
or winding up) with the Series A Junior Participating Preferred
Stock, except distributions made ratably on the Series A Junior
Participating Preferred Stock and all other such parity stock in
proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding
up. In the event the Corporation shall at any time declare or
pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the aggregate amount to which holders of
shares of Series A Junior Participating Preferred Stock were
entitled immediately prior to such event under the proviso in
clause (1) of the preceding sentence shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 7. Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 100 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the
amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series A Junior Participating
Preferred Stock shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
Section 8. Ranking. The Series A Junior Participating
Preferred Stock shall rank junior to all other series of the
Corporation's Preferred Stock as to the payment of dividends and
the distribution of assets, unless the terms of any such series
shall provide otherwise.
Section 9. Amendment. The Certificate of Incorporation of
the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special
rights of the Series A Junior Participating Preferred Stock so as
to affect them adversely without the affirmative vote of the
holders of two thirds or more of the outstanding shares of Series
A Junior Participating Preferred Stock, voting separately as a
class.
Section 10. Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in liquidating distributions and to have
the benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
IN WITNESS WHEREOF, we have executed and subscribed this
Certificate and do affirm the foregoing as true under the
penalties of perjury this 5th day of March, 1986.
/S/ William A. Pogue
Name: William A. Pogue
Title: Chairman of the Board,
President and Chief
Executive Officer
Attest:
/S/ D.H. Craigmile
Name: Donald H. Craigmile
Title: Secretary
<PAGE>
CBI INDUSTRIES, INC.
Certificate of Designations
$3.50 Convertible Exchangeable Preferred
Stock, Series B
Par Value $1.00 Per Share
_________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_________________________
The undersigned, Chairman of the Board of Directors,
President and Chief Executive Officer of CBI Industries, Inc., a
Delaware corporation (hereinafter called the "Corporation"), DOES
HEREBY CERTIFY that the following resolution has been duly
adopted by a duly authorized committee of the Board of Directors
of the Corporation:
RESOLVED, that pursuant to the authority expressly
granted to and vested in the Board of Directors of the
Corporation (the "Board of Directors") by the provisions of the
Certificate of Incorporation of the Corporation, there hereby is
created, out of the 20,000,000 shares of preferred stock of the
Corporation authorized in Article Fourth of its Certificate of
Incorporation (the "Preferred Stock"), a series of Preferred
Stock of the Corporation consisting of 1,725,000 shares, which
series shall have the following powers, designations, preferences
and relative, participating, optional or other rights, and the
following qualifications, limitations and restrictions (in
addition to the powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations and restrictions, set forth in the Certificate of
Incorporation of the Corporation which are applicable to the
Preferred Stock):
1. Designation; Number of Shares; Par Value.
The designation of said shares of the Preferred Stock shall
be $3.50 Convertible Exchangeable Preferred Stock, Series B (the
"Series B Preferred Stock"). The number of shares of Series B
Preferred Stock shall be limited to 1,725,000. The par value of
the Series B Preferred Stock shall be $1.00 per share.
2. Dividends.
(a) The shares of Series B Preferred Stock shall be
entitled to receive, when and as declared by the Board of
Directors or a duly authorized committee thereof (an "Authorized
Board Committee"), out of funds legally available for the payment
of dividends, cumulative cash dividends in the amount of $3.50
per share per annum, and no more. Dividends shall accumulate and
be payable quarterly on the thirtieth day of January, April, July
and October in each year (each a "Dividend Payment Date" or
collectively, "Dividend Payment Dates"), commencing January 30,
1987, except that if any Dividend Payment Date is not a business
day in New York City, then such quarterly dividend shall be
payable on the next succeeding business day and such next
succeeding business day shall be the Dividend Payment Date.
Dividends on the shares of Series B Preferred Stock shall accrue
and be cumulative from the date of their original issue and will
be payable to stockholders of record on the record date, which
shall be not more than 45 days nor less than 10 days preceding
such Dividend Payment Date, fixed for such purpose by the Board
of Directors or an Authorized Board Committee in advance of each
particular Dividend Payment Date. The amount of dividends
payable on shares of Series B Preferred Stock for each full
quarterly dividend period shall be computed by dividing by four
the amount per share per annum set forth in this paragraph 2.
Dividends payable on the Series B Preferred Stock for the initial
dividend period and for any period less than a full quarterly
period shall be computed on the basis of a 360-day year of twelve
30-day months. Dividends paid on shares of Series B Preferred
Stock in an amount less than the total amount of such dividends
at the time accumulated and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding.
(b) So long as any shares of Series B Preferred Stock are
outstanding, unless all accumulated dividends on all outstanding
shares of Series B Preferred Stock have been paid or
contemporaneously are declared and paid through the last Dividend
Payment Date and full quarterly dividends on the Series B
Preferred Stock have been or contemporaneously are declared and
set apart for payment through the next succeeding Dividend
Payment Date, no dividends shall be paid or declared and set
apart for payment or any other distribution made upon the Common
Stock or Series A Junior Participating Preferred Stock or any
other stock of the Corporation ranking junior to the Series B
Preferred Stock as to payment of dividends (other than dividends
paid or other distributions made in stock of the Corporation
ranking junior to the Series B Preferred Stock as to payment of
dividends and upon liquidation, dissolution or winding up), nor
shall any Common Stock, Series A Junior Participating Preferred
Stock or any other stock of the Corporation ranking junior to the
Series B Preferred Stock as to payment of dividends be redeemed,
purchased or otherwise acquired for any consideration (or any
moneys be paid to or made available for a sinking fund for the
redemption of any shares of such stock) by the Corporation
(except by conversion of such junior stock into or exchange of
such junior stock for stock of the Corporation ranking junior to
the Series B Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up).
(c) Except as hereinafter provided, no dividends shall be
paid or declared and set apart for payment or any other
distribution made (other then dividends paid or other
distributions made in stock of the Corporation ranking junior to
the Series B Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up) on the Preferred Stock of
any other series ranking on a parity with the Series B Preferred
Stock as to payment of dividends for any period unless all
accumulated dividends on all outstanding shares of Series B
Preferred Stock have been paid or declared and set apart for
payment or contemporaneously are paid or declared and set apart
for payment through the last Dividend Payment Date and no
dividends shall be paid or declared and set apart for payment or
any other distribution made (other then dividends paid or other
distributions made in stock of the Corporation ranking junior to
the Series B Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up) on the Series B Preferred
Stock unless all accumulated dividends on all outstanding shares
of Preferred Stock of all other series ranking on a parity with
the Series B Preferred Stock as to payment of dividends have been
paid or declared and set apart for payment or contemporaneously
are paid or declared and set apart for payment to the last date
to which such dividends are payable. Whenever all accumulated
dividends are not paid in full upon the Series B Preferred Stock
or any other series of Preferred Stock ranking on a parity with
the Series B Preferred Stock as to payment of dividends, all
dividends declared or other distributions made upon shares of
Series B Preferred Stock and any other series of Preferred Stock
ranking on a parity with the Series B Preferred Stock as to
payment of dividends shall be declared or made pro rata so that
the amount of dividends declared or other distributions made per
share on the Series B Preferred Stock and such other series of
Preferred Stock shall in all cases bear to each other the same
ratio that accumulated and unpaid dividends per share on the
shares of Series B Preferred Stock and such other series of
Preferred Stock bear to each other. Any dividend paid upon the
Series B Preferred Stock at a time when any accumulated dividends
for any prior period are delinquent shall be expressly declared
as a dividend in whole or partial payment of the accumulated
dividend for the earliest period for which dividends are then
delinquent, and shall be so designated to each stockholder to
whom payment is made.
(d) Whenever all accumulated dividends are not paid in full
upon the Series B Preferred Stock, no stock of the Corporation
ranking on a parity with the Series B Preferred Stock as to
payment of dividends may be redeemed (pursuant to a sinking fund
or otherwise), purchased or otherwise acquired for any
consideration by the Corporation except (i) by means of a
redemption pursuant to which all outstanding shares of the Series
B Preferred Stock and all Preferred Stock of the Corporation
ranking on a parity with the Series B Preferred Stock as to
payment of dividends are redeemed or pursuant to which a pro rata
redemption is made from all holders of the Series B Preferred
Stock and all Preferred Stock of the Corporation ranking on a
parity with the Series B Preferred Stock as to payment of
dividends, the amount allocable to each series of such stock
being determined on the basis of the aggregate liquidation
preference of the outstanding shares of each series and the
shares of each series being redeemed only on a pro rata basis, or
(ii) by conversion of such parity Preferred Stock into, or
exchange of such parity Preferred Stock for, stock of the
Corporation ranking junior to the Series B Preferred Stock as to
payment of dividends and upon liquidation, dissolution or winding
up.
(e) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraphs (a)-(d) of this Section 2, and paragraph
(c) of Section 3, purchase or otherwise acquire such shares at
such time and in such manner.
3. Optional Redemptions.
(a) The Corporation may, at its option, at any time, redeem
all, or any number less than all, of the outstanding shares of
Series B Preferred Stock. Any redemption of shares of Series B
Preferred Stock shall be effected at the prices set forth below:
If Redeemed During the Redemption Price
Twelve Month Period Beginning Per Share
October 30, 1986 $53.50
October 30, 1987 $53.15
October 30, 1988 $52.80
October 30, 1989 $52.45
October 30, 1990 $52.10
October 30, 1991 $51.75
October 30, 1992 $51.40
October 30, 1993 $51.05
October 30, 1994 $50.70
October 30, 1995 $50.35
and thereafter at $50.00 per share plus, in each case, an amount
equal to all dividends (whether or not declared or due) accrued
and unpaid on such share of Series B Preferred Stock to the date
fixed for redemption.
(b) Notwithstanding the foregoing, the Series B Preferred
Stock may not be redeemed prior to October 30, 1989 unless the
Closing Price (as hereinafter defined) of the Corporation's
Common Stock, par value $2.50 per share (the "Common Stock"), has
equaled or exceeded 150% of the then effective Conversion Price
(as defined in Section 4 below), for at least 20 trading days
within 30 consecutive trading days ending within five trading
days prior to the date upon which notice of redemption is first
issued. The "Closing Price" for each day shall be the reported
last sale price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case as reported on the
New York Stock Exchange Composite Tape, or, if at any time the
Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or if the
Common Stock is not listed or admitted to trading on any national
securities exchange, on the National Association of Securities
Dealers Automated Quotations National Market System, or, if the
Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System, the
average of the closing bid and asked prices in the over-the-
counter market as furnished by any New York Stock Exchange member
firm selected from time to time by the Board of Directors or an
Authorized Board Committee for such purpose.
(c) Notwithstanding the foregoing provisions of this
Section 3, and subject to the provisions of Section 2 hereof,
whenever all accumulated dividends are not paid in full upon the
Series B Preferred Stock, no shares of the Series B Preferred
Stock may be redeemed (pursuant to a sinking fund or otherwise),
purchased or otherwise acquired for any consideration by the
Corporation, except (i) by means of a redemption pursuant to
which all outstanding shares of the Series B Preferred Stock are
simultaneously redeemed or pursuant to which the outstanding
shares of the Series B Preferred Stock are redeemed on a pro rata
basis or (ii) by conversion of shares of Series B Preferred Stock
into, or exchange of such shares for, Common Stock or any other
stock of the Corporation ranking junior to the Series B Preferred
Stock as to payment of dividends and upon liquidation,
dissolution or winding up.
(d) Notice of any proposed redemption of shares of Series B
Preferred Stock shall be given by the Corporation by mailing a
copy of such notice no less than 30 days nor more than 60 days
prior to the date fixed for such redemption to holders of record
of the shares of Series B Preferred Stock to be redeemed at their
respective addresses appearing on the books of the Corporation.
Said notice shall specify (i) the shares called for redemption,
(ii) the redemption price, (iii) the place at which and the date
on which the shares called for redemption will, upon presentation
and surrender of the certificates of stock evidencing such
shares, be redeemed and the redemption price therefor paid and
(iv) the then effective Conversion Price (as defined in Section 4
below) and that the right of holders of shares of Series B
Preferred Stock being redeemed to exercise their conversion right
shall terminate as to such shares at the close of business on the
date fixed for redemption (provided that no default by the
Corporation in the payment of the redemption price (including any
accrued and unpaid dividends) shall have occurred and be
continuing). Subject to the provisions of paragraph 3(c) hereof,
in the case of the redemption of less than all the outstanding
shares of Series B Preferred Stock, the Corporation will select
by lot the shares to be redeemed among all then outstanding
shares of Series B Preferred Stock in such manner as may be
prescribed by the Board of Directors or an Authorized Board
Committee. From and after the date fixed in any such notice as
the date of redemption of shares of Series B Preferred Stock,
unless default shall be made by the Corporation in providing
monies at the time and place specified for the payment of the
redemption price (including any accrued and unpaid dividends)
pursuant to such notice, all dividends on the Series B Preferred
Stock thereby called for redemption shall cease to accrue, such
shares of Series B Preferred Stock shall no longer be deemed to
be outstanding and all rights of the holders thereof as
stockholders of the Corporation, except the right to receive the
redemption price (including any accrued and unpaid dividends),
shall cease and terminate.
(e) The holder of any shares of Series B Preferred Stock
redeemed upon any exercise of the Corporation's redemption right
shall not be entitled to receive payment of the redemption price
for such shares until such holder shall cause to be delivered to
the place specified in the notice given with respect to such
redemption (i) the certificates representing such shares of
Series B Preferred Stock and (ii) transfer instrument(s)
satisfactory to the Corporation and sufficient to transfer such
shares of Series B Preferred Stock to the Corporation free of any
adverse interest. No interest shall accrue on the redemption
price of any share of Series B Preferred Stock after the date
fixed for its redemption.
(f) All shares of Series B Preferred Stock which shall at
any time have been redeemed shall, after such redemption, have
the status of authorized but unissued shares of Preferred Stock,
without designation as to series, and the number of shares of
Preferred Stock which the Corporation shall have authority to
issue shall not be decreased by the redemption of shares of
Series B Preferred Stock.
4. Conversion Rights.
(a) Each share of the Series B Preferred Stock shall be
convertible at the option of the holder thereof at any time
(except that if any such share shall have been called for
redemption or exchange, then, as to such share, such right shall
terminate at the close of business on the date fixed for such
redemption or exchange, unless default shall be made by the
Corporation in making the payment due upon redemption or in
issuing the debentures due in exchange) into fully paid and
nonassessable shares of Common Stock. The number of shares of
Common Stock issued upon conversion of each share of Series B
Preferred Stock shall be equal to $50 divided by the Conversion
Price then in effect. The Conversion Price initially shall be
$34.00; provided, however, that the Conversion Price shall be
subject to adjustment from time to time in certain instances as
hereinafter provided.
(b) The Common Stock deliverable upon conversion of Series
B Preferred Stock shall be Common Stock of the Corporation, par
value $2.50 per share, as constituted at the date of this
certificate, except as otherwise provided in subparagraphs (i)
and (vii) of paragraph (4)(e), and in paragraph 4(f).
(c) In order for any holder of Series B Preferred Stock to
convert the same into Common Stock, such holder shall surrender
the certificate or certificates for such Series B Preferred Stock
at the office of the Transfer Agent for the Series B Preferred
Stock during usual business hours, which certificate or
certificates, if the Corporation shall so request, shall be duly
endorsed to the Corporation or in blank, or accompanied by proper
instruments of transfer to the Corporation or in blank, and shall
give written notice to the Corporation at such office that he
elects so to convert such Series B Preferred Stock, and state in
writing therein the name or names in which he wishes the
certificate or certificates for Common Stock to be issued.
Shares of Series B Preferred Stock surrendered for conversion
during the period from the close of business on any record date
for the payment of dividends next preceding any Dividend Payment
Date to the opening of business on such Dividend Payment Date
shall (except in the case of shares which have been called for
redemption on a redemption date within such period) be
accompanied by payment in New York Clearing House funds or other
funds acceptable to the Corporation of an amount equal to the
dividend payable on such Dividend Payment Date on the shares
being surrendered for conversion.
(d) The Corporation will, as soon as practicable after such
deposit of certificates for Series B Preferred Stock accompanied
by the written notice and the statement above prescribed and the
payment of any amount required by the provisions of paragraph
(4)(c), deliver at said office to the person for whose account
such Series B Preferred Stock was so surrendered, or to his
nominee or nominees, certificates for the number of shares of
Common Stock to which he shall be entitled as aforesaid, together
with any cash adjustment of any fraction of a share as
hereinafter provided. Subject to the following provisions of
this paragraph, such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such
surrender of the Series B Preferred Stock to be converted, and
the person or persons entitled to receive the Common Stock
deliverable upon conversion of such Series B Preferred Stock
shall be treated for all purposes as the record holder or holders
of such Common Stock on such date. The Corporation shall not be
required to convert any shares of Series B Preferred Stock while
the stock transfer books of the Corporation are closed for any
purpose; but the surrender of Series B Preferred Stock for
conversion during any period while such books are so closed shall
become effective for conversion upon reopening of such books, as
if the surrender had been made immediately prior to the close of
business on the date of such reopening, and conversion shall be
at the Conversion Price in effect at such date. Except as
provided in the last sentence of paragraph (4)(c), no adjustments
in respect of, or payments of dividends on, shares surrendered
for conversion or any dividend on the Common Stock issued upon
conversion, shall be made upon the conversion of any shares of
Series B Preferred Stock; provided, however, that if any shares
shall be converted subsequent to the close of business on the
record date next preceding a Dividend Payment Date (except shares
called for redemption between such record date and Dividend
Payment Date) the registered holder of such shares at the close
of business on such record date shall be entitled to receive the
dividend payable on such shares on such Dividend Payment Date
notwithstanding the conversion thereof or the Corporation's
default on payment of the dividend due on such Dividend Payment
Date.
(e) The Conversion Price shall he subject to adjustment as
follows:
(i) In case the Corporation shall (A) pay a dividend
on its Common Stock in shares of its Common Stock, (B) subdivide
its outstanding shares of Common Stock into a greater number of
shares, or (C) combine its outstanding shares of Common Stock
into a smaller number of shares, the Conversion Price in effect
at the time of the record date of such dividend, or the effective
date of such subdivision or combination, as the case may be,
shall be proportionately adjusted so that the holder of any
Series B Preferred Stock surrendered for conversion after such
time shall be entitled to receive the number and kind of shares
which he would have owned or have been entitled to receive had
such Series B Preferred Stock been converted immediately prior to
such time. Such adjustment shall be made successively whenever
any event listed above shall occur and shall become effective
retroactively to immediately after the record date of such
dividend or immediately after the effective date of such
subdivision or combination.
(ii) Unless the holders of shares of Series B
Preferred Stock shall be permitted to subscribe for or purchase
shares of Common Stock on the same basis as if theretofore
converted into Common Stock, in case the Corporation shall issue
rights (other than those rights (the "Rights") issued pursuant to
that certain Rights Agreement dated as of March 4, 1986, between
the Corporation and Morgan Guaranty Trust Company of New York, as
Rights Agent) or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the
record date for the determination of stockholders entitled to
receive such rights or warrants) to subscribe for or purchase
shares of Common Stock at a price per share less than the Current
Market Price (as defined below) per share of Common Stock on such
record date, then in each such case the Conversion Price shall be
adjusted to equal the price determined by dividing the Conversion
Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants and of which the
denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares so offered pursuant to such rights or warrants
would purchase at such Current Market Price. Such adjustment
shall be made successively whenever such rights or warrants are
issued, and shall become effective retroactively to immediately
after the record date for the determination of stockholders
entitled to receive such rights or warrants; provided, however,
in the event that all the shares of Common Stock offered for
subscription or purchase are not delivered upon the exercise of
such rights or warrants, upon the expiration of such rights or
warrants the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the
numerator and the denominator of the foregoing fraction and the
resulting adjustment been made based upon the number of shares of
Common Stock actually delivered upon the exercise of such rights
or warrants rather than upon the number of shares of Common Stock
offered for subscription or purchase. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of
the Corporation but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of
Common Stock.
(iii) In case the Corporation shall distribute to all
holders of its Common Stock shares of its capital stock (other
than Common Stock), evidences of indebtedness or assets of the
Corporation (excluding dividends paid in, or distributions of,
cash from the retained earnings of the Corporation) or
subscription rights or warrants to subscribe for or purchase
securities of the Corporation (excluding those referred to in
subparagraph (ii) above and excluding the Rights as defined in
subparagraph (ii) above), then in each such case the Conversion
Price shall be adjusted to equal the price determined by dividing
the Conversion Price in effect immediately prior to the record
date for the determination of stockholders entitled to receive
such distribution by a fraction of which the numerator shall be
the Current Market Price per share of the Common Stock on such
record date and of which the denominator shall be such Current
Market Price per share of Common Stock less the fair market value
(as determined by the Board of Directors or an Authorized Board
Committee thereof, whose determination shall be conclusive) of
the portion of the capital stock, evidences of indebtedness,
assets or subscription rights or warrants distributed applicable
to one share of Common Stock. Such adjustment shall be made
successively whenever any such distribution is made, and shall
become effective retroactively to immediately after such record
date.
(iv) For the purpose of any computation under
subparagraphs (ii) and (iii) above, the "Current Market Price"
per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices (as defined in paragraph
3(b)) for the thirty consecutive trading days commencing
forty-five business days before such date.
(v) In any case in which this paragraph 4(e) shall
require that an adjustment as a result of any event becomes
effective retroactively to immediately after a record date or
effective date for such event, the Corporation may elect to defer
until after the occurrence of such event (A) issuing to the
holder of any shares of Series B Preferred Stock converted after
such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion
over and above the shares of Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to
adjustment and (B) paying to such holder any amount in cash in
lieu of a fractional share of Common Stock pursuant to paragraph
4(g) below; and, in lieu of the shares the issuance of which and
the cash the payment of which is so deferred, the Corporation
shall issue or cause its Transfer Agent to issue due bills or
other appropriate evidence of the right to receive such shares
and such cash.
(vi) No adjustment to the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Price; provided,
however, that the Corporation may make any such adjustment at its
election; and provided further, however, that any adjustments
which by reason of this subparagraph (vi) are not made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph 4(e) shall be
made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Anything in this paragraph 4(e)
notwithstanding, the Corporation shall be entitled to make such
decreases in the Conversion Price, in addition to those required
by this paragraph 4(e), as it in its discretion shall determine
to be advisable in order that any stock dividend, subdivision or
combination of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of securities
convertible into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable.
(vii) In the event that any of the Rights (as defined
in subparagraph 4(e)(ii)) are at any time exercised by the
holders thereof and such exercise equitably requires an
adjustment in the Conversion Price or in the kind of securities
issuable upon conversion of the Series B Preferred Stock, such
adjustment shall be made by the Board of Directors. In such
case, the determination of the Board of Directors as to whether
an adjustment in the Conversion Price or in the kind of
securities issuable upon conversion of the Series B Preferred
Stock is required, the amount and nature of any such adjustment,
and the effective date of any such adjustment shall be
conclusive.
(viii) If the Corporation makes any distribution,
dividend, issuance of rights or warrants or subdivision,
combination or reclassification of or on the Common Stock, or any
security to which the conversion right addressed in this Section
4 then applies, which is not covered by any of the preceding
provisions of this paragraph (e) and which equitably requires an
adjustment in the Conversion Price, such adjustment shall be made
as determined by the Board of Directors of the Corporation. In
such case, the determination of the Board of Directors as to
whether an adjustment in the Conversion Price is required, the
amount of any such adjustment, and the effective date of any such
adjustment shall be conclusive.
(f) In case of any consolidation of the Corporation into,
or merger of the Corporation with or into, any other corporation
(other than a consolidation or merger in which the Corporation is
the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common
Stock), or in case of any sale or transfer of all or
substantially all of the assets of the Corporation, or in case of
any reclassification or change of outstanding shares of Common
Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a
subdivision or combination, but including any reclassification of
the Common Stock into two or more classes), or in case of any
statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a
third corporation into the Corporation), the holder of each share
of Series B Preferred Stock then outstanding shall have the right
thereafter to convert such share into the kind and amount of
shares of stock and other securities, cash and other property
receivable upon such consolidation, merger, sale, transfer,
reclassification, change or statutory exchange by a holder of the
number of shares of Common Stock of the Corporation into which
such share of Series B Preferred Stock might have been converted
immediately prior to such consolidation, merger, sale, transfer,
reclassification, change or statutory exchange (assuming that the
holder of such share of Series B Preferred Stock, as a holder of
Common Stock prior to such transaction, would not have exercised
any rights of election as a holder of Common Stock as to the kind
or amount of shares of stock and other securities, cash and other
property receivable upon such consolidation, merger, sale,
transfer, reclassification, change or statutory exchange;
provided, that if the kind or amount of shares of stock and other
securities, cash and other property receivable upon such
consolidation, merger, sale, transfer, reclassification, change
or statutory exchange is not the same for each non-electing share
of Common Stock, then the kind and amount of shares of stock and
other securities, cash and other property receivable shall be
deemed to be the kind and amount so receivable by a plurality of
the non-electing shares). In any such event, effective provision
shall be made, in the articles or certificate of incorporation of
the resulting or surviving corporation or other corporation
issuing or delivering such shares, other securities, cash or
other property or otherwise, so that the provisions set forth
herein for the protection of the conversion rights of the Series
B Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any such other shares of stock and other
securities, cash and other property deliverable upon conversion
of the Series B Preferred Stock remaining outstanding or other
convertible stock or securities received by the holders of the
Series B Preferred Stock in place thereof; and any such resulting
or surviving corporation or other corporation issuing or
delivering such shares, other securities, cash and other property
shall expressly assume the obligation to deliver, upon the
exercise of the conversion privilege, such shares, securities,
cash and other property as the holders of the Series B Preferred
Stock remaining outstanding, or other convertible stock or
securities received by the holders of the Series B Preferred
Stock in place thereof, shall be entitled to receive, pursuant to
the provisions hereof, and to make provision for the protection
of the conversion right as above provided. In case shares of
stock, securities, cash or other property other than Common Stock
shall be issuable or deliverable upon conversion as aforesaid,
then all references to Common Stock in this paragraph 4 shall be
deemed to apply, so far as provided and as nearly as is
reasonable, to any such shares, other securities, cash or other
property. The above provisions shall similarly apply to
successive consolidations, mergers, sales, transfers,
reclassifications, changes or statutory exchanges.
(g) No fractional interests in Common Stock shall be issued
upon conversion of shares of Series B Preferred Stock. If more
than one share of Series B Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full
shares of Common Stock issuable by the Corporation upon
conversion thereof shall be computed on the basis of the
aggregate number of shares of Series B Preferred Stock so
surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable upon conversion of any share of
Series B Preferred Stock, the Corporation will pay a cash
adjustment in respect of such fractional interest in an amount
equal to the same fraction of the Closing Price (as defined in
paragraph 3(b)) per share of Common Stock determined as of the
business day preceding the date of conversion.
(h) Whenever any adjustment is required in the Conversion
Price or the number or type of shares of stock or other
securities, cash or other property into which each share of
Series B Preferred Stock is convertible, the Corporation shall
forthwith (A) file with the Transfer Agent for the Series B
Preferred Stock a statement describing in reasonable detail the
adjustment in the Conversion Price or conversion right, the date
on which the adjustment became effective and the facts requiring
such adjustment and (B) cause a copy of such statement to be
mailed to the holders of record of the Series B Preferred Stock.
(i) Upon any conversion of shares of Series B Preferred
Stock, the shares so converted shall have the status of
authorized and unissued shares of Preferred Stock, without
designation as to series, and the number of shares of Preferred
Stock which the Corporation shall have authority to issue shall
not be decreased by the conversion of shares of Series B
Preferred Stock. The Corporation shall at all times reserve and
keep available, free from preemptive rights, out of its
authorized and unissued stock or stock held as treasury stock,
solely for the purpose of effecting the conversion of the Series
B Preferred Stock, such number of shares of its Common Stock, and
such number of Rights, as shall from time to time be sufficient
to effect the conversion of all shares of Series B Preferred
Stock at such time outstanding. For the purpose of this
paragraph 4(i), the full number of shares of Common Stock, and
the full number of Rights, issuable upon the conversion of all
outstanding shares of Series B Preferred Stock shall be computed
as if at the time of computation of such number of shares of
Common Stock and such number of Rights all outstanding shares of
Series B Preferred Stock were held by a single holder. The
Corporation shall from time to time, in accordance with the laws
of the State of Delaware, increase the authorized number of
shares of its Common Stock if at any time the authorized number
of shares of its Common Stock not outstanding shall not be
sufficient to permit the conversion of all the then outstanding
Series B Preferred Stock.
(j) The Corporation will pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Series B Preferred Stock
pursuant hereto. The Corporation shall not, however, be required
to pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of Common Stock in a name other
than that in which the Series B Preferred Stock so converted was
registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(k) Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value
of the Common Stock, the Corporation will take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully
paid and non assessable shares of Common Stock at the Conversion
Price as so adjusted.
(1) In case: (i) the Corporation shall declare a dividend
(or any other distribution) on its Common Stock (other than cash
dividends paid out of the retained earnings of the Corporation
and dividends payable in Common Stock); or (ii) the Corporation
shall authorize the granting to the holders of its Common Stock
of rights or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights or warrants; or (iii)
of any reclassification or change of the Common Stock of the
Corporation (other than a subdivision or combination of its
outstanding Common Stock (but including any reclassification of
the Common Stock into two or more classes), or a change in par
value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the
Corporation is a party or of any statutory exchange of securities
with another corporation and for which approval of any
stockholders of the Corporation is required, or of the sale or
transfer of all or substantially all of the assets of the
Corporation; or (iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then, in each such
case, the Corporation shall mail to each holder of Series B
Preferred Stock at least fifteen days prior to the applicable
date hereinafter specified, a notice stating (A) the date on
which a record is to be taken for the purpose of such dividend,
distribution or rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights or
warrants are to be determined, or (B) the date on which such
reclassification, change, consolidation, merger, sale, transfer,
statutory exchange, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, change,
consolidation, merger, sale, transfer, statutory exchange,
dissolution, liquidation or winding up. Failure to give such
notice, or any defect therein, shall not, however, affect the
legality or validity of any action described in clauses (i),
(ii), (iii) or (iv) of this paragraph 4(1).
5. Exchange.
(a) The shares of Series B Preferred Stock are
exchangeable, in whole but not in part, at the option of the
Corporation, on any Dividend Payment Date at any time on or after
October 30, 1988, to and including October 30, 2011, for the
Corporation's 7% Convertible Subordinated Debentures due October
30, 2011 (the "Debentures"); provided that on or prior to the
date of exchange the Corporation shall have paid to or set aside
for payment to the holders of outstanding shares of Series B
Preferred Stock all accrued and unpaid dividends to the date of
exchange. Holders of outstanding shares of Series B Preferred
Stock will be entitled to receive $50.00 principal amount of
Debentures in exchange for each share of Series B Preferred Stock
held by them at the time of exchange. The Corporation will mail
to each holder of record of the shares of Series B Preferred
Stock at the address shown on the books of the Corporation
written notice of its intention to exchange no less than 30 nor
more than 60 days prior to the date fixed for the exchange (the
"Exchange Date"). Each such notice shall state: (i) the
Exchange Date, (ii) the place or places where certificates for
such shares of Series B Preferred Stock are to be surrendered for
exchange into Debentures and (iii) that dividends on the shares
of Series B Preferred Stock to be exchanged will cease to accrue
on such Exchange Date. Prior to giving notice of intention to
exchange, the Corporation shall execute and deliver with a bank
or trust company selected by the Corporation, an Indenture in
substantially the form filed as an exhibit to the Registration
Statement on Form S-3 filed with the Securities and Exchange
Commission relating to the Series B Preferred Stock with such
changes as may be required by law or usage. The Corporation will
cause the Debentures to be authenticated on the Exchange Date,
and the Corporation will pay interest on the Debentures at the
rate and on the dates specified in such Indenture from the
Exchange Date.
(b) If notice has been mailed as aforesaid, from and after
the Exchange Date (unless default shall be made by the
Corporation in issuing Debentures in exchange for, or making the
final dividend payment on, the outstanding shares of Series B
Preferred Stock on the Exchange Date), dividends on the shares of
Series B Preferred Stock shall cease to accrue, and said shares
shall no longer be deemed to be issued and outstanding, and all
rights of the holders thereof as stockholders of the Corporation
(except the right to receive from the Corporation the Debentures
and the right to receive accrued and unpaid dividends on such
shares of Series B Preferred Stock to the Exchange Date) shall
cease and terminate. Upon surrender in accordance with said
notice of the certificates for any shares of Series B Preferred
Stock so exchanged (properly endorsed or assigned for transfer,
if the Corporation shall so require and the notice shall so
state), such shares shall be exchanged by the Corporation into
Debentures as aforesaid.
(c) All shares of Series B Preferred Stock which shall at
any time have been exchanged for Debentures shall, after such
exchange, have the status of authorized but unissued shares of
Preferred Stock, without designation as to series, and the number
of shares of Preferred Stock which the Corporation shall have
authority to issue shall not be decreased by the exchange of
shares of Series B Preferred Stock for Debentures.
6. Liquidation Rights.
Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the
Series B Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to
stockholders, the amount of $50.00 per share plus an amount equal
to all dividends (whether or not declared or due) on such shares
accrued and unpaid thereon to the date of final distribution,
before any payment or distribution shall be made on the Common
Stock, the Series A Junior Participating Preferred Stock or on
any other class or series of stock ranking junior to the Series B
Preferred Stock with respect to distributions upon liquidation,
dissolution or winding up. For purposes of this Section 6, the
merger or consolidation of the Corporation or the sale of all or
substantially all of the Corporation's assets shall not be deemed
to be a liquidation, dissolution or winding up of the
Corporation. In the event the assets of the Corporation
available for distribution to the holders of shares of the Series
B Preferred Stock upon any dissolution, liquidation or winding up
of the Corporation shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to this
Section 6, no such distributions shall be made upon account of
any shares of any other class or series of stock of the
Corporation ranking on a parity with the shares of the Series B
Preferred Stock upon such dissolution, liquidation or winding up
unless proportionate distributive amounts shall be paid on
account of the shares of the Series B Preferred Stock, ratably,
in proportion to the full distributable amounts to which holders
of all such parity shares are respectively entitled upon such
dissolution, liquidation or winding up. After the payment to the
holders of the shares of the Series B Preferred Stock of the full
preferential amounts provided for in this Section 6, the holders
of the Series B Preferred Stock as such shall have no right or
claim to any of the remaining assets of the Corporation.
7. Voting Rights.
(a) Except as indicated in this Section 7 and in Section 8
and in accordance with applicable law, the holders of shares of
Series B Preferred Stock shall have no voting rights.
(b) If at any time dividends payable on the Series B
Preferred Stock, or on any one or more other series of Preferred
Stock of the Corporation entitled to receive cumulative preferred
dividends, are in arrears and unpaid in an amount equal to or
exceeding the amount of dividends payable thereon for six
quarterly dividend periods, the number of members of the Board of
Directors shall increase by two, and the holders of the
outstanding shares of Preferred Stock will have the exclusive
right, voting separately as a class, to elect such two directors
of the Corporation at the next regular or special meeting of
stockholders of the Corporation. Such voting right will continue
for the Preferred Stock until all dividends on the Series B
Preferred Stock and on such other series have been paid in full,
at which time such voting right of the holders of Preferred Stock
will terminate, subject to re-vesting in the event of a
subsequent arrearage. Upon any termination of the aforesaid
voting right, the term of office of all the directors elected by
holders of Preferred Stock voting separately as a class will
terminate and the number of members of the Board of Directors
shall decrease by two.
(c) In exercising the voting rights set forth herein or
when otherwise granted voting rights by operation of law, each
share of Series B Preferred Stock shall be entitled to one vote.
8. Amendment.
This Certificate of Designations may be amended, altered or
repealed by the unilateral action of the Board of Directors of
the Corporation without the consent or vote of stockholders.
Notwithstanding the preceding sentence, the Certificate of
Incorporation of the Corporation (including this Certificate of
Designations) shall not be amended, altered or repealed in any
manner which would adversely alter or change the powers,
preferences or special rights of the Series B Preferred Stock
without the affirmative vote or consent of the holders of
two-thirds or more of the outstanding shares of Series B
Preferred Stock, voting separately as a series; provided, that
any increase in the authorized Preferred Stock or the creation
and issuance of any other class or series of Preferred Stock
ranking on a parity with or junior to the Series B Preferred
Stock as to payment of dividends and upon liquidation,
dissolution or winding up or any decrease in the number of shares
which constitute the Series B Preferred Stock (but not below the
number of shares thereof then outstanding) shall not be deemed to
adversely alter or change such powers, preferences or special
rights.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Designations to be duly executed on its behalf by
its undersigned Chairman of the Board, President and Chief
Executive Officer and attested to by its Secretary this 4th day
of December, 1986.
/S/ William A. Pogue
William A. Pogue,
Chairman of the Board,
President and Chief Executive Officer
[Corporate Seal]
ATTEST:
/S/ Donald H. Craigmile
Donald H. Craigmile, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
* * * *
CBI Industries, Inc., 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 CBI
Industries, Inc., the board directed that a certain amendment to
the Certificate of Incorporation of said corporation be submitted
to the shareholders of said corporation and called a meeting of
stockholders of said corporation for consideration thereof. The
proposed amendment is as follows:
The Certificate of Incorporation be amended by adding
Article numbered SIXTEENTH so that, said Article shall read as
follows:
SIXTEENTH: Elimination of Liability of Directors. To
the fullest extent permitted by the General Corporation Law of
the State of Delaware as the same exists or may hereafter be
amended, a director of the corporation shall not be liable to the
corporation or its stockholders for monetary damages for breach
of fiduciary duty as a director.
No amendment to or repeal of this Article
SIXTEENTH shall apply to or have any effect on the liability or
alleged liability of any director of the corporation for or with
respect to any acts or omissions of such director occurring prior
to the effective date of such amendment or repeal.
SECOND: That at the annual general meeting of stockholders of
said corporation 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 and the Certificate of Incorporation 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 CBI Industries, Inc., has caused its
corporate seal to be hereunto affixed and this certificate to be
signed by WILLIAM A. POGUE, it Chairman, and DONALD H. CRAIGMILE,
is Secretary, this 23rd day of April, 1987.
/S/ William A. Pogue
WILLIAM A. POGUE, Chairman
[Corporate Seal]
ATTEST:
BY: /S/ D.H. Craigmile
DONALD H. CRAIGMILE, Secretary
<PAGE>
CBI INDUSTRIES, INC.
Certificate of Designations
Convertible Voting
Preferred Stock, Series C
Par Value $1.00 Per Share
______________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
______________________
The undersigned, Executive Vice President & Chief Financial
Officer of CBI Industries, Inc., a Delaware corporation
(hereinafter called the "Corporation"), DOES HEREBY CERTIFY that
the following resolution has been duly adopted by a duly
authorized special committee of the Board of Directors of the
Corporation (with Sections 6 and 7 of said resolution having been
previously determined and authorized by resolution of the Board
of Directors):
RESOLVED, that pursuant to the authority expressly granted
to and vested in the Board of Directors of the Corporation (the
"Board of Directors") by the provisions of the Certificate of
Incorporation of the Corporation, there hereby is created, out of
the 20,000,000 shares of preferred stock of the Corporation
authorized in Article Fourth of its Certificate of Incorporation
(the "Preferred Stock"), a series of Preferred Stock of the
Corporation consisting of 3,945,000 shares, which series shall
have the following powers, designations, preferences and
relative, participating, optional or other rights, and the
following qualifications, limitations and restrictions (in
addition to the powers, designations, preferences and relative,
participating, optional or other rights, and the qualifications,
limitations and restrictions, set forth in the Certificate of
Incorporation of the Corporation which are applicable to the
Preferred Stock):
1. Designation; Number of Shares; Par Value; Rank.
The shares of such series shall be designated as
"Convertible Voting Preferred Stock, Series C" (the "Series C
Preferred Stock"). The number of shares of Series C Preferred
Stock shall be limited to 3,945,000. The par value of the Series
C Preferred Stock shall be $1.00 per share. The Series C
Preferred Stock shall rank senior to the Common Stock and the
Series A Junior Participating Preferred Stock of the Corporation
(the "Series A Preferred Stock"), and shall rank on a parity with
the $3.50 Convertible Exchangeable Preferred Stock, Series B of
the Corporation (the "Series B Preferred Stock"), in each case as
to payment of dividends and upon liquidation, dissolution and
winding up.
2. Dividends.
(a) The holders of shares of Series C Preferred Stock shall
be entitled to receive, when and as declared by the Board of
Directors or a duly authorized committee thereof (an "Authorized
Board Committee"), out of funds legally available for the payment
of dividends, cumulative cash dividends in the amount of $2.27
per share per annum, and no more. Dividends shall accumulate and
be payable semiannually on the first day of March and September
in each year (each a "Dividend Payment Date" or collectively,
"Dividend Payment Dates"), commencing September 1, 1988, except
that if any Dividend Payment Date is not a business day in
Chicago, Illinois, then such semiannual dividend shall be payable
on the next succeeding business day and such next succeeding
business day shall be the Dividend Payment Date. Dividends on
the shares of Series C Preferred Stock shall accrue and be
cumulative from the date of their original issue and will be
payable on each Dividend Payment Date to stockholders of record
on the record date, which shall be not more than 45 days nor less
than 10 days preceding such Dividend Payment Date, fixed for such
purpose by the Board of Directors or an Authorized Board
Committee in advance of such Dividend Payment Date. The amount
of dividends payable on shares of Series C Preferred Stock for
each full semiannual dividend period shall be computed by
dividing $2.27 by two. Dividends payable on the Series C
Preferred Stock for the initial dividend period and for any
period less than a full semiannual period shall be computed on
the basis of a 360-day year of twelve 30-day months. Dividends
paid on shares of Series C Preferred Stock in an amount less than
the total amount of such dividends at the time accumulated and
payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time
outstanding.
(b) So long as any share of Series C Preferred Stock is
outstanding, unless all accumulated dividends on all outstanding
shares of Series C Preferred Stock have been paid or
contemporaneously are declared and paid through the last Dividend
Payment Date, no dividends shall be paid or declared and set
apart for payment or any other distribution made upon the Common
Stock or the Series A Preferred Stock or any other stock of the
Corporation ranking junior to the Series C Preferred Stock as to
payment of dividends (other than dividends paid or other
distributions made in stock of the Corporation ranking junior to
the Series C Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up), nor shall any Common
Stock, Series A Preferred Stock or any other stock of the
Corporation ranking junior to the Series C Preferred Stock as to
payment of dividends be redeemed, purchased or otherwise acquired
for any consideration (or any moneys be paid to or made available
for a sinking fund for the redemption of any shares of such
stock) by the Corporation (except by conversion of such junior
stock into or exchange of such junior stock for stock of the
Corporation ranking junior to the Series C Preferred Stock as to
payment of dividends and upon liquidation, dissolution or winding
up).
(c) Except as hereinafter provided, no dividends shall be
paid or declared and set apart for payment or any other
distribution made (other then dividends paid or other
distributions made in stock of the Corporation ranking junior to
the Series C Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up) on the Preferred Stock of
any other series ranking on a parity with the Series C Preferred
Stock as to payment of dividends for any period unless all
accumulated dividends on all outstanding shares of Series C
Preferred Stock have been paid or declared and set apart for
payment or contemporaneously are paid or declared and set apart
for payment through the last Dividend Payment Date and no
dividends shall be paid or declared and set apart for payment or
any other distribution made (other then dividends paid or other
distributions made in stock of the Corporation ranking junior to
the Series C Preferred Stock as to payment of dividends and upon
liquidation, dissolution or winding up) on the Series C Preferred
Stock unless all accumulated dividends on all outstanding shares
of Preferred Stock of all other series ranking on a parity with
the Series C Preferred Stock as to payment of dividends have been
paid or declared and set apart for payment or contemporaneously
are paid or declared and set apart for payment to the last date
to which such dividends are payable. Whenever all accumulated
dividends are not paid in full upon the Series C Preferred Stock
or any other series of Preferred Stock ranking on a parity with
the Series C Preferred Stock as to payment of dividends, all
dividends declared or other distributions made upon shares of
Series C Preferred Stock and any other series of Preferred Stock
ranking on a parity with the Series C Preferred Stock as to
payment of dividends shall be declared or made pro rata so that
the amount of dividends declared or other distributions made per
share on the Series C Preferred Stock and such other series of
Preferred Stock shall in all cases bear to each other the same
ratio that accumulated and unpaid dividends per share on the
shares of Series C Preferred Stock and such other series of
Preferred Stock bear to each other. Any dividend paid upon the
Series C Preferred Stock at a time when any accumulated dividends
for any prior period are delinquent shall be expressly declared
as a dividend in whole or partial payment of the accumulated
dividend for the earliest period for which dividends are then
delinquent, and shall be so designated to each stockholder to
whom payment is made.
(d) Whenever all accumulated dividends are not paid in full
upon the Series C Preferred Stock, no stock of the Corporation
ranking on a parity with the Series C Preferred Stock as to
payment of dividends may be redeemed (pursuant to a sinking fund
or otherwise), purchased or otherwise acquired for any
consideration by the Corporation except (i) by means of a
redemption pursuant to which all outstanding shares of the Series
C Preferred Stock and all Preferred Stock of the Corporation
ranking on a parity with the Series C Preferred Stock as to
payment of dividends are redeemed or pursuant to which a pro rata
redemption is made from all holders of the Series C Preferred
Stock and all Preferred Stock of the Corporation ranking on a
parity with the Series C Preferred Stock as to payment of
dividends, the amount allocable to each series of such stock
being determined on the basis of the aggregate liquidation
preference of the outstanding shares of each series and the
shares of each series being redeemed only on a pro rata basis, or
(ii) by conversion of such parity Preferred Stock into, or
exchange of such parity Preferred Stock for, stock of the
Corporation ranking junior to the Series C Preferred Stock as to
payment of dividends and upon liquidation, dissolution or winding
up.
(e) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraphs (a)-(d) of this Section 2, purchase or
otherwise acquire such shares at such time and in such manner.
3. Optional Redemptions.
(a) The Corporation may, at its option, at any time and
from time to time on or after May 1, 1990, redeem all, or any
number less than all, of the outstanding shares of Series C
Preferred Stock. Any redemption of shares of Series C Preferred
Stock shall be effected at the prices set forth below:
If Redeemed During the Redemption Price
Twelve Month Period Beginning Per Share
May 1, 1990 $34.02
May 1, 1991 $33.70
May 1, 1992 $33.37
May 1, 1993 $33.05
May 1, 1994 $32.72
and thereafter at $32.40 per share plus, in each case, an amount
equal to all dividends (whether or not declared or due) accrued
and unpaid on such share of Series C Preferred Stock to the date
fixed for redemption.
(b) Notwithstanding the foregoing provisions of this
Section 3, and subject to the provisions of Section 2 hereof,
whenever all accumulated dividends are not paid in full upon the
Series C Preferred Stock, no shares of the Series C Preferred
Stock may be redeemed, purchased or otherwise acquired for any
consideration by the Corporation, except by means of a redemption
pursuant to which all outstanding shares of the Series C
Preferred Stock are simultaneously redeemed or pursuant to which
the outstanding shares of the Series C Preferred Stock are
redeemed on a pro rata basis.
(c) Notice of any proposed redemption of shares of Series C
Preferred Stock pursuant to this Section 3 shall be given by the
Corporation by mailing a copy of such notice no less than 30 days
nor more than 60 days prior to the date fixed for such redemption
to holders of record of the shares of Series C Preferred Stock to
be redeemed at their respective addresses appearing on the books
of the Corporation. Such notice shall specify (i) the shares
called for redemption, (ii) the redemption price and (iii) the
place at which and the date on which the shares called for
redemption will, upon presentation and surrender of the
certificates of stock evidencing such shares, be redeemed and the
redemption price therefor paid. Subject to the provisions of
paragraph 3(b) hereof, in the case of the redemption of less than
all the outstanding shares of Series C Preferred Stock, the
Corporation will select the shares to be redeemed among all then
outstanding shares of Series C Preferred Stock in such manner as
may be prescribed by the Board of Directors or an Authorized
Board Committee. From and after the date fixed in any such
notice as the date of redemption of shares of Series C Preferred
Stock, unless the Corporation shall default in providing monies
at the time and place specified for the payment of the redemption
price (including any accrued and unpaid dividends) pursuant to
such notice, all dividends on the Series C Preferred Stock
thereby called for redemption shall cease to accrue, such shares
of Series C Preferred Stock shall no longer be deemed to be
outstanding and all rights of the holders thereof as stockholders
of the Corporation, except the right to receive the redemption
price (including any accrued and unpaid dividends), shall cease
and terminate.
(d) The holder of any shares of Series C Preferred Stock
redeemed pursuant to this Section 3 upon any exercise of the
Corporation's redemption right shall not be entitled to receive
payment of the redemption price for such shares until such holder
shall cause to be delivered to the place specified in the notice
given with respect to such redemption (i) the certificate or
certificates representing such shares of Series C Preferred Stock
and (ii) transfer instrument(s) satisfactory to the Corporation
and sufficient to transfer such shares of Series C Preferred
Stock to the Corporation free of any adverse interest. No
interest shall accrue on the redemption price of any share of
Series C Preferred Stock after the date fixed for its redemption.
(e) All shares of Series C Preferred Stock which shall at
any time have been redeemed shall, after such redemption, have
the status of authorized but unissued shares of Preferred Stock,
without designation as to series, and the number of shares of
Preferred Stock which the Corporation shall have authority to
issue shall not be decreased by the redemption of shares of
Series C Preferred Stock.
4. Conversion Rights.
(a) Each share of Series C Preferred Stock shall be
convertible at the option of the holder thereof at any time
(except that if any such share shall have been called for
redemption, then, as to such share, such right shall terminate at
the close of business on the date two business days prior to the
date fixed for such redemption, unless default shall be made by
the Corporation in making the payment due upon redemption) into
fully paid and nonassessable shares of Common Stock. The number
of shares of Common Stock issued upon conversion of each share of
Series C Preferred Stock shall be equal to $32.40 divided by the
Conversion Price then in effect. The Conversion Price initially
shall be $32.40; provided, however, that the Conversion Price
shall be subject to adjustment from time to time in certain
instances as hereinafter provided.
(b) The Common Stock deliverable upon conversion of Series
C Preferred Stock shall be Common Stock of the Corporation, par
value $2.50 per share, as constituted at the date of this
certificate, except as otherwise provided in subparagraphs (i)
and (vii) of paragraph 4(e), and in paragraph 4(f).
(c) In order for any holder of Series C Preferred Stock to
convert the same into Common Stock, such holder shall surrender
the certificate or certificates for such Series C Preferred Stock
at the office of the Transfer Agent for the Series C Preferred
Stock during usual business hours, which certificate or
certificates, if the Corporation shall so request, shall be duly
endorsed to the Corporation or in blank, or accompanied by proper
instruments of transfer to the Corporation or in blank, and shall
give written notice to the Corporation at such office that he
elects so to convert such Series C Preferred Stock, and state in
writing therein the name or names in which he wishes the
certificate or certificates for Common Stock to be issued.
(d) The Corporation will, as soon as practicable after such
deposit of certificates for Series C Preferred Stock accompanied
by the written notice and the statement above prescribed, deliver
at said office, to the person for whose account such Series C
Preferred Stock was so surrendered, or to his nominee or
nominees, certificates for the number of shares of Common Stock
to which he shall be entitled as aforesaid, together with any
cash adjustment of any fraction of a share as hereinafter
provided. Subject to the following provisions of this paragraph,
such conversion shall be deemed to have been made immediately
prior to the close of business on the date of such surrender of
the Series C Preferred Stock to be converted, and the person or
persons entitled to receive the Common Stock deliverable upon
conversion of such Series C Preferred Stock shall be treated for
all purposes as the record holder or holders of such Common Stock
on such date. The Corporation shall not be required to convert
any shares of Series C Preferred Stock while the stock transfer
books of the Corporation are closed for any purpose; but the
surrender of Series C Preferred Stock for conversion during any
period while such books are so closed shall become effective for
conversion upon reopening of such books, as if the surrender had
been made immediately prior to the close of business on the date
of such reopening, and conversion shall be at the Conversion
Price in effect at such date.
(e) The Conversion Price shall be subject to adjustment as
follows:
(i) In case the Corporation shall (A) pay a dividend
on its Common Stock in shares of its Common Stock, (B) subdivide
its outstanding shares of Common Stock into a greater number of
shares, or (C) combine its outstanding shares of Common Stock
into a smaller number of shares, the Conversion Price in effect
at the time of the record date of such dividend, or the effective
date of such subdivision or combination, as the case may be,
shall be proportionately adjusted so that the holder of any
Series C Preferred Stock surrendered for conversion after such
time shall be entitled to receive the number and kind of shares
which he would have owned or have been entitled to receive had
such Series C Preferred Stock been converted immediately prior to
such time. Such adjustment shall be made successively whenever
any event listed above shall occur and shall become effective
retroactively to immediately after the record date of such
dividend or immediately after the effective date of such
subdivision or combination.
(ii) Unless the holders of shares of Series C
Preferred Stock shall be permitted to subscribe for or purchase
shares of Common Stock on the same basis as if theretofore
converted into Common Stock, in case the Corporation shall issue
rights (other than those rights (the "Rights") issued pursuant to
that certain Rights Agreement dated as of March 4, 1986, between
the Corporation and Morgan Guaranty Trust Company of New York, as
Rights Agent) or warrants to all holders of its Common Stock
entitling them (for a period expiring within 45 days after the
record date for the determination of stockholders entitled to
receive such rights or warrants) to subscribe for or purchase
shares of Common Stock at a price per share less than the Current
Market Price (as defined below) per share of Common Stock on such
record date, then in each such case the Conversion Price shall be
adjusted to equal the price determined by dividing the Conversion
Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of
additional shares of Common Stock offered for subscription or
purchase pursuant to such rights or warrants and of which the
denominator shall be the number of shares of Common Stock
outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total
number of shares so offered pursuant to such rights or warrants
would purchase at such Current Market Price. Such adjustment
shall be made successively whenever such rights or warrants are
issued, and shall become effective retroactively to immediately
after the record date for the determination of stockholders
entitled to receive such rights or warrants; provided, however,
in the event that all the shares of Common Stock offered for
subscription or purchase are not delivered upon the exercise of
such rights or warrants, upon the expiration of such rights or
warrants the Conversion Price shall be readjusted to the
Conversion Price which would have been in effect had the
numerator and the denominator of the foregoing fraction and the
resulting adjustment been made based upon the number of shares of
Common Stock actually delivered upon the exercise of such rights
or warrants rather than upon the number of shares of Common Stock
offered for subscription or purchase. For the purposes of this
subparagraph (ii), the number of shares of Common Stock at any
time outstanding shall not include shares held in the treasury of
the Corporation but shall include shares issuable in respect of
scrip certificates issued in lieu of fractions of shares of
Common Stock.
(iii) In case the Corporation shall distribute to all
holders of its Common Stock shares of its capital stock (other
than Common Stock), evidences of indebtedness or assets of the
Corporation (excluding dividends paid in, or distributions of,
cash from the retained earnings of the Corporation) or
subscription rights or warrants to subscribe for or purchase
securities of the Corporation (excluding those referred to in
subparagraph (ii) above and excluding the Rights as defined in
subparagraph (ii) above), then in each such case the Conversion
Price shall be adjusted to equal the price determined by dividing
the Conversion Price in effect immediately prior to the record
date for the determination of stockholders entitled to receive
such distribution by a fraction of which the numerator shall be
the Current Market Price per share of the Common Stock on such
record date and of which the denominator shall be such Current
Market Price per share of Common Stock less the fair market value
(as determined by the Board of Directors or an Authorized Board
Committee thereof, whose determination shall be conclusive) of
the portion of the capital stock, evidences of indebtedness,
assets or subscription rights or warrants distributed applicable
to one share of Common Stock. Such adjustment shall be made
successively whenever any such distribution is made, and shall
become effective retroactively to immediately after such record
date.
(iv) For the purpose of any computation under
subparagraphs (ii) and (iii) above, the "Current Market Price"
per share of Common Stock on any date shall be deemed to be the
average of the daily Closing Prices for the thirty consecutive
trading days commencing forty-five business days before such
date. The "Closing Price" for each day shall be the reported
last sale price regular way or, in case no such reported sale
takes place on such day, the average of the reported closing bid
and asked prices regular way, in either case as reported on the
New York Stock Exchange Composite Tape, or, if at any time the
Common Stock is not listed or admitted to trading on such
Exchange, on the principal national securities exchange on which
the Common Stock is listed or admitted to trading, or if the
Common Stock is not listed or admitted to trading on any national
securities exchange, on the National Association of Securities
Dealers Automated Quotations National Market System, or, if the
Common Stock is not listed or admitted to trading on any national
securities exchange or quoted on such National Market System, the
average of the closing bid and asked prices in the over-
the-counter market as furnished by any New York Stock Exchange
member firm selected from time to time by the Board of Directors
or an Authorized Board Committee for such purpose.
(v) In any case in which this paragraph 4(e) shall
require that an adjustment as a result of any event becomes
effective retroactively to immediately after a record date or
effective date for such event, the Corporation may elect to defer
until after the occurrence of such event (A) issuing to the
holder of any shares of Series C Preferred Stock converted after
such record date and before the occurrence of such event the
additional shares of Common Stock issuable upon such conversion
over and above the shares of Common Stock issuable upon such
conversion on the basis of the Conversion Price prior to
adjustment and (B) paying to such holder any amount in cash in
lieu of a fractional share of Common Stock pursuant to paragraph
4(g) below; and, in lieu of the shares the issuance of which and
the cash the payment of which is so deferred, the Corporation
will cause its Transfer Agent to issue due bills or other
appropriate evidence of the right to receive such shares and such
cash.
(vi) No adjustment to the Conversion Price shall be
required unless such adjustment would require an increase or
decrease of at least 1% in the Conversion Price; provided,
however, that the Corporation may make any such adjustment at its
election; and provided further, however, that any adjustments
which by reason of this subparagraph (vi) are not made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this paragraph 4(e) shall be
made to the nearest cent or to the nearest one-hundredth of a
share, as the case may be. Anything in this paragraph 4(e)
notwithstanding, the Corporation shall be entitled to make such
decreases in the Conversion Price, in addition to those required
by this paragraph 4(e), as it in its discretion shall determine
to be advisable in order that any stock dividend, subdivision or
combination of shares, distribution of rights or warrants to
purchase stock or securities, or distribution of Securities
convertible into or exchangeable for stock hereafter made by the
Corporation to its stockholders shall not be taxable.
(vii) In the event that any of the Rights (as defined
in subparagraph 4(e)(ii)) are at any time exercised by the
holders thereof and such exercise equitably requires an
adjustment in the Conversion Price or in the kind of securities
issuable upon conversion of the Series C Preferred Stock, such
adjustment shall be made by the Board of Directors. In such
case, the determination of the Board of Directors as to whether
an adjustment in the Conversion Price or in the kind of
securities issuable upon conversion of the Series C Preferred
Stock is required, the amount and nature of any such adjustment,
and the effective date of any such adjustment shall be
conclusive.
(viii) If the Corporation makes any distribution,
dividend, issuance of rights or warrants or subdivision,
combination or reclassification of or on the Common Stock, or any
security to which the conversion right addressed in this Section
4 then applies, which is not covered by any of the preceding
provisions of this paragraph (e) and which equitably requires an
adjustment in the Conversion Price, such adjustment shall be made
as determined by the Board of Directors of the Corporation. In
such case, the determination of the Board of Directors as to
whether an adjustment in the Conversion Price is required, the
amount of any such adjustment, and the effective date of any such
adjustment shall be conclusive.
(f) In case of any consolidation of the Corporation into,
or merger of the Corporation with or into, any other corporation
(other than a consolidation or merger in which the Corporation is
the continuing corporation and which does not result in any
reclassification or change of outstanding shares of Common
Stock), or in case of any sale or transfer of all or
substantially all of the assets of the Corporation, or in case of
any reclassification or change of outstanding shares of Common
Stock (other than a change in par value, or from par value to no
par value, or from no par value to par value, or as a result of a
subdivision or combination, but including any reclassification of
the Common Stock into two or more classes), or in case of any
statutory exchange of securities with another corporation
(including any exchange effected in connection with a merger of a
third corporation into the Corporation), the holder of each share
of Series C Preferred Stock then outstanding shall have the right
thereafter to convert such share into the kind and amount of
shares of stock and other securities, cash and other property
receivable upon such consolidation, merger, sale, transfer,
reclassification, change or statutory exchange by a holder of the
number of shares of Common Stock of the Corporation into which
such share of Series C Preferred Stock might have been converted
immediately prior to such consolidation, merger, sale, transfer,
reclassification, change or statutory exchange (assuming that the
holder of such share of Series C Preferred Stock, as a holder of
Common Stock prior to such transaction, would not have exercised
any rights of election as a holder of Common Stock as to the kind
or amount of shares of stock and other securities, cash and other
property receivable upon such consolidation, merger, sale,
transfer, reclassification, change or statutory exchange;
provided, that if the kind or amount of shares of stock and other
securities, cash and other property receivable upon such
consolidation, merger, sale, transfer, reclassification, change
or statutory exchange is not the same for each non-electing share
of Common Stock, then the kind and amount of shares of stock and
other securities, cash and other property receivable shall be
deemed to be the kind and amount so receivable by a plurality of
the non-electing shares). In any such event, effective provision
shall be made, in the articles or certificate of incorporation of
the resulting or surviving corporation or other corporation
issuing or delivering such shares, other securities, cash or
other property or otherwise, so that the provisions set forth
herein for the protection of the conversion rights of the Series
C Preferred Stock shall thereafter be applicable, as nearly as
reasonably may be, to any such other shares of stock and other
securities, cash and other property deliverable upon conversion
of the Series C Preferred Stock remaining outstanding or other
convertible stock or securities received by the holders of the
Series C Preferred Stock in place thereof; and any such resulting
or surviving corporation or other corporation issuing or
delivering such shares, other securities, cash and other property
shall expressly assume the obligation to deliver, upon the
exercise of the conversion privilege, such shares, securities,
cash and other property as the holders of the Series C Preferred
Stock remaining outstanding, or other convertible stock or
securities received by the holders of the Series C Preferred
Stock in place thereof, shall be entitled to receive, pursuant to
the provisions hereof, and to make provision for the protection
of the conversion right as above provided. In case shares of
stock, securities, cash or other property other than Common Stock
shall be issuable or deliverable upon conversion as aforesaid,
then all references to Common Stock in this paragraph 4 shall be
deemed to apply, so far as provided and as nearly as is
reasonable, to any such shares, other securities, cash or other
property. The above provisions shall similarly apply to
successive consolidations, mergers, sales, transfers,
reclassifications, changes or statutory exchanges.
(g) No fractional interests in Common Stock shall be issued
upon conversion of shares of Series C Preferred Stock. If more
than one share of Series C Preferred Stock shall be surrendered
for conversion at one time by the same holder, the number of full
shares of Common Stock issuable by the Corporation upon
conversion thereof shall be computed on the basis of the
aggregate number of shares of Series C Preferred Stock so
surrendered. Instead of any fractional share of Common Stock
which would otherwise be issuable upon conversion of any share of
Series C Preferred Stock, the Corporation will pay a cash
adjustment in respect of such fractional interest in an amount
equal to the same fraction of the Closing Price per share of
Common Stock determined as of the business day preceding the date
of conversion.
(h) Whenever any adjustment is required in the Conversion
Price or the number or type of shares of stock or other
securities, cash or other property into which each share of
Series C Preferred Stock is convertible, the Corporation shall
forthwith (A) file with each of the Transfer Agent for the Series
C Preferred Stock and the Transfer Agent for the Common Stock a
statement describing in reasonable detail the adjustment in the
Conversion Price or conversion right, the date on which the
adjustment became effective and the facts requiring such
adjustment and (B) cause a copy of such statement to be mailed to
the holders of record of the Series C Preferred Stock.
(i) Upon any conversion of shares of Series C Preferred
Stock, the shares so converted shall have the status of
authorized and unissued shares of Preferred Stock, without
designation as to series, and the number of shares of Preferred
Stock which the Corporation shall have authority to issue shall
not be decreased by the conversion of shares of Series C
Preferred Stock. The Corporation shall at all times reserve and
keep available, free from preemptive rights, out of its
authorized and unissued stock or stock held as treasury stock,
solely for the purpose of effecting the conversion of the Series
C Preferred Stock, such number of shares of its Common Stock, and
such number of Rights, as shall from time to time be sufficient
to effect the conversion of all shares of Series C Preferred
Stock at such time outstanding. For the purpose of this
paragraph 4(i), the full number of shares of Common Stock, and
the full number of Rights, issuable upon the conversion of all
outstanding shares of Series C Preferred Stock shall be computed
as if at the time of computation of such number of shares of
Common Stock and such number of Rights all outstanding shares of
Series C Preferred Stock were held by a single holder. The
Corporation shall from time to time, in accordance with the laws
of the State of Delaware, increase the authorized number of
shares of its Common Stock if at any time the authorized number
of shares of its Common Stock not outstanding shall not be
sufficient to permit the conversion of all the then outstanding
Series C Preferred Stock.
(j) The Corporation will pay any and all issue or other
taxes that may be payable in respect of any issue or delivery of
shares of Common Stock on conversion of Series C Preferred Stock
pursuant hereto. The Corporation shall not, however, be required
to pay any tax which may be payable in respect of any transfer
involved in the issue or delivery of Common Stock in a name other
than that in which the Series C Preferred Stock so converted was
registered, and no such issue or delivery shall be made unless
and until the person requesting such issue has paid to the
Corporation the amount of such tax, or has established, to the
satisfaction of the Corporation, that such tax has been paid.
(k) Before taking any action which would cause an
adjustment reducing the Conversion Price below the then par value
of the Common Stock, the Corporation will take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the Corporation may validly and legally issue fully
paid and nonassessable shares of Common Stock at the Conversion
Price as so adjusted.
(1) In case: (i) the Corporation shall declare a dividend
(or any other distribution) on its Common Stock (other than cash
dividends paid out of the retained earnings of the Corporation
and dividends payable in Common Stock); or (ii) the Corporation
shall authorize the granting to the holders of its Common Stock
of rights or warrants to subscribe for or purchase any shares of
stock of any class or of any other rights or warrants; or (iii)
of any reclassification or change of the Common Stock of the
Corporation (other than a subdivision or combination of its
outstanding Common Stock (but including any reclassification of
the Common Stock into two or more classes), or a change in par
value, or from par value to no par value, or from no par value to
par value), or of any consolidation or merger to which the
Corporation is a party or of any statutory exchange of securities
with another corporation and for which approval of any
stockholders of the Corporation is required, or of the sale or
transfer of all or substantially all of the assets of the
Corporation; or (iv) of the voluntary or involuntary dissolution,
liquidation or winding up of the Corporation; then, in each such
case, the Corporation shall mail to each holder of Series C
Preferred Stock at least fifteen days prior to the applicable
date hereinafter specified, a notice stating (A) the date on
which a record is to be taken for the purpose of such dividend,
distribution of rights or warrants or, if a record is not to be
taken, the date as of which the holders of Common Stock of record
to be entitled to such dividend, distribution or rights or
warrants are to be determined, or (B) the date on which such
reclassification, change, consolidation, merger, sale, transfer,
statutory exchange, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their shares of Common Stock for securities or other
property deliverable upon such reclassification, change,
consolidation, merger, sale, transfer, statutory exchange,
dissolution, liquidation or winding up. Failure to give such
notice, or any defect therein, shall not, however, affect the
legality or validity of any action described in clauses (i),
(ii), (iii) or (iv) of this paragraph 4(1).
(m) Immediately upon the Trustee (or any successor) of the
CBI Salaried Employee Stock Ownership Trust (1987) (the
"Trustee") ceasing to be the holder of record of any share of
Series C Preferred Stock (except in the case of the redemption or
repurchase of shares by the Corporation), such share of Series C
Preferred Stock will automatically, without any act or deed on
the part of the Corporation or any other person, be converted
into the number of shares of Common Stock (or, if by virtue of
subparagraphs 4(e)(i) or 4(e)(vii), or paragraph 4(f), such share
of Series C Preferred Stock is then convertible into securities
or assets other than Common Stock, then the number or amount of
such other securities or assets), together with any cash
adjustment required by paragraph 4(g), into which it would then
be convertible if such share were voluntarily presented for
conversion in accordance with the other provisions of this
Section 4. To the extent applicable, the other provisions of
this Section 4 shall govern any automatic conversion pursuant to
this paragraph 4(m), subject to the following:
(i) any share surrendered for transfer by the Trustee
shall be deemed to have been surrendered for conversion by the
transferee prior to the close of business on the day such share
is transferred into the transferee's name on the books of the
Corporation;
(ii) no notice of conversion need be submitted by
either the Trustee or its transferee in order to effect the
automatic conversion provided for hereby;
(iii) notwithstanding any provision of paragraph 4(a),
each share of Series C Preferred Stock is subject to automatic
conversion pursuant to this paragraph 4(m) at any time prior to
such share having been redeemed or otherwise purchased by the
Corporation; and
(iv) notwithstanding the provisions of paragraph 4(j),
the Corporation shall be responsible for the payment of any tax
payable in connection with any transfer of shares of Series C
Preferred Stock which results in the automatic conversion of such
shares pursuant to this paragraph 4(m).
5. Liquidation Rights.
Upon the dissolution, liquidation or winding up of the
Corporation, whether voluntary or involuntary, the holders of the
Series C Preferred Stock shall be entitled to receive out of the
assets of the Corporation available for distribution to
stockholders, an amount per share equal to, $32.40, plus in each
case an amount equal to all dividends (whether or not declared or
due) on such shares accrued and unpaid thereon to the date of
final distribution, before any payment or distribution shall be
made on the Common Stock, the Series A Preferred Stock or on any
other class or series of stock ranking junior to the Series C
Preferred Stock with respect to distributions upon liquidation,
dissolution or winding up. For purposes of this Section 5, the
merger or consolidation of the Corporation or the sale of all or
substantially all of the Corporation's assets shall not be deemed
to be a liquidation, dissolution or winding up of the
Corporation. In the event the assets of the Corporation
available for distribution to the holders of shares of the Series
C Preferred Stock upon any dissolution, liquidation or winding up
of the Corporation shall be insufficient to pay in full all
amounts to which such holders are entitled pursuant to this
Section 5, no such distributions shall be made upon account of
any shares of Series C Preferred Stock or of any other class or
series of stock of the Corporation ranking on a parity with the
shares of the Series C Preferred Stock upon such dissolution,
liquidation or winding up unless proportionate distributive
amounts shall be paid on account of the shares of the Series C
Preferred Stock, ratably, in proportion to the full distributable
amounts to which holders of all such parity shares are
respectively entitled upon such dissolution, liquidation or
winding up. After the payment to the holders of the shares of
the Series C Preferred Stock of the full preferential amounts
provided for in this Section 5, the holders of the Series C
Preferred Stock as such shall have no right or claim to any of
the remaining assets of the Corporation.
6. Voting Rights.
(a) In addition to any voting rights provided by applicable
law or elsewhere in this Section 6, the holders of shares of
Series C Preferred Stock shall be entitled to vote upon all
matters upon which the holders of Common Stock are entitled to
vote and shall vote together with the holders of shares of Common
Stock (and of any other class or series which may similarly be
entitled to vote with the shares of Common Stock, if any) as a
single class. For the purpose of any vote contemplated by this
paragraph 6(a), each share of Series C Preferred Stock shall be
entitled to the number of votes equal to the number of shares of
Common Stock into which such share of Series C Preferred Stock
could then be converted (including for such purpose any
fractional share into which it could then be converted were it
not for the provisions of paragraph 4(g)) pursuant to the
provisions of Section 4 hereof on the record date for the
determination of stockholders entitled to vote on such matters.
(b) If at any time dividends payable on the Series
C Preferred Stock, or on any one or more other series of
Preferred Stock of the Corporation entitled to receive cumulative
preferred dividends, are in arrears and unpaid in an amount equal
to or exceeding the amount of dividends payable thereon for six
quarterly dividend periods (assuming for this purpose only that
dividends on the Series C Preferred Stock are paid quarterly
rather than semiannually), the number of members of the Board of
Directors shall increase by two, and the holders of the
outstanding shares of Preferred Stock will have the exclusive
right, voting separately as a class, to elect such two directors
of the Corporation at the next regular or special meeting of
stockholders of the Corporation. Such voting right will continue
for the Preferred Stock until all dividends on the Series C
Preferred Stock and on such other series have been paid in full,
at which time such voting right of the holders of Preferred Stock
will terminate, subject to re-vesting in the event of a
subsequent arrearage. Upon any termination of the aforesaid
voting right, the term of office of all the directors elected by
holders of Preferred Stock voting separately as a class will
terminate and the number of members of the Board of Directors
shall decrease by two.
7. Amendment.
The Certificate of Incorporation of the Corporation
(including this Certificate of Designations) shall not be
amended, altered or repealed in any manner which would adversely
alter or change the powers, preferences or special rights of the
Series C Preferred Stock without the affirmative vote or consent
of the holders of a majority of the outstanding shares of Series
C Preferred Stock, voting separately as a series; provided, that
any increase in the authorized Preferred Stock or the creation
and issuance of any other class or series of Preferred Stock
ranking on a parity with or junior to the Series C Preferred
Stock as to payment of dividends and upon liquidation,
dissolution or winding up or any decrease in the number of shares
which constitute the Series C Preferred Stock (but not below the
number of shares thereof then outstanding) shall not be deemed to
adversely alter or change such powers, preferences or special
rights.
IN WITNESS WHEREOF, the Corporation has caused this
Certificate of Designations to be duly executed on its behalf by
its undersigned Executive Vice President & Chief Financial
Officer and attested to by its Secretary this 18th day of April,
1988.
/S/ G.L. Schueppert
George L. Schueppert,
Executive Vice President &
Chief Financial Officer
[Corporate Seal]
ATTEST:
/S/ D.H. Craigmile
Donald H. Craigmile, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT OF
CERTIFICATE OF INCORPORATION
*****
CBI INDUSTRIES, INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State
of Delaware,
DOES HEREBY CERTIFY:
FIRST: That a meeting of the Board of Directors of CBI
Industries, Inc., the board directed an amendment to the
Certificate of Incorporation of said corporation be submitted to
the shareholders of said corporation and called a meeting of the
stockholders of said corporation for consideration thereof. The
proposed amendment is as follows:
The Certificate of Incorporation be amended by changing the first
paragraph of the Article numbered FOURTH so that, as amended
said paragraph of said Article shall read as follows:
FOURTH: Authorized Capital. The total number of shares of
stock of all classes which the corporation shall have authority
to issue is One Hundred Forty Million (140,000,000) of which One
Hundred Twenty Million (120,000,000) shares shall be Common
Stock, with a par value of Two Dollars and Fifty Cents ($2.50)
per share and Twenty Million (20,000,000) shares shall be
Preferred Stock, with a par value of One Dollar ($1.00) per
share.
SECOND: That at the annual general meeting of the stockholders
of said corporation 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 and the Certificate of
Incorporation 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 CBI Industries, Inc., has caused its
corporate seal to be hereunto affixed and this certificate to be
signed by J.E. JONES, its Chairman of the Board and President and
C.C. TOERBER, its Secretary, this 14th day of May, 1992.
By: /S/ John E. Jones
Chairman of the Board and President
CORPORATE SEAL
ATTEST:
By: /S/ C.C. Toerber
Secretary
<PAGE>
CBI INDUSTRIES, INC.
CERTIFICATE OF INCREASE
Series A Junior Participating Preferred Stock
Par Value $1.00 Per Share
___________________________
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
___________________________
The undersigned, Chairman of the Board, President and Chief
Executive Officer of CBI Industries, Inc., a Delaware corporation
(hereinafter called the "Company"), DOES HEREBY CERTIFY that the
following resolution has been duly adopted by the Board of
Directors of the Company:
RESOLVED, that because the number of shares of common
stock which the Company has authority to issue has been increased
from 60,000,000 to 120,000,000, it is necessary to amend the
Certificate of Designation, Preferences and Rights of Series A
Junior Participating Preferred Stock ("Certificate of
Designation") to increase the number of shares of such series
from 600,000 to 800,000, and that Section One of the Certificate
of Designation will read as follows:
"Section 1. Designation and Amount. The shares of
such series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such
series shall be 800,000."
IN WITNESS WHEREOF, the Company has caused this Amendment to
the Certificate of Designations to be duly executed on its behalf
by its undersigned Chairman of the Board, President and Chief
Executive Officer and attested to by its Secretary this 21st day
of September, 1992.
/S/ John E. Jones
John E. Jones
Chairman of the Board, President
and Chief Executive Officer
[Corporate Seal]
Attest:
/S/ C.C. Toerber
Charlotte C. Toerber, Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
CBI INDUSTRIES INC., a corporation organized and existing
under and by virtue of the General Corporation Law of the State
of Delaware,
DOES HEREBY CERTIFY:
FIRST: That a meeting of the Board of Directors of CBI
Industries, Inc., the board directed an amendment to the
Certificate of Incorporation of said corporation be submitted to
the shareholders of said corporation and called a meeting of the
stockholders of said corporation for consideration thereof. The
proposed amendment is as follows:
The Certificate of Incorporation be amended by changing
subsection (a) of the Article numbered TENTH so that, as amended,
said Article shall read in its entirety as follows:
"TENTH: Merger, Consolidation, Dissolution, Sale of Assets,
Charter Amendment. Except as otherwise provided in this
Certificate of Incorporation, the corporation shall not take any
of the following actions, except upon the affirmative vote of
holders of not less than two-thirds (2/3) of the outstanding
Common Stock of the corporation entitled to vote and the
affirmative vote of not less than two-thirds (2/3) of each series
of shares of Preferred Stock of the corporation entitled to vote
as a class on such issue, or, where the Board of Directors has
recommended such action, upon the affirmative vote of holders of
a majority of the outstanding Common Stock of the corporation
entitled to vote and the affirmative vote of a majority of each
series of the outstanding shares of Preferred Stock of the
corporation entitled to vote as a class on such issue:
(a) a merger or consolidation (except where the
corporation owns at least 90% of the voting securities of a
corporation which merges into this corporation or, unless
otherwise prohibited by this Certificate of Incorporation, except
where the Board of Directors is authorized under the law of
Delaware to approve a merger without shareholder approval);
(b) dissolution or liquidation;
(c) sale or other disposition of all or substantially
all of the assets of the corporation; or
(d) amendment of the Certificate of Incorporation.
SECOND: That at the annual general meeting of the
stockholders of said corporation 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 and the Certificate of
Incorporation were voted in favor of the amendment.
THIRD: That the aforesaid amendment was duly adopted in
accordance with the applicable 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 CBI Industries, Inc., has caused
its corporate seal to be hereunto affixed and this certificate to
be signed by J. E. Jones, its Chairman of the Board and President
and C.C. Toerber its Secretary this 20th day of May, 1994.
CBI INDUSTRIES, INC.
By: /S/ John E. Jones
J.E. Jones
Chairman of the Board and President
CORPORATE SEAL
ATTEST:
By: /S/ C.C. Toerber
C.C. Toerber, Secretary
<TABLE>
EXHIBIT 11
CBI INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<CAPTION>
Three Months Six Months
Thousands of dollars, except per share amounts Ended June 30, Ended June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
Primary Earnings Per Common Share
Net income to common shareholders $ 12,064 $ 6,926 $ 20,236 $ 11,075
Weighted average number of common shares outstanding 37,791 37,068 37,736 36,971
Primary net income per common share $ 0.32 $ 0.19 $ 0.54 $ 0.30
Fully Diluted Earnings Per Common Share
Net income $ 12,064 $ 6,926 $ 20,236 $ 11,075
Add back expenses included in net income that pertain to ESOP
Series C preferred dividends 2,025 2,119 4,118 4,252
Common dividends on unallocated reverted shares 8 17 24 41
Company contributions (after utilization of common dividends
of $204, $205, $406, $404 charged to retained earnings) 2,019 1,940 4,023 3,919
ESOP debt amortization (212) (526) (424) (1,053)
Tax effect included in net income related to debt service (1,563) (1,407) (3,145) (2,831)
Net income adjusted to exclude ESOP debt service 14,341 9,069 24,832 15,403
Adjustments to reflect the servicing of ESOP debt (required for this
calculation), based on the assumption all Series C preferred shares
were converted to common shares:
Common dividends on unallocated reverted shares (26) (42) (60) (92)
Company contribution (after utilization of common dividends
of $822, $627, $1,660, $1,251 charged to retained earnings) (3,408) (3,612) (6,851) (7,273)
ESOP debt amortization 212 526 424 1,053
Tax effect included in net income related to debt service 1,417 1,300 2,852 2,617
Fully Diluted net income to common shareholders 12,536 7,241 21,197 11,708
Weighted average number of common shares outstanding 37,791 37,068 37,736 36,971
Add common stock equivalents of stock option plan 139 95 139 95
Add common stock equivalents of leveraged Series C preferred shares 4,451 4,568 4,451 4,568
Add common stock equivalents of reverted allocated Series C
preferred shares 817 725 817 725
Fully diluted weighted average number of common shares outstanding 43,198 42,456 43,143 42,359
Fully diluted net income per common share $ 0.29 $ 0.17 $ 0.49 $ 0.28
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