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, 1995
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, 1995 - 38,206,403.
1 of 18
CBI INDUSTRIES, INC. AND SUBSIDIARIES
Table of Contents
PART I. FINANCIAL INFORMATION
Financial Statements: Page
Statements of Income
Six Months Ended June 30, 1995 and 1994..................... 3
Balance Sheets
June 30, 1995 and December 31, 1994......................... 4
Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994..................... 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.......................................................... 18
2
<TABLE>
PART I - FINANCIAL INFORMATION
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,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues
Industrial Gases $251,007 $228,238 $502,776 $425,763
Contracting Services 175,782 208,532 349,777 383,016
Investments 47,009 33,220 84,548 63,094
Total Revenues 473,798 469,990 937,101 871,873
Costs of Products and Services Sold
Industrial Gases (169,151)(155,245) (344,753)(295,738)
Contracting Services (155,479)(177,809) (310,328)(325,316)
Investments (38,584) (26,852) (66,051) (51,061)
Total Costs of Products and Services Sold (363,214)(359,906) (721,132)(672,115)
Gross Profit from Operations 110,584 110,084 215,969 199,758
Selling and Administrative Expense
Industrial Gases (44,500) (42,090) (89,835) (74,529)
Contracting Services (17,771) (20,712) (36,466) (40,526)
Investments (1,455) (1,503) (2,999) (2,726)
Corporate (4,145) (5,424) (8,008) (10,190)
Total Selling and Administrative Expense (67,871) (69,729) (137,308)(127,971)
Income from Operations 42,713 40,355 78,661 71,787
Interest Expense (13,136) (9,656) (22,363) (17,802)
Income before Income Taxes and Minority Interest 29,577 30,699 56,298 53,985
Provision for Income Taxes (13,000) (14,200) (25,600) (25,700)
Income before Minority Interest 16,577 16,499 30,698 28,285
Minority Interest in Income (2,561) (2,928) (6,488) (5,041)
Net Income 14,016 13,571 24,210 23,244
Dividends on Preferred Shares (2,612) (1,507) (4,150) (3,008)
Net Income to Common Shareholders $11,404 $12,064 $20,060 $20,236
Net Income per Common Share
Primary $0.30 $0.32 $0.53 $0.54
Fully Diluted $0.27 $0.29 $0.48 $0.49
Average Common Shares Outstanding (thousands)
Primary 38,183 37,791 38,137 37,736
Fully Diluted 43,535 43,198 43,489 43,143
Dividends on Common Shares
Amount $4,584 $4,544 $9,154 $9,079
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,
1995 1994
<S> <C> <C>
Current Assets
Cash $8,307 $14,013
Temporary Cash Investments 34,890 36,953
Accounts Receivable, less allowances
of 13,800 and 14,800 275,603 295,542
Contracts in Progress with Earned Revenues
exceeding related Progress Billings 64,468 60,143
Inventories (Note 2) 91,919 73,226
Other Current Assets 49,549 37,977
524,736 517,854
Other Assets
Notes Receivable 31,176 37,397
Real Estate Properties 25,875 26,542
Equity in and Advances to Unconsolidated Affiliates 30,498 31,082
Intangible Assets 78,157 78,783
Other Non-Current Assets 68,822 70,124
234,528 243,928
Property and Equipment 1,989,405 1,876,329
Accumulated Depreciation (675,737) (629,399)
1,313,668 1,246,930
Total Assets $2,072,932 $2,008,712
Current Liabilities
Notes Payable $76,374 $72,589
Current Maturities of Long-Term Debt (Note 3) 17,305 17,241
Accounts Payable 74,268 94,523
Dividends Payable 2,816 2,675
Accrued Liabilities 124,396 117,851
Contracts in Progress with Progress Billings
exceeding related Earned Revenues 43,979 42,813
Income Taxes Payable 18,851 31,360
357,989 379,052
Long-Term Debt and Other Liabilities
Long-Term Debt (Note 3) 677,063 666,730
Other Non-Current Liabilities 137,717 143,065
Deferred Income Taxes 45,592 41,687
Minority Interest in Subsidiaries 67,558 62,342
Capital Stock
Preferred Stock
Series D (Note 4) 55,000 -
Series C (Note 4) 113,876 115,244
Unamortized ESOP Debt (Note 6) (72,900) (77,106)
40,976 38,138
Common Stock
Common Stock (Note 5) 99,459 99,459
Additional Paid-in Capital 214,320 214,320
Retained Earnings 472,256 460,683
Unamortized Restricted Stock Awards (9,280) (9,780)
Unamortized ESOP Debt (Note 6) (16,231) (17,167)
Cost of Reacquired Common Stock (Note 5) (33,242) (34,676)
Cumulative Translation Adjustment (36,245) (35,141)
691,037 677,698
Total Liabilities and Capital Stock $2,072,932 $2,008,712
The accompanying notes are an integral part of these financial statements.
</TABLE>
4
<TABLE>
CBI INDUSTRIES, INC. AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months
Thousands of dollars Ended June 30,
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities
Net Income $24,210 $23,244
Depreciation 57,921 50,783
82,131 74,027
Decrease in Accounts Receivable 20,600 29,493
(Increase) in Contracts in Progress, net (3,159) (6,313)
(Decrease) in Accounts Payable,
Accrued Liabilities and Income Taxes Payable, net (28,345) (13,044)
Increase/(Decrease) in Deferred Income Taxes 3,035 (3,974)
(Increase)/Decrease in Undistributed Earnings
of Unconsolidated Affiliates (109) 468
Other, net (21,327) (4,800)
Total Cash Flows from Operating Activities 52,826 75,857
Cash Flows from Capital Investment Activities
Purchase of Property and Equipment (112,224) (122,367)
Cost of Business Acquisitions, net of cash acquired (8,304) -
Disposition of Property and Equipment 3,839 12,323
Decrease in Other Assets, net 8,088 3,599
Other, net (3,270) 5,311
Total Cash Flows from Capital Investment Activities (111,871) (101,134)
Cash Flows from Financing and Shareholder Activities
Issuance of Debt 54,555 75,476
Repayment of Debt (40,635) (24,446)
13,920 51,030
Sale of Preferred Stock and Common Stock 55,928 2,407
Purchase of Common Stock (4,538) (1,899)
Dividends Paid (14,034) (13,275)
Total Cash Flows from Financing and Shareholder Activitie 51,276 38,263
(Decrease)/Increase in Cash and Temporary Cash Investments ($7,769) $12,986
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, 1995
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
1994 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, 1995 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, 1995:
Raw materials and supplies $39,562
Work in process 7,727
Finished goods 44,630
_______
Total inventories $91,919
=======
Average cost method $62,076
First-in, first-out method 29,843
_______
Total inventories $91,919
=======
6
(3) Long-Term Debt
Summary of long-term debt at June 30, 1995:
Commercial Paper and Other Similar Borrowings with a weighted
average quarter-end interest rate of 6.2% $221,681
Senior ESOP Notes with a quarter-end interest rate of 8.354%,
maturing in 1995 through 2002 89,710
6-1/4% Notes, $75,000 face amount, due 2000 74,774
6-5/8% Notes, $75,000 face amount, due 2003 74,533
Variable Rate Unsecured Notes with a weighted average quarter-
end interest rate of 7.1%, maturing in 1995 through 2001 140,311
Variable Rate Secured Notes with a weighted average quarter-
end interest rate of 6.7%, maturing in 1995 through 2000 60,100
Fixed Rate Medium-Term Notes, Series A, with a weighted average
quarter-end interest rate of 7.7%, maturing in 1999 and 2004 31,000
Other 2,259
________
694,368
Less: current maturities (17,305)
________
$677,063
========
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, 1997,
extendible annually for one additional year by mutual consent. Amounts
borrowed under the agreement may be prepaid 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, 1995 $ 9,223
Year ending December 31, 1996 20,328
Year ending December 31, 1997 247,571
Year ending December 31, 1998 56,978
Year ending December 31, 1999 115,752
Year ending December 31, 2000 98,388
After 2000 146,128
________
$694,368
========
7
(4) 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 - 3,514,696 shares were issued and outstanding as Convertible
Voting Preferred Stock, Series C, at June 30, 1995 and 3,556,918 shares
at December 31, 1994. The annual dividend is $2.27 per share, payable
semi-annually.
Series D - 550,000 shares were issued and outstanding as 7.48%
Cumulative Preferred Stock, Series D, on March 31, 1995. CBI sold these
shares on March 31, 1995 at $100 per share. The annual dividend is $7.48
per share, payable quarterly. No dividends may be paid on CBI's
Common Stock or Series A Junior Participating Preferred Stock, unless
all dividends payable on outstanding shares of Series D Preferred Stock
have been paid, and shall rank on parity with the Series C Preferred
Stock as to payment of dividends. The holders of shares of Series D
Preferred Stock have no voting rights. The Series D Preferred Stock is
mandatorily redeemable on, but not prior to, April 1, 2000 at a price of
$100 per share.
(5) Common Stock
Common stock - $2.50 par value; authorized - 240,000,000 shares at
June 30, 1995; issued - 39,783,614 shares at June 30, 1995 and
December 31, 1994.
Reacquired stock - The number of reacquired shares of common stock was
1,577,211 at June 30, 1995 and 1,686,650 at December 31, 1994.
(6) Employee Stock Ownership Plan (ESOP)
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 capital stock. 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, 1995, 704,507 common shares and 1,787,387
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 quarter ended June 30, 1995 was
$14.0 million ($0.30 per common share), as compared to $13.6 million ($0.32
per common share) for the second quarter of 1994. Net income for the first
half of 1995 was $24.2 million ($0.53 per common share), compared to $23.2
million ($0.54 per common share) in the first half of 1994.
Revenues in the second quarter of 1995 were $473.8 million, up 0.8% from the
$470.0 million recorded in the comparable 1994 quarter. For the first six
months of 1995, revenues of $937.1 million were 7.5% greater than the $871.9
million realized in the first half of 1994. In the second quarter of 1994,
Liquid Carbonic consolidated for the first time the financial results of
certain of its Canadian distributors (the "Canadian consolidation"),
incorporating the results of these distributors for both the first and second
quarters of 1994. Excluding the first quarter 1994 revenues from the Canadian
consolidation, revenues for the second quarter of 1994 would have been $457.4
million, resulting in a 3.6% increase in revenues between the second quarters
of 1995 and 1994.
Gross profit for the second quarter of 1995 was $110.6 million (23.3% of
revenues), essentially level with 1994's second quarter. Excluding the effect
of the Canadian consolidation, gross profit would have increased 5.3% between
years. For the first six months of 1995, gross profit of $216.0 million
(23.0% of revenues) was up 8.1% over the $199.8 million (22.9% of revenues)
recorded in 1994's first half. Gross margins for the six months improved from
1994 in the Industrial Gases and Investments segments, but declined in
Contracting Services. Selling and administrative expense declined 2.7% from
the second quarter of 1994 to $67.9 million in the current quarter, although
increasing 4.6% if the effect of the Canadian consolidation is excluded. For
the year to date, selling and administrative expense of $137.3 million was up
7.3% from 1994.
CBI's income from operations in the second quarter and first half of 1995 was
$42.7 million (9.0% of revenues) and $78.7 million (8.4% of revenues),
respectively, compared to $40.4 million (8.6% of revenues) and $71.8 million
(8.2% of revenues), respectively, in 1994. Cash flow from operations for the
second quarter and first half of 1995 was $74.5 million and $141.4 million,
respectively, compared to $78.7 million and $147.6 million, respectively, in
1994.
CBI's comparative operating performance, before interest and taxes, for the
three and six month periods ending June 30, 1995 and 1994 was as follows
(dollars in thousands):
Three Months Six Months
_____________________ _________________
1995 1994 1995 1994
____ ____ ____ ____
Revenues $473,798 $469,990 $937,101 $871,873
Costs (363,214) (359,906) (721,132) (672,115)
_________ ________ ________ ________
Gross profit 110,584 110,084 215,969 199,758
Gross margin - % 23.3% 23.4% 23.0% 22.9%
Selling and administrative (67,871) (69,729) (137,308) (127,971)
________ ________ ________ ________
Income from operations 42,713 40,355 78,661 71,787
Operating margin - % 9.0% 8.6% 8.4% 8.2%
Depreciation 30,712 25,946 57,921 50,783
Other non-cash charges 1,071 12,427 4,819 25,019
________ ________ ________ ________
Cash flow from operations $ 74,496 $ 78,728 $141,401 $147,589
======== ======== ======== ========
9
INDUSTRIAL GASES. Liquid Carbonic's results for the periods ending June 30,
1995 and 1994 were as follows (dollars in thousands):
Three Months Six Months
____________________ ___________________
1995 1994 1995 1994
____ ____ ____ ____
Revenues $251,007 $228,238 $502,776 $425,763
Costs (169,151) (155,245) (344,753) (295,738)
________ ________ ________ ________
Gross profit 81,856 72,993 158,023 130,025
Gross margin - % 32.6% 32.0% 31.4% 30.5%
Selling and administrative (44,500) (42,090) (89,835) (74,529)
________ ________ ________ ________
Income from operations $ 37,356 $ 30,903 $ 68,188 $ 55,496
Operating margin - % 14.9% 13.5% 13.6% 13.0%
======== ======== ======== ========
Liquid Carbonic's revenues for the second quarter of 1995 were 10.0% greater
than in the second quarter of 1994; excluding the effect in 1994 of the
Canadian consolidation, revenues for the quarter would have increased 16.4%.
For the year to date, revenues grew 18.1%. Most of the growth in revenues
occurred outside the United States, particularly in Brazil, where a
combination of higher volumes and prices in U.S. dollar terms resulted in
revenue growth in excess of 40% for both the quarter and year to date. All
major markets of Liquid Carbonic outside the United States except for Mexico
and Argentina, where operations have been affected by difficult local economic
conditions, registered double-digit increases in revenues for both the quarter
and six-month periods. Revenues in the United States increased approximately
nine percent between years due to the effects of increased prices for carbon
dioxide, increased sales of oxygen, nitrogen and hydrogen from new facilities,
and increased sales of methanol and formaldehyde.
Gross profit in the second quarter increased 20.4% (after adjusting for the
Canadian consolidation effect) and was up 21.5% for the year to date from a
combination of increased revenues and improved gross margins. Gross margins
were favorably impacted by higher sales pricing and more efficient new
facilities in the U.S. and by increased volumes throughout the rest of the
world, particularly in products with higher profit margins.
Selling and administrative expense increases of $7.2 million in the quarter
(excluding the Canadian consolidation effect) and $15.3 million for the year
to date were generally in line with the increases in revenue, but were also
affected by the foreign exchange impacts of expenditures in countries whose
currencies have recently appreciated against the U.S. dollar and by greater
marketing costs in certain countries.
Liquid Carbonic's income from operations increased 21.7% between quarters
(adjusting for the effect of the Canadian consolidation) and 22.9% for the
comparable six-month periods.
10
CONTRACTING SERVICES. The operating results of Chicago Bridge & Iron Company
for the periods ending June 30, 1995 and 1994 were as follows (dollars in
thousands):
Three Months Six Months
_________________________________________
1995 1994 1995 1994
____ ____ ____ ____
Revenues $175,782 $208,532 $349,777 $383,016
Costs (155,479) (177,809) (310,328) (325,316)
________ ________ ________ ________
Gross profit 20,303 30,723 39,449 57,700
Gross margin - % 11.6% 14.7% 11.3% 15.1%
Selling and administrative (17,771) (20,712) (36,466) (40,526)
________ ________ ________ ________
Income from operations $ 2,532 $ 10,011 $ 2,983 $ 17,174
Operating margin - % 1.4% 4.8% 0.9% 4.5%
======== ======== ======== ========
Revenues for the Contracting Services segment in the second quarter of 1995
declined 15.7% from the comparable 1994 quarter and were down 8.7% for the six
months to date. In the United States, a low volume of work put in place,
primarily reflecting a reduced level of new business awards in 1994, was the
principal factor in driving domestic revenues down more than 12% in 1995's
second quarter, when compared to the second quarter of 1994. Outside the
United States, revenues declined more than 20% in the quarter and year to date
from the higher level of work put in place in 1994, principally in the
Caribbean, Southeast Asia and Africa.
Gross and operating margins for the segment decreased for both the quarter and
year to date, compared to 1994, due mainly to unabsorbed overheads caused by
the low level of work put in place worldwide in the first half of 1995 and to
highly competitive conditions which have existed for the last six quarters.
Margins for Chicago Bridge are expected to remain under pressure until its
level of work increases and the mix of new business opportunities improves in
favor of higher-margined projects.
New contract awards for the second quarter of 1995 totalled $184.6 million, up
35.0% from the comparable quarter of 1994. For the six months of 1995 to
date, new contract awards of $416.7 million are 16.2% above those in the first
half of 1994. Approximately two-thirds of the awards for the year to date are
in the United States and reflect a near-term demand for peakshaving LNG
facilities and continuing demand for turnarounds and other service type work.
The backlog of work to be executed in the future stood at $347.6 million as of
June 30, 1995, up from $287.5 million at the end of 1994, but lower than the
$384.5 million of backlog at June 30, 1994.
11
Investments. The operating results of Statia Terminals and the contributions
from financial investments, which together comprise the Investments segment,
were as follows for the periods ending June 30, 1995 and 1994 (dollars in
thousands):
Three Months Six Months
__________________ __________________
1995 1994 1995 1994
____ ____ ____ ____
Revenues $47,009 $33,220 $84,548 $63,094
Costs (38,584) (26,852) (66,051) (51,061)
_______ _______ _______ _______
Gross profit 8,425 6,368 18,497 12,033
Gross margin - % 17.9% 19.2% 21.9% 19.1%
Selling and administrative (1,455) (1,503) (2,999) (2,726)
_______ _______ _______ _______
Income from operations $ 6,970 $ 4,865 $15,498 $ 9,307
Operating margin - % 14.8% 14.6% 18.3% 14.8%
======= ======= ======= =======
Revenues for the second quarter and for the year to date increased from the
prior year by 41.5% and 34.0%, respectively, primarily due to growth in
bunkering and storage revenues at Statia Terminals' St. Eustatius facility. A
five-million-barrel facility which became operational at St. Eustatius in the
first quarter of 1995 contributed substantially to this increase in revenues
in both periods.
Income from operations improved 43.3% for the quarter and 66.5% for the six
months to date due to the increase in revenues, improvements in Statia
Terminal's operating margins and an increase in income from other Investments
segment assets.
12
OTHER INCOME STATEMENT MATTERS. Interest expense of $13.1 million for the
second quarter and $22.4 million for the first half of 1995 was greater than
that of the year previous, due to higher levels of debt and an increase in
interest rates. The effective income tax rate for the first six months of
1995 was 45.5%, compared to 47.6% for the comparable 1994 period, as effective
tax rates on non-U.S. source earnings declined.
Fully diluted earnings per common share, assuming the conversion of the
company's Series C Convertible Voting Preferred Stock, as required by
accounting disclosure rules, was $0.27 and $0.48, respectively, for the second
quarter and first half of 1995, as compared to $0.29 and $0.49, respectively,
for the counterpart 1994 periods.
FINANCIAL CONDITION
BALANCE SHEET. Cash and temporary cash investments totalled $43.2 million at
June 30, 1995, down from $51.0 million at December 31, 1994. Working capital
increased from $138.8 million at the end of 1994 to $166.7 million at June 30,
1995, primarily reflecting an increase in inventories and payment of
international tax liabilities. Total debt (notes payable plus current and
non-current long-term debt) at June 30, 1995 was $770.7 million, up 1.9% from
the $756.6 million of debt at December 31, 1994. On March 31, 1995, CBI
issued $55 million of Series D preferred shares, the proceeds of which were
used to reduce short-term borrowings. The ratio of total debt to total
capitalization (total debt plus capital stock) declined from 51.4% at December
31, 1994 to 49.5% as of June 30, 1995. 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 45.0% at December 31, 1994 and 43.7% at June 30, 1995.
CAPITAL EXPENDITURES. Expenditures for new plant and equipment were $49.9
million in the second quarter of 1995 and $112.2 million for the first six
months of 1995, compared to $54.8 million and $122.4 million, respectively, in
1994. $19.8 million of expenditures in the second quarter of 1995 and $61.0
million in the first six months represented investments in increased capacity.
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 (HF) 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 of the 4,300 (approximate) plaintiffs who originally brought
suit as a result of the incident.
After CBI's insurers declined to indemnify CBI Na-Con for the Texas City
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
accepted the case for review. On March 2, 1995 the Texas Supreme Court
reversed the Court of Appeals and affirmed the judgment of the Trial
Court that coverage did not exist. CBI filed a motion asking the Supreme
Court to reconsider its decision, which is pending.
While neither the filing of additional lawsuits nor the outcome of any
particular lawsuit can be predicted with certainty, CBI's management
believes that remaining potential liabilities resulting from the
occurrence at Texas City will not have a materially adverse effect on
the Company's operations or financial condition.
ANTITRUST MATTERS. Liquid Carbonic Industries Corporation ("Liquid
Carbonic") has been or is currently involved in various legal
proceedings relating to antitrust matters.
Liquid Carbonic and its subsidiaries 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
governmental investigation cannot be predicted with certainty, Liquid
Carbonic believes that these investigations and the results thereof will
not have a materially adverse effect on its operations or financial
condition.
Since April, 1992, several lawsuits have been filed against Liquid
Carbonic and various competitors which 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
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 as part of 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 treble damages, civil penalties,
injunctive relief, costs and attorney's fees. The management of Liquid
Carbonic believes that the allegations made against Liquid Carbonic in
this litigation are without merit and that the damages alleged are
exaggerated and do not have sound economic and business support. Trial
is set for early 1996. Liquid Carbonic intends to defend itself
vigorously in this lawsuit and believes that it will either prevail or
that the ultimate outcome will not have a material adverse effect on its
operations or financial condition. However, litigation is unpredictable,
and an unexpected adverse jury verdict and judgment on that verdict in
14
Item 1. Legal Proceedings (Continued)
an amount approximating the amount of damages alleged by the plaintiffs
would have a severe adverse financial effect on CBI and Liquid Carbonic.
An agreement was reached in the second quarter of 1995 to settle,
subject to Court approval, the lawsuit brought against Liquid Carbonic
and others under the antitrust laws of the State of California based
upon the allegations of the Florida case.
In 1994, several claims were filed against Liquid Carbonic, Inc., a
wholly owned Canadian subsidiary of Liquid Carbonic, and various
competitors generally alleging that for the period 1954 to 1990 the
defendants conspired to fix prices for bulk and cylinder gas oxygen in
Canada in violation of the Canadian competition laws. The complainants
consist mainly of hospitals located in the Provinces of British Columbia
and Ontario. The company believes that the damages sought by the
plaintiffs are without merit and the company intends to vigorously
defend against these claims. While the outcome of any particular
lawsuit cannot be predicted with certainty, Liquid Carbonic believes
that these Canadian antitrust claims 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.
CORPORATE LITIGATION. A purported class action on behalf of all holders
of CBI common stock is pending in the Chancery Court of Delaware against
the company and certain of its Directors. This lawsuit, WWILLIAM STEINER
V. CBI INDUSTRIES, et al, was commenced on December 22, 1994. It alleges
that the defendants breached their fiduciary duty to shareholders by
rejecting proposals by Airgas, Inc. for the Company to either merge with
Airgas or to sell Liquid Carbonic to Airgas, and by amending the
Amendment and Restatement of Rights Agreement dated as of August 8,
1989, between the Company and First Chicago Trust Company of New York,
as Rights Agent (the "Rights Agreement"). Plaintiff seeks to (a) enjoin
the Directors to carry out their fiduciary duties; (b) declare the
Rights Agreement null and void; (c) enjoin the Company and its Directors
from erecting unlawful barriers to the acquisition of the Company; and
(d) recover from defendants unspecified monetary damages sustained by
shareholders of CBI as a result of the alleged acts of the Board of
Directors. The Company intends to vigorously defend against this action.
OTHER LITIGATION. In addition to the above lawsuits, CBI is a defendant
in a number of other lawsuits arising from the conduct of its business.
While it is impossible at this time to determine with certainty the
ultimate outcome of these other lawsuits, 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.
RESERVES FOR LEGAL PROCEEDINGS. 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.
15
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 11, 1995. The matters voted upon at the Meeting are
described in (c) below.
(c) (i) To elect five directors to serve for a three year term
expiring in 1998.
Nominee Votes For Votes Withheld
_______________________ __________ ______________
E. Hubert Clark 35,033,431 730,450
John T. Horton 35,081,954 681,927
Stephanie Pace Marshall 34,987,338 776,543
George L. Schueppert * 35,052,874 711,007
Robert L. Stewart 35,057,849 706,032
* George L. Schueppert, Executive Vice President - Finance,
Chief Financial Officer and Director, elected to retire on
August 4, 1995.
(ii) To adopt the CBI Industries, Inc. 1995 Stock Option Plan.
Votes For - 33,621,541
Votes Against - 1,656,822
Votes Abstaining - 485,518
(iii) To amend the Company's Certificate of Incorporation to permit
the Company to increase the number of authorized shares of
common stock from one hundred twenty million to two hundred
forty million shares.
Votes For - 29,972,181
Votes Against - 5,350,107
Votes Abstaining - 441,593
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3. (i) Articles of Incorporation
As amended June 21, 1995.
(ii) By-Laws
As amended August 9, 1995.
4. Instruments Defining the Rights of Security Holders,
Including Indentures
4.1 Description of 7.48% Cumulative Preferred Stock, Series D
can be found in CBI's Form 8-K dated April 5, 1995 and is
incorporated herein by reference.
4.2 Series A Preferred Stock Purchase Rights Agreement as
amended can be found in CBI's Form 8-K dated April 21,
1995 and is incorporated herein by reference.
10. Material Contracts.
Executive Contracts and Compensation Plans.
10.1 CBI Industries, Inc. 1995 Stock Option Plan can be
found in CBI's Form S-8 dated May 16, 1995 and is
incorporated herein by reference.
11. Computation of Earnings per Common Share
27. Financial Data Schedule
16
Item 6. Exhibits and Reports on Form 8-K (Continued)
(b) Reports on Form 8-K
A Form 8-K was filed under Item 5, Other Events and Item 7,
Financial Statements, Pro Forma Financial Information and Exhibits.
The date of that report was April 5, 1995.
A Form 8-K was filed under Item 5, Other Events and Item 7,
Financial Statements, Pro Forma Financial Information and Exhibits.
The date of that report was April 21, 1995.
17
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/ Alan J. Schneider
______________________________
Alan J. Schneider
Vice President - Finance
and Chief Financial Officer
Date: August 11, 1995
18
EXHIBIT 3. (i)
RESTATED
CERTIFICATE OF INCORPORATION
OF
CBI INDUSTRIES, INC.
Originally Incorporated on February 23, 1979
CBI Industries, Inc., a corporation organized and existing under the laws of
the State of Delaware, hereby certifies as follows:
1. The name of the corporation is CBI Industries, Inc. and its
original Certificate of Incorporation was filed with the Secretary of
State of the State of Delaware on February 23, 1979.
2. Pursuant to a resolution of the board of directors adopted August
10,1994 and pursuant to Section 245 of the General Corporation Law of
the State of Delaware, a Restated Certificate of Incorporation has been
adopted which only restates and integrates and does not further amend
the provisions of its original Certificate of Incorporation as
heretofore amended or supplemented, and there is no discrepancy between
those provisions and the provisions of this Restated Certificate of
Incorporation.
3. The text of the Certificate of Incorporation is hereby restated to
read in its entirety as follows:
RESTATED
CERTIFICATE OF INCORPORATION
OF
CBI INDUSTRIES, INC.
Originally Incorporated on February 23, 1979
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 1209 Orange 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 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.
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
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
corporation. 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
2
(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. (Deleted)
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.
SEVENTH: Cumulative Voting. (Deleted)
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. 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
3
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 or, unless 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.
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.
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.
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
4
(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 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.
5
(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 an 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
6
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.
7
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.
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.
IN WITNESS WHEREOF, the Company has caused this Restated Certificate of
Incorporation 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 22nd day of September, 1994.
/s/ John E. Jones
John E. Jones
Chairman of the Board,
President
and Chief Executive Officer
[Corporate Seal]
Attest:
/s/ Charlotte C. Toerber
Charlotte C. Toerber, Secretary
8
FORM OF
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, and on June 10, 1992 adopted the following resolution creating
a series of eight hundred thousand (800,000) 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 800,000.
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
1
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
2
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
3
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
4
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
5
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/ Donald H. Craigmile
Name: Donald H. Craigmile
Title: Secretary
6
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
1
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
2
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
3
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
4
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
5
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.
6
(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
7
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
8
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
9
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.
10
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/ George L. Schueppert
George L. Schueppert,
Executive Vice President &
Chief Financial Officer
[Corporate Seal]
ATTEST:
/s/ Donald H. Craigmile
Donald H. Craigmile, Secretary
11
CBI INDUSTRIES, INC.
AMENDED
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, 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 none of the authorized shares of
the Corporation's $3.50 Convertible Exchangeable
Preferred Stock, Series B, par value $1.00 per shares
(the Series B Preferred Stock") is outstanding and
none of the Series B Preferred Stock will be issued
subject to the Certificate of Designations filed on
December 5, 1986 with respect to the Series B
Preferred Stock.
IN WITNESS WHEREOF, the Company has caused this Amended 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 22nd day of September, 1994.
/s/ John E. Jones
John E. Jones
Chairman of the Board,
President
and Chief Executive Officer
[Corporate Seal]
Attest:
/s/ Charlotte C. Toerber
Charlotte C. Toerber, Secretary
12
CBI INDUSTRIES, INC.
Certificate of Designations
7.48% Cumulative Preferred Stock, Series D
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 and 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 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 550,000 shares, which series shall be capital stock
of the Corporation and 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 7.48%
Cumulative Preferred Stock, Series D (the "Series D Preferred Stock"). The
number of shares of Series D Preferred Stock shall be limited to 550,000. The
par value of the Series D Preferred Stock shall be $1.00 per share. The
Series D 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 Convertible Voting
Preferred Stock, Series C (the "Series C Preferred Stock"), in each case as to
payment of dividends and upon liquidation, dissolution and winding up.
2. Dividends.
(a) The shares of Series D 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 7.48% per share per annum, and no more. Dividends shall accumulate
and be payable quarterly on the fifteenth day of March, June, September, and
December in each year (each a "Dividend Payment Date" or collectively,
"Dividend Payment Dates"), commencing June 15, 1995, 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 D 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
13
advance of each particular Dividend Payment Date. The amount of dividends
payable on shares of Series D 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 D 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 D 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 D Preferred Stock are outstanding,
unless all accumulated dividends on all outstanding shares of Series D
Preferred Stock have been paid or contemporaneously are declared and paid
through the last Dividend Payment Date and full quarterly dividends on the
Series D 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 D 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 D 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 D 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 D 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 than
dividends paid or other distributions made in stock of the Corporation ranking
junior to the Series D 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 D Preferred Stock as to payment of
dividends for any period unless all accumulated dividends on all outstanding
shares of Series D 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
than dividends paid or other distributions made in stock of the Corporation
ranking junior to the Series D Preferred Stock as to payment of dividends and
upon liquidation, dissolution or winding up) on the Series D Preferred Stock
unless all accumulated dividends on all outstanding shares of Preferred Stock
of all other series ranking on a parity with the Series D 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 D Preferred Stock or any other
series of Preferred Stock ranking on a parity with the Series D Preferred
Stock as to payment of dividends, all dividends declared or other
distributions made upon shares of Series D Preferred Stock and any other
series of Preferred Stock ranking on a parity with the Series D 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 D 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 D Preferred Stock and such other series of
Preferred Stock bear to each other. Any dividend paid upon the Series D
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
14
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 D Preferred Stock, no stock of the Corporation ranking on a parity with
the Series D 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 D Preferred Stock and
all Preferred Stock of the Corporation ranking on a parity with the Series D
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 D Preferred Stock
and all Preferred Stock of the Corporation ranking on a parity with the Series
D 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 D 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 D
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. Redemption.
(a) The Corporation shall redeem all of the outstanding shares of
Series D Preferred Stock on April 1, 2000. Such redemption of shares of
Series D Preferred Stock shall be effected at a price of $100 per share, plus
an amount equal to accrued and unpaid dividends thereon to the date of the
redemption. The Series D Preferred Stock shall not be redeemable at the
option of the Corporation prior to April 1, 2000.
(b) If funds for the mandatory redemption of all of the shares of the
Series D Preferred Stock are not available on the mandatory redemption date,
the Series D Preferred Stock shall remain outstanding until such time as funds
are legally available for payment of the redemption price. If payment of the
redemption price is not made when due, dividends will continue to accrue on
the Series D Preferred Stock until funds are available for payment of the
redemption price and such redemption price is paid.
Notice of mandatory redemption shall be mailed by first class mail,
postage prepaid, to each Holder of the shares to be redeemed, at such Holder's
address as the same appears on the stock books of the Corporation. Such
notice shall be so mailed not less than 30 nor more than 45 days prior to the
date fixed for redemption. Each such notice shall state: (i) the redemption
date; (ii) the redemption price; (iii) the place or places where certificates
for such shares of Series D Preferred Stock are to be surrendered for payment
of the redemption price and (iv) that dividends on the shares to be redeemed
will cease to accrue on such redemption date.
If notice of redemption has been given under this Section 3, from and
after the redemption date for the shares of Series D Preferred Stock called
for redemption (unless default shall be made by the Corporation in providing
money for the payment of the redemption price of the shares so called for
redemption), dividends on the shares of Series D Preferred Stock so called for
redemption shall cease to accrue and said shares 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) shall cease.
Upon surrender in accordance with said notice of the certificates for any
shares so redeemed (properly endorsed or assigned for transfer, if the notice
15
shall so state), the redemption price set forth above shall be paid by the
Transfer Agent (or by such bank or trust company designated by the Board of
Directors) to the Holders of the shares of Series D Preferred stock subject to
redemption.
(c) All shares of Series D 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 D
Preferred Stock.
4. Liquidation Rights.
Upon the dissolution, liquidation or winding up of the Corporation,
whether voluntary or involuntary, the holders of the Series D Preferred Stock
shall be entitled to receive out of the assets of the Corporation available
for distribution to stockholders, the amount of $100 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 D Preferred Stock with respect to distributions upon
liquidation, dissolution or winding up. For purposes of this Section 4, 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
D 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 4, 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 D Preferred
Stock upon such dissolution, liquidation or winding up unless proportionate
distributive amounts shall be paid on account of the shares of the Series D
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 D Preferred Stock of the full preferential amounts
provided for in this Section 6, the holders of the Series D Preferred Stock as
such shall have no right or claim to any of the remaining assets of the
Corporation.
5. Voting Rights.
(a) Except as indicated in this Section 5 and in Section 7 and in
accordance with applicable law, the holders of shares of Series D Preferred
Stock shall have no voting rights.
(b) If at any time dividends payable on the Series D 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 D 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.
16
(c) In exercising the voting rights set forth herein or when otherwise
granted voting rights by operation of law, each share of Series D Preferred
Stock shall be entitled to one vote.
6. Reacquired Shares.
Any shares of Series D 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.
7. Exclusive Remedy.
In the event that dividends are not timely declared on the shares of the
Series D Preferred Stock, the exclusive remedy of the Holders against the
Corporation shall be as set forth in this Certificate of Designation,
Preferences and Rights and in no event shall Holders of such shares have any
right to maintain a suit or proceeding against the Corporation in respect of
such dividends or damages for the failure to receive the same or resulting
from such noncompliance.
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 D Preferred Stock without the affirmative vote or consent of the
holders of two-thirds or more of the outstanding shares of Series D 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 D
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 D 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 30th day of March, 1995.
/s/ George L. Schueppert
George L. Schueppert,
Executive Vice President and Chief
Financial Officer
[Corporate Seal]
ATTEST:
/s/ Charlotte C. Toerber
Charlotte C. Toerber, Secretary
17
CERTIFICATE OF AMENDMENT OF
RESTATED 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 Restated 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 Restated 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 Two Hundred
Sixty Million (260,000,000) of which Two Hundred Forty Million (240,000,000)
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 of 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 John E. Jones, its
Chairman of the Board and President and Charlotte C. Toerber, its Secretary,
this 7th day of June, 1995.
By: /s/ John E. Jones
CORPORATE SEALJohn E. Jones
Chairman of the Board and President
ATTEST:By: /s/ Charlotte C. Toerber
Charlotte C. Toerber
Secretary
18
EXHIBIT 3. (ii)
BY-LAWS
OF
CBI INDUSTRIES, INC.
(As Amended August 9, 1995)
ARTICLE
I
Offices
The registered office of the company shall be located at 100 West Tenth
Street, Wilmington, Delaware. The company may also have such other offices
within or without the State of Delaware as may hereafter be established by or
with the authority of the board of directors.
ARTICLE II
Seal
The seal of the company shall be a round disk consisting of an outer
circle having on its circumference the words "CBI INDUSTRIES, INC., DELAWARE"
and an inner circle having within it the words "CORPORATE SEAL."
ARTICLE III
Capital Stock
SECTION 1: The holder of each fully paid share of the capital stock of
the company shall be entitled to a certificate or certificates stating the
number of shares owned by such stockholder. All stock certificates shall be
in such form consistent with law, the certificate of incorporation and these
by-laws as shall from time to time be approved by the board of directors.
They shall be numbered consecutively, signed by the chairman of the board, the
president or a vice-president and by the secretary or an assistant secretary
or the treasurer or an assistant treasurer and sealed with the corporate
seal. In any case in which such certificate is countersigned manually by
either a transfer agent or registrar other than the company or one of its
employees, the corporate seal and signatures of the officers of the company,
or any of them, and the signature of the registrar or transfer agent not
countersigning manually, as the case may be, may be engraved or printed
facsimiles. In any case in which any officer who has signed or whose
facsimile signature has been placed on such a certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
company with the same effect as if such officer had not ceased to be such at
the date of its issue.
SECTION 2: The names and addresses of the persons to whom certificates
for shares of stock are issued and the number of shares represented by and the
date of the issue and transfer of each certificate shall be entered on books
of the company kept for that purpose. The stock record and transfer books and
the blank stock certificates shall be kept by such transfer agent or by the
secretary or such other officer as shall be designated by the board of
directors for that purpose.
SECTION 3: Except as otherwise provided in these by-laws or required by
law, shares of stock shall be transferable only on the books of the company
upon surrender of the certificate or certificates therefor to the secretary or
an assistant secretary of the company, or to the transfer agent of the company
if such an agent shall have been appointed, properly endorsed or accompanied
by proper assignments duly executed by the registered holder thereof in person
or by his attorney duly authorized in writing. Every certificate surrendered
to the company for transfer or exchange shall be canceled and the date of
cancellation shall be shown thereon. The company shall treat the registered
1
holder of each certificate for a share or shares of its stock as the owner of
such share or shares until the same shall have been transferred on the books
of the company as above provided.
SECTION 4: The company, whenever the board of directors shall so
determine, shall maintain one or more transfer offices or agencies, each in
charge of a transfer agent designated by the board of directors, where the
shares of the capital stock of the company may be transferred, and also one or
more registry offices, each in charge of a registrar designated by the board
of directors, where the share of such capital stock may be registered, and no
certificate for shares of such stock in respect of which a transfer agent and
registrar shall have been designated shall be valid unless countersigned by
such transfer agent and registered by such registrar. The board of directors
may also have such additional rules and regulations as it may deem expedient
concerning the issue, transfer and registration of certificates for shares of
the capital stock of the company.
SECTION 5: The holder of any share of capital stock of the company
shall immediately notify the company of any loss, theft, destruction or
mutilation of the certificate therefor and the board of directors may, in its
discretion, cause a new certificate or certificates to be issued to him, upon
the surrender of the mutilated certificate or in case of loss, theft or
destruction of the certificate, upon satisfactory proof of such loss, theft or
destruction and upon such terms and indemnity and with such bond as the board
of directors may prescribe, but the board of directors in its discretion may
refuse to replace any lost or destroyed certificate except upon the order of a
court of competent jurisdiction.
SECTION 6: (a) In order that the company may determine the stock-
holders entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of
any other lawful action, the board of directors may fix, in advance, a record
date, which shall not be more than sixty nor less than ten days before the
date of such meeting, nor more than sixty days prior to any other action.
(b) If no record date is fixed:
(1) The record date for determining stockholders entitled to notice of
or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or,
if notice is waived, at the close of business on the day next preceding
the day on which the meeting is held.
(2) The record date for determining stockholders for any other purpose
shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
(c) A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the board of directors may fix a new record
date for the adjourned meeting.
ARTICLE IV
Meetings of Stockholders
SECTION 1: All meetings of stockholders shall be at the principal
office of the company or such other place as may be designated by the board of
directors from time to time.
SECTION 2: The regular annual meeting of the stockholders shall be held
in the month, on the day and at the hour in each year as designated by
resolution of the board of directors, for the purpose of electing a board of
directors and for the transaction of such other business as may be properly
brought before such meeting.
2
SECTION 3: Special meetings of the stockholders for any purpose or
purposes may be called at any time by the chairman of the board of directors,
by the president or by the board of directors, and no other person or group of
persons shall be entitled to call a special meeting of the stockholders.
SECTION 4: Written or printed notice stating the place, day and hour of
the meeting and, in the case of a special meeting, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten (10) nor
more than sixty (60) days before the date of the meeting, or in the case of a
merger or consolidation of the company requiring stockholder approval or a
sale, lease or exchange of substantially all of the property and assets of the
company, not less than twenty (20) nor more than sixty (60) days before the
date of the meeting, either personally or by mail, to each stockholder of
record entitled to vote at such meeting. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to
the stockholder at his address as it appears on the records of the company,
with postage thereon prepaid.
SECTION 5: At all meetings of stockholders a majority of the
outstanding shares, excluding such shares as may be owned by the company,
represented in person or by proxy, shall constitute a quorum for the
transaction of any business other than adjourning from time to time until a
quorum shall be obtained, or adjourning sine die, and for any such adjournment
a majority vote of whatever stock shall be represented shall be sufficient. At
any adjourned meeting at which a quorum is present any business may be
transacted which might have been transacted if the meeting had been held at
the time fixed in the notice thereof.
SECTION 6: Each outstanding share which is entitled to vote on matters
submitted to a vote at any meeting of stockholders may be voted by proxy.
Such proxy must be in writing and filed with the Secretary not later than the
time for ascertainment of a quorum in connection with the meeting at which
such proxy is to be voted. No proxy shall be valid after eleven (11) months
from the date of its execution unless otherwise provided in the proxy.
SECTION 7: The secretary or an assistant secretary shall make, at least
ten (10) days before each meeting of stockholders, a complete list of the
stockholders entitled to vote at such meeting, arranged in alphabetical order,
with the address of, and the number of shares registered in the name of, each
stockholder. Such list, for a period of ten (10) days prior to such meeting,
shall be kept on file at a place within the city where the meeting is to be
held, which place shall be specified in the notice of the meeting, or if not
so specified, at the place where the meeting is to be held. Such list shall
be subject to inspection by any stockholder, at any time during usual business
hours, for any purpose germane to the meeting, and shall also be kept open, at
the time and place of the meeting, subject to the inspection of any
stockholder who is present, during the whole time of the meeting. The stock
ledger shall be the only evidence as to who are the stockholders entitled to
examine the stock ledger, the list required by this section or the books of
the company, or to vote in person or by proxy at any meeting of stockholders.
SECTION 8: Unless otherwise modified by resolution of the board of
directors of the company, the order of business at each regular annual meeting
of stockholders shall be as follows:
(a) Ascertainment of quorum
(b) Proof of due notice of meeting
(c) Unfinished business
(d) New business
(e) Election of directors
(f) Reports of officers and committees
(g) Adjournment
SECTION 9: Business may be properly brought before an annual meeting of
stockholders by a stockholder only upon the stockholder's timely notice
thereof in writing to the secretary of the company. To be timely, a
stockholder's notice must be in writing and delivered or mailed by first class
3
United States mail, postage prepaid, to the secretary of the company not less
than sixty (60) days prior to the first anniversary of the date of the last
meeting of stockholders called for the election of directors. A stockholder's
notice to the secretary shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (a) a brief description of the
business desired to be brought before the annual meeting, (b) the name and
record address of the stockholder proposing such business, (c) the class and
number of shares of stock of the company which are beneficially owned by the
stockholder, and (d) any material interest of the stockholder in such
business. Notwithstanding the foregoing, nothing in this Section 9 shall be
interpreted or construed to require the inclusion of information about any
such proposal in any proxy statement distributed by, at the direction of, or
on behalf of the board of directors. The chairman of an annual meeting shall
determine whether any business was properly brought before the meeting in
accordance with the provisions of this Section 9. If he should determine that
such business was not properly brought before the meeting, he shall so declare
to the meeting and any such business shall not be transacted.
SECTION 10: Nominations of persons for election to the board of
directors of the company shall be made only (a) by or at the direction of the
board of directors or (b) by any stockholder of the company entitled to vote
for the election of directors at a meeting of stockholders who complies with
the procedures set forth in this Section 10. Such nominations, other than
those made by or at the direction of the board of directors, shall be made by
notice in writing delivered or mailed by first class United States mail,
postage prepaid, to the chairman of the nominating & public affairs committee
of the board of directors of the company not less than sixty (60) days prior
to the first anniversary of the date of the last meeting of stockholders
called for the election of directors. Such stockholder's notice shall set
forth: (i) as to each person whom such stockholder proposes to nominate for
election or re-election as a director, (A) the name, age, business address
and, if known, residence address of each nominee proposed in such notice,
(B) the principal occupation or employment of each such nominee, (C) the
number of shares of stock of the company which are beneficially owned by each
such nominee, and (D) such other information as would be required by the
federal securities laws and the rules and regulations promulgated thereunder
in respect of an individual nominated as a director of the company and for
whom proxies are solicited by the board of directors of the company (including
such nominee's written consent to being named in the proxy statement as a
nominee and to serving as a director if elected); and (ii) as to the
stockholder giving the notice, (A) the name and address, as they appear on the
company's books, of such stockholder, and (B) the class and number of shares
of stock of the company which are beneficially owned by such stockholder.
Notwithstanding the foregoing, nothing in this Section 10 shall be interpreted
or construed to require the inclusion of information about such nominees in
any proxy statement distributed by, at the direction of, or on behalf of the
board of directors. The chairman of any meeting of stockholders may, if the
facts warrant, determine and declare to the meeting that a nomination was not
made in accordance with the procedures prescribed by this Section 10, and if
he should so determine, he shall so declare to the meeting and the nomination
shall be disregarded.
ARTICLE V
Directors
SECTION 1: The business and affairs of the company shall be managed by
a board of directors. Directors shall be elected at each annual meeting of
the stockholders, but if for any reason the election is not held at an annual
meeting, it may be held at a subsequent special meeting of stockholders. The
directors shall be divided into three classes as nearly equal in number as
possible. Each director, when elected, shall hold office for a term to expire
at the third succeeding annual meeting of shareholders after his election or
until his successor is elected and qualified. The board of directors may
accept resignations of individual directors at any time. Any vacancy
occurring in the board of directors by reason of resignation, death,
incapacity or any other cause, and any newly created directorships resulting
from any increase in the authorized number of directors may be filled by a
4
majority of the directors then in office, although less than a quorum, or by a
sole remaining director. Any director so elected to fill a newly created
directorship resulting from any increase in the authorized number of directors
shall be elected to a class designated by the Board and shall hold office
until the next election of that class, and until such director's successor
shall have been elected and qualified. Any director so elected to fill a
vacancy resulting from any other cause shall serve until the term of that
office shall expire, and until such director's successor shall have been
elected and qualified.
SECTION 2: No person shall be a director who is not a stockholder of
the company.
SECTION 3: Meetings of the board of directors, unless otherwise desig-
nated by the board of directors, shall be held at the principal office of the
company. Regular meetings of the board of directors shall be held at such
times as may be fixed by resolution of the board. Special meetings of the
board of directors may be called at any time by the chairman of the board of
directors or the president or, in their absence or refusal to act, by any
vice-president. A special meeting may also be called by the secretary upon
the written request of a majority of the board of directors. A special
meeting shall be called by giving written notice to each director (a) by mail
sent to his address as it appears on the records of the company, or (b) by
personal delivery or (c) by electronic communication prior to the time of such
meeting, stating the time, place and objects of such meeting. Such notice
shall be given by the secretary or an assistant secretary, but if the
secretary or assistant secretary fails to give the notice, the same may be
given by the officer or directors calling the meeting. No notice need be
given of any regular meeting of the board of directors and special meetings
may be held without notice at any time and place by the unanimous consent in
writing of all the directors.
SECTION 4: A majority of the board of directors shall constitute a
quorum for the transaction of business at any meeting of the board, but a
smaller number may adjourn from time to time until a quorum is obtained, or
may adjourn sine die. At any adjourned meeting at which a quorum is present
any business may be transacted which might have been transacted if the meeting
had been held at the time fixed in the notice thereof. Common or interested
directors may be counted in determining a quorum at a meeting of the board of
directors which authorizes action pursuant to Article IX.
SECTION 5: At all meetings of the board of directors the vote of a
majority of the whole board shall be decisive on all questions before the
meeting, and shall be requisite to any action of the board, except as
otherwise provided by law or by these by-laws. Any contract or transaction
made pursuant to Article IX may be approved by the affirmative vote of the
majority of the disinterested directors even though the disinterested
directors may constitute less than a quorum.
SECTION 6: Unless otherwise modified by resolution of a majority of the
board of directors of the company, the order of business at both regular and
special meetings of the board of directors shall be set by the chairman of
the board. The secretary, an assistant secretary or the directors setting the
order of business, shall transmit such order of business to the board of the
directors, in writing, either prior to or contemporaneous with the
commencement of each meeting.
SECTION 7: Any action required or permitted to be taken at any meeting
of the board of directors, or of any committee thereof, may be taken without a
meeting if all members of the board or committee, as the case may be, consent
thereto in writing, and the writing or writings are filed with the minutes of
proceedings of the board or committee. Such consent shall have the same
effect as a unanimous vote of all directors.
SECTION 8: (a) The board of directors may, in its discretion, by
resolution adopted by a majority of the whole board, constitute a general
executive committee for the board, appoint the members thereof, and specify
its authority and responsibility. Such committee shall be composed of not
5
less than five members of the board of directors who shall serve at the
pleasure of the board. The executive committee shall have such powers,
subject to the limitations of paragraph (b) of this Section 8, and shall
perform such duties as the board may delegate to it in writing from time to
time, including the immediate oversight and direction of the business affairs
of the company.
(b) The executive committee shall be organized and shall perform its
functions as directed by the board. Any action taken by the executive
committee shall be promptly reported to the board of directors as a whole for
ratification. The committee shall act by a majority of the members thereof,
and any action duly taken by the executive committee within the course and
scope of its authority and after proper ratification shall be binding on the
company.
(c) The executive committee may be abolished at any time by the vote of
a majority of the whole board of directors, and during the course of the
committee's existence, the membership thereof may be increased or decreased,
and the authority and duties of the committee changed by the board of
directors as it may deem appropriate. The chairman of the board shall be a
member ex officio and act as the chairman of the executive committee.
SECTION 9: (a) The board of directors, at its discretion, may
constitute and appoint special committees, in addition to the executive
committee, to assist in the supervision, management, and control of the
affairs of the company, with responsibilities and powers appropriate to the
nature of the several committees and as provided by the board of directors in
the resolution of appointment or in subsequent resolutions and directives.
Such committees may include but are not limited to an audit committee, a
nominating & public affairs committee, and a compensation committee. Each
committee so constituted and appointed by the board shall serve at the
pleasure of the board and the members thereof shall include not less than
three members of the board of directors, and such further persons as the board
may designate.
(b) In addition to such obligations and functions as may be expressly
provided for by the board of directors, each committee so constituted and
appointed by the board shall from time to time report to and advise the board
on company affairs within its particular area of responsibility and interest.
(c) The board of directors may provide by general resolution applicable
to such special committees for the organization and conduct of the business of
the committees.
ARTICLE VI
Officers and Assistant Officers
SECTION 1: The officers of the company shall be a chairman of the board
of directors, hereinafter called the "chairman of the board," a president, one
or more vice-presidents, a secretary, a treasurer and, at the election of the
board of directors, a controller. Such officers shall be elected at the first
meeting of the board of directors after the annual meeting of the stockholders
in each year but if not elected at such meeting may be elected at any other
meeting of the board of directors. All officers shall hold their respective
offices from the date of election thereto until the first meeting of the board
of directors after the next annual meeting of the stockholders, or until their
successors shall have been elected, but all or any of the officers of the
company may be removed from their respective offices at the pleasure of the
board of directors. The board of directors may also at any time elect such
other officers and assistant officers as it may deem proper and may prescribe
their duties and authority. The chairman of the board, the president, and at
least one vice-president shall be directors. Whenever there is more than one
vice-president the board of directors may designate one or more executive
vice-presidents or senior vice-presidents or both and assign to them such
6
responsibilities as may be appropriate. Any two or more offices may be held
by the same person except that neither the chairman of the board nor the
president shall hold the office of secretary.
SECTION 2: The chairman of the board shall preside at all meetings of
the stockholders and of the board of directors at which he is present. If
designated the chief executive officer of the company by the board of
directors, the chairman of the board shall exercise general supervision and
direction over the conduct of the business and affairs of the corporation,
shall have the power to appoint counsel for the corporation and to appoint
such subordinate officers (other than those officers required by Article VI of
these by-laws to be elected by the board of directors), agents, clerks and
employees as may be found necessary to transact the business of the
corporation and, without the consent of the board of directors, to remove any
such appointive officer, agent, clerk or employee of the corporation. The
chairman of the board shall have such other powers and perform such other
duties as may from time to time be prescribed by the board of directors.
SECTION 3: The president shall, in the absence of the chairman of the
board, preside at all meetings of the stockholders and of the board of
directors at which he is present. If designated the chief executive officer
of the company by the board of directors, the president shall exercise the
powers granted to the chief executive officer as described in Section 2 and
shall have such other powers and perform such other duties as may from time to
time be prescribed by the board of directors or as may be determined by
agreement between the chairman of the board and the president. In case of the
absence or disability of the chairman of the board, or his refusal to act, the
president shall have the powers and perform the duties of the chairman of the
board.
SECTION 4: The vice-presidents shall have such powers and duties as may
from time to time be prescribed by the board of directors or by the chief
executive officer in accordance with these by-laws. The board of directors
may designate one or more executive vice-presidents or senior vice-presidents
or both such executive and senior vice-presidents and may prescribe the powers
and duties of each. In case of absence, disability or refusal to act on the
part of both the chairman of the board and the president, one of the executive
vice-presidents or senior vice-presidents designated by the board of directors
shall have the powers and perform the duties of the chief executive officer
during such period of absence, disability or refusal to act.
SECTION 5: The secretary shall keep minutes of all meetings of the
stockholders, the board of directors and the committees of the board, if any,
shall give the required notices of all such meetings, shall notify all
officers and directors of their election and shall keep the seal of the
company and affix the same, attested by his signature, to such instruments as
may require it. The secretary shall keep or cause to be kept the stock
certificate book and the other usual corporate records. He shall make such
reports to the board of directors as they may request.
SECTION 6: The board of directors may designate a vice-president as the
chief financial officer of the company in which event that officer shall have
all the powers and duties of the treasurer except those prescribed by the
board or delegated by the chief financial officer to be performed by the
treasurer. In the absence of such a designation, the treasurer shall be the
chief financial officer of the company. The chief financial officer shall
have custody of and be responsible for all moneys, deposits and securities of
the company, for keeping full and accurate records of transactions, accounts,
liabilities and financial condition, for authorizing signatures on bank and
other accounts, authorizing endorsers on checks, bills, notes and other
negotiable and non-negotiable instruments, for arranging for borrowing and
lending, procuring insurance, managing cash flow and investments, and shall
generally, together with the chief executive officer, have supervision of the
finances of the company. His books and accounts shall be open at all times to
inspection by any director and, at appropriate times, by the company's
auditors. The chief financial officer shall make a report of the financial
condition of the company for the annual meeting of stockholders in each year
7
and shall make such other reports and statements as may from time to time be
required by the board of directors or by the laws of the State of Delaware.
SECTION 7: The board of directors may designate a controller who shall
also be the chief accounting officer of the company in which event that
officer shall be in charge of general accounting books and records of the
company. The controller shall have general supervision of the accounting
practices of the company; cause to be enforced and applied the accounting
rules and regulations prescribed by any applicable body or agency, have charge
of the accounting books and records of the company and perform such other
duties as may be assigned to him by the board of directors, the chief
executive officer or the chief financial officer. His accounting books and
records shall be open at all times to inspection by any director and, at
appropriate times, by the company's auditors.
SECTION 8: Contracts and other written instruments shall be signed by
the chairman of the board or the president or a vice-president unless some
other officer or employee of the company is authorized or required to sign
them. The chairman of the board or the president or any vice-president or any
other officer, assistant officer or employee designated in writing by the
chief financial officer, may sign or endorse checks, drafts and other
instruments used in the ordinary course of the business.
SECTION 9: The duties of assistant officers, such as assistant
secretaries, assistant treasurers or assistant controllers, shall be
determined from time to time by the board of directors or, subject to such
action as the board of directors may take in respect thereto, by the chief
executive officer.
ARTICLE VII
Fiscal Year
The fiscal year of the company shall be the calendar year.
ARTICLE VIII
Indemnification
SECTION 1: Indemnification of Directors and Officers. The company
shall, to the fullest extent to which it is empowered to do so by the General
Corporation Law of Delaware or any other applicable laws, as may from time to
time be in effect, indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he is or was or has agreed to become a director or
officer of the company, or is or was serving or has agreed to serve at the
request of the company as a director or officer of another corporation,
partnership, joint venture, trust or other enterprise, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit
or proceeding. Expenses incurred in defending any action, suit or proceeding,
whether civil, criminal, administrative or investigative, shall be paid by the
company in advance of the final disposition of such action, suit or proceeding
upon receipt of an undertaking by or on behalf of the director or officer to
repay if it shall ultimately be determined that he is not entitled to be
indemnified by the company. Any indemnification of or advance of expenses to
a director or officer under this Section 1 of this Article shall be made
promptly upon the written request of the director or officer. If a
determination by the company that the director or officer is entitled to
indemnification pursuant to this Article is required by law and the company
fails to respond within 60 days to a written request for indemnity, the
company shall be deemed to have approved such request. If the company denies
a written request for indemnity or advancement of expenses, in whole or in
part, or if payment in full pursuant to such request is not made within 60
days, the right to indemnification or advances as granted by this Article
shall be enforceable by the director or officer in any court of competent
jurisdiction. The costs and expenses of such person incurred in connection
8
with successfully establishing his right to indemnification or advancement, in
whole or in part, in any such action shall also be indemnified by the
company. If the company raises as a defense to any such action for
indemnification that the claimant has not met any applicable standard of
conduct, the burden of proving such defense shall be on the company, whether
or not there has been an actual determination by the company (including a
determination by its board of directors, its independent legal counsel, or its
stockholders) that the claimant has not met such applicable standard of
conduct.
SECTION 2: Contract with the Company. The provisions of Section 1 of
this Article VIII shall be deemed to be a contract between the company and
each director or officer who serves in any such capacity at any time while
said Section 1 is in effect, and any repeal or modification of said Section 1
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought or threatened based in whole or in part upon
any such state of facts. The contract right provided hereunder to each
director and officer may not be modified retroactively without the consent of
such person.
SECTION 3: Indemnification of Employees and Agents. Persons who are
not covered by the foregoing provisions of this Article VIII and who are or
were employees or agents of the company, or are or were serving at the request
of the company as employees or agents of another corporation, partnership,
joint venture, trust or other enterprise, may be indemnified to the extent the
company is empowered to do so by the General Corporation Law of Delaware or
any other applicable laws, when and as authorized at any time or from time to
time by the board of directors in its sole discretion.
SECTION 4: Other Rights of Indemnification. The indemnification
provided or permitted by this Article VIII shall not be deemed exclusive of
any other rights to which those indemnified may be entitled by law or
otherwise, and shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
SECTION 5: Liability Insurance. The company shall have the power to
purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the company or is or was serving at
the request of the company as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such whether or not the company would
have the power to indemnify him against such liability under the provisions of
this Article VIII.
ARTICLE IX
SECTION 1: The Company may, to the fullest extent to which it is
empowered to do so by the General Corporation Law of Delaware or any other
applicable laws as may from time to time be in effect, contract or transact
business between itself and any other organization in which one or more of its
officers or directors are officers or directors or have a financial interest
if the officer's or director's interest or relationship to the contract or
transaction is disclosed or is known to the board of directors.
SECTION 2: The board of directors shall fix the compensation of the
directors.
ARTICLE X
Amendments
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by action of the board of directors.
9
ARTICLE XI
Acquisition, Merger or Consolidation
In any instance in which the board of directors is considering the terms
of any offer that would involve the acquisition by the offeror of a controlling
interest in the company or a merger or consolidation of the company with or the
sale of its assets to another company, the board shall consider, in addition to
the economic interests of the stockholders, all relevant factors, including:
1. The social and economic impact upon the employees of the company;
2. The economic and environmental impact upon the communities in which
the company's major facilities are located;
3. The continuing ability of the company to meet the needs of its
customers and clients and to fulfill its existing contractual commitments;
and
4. The preservation of engineering integrity required to provide
adequate safeguards to society with respect to the structural adequacy of
the structures that the company designs, fabricates and builds.
10
<TABLE>
EXHIBIT 11
CBI INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
<CAPTION>
Three Months Six Months
Thousands of dollars and shares, except per share amounts Ended June 30, Ended June 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Primary Earnings Per Common Share
Net income to common shareholders $11,404 $12,064 $20,060 $20,236
Weighted average number of common shares outstanding 38,183 37,791 38,137 37,736
Primary net income per common share $0.30 $0.32 $0.53 $0.54
Fully Diluted Earnings Per Common Share
Net income to common shareholders $11,404 $12,064 $20,060 $20,236
Add back expenses included in net income that pertain to ESOP
Series C preferred dividends 1,984 2,025 3,961 4,118
Common dividends on unallocated reverted shares - 8 - 24
Company contributions (after utilization of common dividends
of $205, $204, $404, $406 charged to retained earnings) 2,256 2,019 4,588 4,023
ESOP debt amortization - (212) - (424)
Tax effect included in net income related to debt service (1,726) (1,563) (3,473) (3,145)
Net income adjusted to exclude ESOP debt service 13,918 14,341 25,136 24,832
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) - (60)
Company contribution (after utilization of common dividends
of $834, $822, $1,663, $1,660 charged to retained earnings) (3,611) (3,408) (7,290) (6,851)
ESOP debt amortization - 212 - 424
Tax effect included in net income related to debt service 1,600 1,417 3,218 2,852
Fully diluted net income to common shareholders $11,907 $12,536 $21,064 $21,197
Weighted average number of common shares outstanding 38,183 37,791 38,137 37,736
Add common stock equivalents of stock option plan 80 139 80 139
Add common stock equivalents of Series C preferred shares 5,272 5,268 5,272 5,268
Fully diluted weighted average number of common shares outstanding 43,535 43,198 43,489 43,143
Fully diluted net income per common share $0.27 $0.29 $0.48 $0.49
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF JUNE 30, 1995 AND THE INCOME STATEMENT FOR THE SIX MONTHS ENDED JUNE
30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> $43,197
<SECURITIES> 0
<RECEIVABLES> 289,403
<ALLOWANCES> (13,800)
<INVENTORY> 91,919
<CURRENT-ASSETS> 524,736
<PP&E> 1,989,405
<DEPRECIATION> (675,737)
<TOTAL-ASSETS> $2,072,932
<CURRENT-LIABILITIES> 357,989
<BONDS> 677,063
<COMMON> 313,779
55,000
40,976
<OTHER-SE> 377,258
<TOTAL-LIABILITY-AND-EQUITY> $2,072,932
<SALES> 0
<TOTAL-REVENUES> 937,101
<CGS> 0
<TOTAL-COSTS> 721,132
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 22,363
<INCOME-PRETAX> 56,298
<INCOME-TAX> 25,600
<INCOME-CONTINUING> 24,210
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 20,060
<EPS-PRIMARY> .53
<EPS-DILUTED> .48
</TABLE>
