___________________________________________________________________________
___________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to _____________
Commission File Number 1-6117
SOUTHDOWN, INC.
(Exact name of registrant as specified in its charter)
Louisiana 72-0296500
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1200 Smith Street
Suite 2400
Houston, Texas 77002
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 650-6200
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
At April 29, 1994 there were 17.2 million common shares
outstanding.
_________________________________________________________________________
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SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
INDEX
Page
No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheet
March 31, 1994 and December 31, 1993 1
Statement of Consolidated Earnings
Three months ended March 31, 1994 and 1993 2
Statement of Consolidated Cash Flows
Three months ended March 31, 1994 and 1993 3
Statement of Consolidated Revenues and
Operating Earnings by Business Segment
Three months ended March 31, 1994 and 1993 4
Statement of Shareholders' Equity
Three months ended March 31, 1994 4
Notes to Consolidated Financial Statements 5
Independent Accountants' Review Report 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 16
Item 6. Exhibits and Reports on Form 8-K 18
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(unaudited)
(in millions)
----------------------
March 31, December 31,
1994 1993
--------- --------
ASSETS
Current assets:
Cash and cash equivalents $ 8.4 $ 7.4
Accounts and notes receivable, less allowance
for doubtful accounts of $8.3 and $7.0 73.5 75.7
Inventories (Note 2) 71.6 54.7
Deferred income taxes 24.0 25.5
Prepaid expenses and other 3.6 3.6
--------- --------
Total current assets 181.1 166.9
Property, plant and equipment, less accumulated
depreciation, depletion and amortization of
$281.3 and $274.8 589.3 593.2
Goodwill 73.8 74.5
Other long-term assets:
Long-term receivables 20.6 20.6
Other 50.0 51.8
--------- --------
$ 914.8 $ 907.0
--------- --------
--------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 0.9 $ 19.9
Accounts payable and accrued liabilities 97.1 91.9
--------- --------
Total current liabilities 98.0 111.8
Long-term debt 222.9 274.0
Deferred income taxes 125.9 127.6
Minority interest in consolidated
joint venture 28.7 28.8
Long-term portion of postretirement benefit
obligation 83.4 83.8
Other long-term liabilities and
deferred credits 18.0 18.8
--------- --------
576.9 644.8
--------- --------
Shareholders' equity:
Preferred stock redeemable at
issuer's option (Note 3) 154.1 67.9
Common stock, $1.25 par value 21.4 21.3
Capital in excess of par value 122.9 127.6
Reinvested earnings 39.5 45.4
--------- --------
337.9 262.2
--------- --------
$ 914.8 $ 907.0
--------- --------
--------- --------
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<PAGE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED EARNINGS
(unaudited)
(in millions, except
per share data)
---------------------
Three Months Ended
March 31,
---------------------
1994 1993
-------- --------
Revenues $119.4 $ 106.1
-------- --------
Costs and expenses:
Operating 87.1 75.7
Depreciation, depletion and amortization 10.9 10.8
Selling and marketing 4.2 4.5
General and administrative 10.5 12.0
Other (income) expense, net 1.3 (0.1)
-------- --------
114.0 102.9
Minority interest in earnings of
consolidated joint venture (0.1) -
-------- --------
113.9 102.9
-------- --------
Operating earnings 5.5 3.2
Interest (8.7) (10.4)
-------- --------
Loss before income taxes and cumulative
effect of a change in accounting principle (3.2) (7.2)
Federal and state income tax benefit 1.0 2.8
-------- --------
Loss before cumulative effect of a change in
accounting principle (2.2) (4.4)
Cumulative effect of a change in accounting
principle, net of taxes - (48.5)
-------- --------
Net loss $ (2.2) $ (52.9)
-------- --------
-------- --------
Dividends on preferred stock (Note 3) $ (2.1) $ (1.3)
-------- --------
-------- --------
Loss per common share (Note 3 and Exhibit 11):
Loss before cumulative effect of a change
in accounting principle $(0.25) $ (0.34)
Cumulative effect of a change in accounting
principle, net of taxes - (2.86)
-------- --------
$(0.25) $ (3.20)
-------- --------
-------- --------
Average shares outstanding (Exhibit 11) 17.1 16.9
-------- --------
-------- --------
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<PAGE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED CASH FLOWS
(unaudited)
(in millions)
--------------------
Three Months Ended
March 31,
--------------------
1994 1993
------- ------
Operating activities:
Net loss $(2.2) $(52.9)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Cumulative effect of a change in
accounting principle - 48.5
Depreciation, depletion and amortization 10.9 10.8
Deferred income tax benefit (0.2) (3.1)
Amortization of debt issuance costs 1.2 0.8
Changes in operating assets
and liabilities (12.7) (11.5)
Other adjustments (0.1) 0.1
------- -------
Net cash used in operating activities (3.1) (7.3)
------- -------
Investing activities:
Additions to property, plant and equipment (6.5) (5.5)
Proceeds from asset sales - 1.5
Other (1.1) 0.7
------- -------
Net cash used in investing activities (7.6) (3.3)
------- -------
Financing activities:
Additions to long-term debt - 18.4
Reductions in long-term debt (70.0) (6.3)
Proceeds from sale of preferred stock 86.3 -
Securities issuance costs (4.2) -
Dividends (0.4) (0.4)
------- -------
Net cash provided by financing activities 11.7 11.7
------- -------
Net increase in cash and cash equivalents 1.0 1.1
Cash and cash equivalents at beginning of period 7.4 12.5
------- -------
Cash and cash equivalents at end of period $ 8.4 $ 13.6
------- -------
------- -------
Cash payments for income taxes totaled $115,000 in the first quarter
of 1994. There were no cash payments for income taxes in the first quarter
of 1993. Interest paid, net of amounts capitalized, was $3.2 million and
$2.7 million in 1994 and 1993, respectively. The $48.5 million noncash
operating charge in 1993 for the cumulative effect of a change in
accounting principle also resulted in a noncash charge to deferred income
taxes of $25.9 million and a noncash credit to long-term portion of
postretirement benefit obligation of $74.4 million. Noncash investing
activities in 1993 included the sale of a hazardous waste processing
facility for $5.6 million face value of a new issue of the purchaser's
preferred stock.
-3- <PAGE>
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF CONSOLIDATED REVENUES AND OPERATING EARNINGS
BY BUSINESS SEGMENT
(unaudited)
(in millions)
---------------------
Three Months Ended
March 31,
---------------------
1994 1993
------- --------
Contributions to revenues:
Cement $ 73.7 $ 66.6
Concrete products 49.6 37.7
Environmental services 7.8 9.9
Intersegment sales (11.9) (8.2)
Corporate and other 0.2 0.1
------- --------
$119.4 $ 106.1
------- --------
------- --------
Contributions to operating earnings (loss)
before interest expense and income taxes:
Cement $ 16.9 $ 14.6
Concrete products (0.8) (1.2)
Environmental services (1.4) 0.2
Corporate
General and administrative (6.9) (9.0)
Depreciation, depletion and amortization (1.2) (1.1)
Miscellaneous expense (1.1) (0.3)
------- --------
$ 5.5 $ 3.2
------- --------
------- --------
SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
STATEMENT OF SHAREHOLDERS' EQUITY
(unaudited)
(in millions)
-----------------------------------------------------
Capital
Preferred Common in excess
Stock Stock of
-------------------------------- par Reinvested
Shares Amount Shares Amount value earnings
------ ------- ------- ------ ------- ----------
Balance at
December 31, 1993 3.0 $ 67.9 17.0 $ 21.3 $127.6 $ 45.4
Net loss - - - - - (2.2)
Issuance of Series D
Preferred Stock
(Note 3) 1.7 86.3 - - - -
Issuance expenses
of capital stock - - - - (3.9) -
Dividends on pre-
ferred stock
(Note 3) - - - - - (2.1)
Exercise of stock
options - - 0.2 0.1 - (1.5)
Other - (0.1) - - (0.8) (0.1)
------ ------- ------- ------ ------ ----------
Balance at
March 31, 1994 4.7 $ 154.1 17.2 $ 21.4 $122.9 $ 39.5
------ ------- ------- ------ ------- ----------
------ ------- ------- ------ ------- ----------
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SOUTHDOWN, INC. AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1 - Unaudited Consolidated Financial Statements:
The Consolidated Balance Sheet of Southdown, Inc. and subsidiary companies
(the Company) at March 31, 1994 and the Statements of Consolidated
Earnings, Consolidated Cash Flows, Consolidated Revenues and Operating
Earnings by Business Segment and Shareholders' Equity for the periods
indicated herein have been prepared by the Company without audit. The
Consolidated Balance Sheet at December 31, 1993 is derived from the
December 31, 1993 audited financial statements, but does not include all
disclosures required by generally accepted accounting principles. It is
assumed that these financial statements will be read in conjunction with
the audited financial statements and notes thereto included in the
Company's 1993 Annual Report on Form 10-K, as amended by Form 10-K/A dated
May 11, 1994.
In the opinion of management, the statements reflect all adjustments
necessary for a fair presentation of the financial position, results of
operations and cash flows of the Company on a consolidated basis at March
31, 1994 and 1993. The interim statements for the period ended March 31,
1994 are not necessarily indicative of results to be expected for the full
year.
Note 2 - Inventories:
(unaudited, in millions)
------------------------
March 31, December 31,
1994 1993
--------- ---------
Finished goods $ 22.1 $ 15.4
Work in progress 16.5 7.0
Raw materials 5.8 6.0
Supplies 27.2 26.3
--------- ---------
$ 71.6 $ 54.7
--------- ---------
--------- ---------
Inventories stated on the LIFO method were $30.5 million at March 31,
1994 and $20.4 million at December 31, 1993 compared with current costs of
$38.4 million and $28.3 million, respectively.
Note 3 - Capital Stock:
Common Stock
At March 31, 1994 17,155,000 shares of common stock were issued and
outstanding.
-5-
<PAGE>
Preferred Stock Redeemable at Issuer's Option
Series A Preferred Stock - The Company had 1,999,000 shares of
Preferred Stock, $0.70 Cumulative Convertible Series A (Series A Preferred
Stock) issued and outstanding at March 31, 1994, December 31, 1993 and
March 31, 1993. Dividends paid on the Series A Preferred Stock were
approximately $350,000 during each of the three-month periods ended March
31, 1994 and 1993.
Series B Preferred Stock - The Company had 957,000 shares of
Preferred Stock, $3.75 Convertible Exchangeable Series B (Series B
Preferred Stock) issued and outstanding at March 31, 1994, and 959,000
shares issued and outstanding at December 31, 1993 and March 31, 1993.
Dividends accrued on the Series B Preferred Stock were approximately
$900,000 during each of the three months ended March 31, 1994 and 1993.
It is the Company's present intention to issue a notice of
redemption for some or all of the outstanding shares of its Series B
Preferred Stock as soon as the market price of the Company's common stock
stabilizes at a level that provides reasonable assurance that such
preferred stock will be converted into the Company's common stock. The
Series B Preferred Stock has a redemption price of $50.00 per share plus
accrued and unpaid dividends to the redemption date. Each share of Series
B Preferred Stock is convertible into 2.5 shares of the Company's common
stock (equivalent to a conversion price of $20.00 per share of common
stock).
Series D Preferred Stock - On January 27, 1994, the Company issued
1,725,000 shares of Preferred Stock, $2.875 Cumulative Convertible Series D
(Series D Preferred Stock) all of which were outstanding at March 31, 1994.
The net proceeds of approximately $82 million were utilized to reduce long-
term debt and to fund working capital requirements. Dividends accrued on
the Series D Preferred Stock were approximately $900,000 during the three
month period ended March 31, 1994.
Note 4 - Contingencies:
See Item 2. "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Liquidity and Capital Resources -
Known Events, Trends and Uncertainties" for discussion of certain
contingencies.
Note 5 - Review by Independent Accountants:
The unaudited financial information presented in this report has
been reviewed by the Company's independent public accountants. The review
was limited in scope and did not constitute an audit of the financial
information in accordance with generally accepted auditing standards such
as is performed in the year-end audit of financial statements. The report
of Deloitte & Touche on its limited review of the financial information as
of March 31, 1994 and for the three-month periods ended March 31, 1994 and
1993 follows.
-6-
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
To the Shareholders and
Board of Directors of
Southdown, Inc.
Houston, Texas
We have reviewed the accompanying consolidated balance sheet of
Southdown, Inc. and subsidiary companies as of March 31, 1994, and the
related statement of consolidated earnings and the statement of
consolidated cash flows for the three months ended March 31, 1994 and 1993
and the statement of shareholders' equity for the three months ended March
31, 1994. These financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established by
the American Institute of Certified Public Accountants. A review of the
interim financial information consists principally of applying analytical
procedures to financial data and making inquiries of persons responsible
for financial and accounting matters. It is substantially less in scope
than an audit conducted in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to such consolidated financial statements for them to
be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of Southdown, Inc. and
subsidiary companies as of December 31, 1993 and the related consolidated
statements of earnings, shareholders' equity, and cash flows for the year
then ended (not presented herein); and in our report dated January 27,
1994, we expressed an unqualified opinion on those consolidated financial
statements. In our opinion, the information set forth in the accompanying
consolidated balance sheet as of December 31, 1993 is fairly stated, in all
material respects, in relation to the consolidated balance sheet from which
it has been derived.
Deloitte & Touche
Houston, Texas
May 11, 1994
-7-
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Consolidated First Quarter Earnings
Operating earnings for the first quarter of 1994 were $5.5
million compared with $3.2 million in the prior year quarter. The net loss
for the three months ended March 31, 1994 was $2.2 million, $0.25 per
share. The net loss for the prior year quarter was $52.9 million, $3.20
per share fully diluted, including a $48.5 million, $2.86 per share, charge
related to the adoption of Statement of Financial Accounting Standards No.
106 (SFAS No. 106). This charge represented initial recognition of the
liability for postretirement benefits other than pensions attributable to
employee services provided prior to the mandatory adoption of the new
accounting principle.
First quarter 1994 revenues improved 13% compared with the prior
year quarter primarily because of a 7% and 27% increase, respectively, in
cement and ready-mixed concrete sales volumes combined with a $3.23 per ton
and $1.25 per cubic yard, respectively, improvement in cement and ready-
mixed concrete sales prices. These higher volumes and prices also
contributed to the improved operating results reported by the Cement and
Concrete Products segments. However, in the first quarter of 1994, all of
the Company's hazardous waste processing facilities generated lower
operating earnings compared with the prior year period and solid hazardous
waste derived fuel volumes burned in the Company's Tennessee cement kiln
declined 26% which together resulted in a $1.6 million decline in the
operating results of the Environmental Services segment. Also included in
the results of the first quarter of 1994 were charges totaling $1.7 million
in conjunction with the disposition of lawsuits.
General and administrative expenses for 1994 were lower than the
prior year quarter because the prior year period included a $1.8 million
charge to accrue the estimated cost of postretirement healthcare benefits
calculated under SFAS No. 106 in excess of claims incurred. No such charge
is required for the current period.
Interest expense for the three months ended March 31, 1994 was
$1.7 million lower than the comparable 1993 quarter because of lower debt
levels.
Segment Operating Earnings
Cement
Operating earnings of the Cement segment for the three month
period ended March 31, 1994 were $16.9 million compared with $14.6 million
in the prior year quarter. Despite (i) higher per unit operating costs
attributable to unplanned kiln outages, (ii) two months of abnormally
severe winter weather in many markets and (iii) a $1.4 million provision
for doubtful accounts in the first quarter of 1994 compared with $210,000
in the prior year quarter, operating earnings improved over the prior year
period primarily because of a $3.23 per ton increase in average cement
sales prices.
-8-
<PAGE>
Sales volumes, average unit price and cost data and unit
operating profit margins relating to the Company's cement plant operations
appear in the following table:
Three Months Ended
March 31,
----------------------
1994 1993
--------- ---------
Tons of cement sold (thousands) 1,240 1,164
--------- ---------
--------- ---------
Weighted average per ton data:
Sales price (net of freight) $ 52.00 $ 48.77
Manufacturing and other
plant operating costs 1 41.84 39.49
--------- ---------
Margin $ 10.16 $ 9.28
--------- ---------
--------- ---------
______________
(1) Includes fixed and variable manufacturing
costs, selling expenses, plant general and
administrative costs, other plant overhead
and miscellaneous costs.
The increase in sales prices per ton for the current quarter
compared with the prior year period reflects partial realization of price
increases implemented at most of the Company's cement plants during the
previous twelve months. The increase in operating costs per ton for the
three months ended March 31, 1994 compared with the prior year period was
primarily attributable to higher maintenance and repair costs of several of
the manufacturing facilities because of abnormally severe weather
conditions and various major repairs undertaken in the first quarter of
1994.
Concrete Products
Despite higher average cement costs, the operating loss for the
Concrete Products segment decreased to $828,000 compared with a $1.2
million loss in the prior year quarter. Revenues increased 32% from the
prior year quarter as sales volumes and prices from all of the product
lines in the concrete products operation improved. The loss at the
southern California operations declined 8% primarily because of improved
sales volumes and prices from its aggregate operations. Florida operating
results increased by approximately $400,000 compared with the prior year
period reflecting higher sales volumes and sales prices from the ready-
mixed concrete operations as well as continuing improvement from the block,
resale and fly ash operations.
-9-
<PAGE>
Sales volumes, unit price and cost data and unit operating profit
(loss) margins relating to the Company's ready-mixed concrete operations
appear in the following table:
Three Months Ended
March 31, 1994
---------------------
1994 1993
--------- --------
Yards of ready-mixed concrete
sold (thousands) 893 705
--------- ---------
--------- ---------
Weighted average per cubic
yard data:
Sales price $ 45.18 $ 43.93
Operating costs 1 47.04 46.05
--------- ---------
Margins $ (1.86) $ (2.12)
--------- ---------
--------- ---------
______________
(1) Includes variable and fixed plant costs,
delivery, selling, general and administrative
and miscellaneous operating costs.
The increase in the weighted average sales price per cubic yard
for the three months ended March 31, 1994 compared with the 1993 period
reflects higher sales prices primarily in the Company's Florida market.
The increase in weighted average operating costs per cubic yard for the
three months ended March 31, 1994 compared with 1993 is primarily
attributable to higher material costs in Florida.
Environmental Services
The Environmental Services segment reported an operating loss of
$1.4 million for the three months ended March 31, 1994 compared with
operating earnings of $238,000 in the prior year quarter. The hazardous
waste processing facilities had operating earnings of $168,000 in the
current quarter compared with $1.1 million in the prior year period as
operating results from all facilities were lower than the previous year
because of abnormally severe weather conditions and lower sales volumes.
In March 1994, the Company sold its Illinois hazardous waste processing
facility for $1 million. No gain or loss was recognized on the
transaction. Resource recovery operations declined $972,000 to an operating
loss of $181,000 in the current period primarily as a result of a 26%
decrease in solid hazardous waste derived fuel volumes burned and higher
than expected professional fees including costs incurred to complete a
previously commissioned research study. The decrease in solid hazardous
waste derived fuel volumes was primarily the result of shortages of
available volumes because of competitive market conditions and weather
related operating problems.
Corporate
Corporate general and administrative expenses for the current
period were substantially below the first quarter of 1993, primarily
because the prior year period included a $1.8 million charge to accrue the
estimated postretirement healthcare benefits calculated under SFAS No. 106
in excess of claims incurred. No such charge was required for the 1994
period.
Miscellaneous expense in the first quarter of 1994 included
charges totaling $1.7 million in conjunction with the disposition of
lawsuits.
-10-
<PAGE>
Liquidity and Capital Resources
The discussion of liquidity and capital resources included on pages
37 through 47 of the Company's Annual Report on Form 10-K for the year
ended December 31, 1993, as amended by Form 10-K/A dated May 11, 1994,
should be read in conjunction with the discussion of liquidity and capital
resources contained herein.
In late January 1994, the Company realized approximately $82
million in net proceeds from the sale of 1,725,000 shares of a new issue of
preferred stock. The net proceeds were used to prepay an $18 million
promissory note due in March 1994 and to reduce borrowings under the
Company's Revolving Credit Facility, $47 million of which was incurred in
early January 1994 to redeem $45 million principal amount of the Company's
12% Senior Subordinated Notes Due 1997 (12% Notes). Other borrowings under
the Company's Revolving Credit Facility were utilized to fund working
capital requirements and to invest approximately $6.5 million in plant,
property and equipment. The remaining $45 million outstanding principal
amount of the 12% Notes was redeemed on May 1, 1994 with additional
borrowings under the Revolving Credit Facility.
It is the Company's present intention to issue a notice of
redemption for some or all of the outstanding shares of its Series B
Preferred Stock as soon as the market price of the Company's common stock
stabilizes at a level that provides reasonable assurance that such
preferred stock will be converted into the Company's common stock. The
Series B Preferred Stock has a redemption price of $50.00 per share plus
accrued and unpaid dividends to the redemption date. Each share of Series
B Preferred Stock is convertible into 2.5 shares of the Company's common
stock (equivalent to a conversion price of $20.00 per share of common
stock).
In the first quarter of 1993, the Company borrowed approximately
$18.4 million under its Revolving Credit Facility primarily to (i) finance
the seasonal build-up of inventories, (ii) make scheduled debt principal
payments of $6.3 million and (iii) make investments of approximately $5.5
million in property, plant and equipment.
The Company's Revolving Credit Facility totals $200 million and
matures in November 1996. The Revolving Credit Facility includes $20
million of borrowing capacity that is restricted solely for potential
funding of obligations under an agreement between the Company and the U.S.
Maritime Administration related to certain shipping operations owned
previously by Moore McCormack Resources, Inc. (Moore McCormack), an entity
acquired by the Company in 1988. The facility also includes the issuance
of standby letters of credit up to a maximum of $95 million. Substantially
all of the Company's assets are pledged to secure this facility. At March
31, 1994, $14.6 million of borrowings and $70.8 million of letters of
credit were outstanding under the Revolving Credit Facility, leaving $94.6
million of unused and unrestricted capacity.
Changes in Financial Condition
The change in the financial condition of the Company between
December 31, 1993 and March 31, 1994 reflects the realization of
approximately $82 million in net proceeds from the sale of a new issue of
preferred stock which was used to pay down debt, including $18 million
classified as current maturities of long-term debt, and to fund working
capital requirements and capital expenditures. The increase in inventories
reflects the typical seasonal build-up in cement inventories in preparation
for the peak selling
-11-
<PAGE>
months in the second and third quarters. Accrued liabilities increased
because of the timing of payments on normal trade and other obligations.
Known Events, Trends and Uncertainties
Environmental Matters
The Company is subject to extensive Federal, state and local air,
water and other environmental laws and regulations. These constantly
changing laws regulate the discharge of materials into the environment and
may require the Company to remove or mitigate the environmental effects of
the disposal or release of certain substances at the Company's various
operating facilities.
The Federal Water Pollution Control Act, commonly known as the
Clean Water Act, provides comprehensive federal regulation of various
sources of water pollution. The Clean Air Act Amendments of 1990 provided
comprehensive federal regulation of various sources of air pollution, and
established a new federal operating permit program for virtually all
manufacturing operations. The Clean Air Act Amendments will likely result
in increased capital and operational expenses for the Company in the
future, the amounts of which are not presently determinable. By 1995, the
Company's U.S. operations will have to submit detailed permit applications
and pay recurring permit fees. In addition, the U.S. Environmental
Protection Agency (U.S. EPA) is developing air toxics regulations for a
broad spectrum of industrial sectors, including portland cement
manufacturing. U.S. EPA has indicated that the new maximum available
control technology standards could require significant reduction of air
pollutants below existing levels prevalent in the industry. Management has
no reason to believe, however, that these new standards would place the
Company at a competitive disadvantage. The Comprehensive Environmental
Response, Compensation, and Liability Act of 1980 (CERCLA), as amended by
the Superfund Amendments and Reauthorization Act of 1986 (SARA), as well as
analogous laws in certain states, create joint and several liability for
the cost of cleaning up or correcting releases to the environment of
designated hazardous substances. Among those who may be held jointly and
severally liable are those who generated the waste, those who arranged for
disposal, those who owned the disposal site or facility at the time of
disposal and current owners.
Hazardous waste processing facilities and the cement plants that
burn hazardous waste derived fuel (HWDF), by definition, involve materials
that have been designated as hazardous wastes. The Company's utilization
of HWDF in some of its cement kilns has necessitated the familiarization of
its work force with the more exacting requirements of applicable
environmental laws and regulations with respect to human health and the
environment. The failure to observe the exacting requirements of these
laws and regulations could jeopardize the Company's hazardous waste
management permits and, under certain circumstances, expose the Company to
significant liabilities and costs of cleaning up releases of hazardous
wastes into the environment or claims by employees or others alleging
exposure to toxic or hazardous substances. Management believes that the
Company's current procedures and practices for handling and management of
materials are consistent with industry standards and legal requirements and
that appropriate precautions are taken to protect employees and others from
harmful exposure to hazardous materials. However, because of the
complexity of operations and legal requirements, there can be no assurance
that past or future operations will not result in operational errors,
violations, remediation liabilities or claims by employees or others
alleging exposure to toxic or hazardous materials. Owners and operators of
industrial facilities and those who handle, store or dispose of hazardous
substances may be subject to fines or other actions imposed by the U.S. EPA
and corresponding state regulatory agencies for violations of laws or
regulations relating to those substances. The Company has incurred fines
imposed by various environmental regulatory agencies in the past.
-12-
<PAGE>
On March 23, 1994, the Ohio Hazardous Waste Facility Board denied
the Company's application for a Resource Conservation and Recovery Act
(RCRA) Part B permit for the Ohio cement plant's hazardous waste derived
fuels storage facility. The Company intends to file a motion for
reconsideration of the Board's decision and believes that a RCRA Part B
permit ultimately will be issued.
In June 1992, the Company's Knoxville, Tennessee cement plant
submitted to the U.S. EPA a Boiler and Industrial Furnace Certificate of
Compliance, a lengthy filing made to allow the plant to continue to burn
hazardous waste derived fuels. In a Notice of Violation (NOV) dated April
12, 1994, the U.S. EPA Region IV asserted that certain additional
information should have been included in the Certificate of Compliance and,
consequently, that the Company is in violation of certain requirements of
RCRA. The Company has filed a request for an extension of time to respond
and has received verbal assurances that the extension will be granted.
Although U.S. EPA did not propose any fines or penalties in the NOV, the
NOV noted that RCRA authorizes U.S. EPA to assess penalties of up to
$25,000 per day for each violation of RCRA regulations. Based on
information developed to date, the Company believes that this matter should
be resolved without any material fines or penalties.
Cement kiln dust - Industrial operations have been conducted at
some of the Company's cement manufacturing facilities for almost 100 years.
Many of the raw materials, products and by-products associated with the
operation of any industrial facility, including those for the production of
cement or concrete products, may contain chemical elements or compounds
that are designated as hazardous substances. Some examples of such
materials are the trace metals present in cement kiln dust (CKD), chromium
present in refractory brick formerly widely used to line cement kilns and
general purpose solvents. Under the Bevill amendment, CKD is currently
exempt from management as a hazardous waste, except CKD which is produced
by kilns burning HWDF and which fails to meet certain criteria. In
December 1993, as required by the Bevill amendment, the U.S. EPA issued a
Report to Congress on CKD and hearings were held on February 15, 1994. A
change in the status of CKD would require the cement industry to develop
new methods for handling this high volume, low toxicity waste. Also, CKD
that is infused with water may produce a leachate with an alkalinity high
enough to be classified as hazardous and may also leach certain hazardous
trace metals present therein. Leaching has led to the classification of at
least three CKD disposal sites of other companies as federal Superfund
sites. Several of the Company's inactive CKD disposal sites around the
country have been under investigation by the Company, as well as in some
cases by federal and state environmental agencies, to determine if remedial
action is required at any of the sites and, if so, the extent of any such
remedial action. The Company has recorded charges totaling $9.7 million
through the end of 1993 as the estimated remediation cost for one of these
sites.
On a voluntary basis, without administrative or legal action
being taken, the Company is also investigating two other inactive Ohio CKD
disposal sites. The two additional sites in question were part of a cement
manufacturing facility that was owned and operated by a now dissolved
cement company from 1924 to 1945 and by a division of USX Corporation (USX)
from 1945 to 1975. On September 24, 1993, the Company filed a complaint
against USX, alleging that USX is a potentially responsible party under
CERCLA and under applicable Ohio law, and therefore jointly and severally
liable for costs associated with cleanup of the larger of the two sites
(USX Site). Based on the limited information available as of December 31,
1993, the Company has received two preliminary engineering estimates of the
potential magnitude of the remediation costs for the USX Site, $8 million
and $32 million, depending on the assumptions used.
-13-
<PAGE>
The Company intends to vigorously pursue its right to
contribution from USX for cleanup costs under CERCLA and Ohio law. The
Company believes that USX is a responsible party because it owned and
operated the USX Site at the time of disposal of the hazardous substances,
arranged for the disposal of the hazardous substances and transported the
hazardous substances to the USX Site. Therefore, the Company believes
there is a reasonable basis for the apportionment of cleanup costs relating
to the USX Site between the Company and USX with USX shouldering
substantially all of the cleanup costs because, based on the facts known at
this time, the Company itself disposed of no CKD at the USX Site and is
potentially liable under CERCLA because of its current ownership of the USX
Site. These determinations, however, are preliminary, and are based only
upon facts available to the Company prior to completing discovery.
Under CERCLA and applicable Ohio law, a court generally applies
equitable principles in determining the amount of contribution which a
potentially responsible party must provide with respect to a cleanup of
hazardous substances and such determination is within the sole discretion
of the court. In addition, no regulatory agency has directly asserted a
claim against the Company as the owner of the USX Site requiring it to
remediate the property, and no cleanup of the USX Site has yet been
initiated.
No substantial investigative work has been undertaken at other
CKD sites. Although data necessary to enable the Company to estimate total
remediation costs is not available, the Company acknowledges that the
ultimate cost to remediate the CKD disposal problem in Ohio could be
significantly more than the amounts reserved.
While the Company's facilities at several locations are presently
the subject of various local, state and federal environmental proceedings
and inquiries, including being named a potentially responsible party with
regard to Superfund sites, primarily at several locations to which they are
alleged to have shipped materials for disposal, most of these matters are
in their preliminary stages and final results may not be determined for
years. Management of the Company believes, however, based solely upon the
information the Company has developed to date, that known matters can be
successfully resolved in cooperation with local, state and federal agencies
without having a material adverse effect, either individually or in the
aggregate, upon the consolidated financial statements of the Company.
However, because the Company's results of operations vary considerably with
construction activity and other factors, it is possible that future charges
for environmental contingencies could, depending on their timing and
magnitude, have a material adverse impact on the Company's results of
operations in a particular period. Until all environmental studies,
investigations, remediation work and negotiations with potential sources of
recovery have been completed, however, it is impossible to determine the
ultimate cost of resolving these environmental matters.
Other Contingencies
Discontinued Moore McCormack Operations - In conjunction with the
acquisition of Moore McCormack in 1988, the Company assumed certain
liabilities for operations that Moore McCormack had previously
discontinued. These liabilities, some of which are contingent, represent
guarantees and undertakings related primarily to Moore McCormack's
divestiture of certain businesses in 1986 and 1987. Payments relating to
liabilities from these discontinued operations were $300,000 in the first
quarter of 1994, $2.4 million in fiscal 1993 and $2.5 million in fiscal
1992. The Company is either a guarantor or directly liable under certain
charter hire debt agreements totaling approximately $11 million at March
31, 1994, declining by approximately $4 million per year thereafter through
February 1997. Although the estimated liability under these guaranties has
been included in the liability for discontinued Moore
-14-
<PAGE>
McCormack operations, enforcement of the guaranty, while not resulting in a
charge to earnings, would result in a substantial cash outlay by the
Company. However, the Company believes it currently has sufficient
borrowing capacity under its Revolving Credit Facility to fund these
guaranties, if required, as well as meet its other borrowing needs for the
foreseeable future.
Restructured Accounts Receivable - For many years, the Company
has from time-to-time offered extended credit terms to certain of its
customers, including converting trade receivables into longer term notes
receivable. This practice became more prevalent during 1992 and continued
during 1993, particularly in the southern California market area where many
of the Company's customers have been adversely affected by the prolonged
recession in the construction industry in that region. A group of five
such customers were indebted to the Company at March 31, 1994 in the amount
of $20.6 million. All of the notes and a portion of the accounts
receivable, approximately 77% of the $20.6 million, are collateralized.
During 1993, two of these customers defaulted on the payment
terms of their notes. The Company restructured its agreement with one of
the defaulting customers late in the second quarter of 1993 and that
customer was in compliance with the terms of the restructured agreement as
of March 31, 1994. The Company has stopped selling cement on credit to the
other customer in default and is presently evaluating its options for
collection of outstanding balances.
A third customer in the California group, while not in default on
its note, had difficulty in maintaining prompt payment for its cement
purchases and restructuring discussions were commenced in late 1993. In
March 1994, the Company withdrew a preliminary purchase proposal to acquire
certain ready-mixed concrete and aggregate assets of this customer but
restructuring discussions are continuing. The Company is contractually
committed to supply up to 90% of the cement requirements of another of the
three non-defaulting customers on extended credit terms, provided this
customer remains current with respect to both current purchases and
payments on its note.
In the opinion of management, the Company is adequately reserved
for credit risks related to its potentially uncollectible receivables.
However, the Company continues to assess its allowance for doubtful
accounts and may increase or decrease its periodic provision for doubtful
accounts as additional information regarding the collectibility of these
and other accounts become available.
Labor Matters - The drivers at the Company's Transit Mixed
Concrete Company (Transmix) ready-mixed concrete operations in southern
California are represented by Local Union No. 420 of the International
Brotherhood of Teamsters (the Teamsters). Transmix's collective bargaining
agreement with the Teamsters expired in April 1994, and on May 1, 1994, a
tentative agreement between the negotiators was rejected by a vote of the
union members. As of May 5, 1994, Transmix and several other unionized
employers in its negotiating group had agreed with the union to extend
negotiations for up to two weeks and had selected a federal mediator to
assist in resolving this matter. The Teamsters, however, have reserved the
right to strike at any time and have, in fact, struck certain other ready-
mixed concrete operations in the Los Angeles area. Transmix is prepared
for a strike, including the possible hiring of replacement workers for
those employees who do strike. Management of the Company believes that a
strike should not have a material adverse effect on its consolidated
financial statements. However, because a strike would have a negative
impact on the revenues from the Company's southern California concrete
business and could result in a short-term increase in certain costs, it is
possible that if the Teamsters do strike, depending on the duration of the
strike and the nature of any steps Transmix may take to continue
operations, a strike could have a material adverse impact on the Company's
results of
-15-
<PAGE>
operations in a particular period. However, Transmix believes that
replacement workers could be hired at significant cost savings from what it
pays at present and thus enhance its competitiveness with certain ready-
mixed concrete producers in southern California who have significantly
lower labor costs. In the event of a strike, Transmix will take all actions
it deems appropriate to protect its interests.
The hourly workers at the Company's Fairborn, Ohio cement plant are
represented by the International Brotherhood of Boilermakers, Cement, Lime,
Gypsum and Allied Workers Division Local Lodge No. D-357 (the
Boilermakers). On March 1, 1994 the Fairborn plant's collective bargaining
agreement with the Boilermakers expired. The Boilermakers are continuing
to work under the expired agreement while negotiations on a new contract
are underway.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(a) The information appearing under "Management's Discussion and Analysis
of Financial Condition and Results of Operations - Liquidity and
Capital Resources - Known Events, Trends and Uncertainties -
Environmental Matters" is incorporated hereunder by reference,
pursuant to Rule 12b-23.
(b) In early March 1994, the Company and a number of other cement
producers and industry associations received requests for information
from the Antitrust Division of the U.S. Department of Justice as part
of an investigation into possible price-fixing and market allocation
by cement producers. The Civil Investigative Demand received by the
Company relates to the period from 1991 to the present and requires
the Company to produce certain documents and respond to certain
interrogatories. The commencement of such an investigation does not
necessarily indicate that an enforcement action will be commenced
against any cement producer. Because of the early stage of the
investigation, it is not possible to predict the outcome of this
matter.
(c) In connection with the acquisition of a hazardous waste processor in
1990, subsidiaries of Southdown Environmental Services, Inc. (SES)
entered into an Oil Purchase Agreement with the seller and a
Consulting Agreement with the sole stockholder of the seller. Based
upon the seller's failure to pay invoices for fuel oil delivered under
the Oil Purchase Agreement, the SES subsidiaries terminated the
agreement in the Fall of 1991 and filed suit in Texas state court
against the seller for collection of amounts due under the Oil
Purchase Agreement and the Stock Purchase Agreement pursuant to which
the Company acquired the processor and for various other matters.
(Century Resources, Inc. and Southdown Environmental Treatment
Systems, Inc. v. Torco Oil Company and Anthony M. Tortoriello; 333rd
Judicial District Court of Harris County, Texas - Cause No. 91-54262).
The defendants filed counterclaims and lawsuits against the Company
seeking monetary damages in the amount of approximately $30 million
for alleged breach of the Consulting Agreement and the Oil Purchase
Agreement and approximately $10 million in punitive damages. (Anthony
M. Tortoriello v. Southdown Environmental Treatment Systems, Inc., a
Delaware corporation, and Century Resources, Inc., an Illinois
corporation; Circuit Court of Cook County, Illinois, Chancery Division
- Case No. 92-CH-09365); and (Torco Oil Company, an Illinois
corporation v. Southdown Environmental Treatment Systems, Inc., a
Delaware corporation, and Century Resources, Inc., an Illinois
corporation; Circuit Court of Cook County, Illinois, Chancery Division
- Case No. 92-CH-9874). In the first quarter of 1994, a settlement
was reached between the parties whereby, among other things, the
seller and the sole
-16-
<PAGE>
stockholder of the seller reaffirmed the seller's indemnification
obligations for certain environmental and other matters and all
parties agreed to a dismissal with prejudice of all claims and
counterclaims.
(d) Litigation was initiated in 1992 by former shareholders of a Browning-
Ferris Industries, Inc. (BFI) subsidiary acquired from BFI by the
Company and included claims asserting, among other things, that an
installment of a conditional deferred payment obligation which the
Company believed to be in the amount of $9.0 million was actually in
the amount of $10.0 million, that adjustments to the purchase price
and certain additional amounts aggregating approximately $500,000 were
payable to such shareholders, that an accounting must be provided to
such shareholders, and that the defendants acted intentionally and
maliciously and therefore that the shareholders were entitled to
punitive damages. (Benita H. O'Meara, an individual; Ernest O. Roehl,
an individual, v. Southdown Environmental Systems, Inc., a Delaware
corporation, aka BFI Environmental Treatment Systems, Inc., a Delaware
corporation, aka Southdown Environmental Treatment Systems, Inc., a
corporation; Does 1 through 50, inclusive) (Superior Court of the
State of California for the County of Los Angeles -Case No. BC 056904)
The Company notified BFI of its claim for indemnity under the stock
purchase agreement but BFI denied the Company's claim. The Company
responded timely to the suit and filed a cross-complaint and a new
lawsuit against BFI seeking judicial clarification as to BFI's
liability under the indemnity agreement, damages and other relief.
(Southdown, Inc., a Louisiana corporation, v. Browning-Ferris
Industries, Inc., a Delaware corporation; CECOS International, Inc., a
New York corporation; and Does 1 through 50, inclusive) (Superior
Court of the State of California for the County of Los Angeles - Case
No. BC 063261) On January 3, 1994 the parties orally agreed to an
out-of-court settlement pursuant to which all claims of the former
shareholders have been resolved. The Company believes that BFI agreed
to be liable for 70% of the up to $1 million additional amount
potentially owed to the former shareholders, but BFI now contends that
under certain circumstances it may have no liability for such amounts.
The Company and BFI have attempted to negotiate settlement
documentation to determine the apportionment of the responsibility for
the payment of any such additional amount to the former shareholders.
The Company and BFI met on May 3, 1994, but were unable to resolve
this matter. The terms of the settlement are now set to be resolved
by the judge following a court hearing in Los Angeles on May 27, 1994.
(e) The Company owns two inactive CKD disposal sites in Ohio that were
formerly owned by a division of USX. In September 1993, the Company
filed a complaint against USX alleging that with respect to the larger
of these two sites (the USX Site), USX is a potentially responsible
party and therefore jointly and severally liable for costs associated
with cleanup of the USX Site. (Southdown, Inc. v. USX Corporation,
Case No. C-3-93-354, U.S. District Court, Southern District of Ohio
Western Division) USX answered the complaint in November 1993 by
filing a motion to dismiss the lawsuit. On March 11, 1994 the
Magistrate Judge issued a report recommending denial of USX's motion
to dismiss. On March 29, 1994, USX filed objections to the Magistrate
Judge's report, and on April 8, 1994, the Company responded to USX's
objections. On April 11, 1994, the Court recommitted the Magistrate
Judge's report to the Magistrate Judge for reconsideration of all
matters raised by USX's objections and the Company's response thereto.
Based on advice of counsel, the Company believes there is a reasonable
basis for the apportionment of cleanup costs relating to the USX Site
between the Company and USX, with USX shouldering substantially all of
the cleanup costs because, based on the facts known at this time, the
Company itself disposed of no CKD at the USX Site and is potentially
liable
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<PAGE>
under CERCLA because of its current ownership of the USX Site. These
determinations, however, are preliminary, and are based only upon
facts available to the Company prior to completing discovery.
(f) In late July 1993, a citizens environmental group brought suit in U.S.
District Court for the Southern District of Ohio, Western Division
(Greene Environmental Coalition, Inc. (GEC), an Ohio not-for-profit
corporation v. Southdown, Inc., a Louisiana corporation - Case No. C-
3-93-270) alleging the Company is in violation of the Clean Water Act
by virtue of the discharge of pollutants in connection with the runoff
of stormwater and groundwater from an inactive cement kiln dust
disposal site (the USX Site) and is seeking injunctive relief,
unspecified civil penalties and attorneys' fees, including expert
witness fees. In August 1993, the Company moved to dismiss the
complaint. Pursuant to a preliminary pretrial conference order issued
by the court, the environmental group provided the Company with a
written settlement demand in early October 1993. On November 12,
1993, the Company rejected the environmental group's settlement demand
without offering a counterproposal. On March 30, 1994, the court
denied the Company's motion to dismiss. Subsequently, the Company
filed an answer to the GEC complaint and also filed a third-party
complaint against USX alleging that: (i) the Company is entitled to be
indemnified by USX for all costs and civil penalties the Company may
incur; and (ii) the Company is entitled to contribution from USX for
USX's proportionate share of the costs and civil penalties the Company
may incur.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
11 Statement of Computation of Per Share Earnings.
99.1 Bylaws of the Company amended as of March 17, 1994.
99.2 Amendment Number One to Second Amended and Restated Credit
Agreement as of February 18, 1994 among the Company; Wells Fargo
Bank, N.A. (is its individual capacity and as agent); Societe
Generale, Southwest Agency; Credit Suisse; Caisse National De
Credit Agricole; Banque Paribas, CIBC, Inc.; The Bank of Nova
Scotia and the First National Bank of Boston.
99.3 Agreement dated as of December 15, 1993 between Kosmos Cement
Company and International Brotherhood of Boilermakers, Cement,
Lime, Gypsum & Allied Workers Division Lodge D-532.
99.4 Agreement dated as of December 15, 1993 between Kosmos Cement
Company and International Brotherhood of Boilermakers, Cement,
Lime, Gypsum & Allied Workers Division Lodge D-592.
(b) Reports on Form 8-K
On January 4, 1994, a current report on Form 8-K was filed relating to
(i) two inactive cement kiln dust disposal sites owned by the Company
and (ii) a claim for indemnification by Energy Development
Corporation.
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<PAGE>
SIGNATURES
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.
SOUTHDOWN, INC.
(Registrant)
Date: May 12, 1994 By: JAMES L. PERSKY
-----------------------------
James L. Persky
Senior Vice President-Finance
(Principal Financial Officer)
Date: May 12, 1994 By: ALLAN KORSAKOV
-----------------------------
Allan Korsakov
Corporate Controller
(Principal Accounting Officer)
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<PAGE>
EXHIBIT 11
----------
SOUTHDOWN, INC. AND SUBSIDIARIES
---------------------------------
STATEMENT OF COMPUTATION OF PER SHARE EARNINGS
-----------------------------------------------
(In millions, except per share amounts - Unaudited)
<TABLE>
<CAPTION>
Quarter Ended
March 31,
------------------------
1994 1993
---------- ----------
<S> <C> <C>
Loss for primary earnings
per share:
Loss before cumulative
effect of a change in accounting
principle and preferred stock
dividends $ (2.2) $ (4.4)
Preferred stock dividends (2.1) (1.3)
---------- ----------
Loss for primary earnings per share
before cumulative effect of a
change in accounting principle (4.3) (5.7)
Cumulative effect of a change in
accounting principle - (48.5)
---------- ----------
Net loss for primary earnings per share $ (4.3) $ (54.2)
---------- ----------
---------- ----------
Loss for fully diluted earnings
per share:
Loss before cumulative effect
of a change in accounting principle
and preferred stock dividends $ (2.2) $ (4.4)
Antidilutive preferred stock dividends (2.1) (1.3)
---------- ----------
Loss for fully diluted earnings per
share before cumulative effect of
a change in accounting principle (4.3) (5.7)
Cumulative effect of a change in
accounting principle - (48.5)
---------- ----------
Net loss for fully diluted earnings
per share $ (4.3) $ (54.2)
---------- ----------
---------- ----------
Average shares outstanding:
Common stock 17.1 16.9
Common stock equivalents from assumed
exercise of stock options and
warrants (treasury stock method) 0.9 -
---------- ----------
Total for primary earnings per share 18.0 16.9
Other potentially dilutive securities:
- assumed conversion of Series A
convertible preferred stock at
one-half share of common stock 1.0 1.0
- assumed conversion of Series B
convertible preferred stock at
2.5 shares of common stock 2.4 2.4
- assumed conversion of the Series D
convertible preferred stock at
1.51 shares of common stock 1.8 -
---------- ----------
Total for fully diluted earnings
per share 23.2 20.3
Less: Antidilutive securities
Stock options and warrants (0.9) -
Series A preferred stock (1.0) (1.0)
Series B preferred stock (2.4) (2.4)
Series D preferred stock (1.8) -
---------- ----------
17.1 16.9
---------- ----------
---------- ----------
Loss per share primary and fully diluted:
Loss before cumulative effect of a
change in accounting principle $ (0.25) $ (0.34)
Cumulative effect of a change in
accounting principle, net - (2.86)
---------- ----------
$ (0.25) $ (3.20)
---------- ----------
---------- ----------
</TABLE>
- As Amended March 17, 1994 -
BYLAWS
OF
SOUTHDOWN, INC.
ARTICLE I
Shareholders
Section 1 - Place of Holding Meetings
All meetings of the shareholders shall be held at the principal
business office of the corporation in New Orleans, Louisiana, or
at such other place as may be specified in the notice of the
meeting.
Section 2 - Annual Election of Directors
An annual meeting of shareholders for the election of directors
shall be held in each calendar year on such date as the board of
directors may determine but not later than 18 months after the
date of the annual meeting held the preceding year, at such time
as may be specified in the notice of the meeting.
Section 3 - Voting
(a) On demand of any shareholder, the vote for directors, or on
any questions before a meeting, shall be by ballot. All
elections shall be had by plurality, and all questions
decided by majority, of the votes cast, except as otherwise
provided by the articles or by law.
(b) At each meeting of shareholders, a list of the shareholders
entitled to vote, arranged alphabetically and certified by
the transfer agent, showing the number and class of shares
held by each such shareholder on the record date for the
meeting, shall be produced on the request of any
shareholder.
(c) The date and time of the opening and the closing of the
polls for each matter on which the shareholders will vote at
any meeting of the shareholders shall be announced at the
meeting by the chairman of the meeting. The Board of
Directors of the corporation (or any committee designated by
it for that purpose) may, to the extent not prohibited by
law, adopt by resolution such rules, regulations and
procedures for the conduct of any meeting of shareholders as
it may deem appropriate or convenient. Except to the extent
inconsistent with such rules, regulations and procedures as
adopted by the Board of Directors or any such committee, the
chairman of any meeting has the right and authority to
prescribe such rules, regulations and procedures and to do
all such acts as, in the judgment of the chairman, are
appropriate or convenient for the conduct of any meeting.
Such rules, regulations or procedures, whether adopted by
the Board of Directors or any such committee or prescribed
by the chairman of any meeting, may, to the extent not
prohibited by law, include, without limitation,
establishment of the following: (1) an agenda or order of
business for the meeting; (2) rules, regulations and
procedures for maintaining order at the meeting and the
safety of those present; (3) limitations on attendance at or
participation in the meeting to shareholders of record of
the corporation, their duly authorized and constituted
proxies or such other persons as the chairman of the meeting
shall determine; (4) restrictions on entry to the meeting
after the time fixed for the commencement thereof; and (5)
limitations on the time allotted to questions or comments by
participants at the meeting. Unless, and to the extent,
determined by the Board of Directors, by a duly appointed
committee or by the chairman of the meeting, meetings of
shareholders are not required to be held in accordance with
the rules of parliamentary procedure.
Section 4 - Quorum
Except as provided herein, any number of shareholders, together
holding at least a majority of the outstanding shares entitled to
vote thereat, who are present in person or represented by proxy
at the meeting, constitute a quorum for the transaction of
business despite the subsequent withdrawal or refusal to vote of
any shareholder. If notice of any meeting is mailed to the
shareholders entitled to vote at the meeting, stating the purpose
or purposes of the meeting and that the previous meeting failed
for lack of a quorum, then any number shareholders, present in
person or represented by proxy and together holding at least one-
fourth of the outstanding shares entitled to vote thereat,
constitute a quorum at such meeting.
Section 5 - Adjournment of Meeting
If less than a quorum is in attendance at any time for which a
meeting is called, the meeting may be adjourned by a majority in
interest of the shareholders present or represented and entitled
to vote thereat.
Section 6 - Special Meeting: How Called
Special Meetings of the shareholders for any purpose or purposes
may be called in the manner set forth in the Restated Articles of
Incorporation.
Section 7 - Notice of Shareholders' Meetings
Written or printed notice, stating the place and time of any
meeting, and, if a special meeting, the general nature of the
business to be considered, shall be given to each shareholder
entitled to vote thereat, at his last known address, at least ten
days before the meeting.
Section 8 - Form of Proxies
Without limiting the manner in which a shareholder may authorize
another person or persons to act for him as proxy, the following
shall constitute a valid means by which a shareholder may grant
such authority:
(a) A shareholder may execute a writing authorizing another
person or persons to act for him or her as proxy. Execution
may be accomplished by the shareholder or his or her
authorized officer, director, employee or agent signing such
writing or causing his or her signature to be affixed to
such writing by any reasonable means including, but not
limited to, by facsimile signature.
(b) Any copy, facsimile telecommunication or other reliable
reproduction of the writing created under subsection (a) of
this section 8 may be substituted or used in place of the
original writing for any and all purposes for which the
original writing could be used, including filing with the
secretary of the corporation at or before the meeting,
provided that such copy, facsimile telecommunication or
other reproduction shall be a complete reproduction of the
entire original writing.
ARTICLE II
Directors
Section 1 - Number of Directors
The number of directors is twelve (12); provided, that the number
of directors shall be increased automaticially (i) by two
directors for such period as the holders of Preferred Stock, $.70
Cumulation Convertible Series A shall be entitled to elect two
(2) directors of the corporation and (ii) by two (2) directors
for such period as the holders of Preferred Stock, $3.75
Convertible Exchangeable Series B shall be entitled to elect two
(2) directors of the corporation, in each case as set forth in
Article III of the Restated Articles of Incorporation, as
amended.
Section 2 - Place of Holding Meetings
Meetings of the directors, regular or special, may be held at any
place, within or outside Louisiana, as the board may determine.
Section 3 - Meeting After Annual Meeting
A meeting of the Board of Directors shall be held immediately
following the annual meeting of shareholders, and no notice of
such meeting shall be necessary to the directors, whether or not
newly elected, in order legally to constitute the meeting,
provided a quorum is present; or they may meet at such time and
place as fixed by the consent in writing of all of the directors,
or by notice given by the majority of the remaining directors.
At such meeting, or at any subsequent meeting called for the
purpose, the directors shall elect the officers of the
corporation.
Section 4 - Regular Directors' Meeting
Any regular meeting of the directors may be held without notice,
if a calendar of regular meeting dates including the date of such
meeting has been established by the directors at least two weeks
prior to such meeting, at the principal business office of the
corporation or at any other location specified in such calendar
of regular meeting dates. Any regular meeting of the directors
may be held in the absence of establishment of such calendar of
regular meeting dates, or at a location other than the principal
business office of the corporation or location specified in such
calendar, by the given notice as required for special directors'
meetings. Any proposed agenda for such regular meetings shall
not be exclusive of other matters properly brought before the
meeting.
Section 5 - Special Directors' Meeting: How Called
Special meetings of the directors may be called at any time by
the board of directors or by the executive committee, if one be
constituted, by the chairman of the board of directors, or by the
president, or in writing, with or without a meeting, by a
majority of the directors or of the members of the executive
committee. Special meetings may be held at such place or places
within or outside Louisiana as may be designated by the person or
persons calling the meeting.
Section 6 - Notice of Special Directors' Meetings
Notice of the place and time of every special meeting of the
board of directors (and of the first meeting of the newly-elected
board, if held on notice) (i) if given by telephone or telegraph
shall be delivered to each director at his residence or usual
place of business at least 3 days before the date of the meeting,
and (ii) if given by a means other than telephone or telegraph
shall be sent to each director at his residence or usual place of
business at least 5 days before the date of the meeting. Any
proposed agenda or statement of purpose or purposes for a special
meeting of directors shall not be exclusive of other matters
properly brought before the meeting.
Section 7 - Quorum
At all meetings of the board, a majority of the directors in
office constitute a quorum for the transaction of business, and
the act of a majority of the directors present at any meeting at
which a quorum is present shall be the act of the Board of
Directors, unless the concurrence of a greater proportion is
required for such action by law, the articles of the bylaws. If
a quorum is not present at any meeting of directors, the
directors present thereat may adjourn the meeting from time to
time, without notice other than announcement at the meeting,
until a quorum is present. If a quorum be present, the directors
present may continue to act by vote of a majority of a quorum
until adjournment, notwithstanding the subsequent withdrawal of
enough directors to leave less than a quorum or the refusal of
any directors present to vote.
Section 8 - Remuneration to Directors
Directors, as such, shall not receive any stated salary for their
services, but by resolution of the Board, expenses of attendance,
if any, and except as to salaried officers or employees of the
corporation or an affiliated company, a fixed fee for the
performance of their duties as directors, as may be determined
from time to time by resolution of the Board, may be allowed to
directors, but this Section does not preclude any director from
serving the corporation in any other capacity and receiving
compensation therefor.
Section 9 - Powers of Directors
The board of directors has the management of the business of the
corporation, and subject to any restrictions imposed by law, the
articles or these bylaws, may exercise all the powers of the
corporation. Without prejudice to such general powers, the
directors have the following specific powers:
(a) From time to time, to devolve the powers and duties of any
officer upon any other person for the time being.
(b) To confer upon any officer the power to appoint, remove and
suspend, and fix and change the compensation of, subordinated
officers, agents and factors.
(c) To determine who shall be entitled to vote, or to assign and
transfer any shares of stock, bonds, debentures or other
securities of other corporations held by this corporation.
(d) To delegate any of the powers of the board to any standing
or special committee or to any officer or agent (with power to
sub-delegate) upon such terms as they deem fit.
Section 10 - Resignations
The resignation of a director shall take effect on receipt
thereof by the president or secretary, or on any later, date, not
more than thirty days after such receipt, specified therein.
Section 11 - Term of Office
Each director of the corporation shall hold office for the full
term of office to whom he shall have been elected and until his
successor shall have been elected and shall qualify, or until his
death, resignation or removal.
Section 12 - Participation in Meetings
Directors may participate in and be present at any meeting of the
board by means of conference telephone or similar communications
equipment if all persons participating in such meeting can hear
and communicate with each other.
Section 13 - Chairman of the Board
The board of directors shall elect one of its members to be
chairman of the board, to serve in such capacity at the pleasure
of the board. In his capacity as chairman of the board, he shall
not be an officer of the corporation. The chairman of the board
shall preside at meetings of the board of directors and
shareholders and perform such other duties as from time to time
may be assigned to him by the board.
Section 14 - Vice Chairman of the Board
The board of directors may elect one of its members to be vice
chairman of the board to serve in such capacity at the pleasure
of the board. In his capacity as vice chairman of the board, he
shall not be an officer of the corporation. In the absence of
the chairman of the board, the vice chairman of the board shall
preside at meetings of the board of directors and shareholders
and perform such other duties as from time to time may be
assigned to him by the board.
ARTICLE III
Committees
Section 1 - Executive Committee
The board may appoint an executive committee, which, when the
board is not in session, to the full extent of the powers of the
board shall have and may exercise the powers of the board in the
management of the business and affairs of the corporation and may
have power to authorize the seal of the corporation to be affixed
to documents, provided that the executive committee shall not
have the power to make or alter bylaws, fill vacancies on the
board or the executive committee, or change the membership of the
executive committee.
Section 2 - Minutes of Meeting of Committees
Any committees designated by the board shall keep regular minutes
of their proceedings, and shall report the same to the board when
required, but no approval by the board of any action properly
taken by a committee shall be required.
Section 3 - Procedure
If the Board fails to designate the chairman of a committee, the
Chairman of the Board, if a member, shall be Chairman. Each
committee shall meet at such times as it shall determine, and at
any time on call of the chairman. A majority of a committee
constitutes a quorum, and the committee may take action by vote
of a majority of the members present at any meeting at which
there is a quorum. The Board has power to change the members of
any committee at any time, to fill vacancies, and to discharge
any committee at any time.
Section 4 - Participation in Meetings
Members of a committee may participate in and be present at any
meeting of the committee by means of conference telephone or
similar communications equipment if all person participating in
such meeting can hear and communicate with each other.
ARTICLE IV
Officers
Section 1 - Titles
The officers of the corporation shall be a president, one or more
vice-presidents, a treasurer, a secretary and such other
officers, including a chief executive officer and chief operating
officer, as may, from time to time, be elected or appointed by
the board or appointed by the president. Any two offices may be
combined in the same person, provided that no person holding more
than one office may sign, in more than one capacity, any
certificate or other instrument required by law to be signed by
two officers. No officer need be a director.
Section 2 - President
The president shall be the chief executive officer of the
corporation. Subject to the direction of the board of directors,
he shall have the responsibility for the management and control
of the business and affairs of the corporation; he shall see that
all orders and resolutions of the board are carried into effect
and direct the other officers in the performance of their duties;
and he shall perform all duties and have all powers that are
commonly incident to the office of chief executive or that are
assigned to him by the board of directors. In the absence of the
chairman of the board and the vice chairman of the board, he
shall preside at shareholders' meetings and at directors'
meetings.
Section 3 - Vice Presidents
Each vice president shall have such powers, and shall perform
such duties, as shall be assigned to him by the directors, by the
chairman of the board, or by the president, and, in the order
determined by the board, shall, in the absence or disability of
the chairman and president, perform their duties and exercise
their powers.
Section 4 - Treasurer
The treasurer has custody of all funds, securities, evidences of
indebtedness and other valuable documents of the corporation. He
shall receive and give, or cause to be given, receipts and
acquittances of moneys paid in on account of the corporation, and
shall pay out of the funds on hand all just debts of the
corporation of whatever nature, when due. He shall enter, or
cause to be entered, in books of the corporation to be kept for
that purpose, full and accurate accounts of all moneys received
and paid out on account of the corporation, and, whenever
required by the president or the directors, he shall render a
statement of his accounts. He shall keep or cause to be kept
such books as will show a true record of the expenses, gains,
losses, assets and liabilities of the corporation; and he shall
perform all of the other duties incident to the office of
treasurer. If required by the board, he shall give the
corporation a bond for the faithful discharge of his duties and
for restoration to the corporation, upon termination of his
tenure, of all property of the corporation under his control.
Section 5 - Secretary
The secretary shall give, or cause to be given, notice of all
meetings of shareholders, directors and committees, and all other
notices required by law or by these bylaws, and in case of his
absence or refusal or neglect so to do, any such notice may be
given by the shareholders or directors upon whose request the
meeting is called as provided in these bylaws. He shall record
all of the proceedings of the meetings of the shareholders, of
the directors, and of committees in a book to be kept for that
purpose. Except as otherwise determined by the directors, he has
charge of the original stock books, transfer books and stock
ledgers, and shall act as transfer agent in respect of the stock
and other securities issued by the corporation. He has custody
of the seal of the corporation, and shall affix it to all
instruments requiring it; and he shall perform such other duties
as may be assigned to him by the directors, the chairman of the
board of directors, or the president.
Section 6 - Assistants
Assistant secretaries or treasurers shall have such duties as may
be assigned to them by the directors, by the chairman of the
board, or by the president, and as may be delegated to them by
the secretary and treasurer respectively.
ARTICLE V
Capital Stock
Section 1 - Certificates of Stock
Certificates of Stock, numbered and with the seal of the
corporation affixed or imprinted, signed by the Chairman of the
Board of Directors, or the President or Vice President, and the
Treasurer or Secretary, shall be issued to each shareholder,
certifying the number of shares owned by him in the corporation.
Where such certificate is countersigned (1) by a transfer agent
other than the corporation or its employee, or (2) by a registrar
other than the corporation or its employee, any other signature
on the certificate may be a facsimile.
Section 2 - Lost Certificates
A new certificate of stock may be issued in place of any
certificate theretofore issued by the corporation, alleged to
have been lost, stolen, mutilated or destroyed or mailed and not
received, and the directors may in their discretion require the
owner of the replaced certificate to give the corporation a bond,
unlimited as to stated amount, to indemnify the corporation
against any claim which may be made against it on account of the
replacement of the certificate or any payment made or other
action taken in respect thereof.
Section 3 - Transfer of Shares
Shares of stock of the corporation are transferrable only on its
books, by the holders thereof in person or by their duly
authorized attorneys or legal representatives, and upon such
transfer, the old certificate shall be surrendered to the person
in charge of the stock transfer records, by whom they shall be
cancelled, and new certificates shall thereupon be issued. A
record shall be made of each transfer, and whenever a transfer is
made for collateral security, and not absolutely, it shall be so
expressed in the entry of the transfer. The board may make
regulations concerning the transfer of shares, and may in their
discretion authorize the transfer of shares from the names of
deceased persons whose estates are not administered, upon receipt
of such indemnity as they may require.
Section 4 - Record Dates
The board may fix a record date for determining shareholders of
record for any purpose, such date to be not more than sixty days
and, if fixed for the purpose of determining shareholders
entitled to notice of and to vote at a meeting, not less than ten
days, prior to the date of the action for which the date is
fixed.
Section 5 - Transfer Agents, Registrars
The board may appoint and remove one or more transfer agents and
registrars for any stock. If such appointments are made, the
transfer agents shall effect original issuances of stock
certificate and transfers of shares, record and advise the
corporation and one another of such issuances and transfers,
countersign and deliver stock certificates, and keep the stock,
transfer and other pertinent records; and the registrars shall
prevent over-issues by registering and countersigning all stock
certificates issued. A transfer agent and registrar may be
identical.
ARTICLE VI
Miscellaneous Provisions
Section 1 - Corporation Seal
The Corporate seal is circular in form, and contains the name of
the corporation and the words "SEAL, LOUISIANA". The seal may be
used by causing it, or a facsimile thereof, to be impressed or
affixed or otherwise reproduced.
Section 2 - Checks, Drafts, Notes
All checks, drafts, other orders for the payment of money, and
notes or other evidences of indebtedness, issued in the name of
the corporation, shall be signed by such officer or officers,
agent or agents of the corporation and in such manner as shall,
from time to time, be determined by the board.
Section 3 - Fiscal Year
The fiscal year of the corporation begins on January 1.
Section 4 - Notice
Whenever any notice is required by these bylaws to be given,
personal notice is not meant unless expressly so stated; any
notice is sufficient if given by depositing the same in a mail
receptacle in a sealed post-paid envelope addressed to the person
entitled thereto at his last known address as it appears on the
records of the corporation; and such notice is deemed to have
been given on the day of such mailing.
Section 5 - Waiver of Notice
Whenever any notice of the time, place or purpose of any meeting
of shareholders, directors or committee is required by law, the
articles or these bylaws, a waiver thereof in writing, signed by
the person or persons entitled to such notice and filed with the
records of the meeting before or after the holding thereof, or
actual attendance at the meeting of shareholders in person or by
proxy or at the meeting of directors or committee in person, is
equivalent to the giving of such notice except as otherwise
provided by law.
Section 6 - Indemnification of officers, directors, employees,
and agents
(a) The corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any action,
suit or proceeding, whether civil, criminal, administrative
or investigative, including any action by or in the right of
the corporation by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another business,
foreign or nonprofit corporation, partnership, joint venture
or other enterprise, against 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 if he acted in good faith
and in a manner he reasonably believed to be in or not
opposed to the best interest of the corporation, and with
respect to any criminal action or proceeding, has no
reasonable cause to believe his conduct was unlawful.
However, in case of actions by or in the right of the
corporation, the indemnity shall be limited to expenses,
including attorneys' fees and amounts paid in settlement not
exceeding, in the judgment of the board of directors, the
estimated expense of litigating the action to conclusion,
actually and reasonably incurred in connection with the
defense or settlement of such action and no indemnification
shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged by a court of
competent jurisdiction, after exhaustion of all appeals
therefrom, to be liable for willful or intentional
misconduct in the performance of his duty to the corporation
unless and only to the extent that the court shall determine
upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, he is
fairly and reasonably entitled to indemnity for such
expenses which the court shall deem proper. The termination
of any action, suit or proceeding by judgement, order,
settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, or itself, create a presumption
that the person did not act in good faith and in a manner
which he reasonably believed to be in or not opposed to the
best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
(b) In any event, a director, officer, employee or agent of the
corporation who has been successful on the merits or
otherwise in defense of any such action, suit or proceeding,
or in defense of any claim, issue or matter therein, shall
be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection
therewith.
(c) Any indemnification under subsection (a) of this Section,
unless ordered by the Court shall be made by the corporation
only as authorized in a specific case upon a determination
that the applicable standard of conduct has been met. Such
determination shall be made (1) by the board of directors by
a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable and the board of directors
so directs, by independent legal counsel or (3) by the
shareholders.
(d) Expenses incurred in defending such an action, suit or
proceeding may be paid by the corporation in advance of the
final disposition thereof if authorized by the board of
directors, without regard to whether participating members
thereof are parties to such action, suit, or proceeding,
upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount if
it shall ultimately be determined that he is not entitled to
be indemnified by the corporation as authorized in this
Section.
(e) The indemnification and advancement of expenses provided by
or granted pursuant to the other subsections of this Section
shall not be deemed exclusive of any other rights to which
the person indemnified or obtaining advancement of expenses
is entitled under any agreement, authorization of
shareholders or directors, regardless of whether directors
authorizing such indemnification are beneficiaries thereof,
or otherwise, both as to action in his official capacity and
as to action in another capacity while holding such office,
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 his heirs and legal representative; however, no
such other indemnification measure shall permit
indemnification of any person for the results of such
person's willful or intentional misconduct.
(f) The corporation shall have power to procure or maintain
insurance or other similar arrangement on behalf of any
person who is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of
the corporation as a director, officer, employee or agent of
another business, nonprofit or foreign corporation,
partnership, joint venture or other enterprise against any
liability asserted against or incurred by him in any such
capacity, or arising out of his status as such, whether or
not the corporation would have the power to indemnify him
against such liability under the provisions of this Section.
Without limiting the power of the corporation to procure or
maintain any other kind of insurance or similar arrangement,
the corporation may create a trust fund or other form of
self-insurance arrangement for the benefit of persons
indemnified by the corporation and may procure or maintain
such insurance with any insurer deemed appropriate by the
board of directors regardless of whether all or part of the
stock or other securities thereof are owned in whole or part
by the corporation. In the absence of actual fraud, the
judgment of the board of directors as to the terms and
conditions of such insurance or self-insurance arrangement
and the identity of the insurer or other person
participating in a self-insurance arrangement shall be
conclusive, and such arrangements for insurance shall not be
subject to voidability and shall not subject the directors
approving such arrangement to liability, on any ground,
regardless of whether directors participating in approving
such insurance arrangements shall be beneficiaries thereof.
The provisions of the Insurance Code (Title 22 of the
Revised Statutes) will not apply to any wholly-owned
subsidiary of this corporation if it issues contracts of
insurance only as permitted by this subsection for coverage
of a person who is or was a director, officer, employee, or
agent of this corporation, or who is or was serving at the
request of this corporation as a director, officer,
employee, or agent of another business, nonprofit or foreign
corporation, partnership, joint venture, or other
enterprise, which contracts of insurance for such directors,
officers, employees, or agents may be issued by such wholly-
owned subsidiary without compliance with the provisions of
the Insurance Code.
Section 7 - Redemption of Control Shares
In accordance with Section 140.1 of the Louisiana Business
Corporation Law, the Company may redeem any or all control shares
acquired in a control share acquisition with respect to which
either:
(a) no acquiring person statement has been filed with
the Company in accordance with Section 137 of the
Louisiana Business Corporation Law; or
(b) the control shares are not accorded full voting
rights by the shareholders of the Company as provided
in Section 140 of the Louisiana Business Corporation
Law.
A redemption pursuant to subparagraph (a) hereof may be made at
any time during the period ending sixty (60) days after the last
acquisition of control shares by an acquiring person. A
redemption pursuant to subparagraph (b) hereof may be made at any
time during the period ending two (2) years after the shareholder
vote with respect to the voting rights of such control shares.
Any redemption pursuant to this Paragraph shall be made at the
fair value of the control shares and pursuant to such procedures
as may be adopted by resolution of the Board of Directors of the
Company.
ARTICLE VII
Amendments
Except as otherwise provided in the Restated Articles of
Incorporation, the shareholders or the directors, by affirmative
vote of a majority of those present or represented, may at any
meeting, amend or alter any of the bylaws; subject, however, to
the right of the shareholders to change or repeal any bylaws made
or amended by the directors.
AMENDMENT NUMBER ONE TO SECOND
AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDMENT NUMBER ONE TO SECOND AMENDED AND
RESTATED CREDIT AGREEMENT, dated as of February 18, 1994, is
entered into among SOUTHDOWN, INC., a Louisiana corporation
("Borrower"), the banks and financial institutions that are
signatories to the Credit Agreement (collectively, "Banks", and
individually, a "Bank"), and WELLS FARGO BANK, N.A., a national
banking association, as agent for Banks hereunder ("Agent").
WHEREAS, Borrower has requested that the Credit
Agreement be modified to permit the redemption, payment, or
acquisition, in one or more transactions, of its Series A
Preferred Stock on the same terms and conditions that it now
permits the redemption, payment, or acquisition of its
Convertible Exchangeable Preferred Stock; and
WHEREAS, subject to the terms and conditions contained
herein, Banks are willing to amend such provisions of the Credit
Agreement.
NOW, THEREFORE, in consideration of the mutual
covenants, conditions, and provisions hereinafter set forth, the
parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions for this Amendment. Any and all
initially capitalized terms used herein shall have the meanings
ascribed thereto in the Credit Agreement, as amended hereby,
unless specifically defined herein. For purposes of this
Amendment, the following initially capitalized terms shall have
the following meanings:
"Agent" shall have the meaning set forth in the
introduction to this Amendment.
"Amendment" means and refers to this Amendment Number
One to Second Amended and Restated Credit Agreement among
Borrower, Banks parties hereto, and Agent, together with any
and all exhibits and schedules hereto.
"Bank" and "Banks" shall have the respective meanings
set forth in the introduction to this Amendment.
"Borrower" shall have the meaning set forth in the
introduction to this Amendment.
"Credit Agreement" means and refers to that certain
Second Amended and Restated Credit Agreement, dated as of
November 19, 1993, among Borrower, Banks, and Agent.
1.2 Amendment of Section 1.1 of the Credit Agreement.
Section 1.1 of the Credit Agreement is hereby amended by (a)
adding the defined terms "Series A Preferred Stock" and
"Redeemable Preferred Stock" as follows, and (b) deleting the
defined terms "Balance of the Net Issuance Proceeds," "Failed
Conversion," "Permitted Junior Payments," "Permitted Preferred
Stock," and "Underwritten Call" in their entirety and
substituting therefor the following correlative defined terms:
"Balance of Net Issuance Proceeds" means and refers to
(a) the aggregate Net Issuance Proceeds of Qualifying
Offerings, minus (b) the aggregate amount paid by Borrower
on or after September 30, 1993 to redeem or acquire
Redeemable Preferred Stock in connection with one or more
Failed Conversions (such amount to be calculated by
excluding amounts paid by Borrower that were covered by an
Underwritten Call where the underwriter has performed its
underwriting obligations).
"Failed Conversion" means and refers to an attempted
redemption or acquisition (except acquisitions from time to
time if the aggregate amount paid in connection with all
such excepted acquisitions does not exceed $50,000) of
Redeemable Preferred Stock by Borrower where, in response to
such attempt, the holders of five percent (5%) or more of
the outstanding shares of such Redeemable Preferred Stock
that Borrower offered to redeem or acquire do not elect to
convert such stock into Borrower Common Stock.
"Permitted Junior Payments" means and refers to, so
long as at each time thereof, no Event of Default or
Unmatured Event of Default has occurred and is continuing
and no such Event of Default or Unmatured Event of Default
would result therefrom, (a) the redemption, payment, or
acquisition, in one or more transactions, of up to Forty-
Five Million Dollars ($45,000,000) principal amount of the
Senior Subordinated Notes, (b) from and after the date of
the consummation of a Qualifying Offering, and so long as,
prior thereto, there has not been a Failed Conversion, the
redemption, payment, or acquisition, in one or more
transactions, in an aggregate amount (excluding any
consideration paid in the form of Borrower Common Stock) up
to the Net Issuance Proceeds of such Qualifying Offering, of
the Senior Subordinated Notes or the Redeemable Preferred
Stock, (c) from and after the date of the consummation of a
Qualifying Offering and if, prior thereto, there has been a
Failed Conversion, the redemption, payment, or acquisition,
in one or more transactions, in an aggregate amount
(excluding any consideration paid in the form of Borrower
Common Stock) up to the Balance of Net Issuance Proceeds, of
the Senior Subordinated Notes or the Redeemable Preferred
Stock, (d) the redemption or acquisition, in one or more
transactions, in an aggregate amount (excluding any
consideration paid in the form of Borrower Common Stock) up
to the obligation of the underwriter under an Underwritten
Call, of the Redeemable Preferred Stock, (e) the incurrence
of the Exchange Subordinated Debt pursuant to Section
6.1(c), (f) the conversion of any Permitted Preferred Stock
into, or the redemption or acquisition of any Permitted
Preferred Stock for, Borrower Common Stock and payments of
immaterial amounts in lieu of fractional shares in
connection with any such conversion, redemption, or
acquisition, and (g) the redemption, repurchase, or
retirement for value of Borrower Common Stock so long as the
aggregate amount of all such redemptions, repurchases, and
retirements for value do not exceed $50,000.
"Permitted Preferred Stock" means and refers to (a) the
Series A Preferred Stock, (b) the Convertible Exchangeable
Preferred Stock, (c) the Series C Preferred Stock, and (d)
Preferred Stock issued by Borrower (and not by one or more
of its Subsidiaries) that is not Prohibited Preferred Stock.
"Redeemable Preferred Stock" means the Series A
Preferred Stock and the Convertible Exchangeable Preferred
Stock.
"Series A Preferred Stock" means and refers to
Borrower's Preferred Stock, $.70 Cumulative Convertible
Series A.
"Underwritten Call" means and refers to an underwriting
agreement whereby an underwriter, with a rating of A or A2,
or better, from S&P or Moody's agrees, in connection with a
proposed redemption or acquisition of Redeemable Preferred
Stock, to purchase from Borrower shares of Borrower Common
Stock at a price at least equal to the conversion price then
applicable to such Redeemable Preferred Stock. The number
of such shares that such underwriter shall so agree to
purchase shall be a number such that, after giving effect to
such purchase and any conversion of such Redeemable
Preferred Stock to Borrower Common Stock in accordance with
the terms and conditions governing such Redeemable Preferred
Stock, Borrower will have issued at least 95% of the number
of shares of Borrower Common Stock as it would have issued
if all such Redeemable Preferred Stock proposed to be
redeemed or acquired had been so converted. Such purchase
may be a direct purchase of Borrower Common Stock or may be
effected indirectly, such as pursuant to an agreement by
such underwriter to purchase tendered shares of Redeemable
Preferred Stock and, thereupon, to convert such shares to
Borrower Common Stock.
ARTICLE 2
CONDITIONS
2.1 Conditions to the Effectiveness of this Amendment.
The effectiveness of this Amendment is subject to the
fulfillment, to the satisfaction of Agent, of each of the
following conditions:
2.1.1 the Agent shall have received a certificate
from a Secretary or Assistant Secretary of Borrower attesting to
the resolutions of Borrower's board of directors authorizing the
execution and delivery of this Amendment and authorizing specific
officers to execute and deliver same;
2.1.2 the Agent shall have received an executed
counterpart of this Amendment duly executed and delivered by
Borrrower and each of the Majority Banks; and
2.1.3 the Agent shall have received a
certificate from a Responsible Officer certifying that:
(i) the representations and warranties of
Borrower and the Specified Subsidiaries contained in the
Credit Agreement and the Loan Documents, to the extent that
each is a party thereto, are true and correct in all
material respects at and as of the date of the effectiveness
of this Amendment, as though made on and as of such date
(except to the extent that such representations and
warranties expressly relate solely to an earlier date);
(ii) neither an Event of Default nor an
Unmatured Event of Default have occurred and is continuing
on the date of the effectiveness of this Amendment;
(iii) on the date of the effectiveness of
this Amendment, no Material Adverse Change has occurred, as
a result of one or more acts or occurrences; and
(iv) the Credit Agreement and each of the
Loan Documents are in full force and effect.
ARTICLE 3
MISCELLANEOUS
3.1 Effectiveness. This Amendment may be executed in
any number of counterparts, each of which when so executed and
delivered shall be deemed an original. All of such counterparts
shall constitute but one and the same instrument. Delivery of an
executed counterpart of the signature pages of this Amendment by
telecopier shall be equally effective as delivery of a manually
executed counterpart. Any party delivering an executed
counterpart of the signature pages of this Amendment by
telecopier thereafter also shall deliver promptly a manually
executed counterpart, but the failure to deliver such manually
executed counterpart shall not affect the validity,
enforceability, or binding effect of this Amendment. This
Amendment shall be effective as of the date hereof, subject to
the fulfillment of the conditions set forth in Section 2.1 of
this Amendment. This Amendment shall have no retroactive effect
whatsoever.
3.2 No Other Amendment. Except as expressly amended
hereby, the Credit Agreement shall remain unchanged and in full
force and effect. To the extent any terms or provisions of this
Amendment conflict with those of the Credit Agreement, the terms
and provisions of this Amendment shall control. This Amendment
shall be deemed a part of and is hereby incorporated in the
Credit Agreement.
3.3 Governing Law. This Amendment shall be governed
by, and construed and enforced in accordance with, the laws of
the State of California.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed and delivered as of the date first set
forth above.
SOUTHDOWN, INC.,
a Louisiana corporation
By____________________________
Title:______________________
WELLS FARGO BANK, N.A.,
a national banking
association, in its individual
capacity and as Agent
By____________________________
Title:______________________
SOCIETE GENERALE, SOUTHWEST
AGENCY
By____________________________
Title:______________________
CREDIT SUISSE
By____________________________
Title:______________________
By____________________________
Title:______________________
CAISSE NATIONALE DE CREDIT
AGRICOLE
By____________________________
Title:______________________
BANQUE PARIBAS
By____________________________
Title:______________________
CIBC INC.
By____________________________
Title:______________________
<PAGE>
THE BANK OF NOVA SCOTIA
By____________________________
Title:______________________
THE FIRST NATIONAL BANK OF
BOSTON
By____________________________
Title:______________________
KOSMOS CEMENT COMPANY
Deckers Creek - Morgantown, West Virginia
AGREEMENT
between
KOSMOS CEMENT COMPANY
and
INTERNATIONAL BROTHERHOOD OF BOILERMAKERS,
CEMENT, LIME, GYPSUM & ALLIED WORKERS DIVISIOIN
Lodge D-532
1993-1997<PAGE>
AGREEMENT
This Agreement, dated December 15, 1993 is made by and between
the KOSMOS CEMENT COMPANY and the INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT, LIME, GYPSUM, AND ALLIED WORKERS DIVISION
LOCAL LODGE NO. D532, referred to respectively as the "Company" and
the "Union."
ARTICLE I - RECOGNITION
1.1 The Company recognizes the Union as the sole bargaining agent
for its employees as is defined in Section 2 who work at the
Company's operations at Morgantown (Deckers Creek), West Virginia,
for the purpose of collective bargaining with respect to rates of
pay, hours, and other conditions of employment.
1.2 The term "employee" as used in this agreement shall include
all permanent production and maintenance employees including lead
men, but excluding all clerical employees, guards and supervisors
as defined in the Act and all other employees.
1.3 Union officers and members shall refrain from any union
solicitation on company time.
1.4 All provisions of this agreement shall be applied to all
employees without regard to race, color, sex, religious creed, age
or national origin. The company and the union will comply with
all federal and state laws concerning the rights of workers
including the Americans with Disabilities Act and the Family and
Medical Leave Act.
ARTICLE II - UNION AND COMPANY COOPERATION
2.1 The Union agrees that it will cooperate with the Company in
all matters of industrial relations including carrying out Equal
Employment Opportunity obligations and will support the Company's
efforts to assure a fair day's work on the part of its members and
that it will actively strive to eliminate absenteeism and other
practices which restrict production. It further agrees that its
members will abide by the rules of the Company in its effort to
prevent accidents, to eliminate waste in production, conserve
materials and supplies, improve the quality of workmanship, and
strengthen goodwill between the Company and its employees.
2.2 The Union agrees that it will use its best efforts to assist
the Company in enhancing the competitiveness of the Company, and
augmenting or increasing revenue generation.
2.3 The parties hereto intend by this Agreement to provide a
stabilized and mutually beneficial relationship between them and to
insure the production of quality products on schedule and at
competitive costs during the life of this Agreement. The Company
and the Union will also establish an active Employee Participation
Program to facilitate ideas and develop and implement programs to
improve the overall operations and enhance employee involvement.
ARTICLE III - THE CORE CONCEPT
3.1 The parties agree that the basic structure of the Company's
operation and the organization of its work force is based on the
"Core Concept." Under the Core Concept, employees will generally
perform the "core" of the work to be done at the mine and stone
loading operations with the remainder to be performed by
substantial but various numbers and types of outside contractors.
The parties recognize that the Company is in the primary business
of manufacturing cement and other products requiring similar
process (utilizing alternative substitute fuels). The parties
further recognize that the business is limited in scope and that
the Company should avoid, to the extent possible, getting into
other businesses such as special projects, special maintenance
other than routine preventive maintenance, day to day labor pool
work, janitorial work, trucking and the like, where other business
concerns may have more expertise, competence, economies of scale or
other advantages. The Company has the right to subcontract these
and other types of work where in the Company's judgement such
subcontracting is in the economic best interest of the Company and
its employees. It is understood and agreed that the Core Concept
does not require any specific number of employees, nor does it
cover any specific work or job classifications. Rather, the Core
Concept is a way of doing business which is designed to increase
productivity of the plant and the job security of the employees.
Subcontracting will not be used to permanently
replace bargaining unit employees.
ARTICLE IV - UNION ACTIVITY
4.1 The Company agrees that during all reasonable times when the
mine and stone hauling are operating a duly accredited
representative of the Union shall be entitled access to the mine
during the regular working hours for the purpose of assisting in
the adjustment of pending grievances, provided that the designated
representative of the Company is properly notified in advance and
the Union representative establishes proper identification. If it
is necessary to go into the work area of the mine (for example, to
view a particular operation relative to a pending grievance), then
the appropriate Company official shall accompany the Union
representative so that both parties see the same thing so as to aid
in resolving the grievance.
4.2 The Union Grievance Committee representing the employees in
matters other than negotiations shall consist of not more than two
(2) employees. The Operations Manager or his designee will meet
with the Committee within five (5) days, excluding Saturdays,
Sundays and holidays, of any request by the President of the Local
Union to the Operations Manager for such a meeting.
4.3 Insofar as practical, meetings will be conveniently scheduled
by the company so as to complete all business within normal working
hours. Such employees attending meetings will be compensated at
their regular straight time rate of pay for hours normally
scheduled to work.
4.4 Employees receiving formal disciplinary action may request
that a union representative be present.
ARTICLE V - MANAGEMENT RIGHTS
5.1 The Union recognizes that the management of the mine and stone
loading operations, the direction of the working forces, including
the right to hire, discipline for just cause, the right to make and
change and enforce (after posting) rules for the maintenance of
discipline and safety; the exclusive rights to determine partial or
permanent discontinuance or shutdown of operations (the Company's
only obligation when exercising this right is to bargain with the
union over the effects of that decision); the right to promote, or
transfer employees; the right to transfer and relieve employees
from duty because of lack of work or other legitimate reason, and
the right to establish and change the working schedules and duties
of employees are vested in the Company, except as otherwise
provided in the Agreement. The listing of specific rights in this
Agreement is not intended to be nor shall be considered restrictive
of or a waiver of any of the rights of management not listed and
not specifically surrendered herein, whether or not such rights
have been exercised by the Company in the past.
ARTICLE VI - WAGES
6.1 It is agreed that for the duration of this Agreement, the wage
groups and the rates of pay shall be those set in Schedule "A".
6.2 For shift premium only:
(1) All regularly scheduled work beginning between 6:00 A.M.
and 1:59 P.M. inclusive, shall be considered day shift work.
(2) All regularly scheduled work beginning between 2:00 P.M.
and 9:59 P.M. inclusive, shall be considered middle shift work.
(3) All regularly scheduled work beginning between 10:00 P.M.
and 5:59 A.M. inclusive, shall be considered night shift work.
6.3 Each employee regularly scheduled to work on the middle shift
shall be paid a premium of forty cents ($.40) for all hours worked
by him on that shift. Each employee regularly scheduled to work on
the night shift shall be paid fifty-five cents ($.55) for all hours
worked by him on that shift. These premium rates do not apply to
day workers even though they may work over into a premium pay
shift. If, however, the day worker is scheduled to take the place
of a regular scheduled shift worker, then the premium rate applies.
6.4 All consecutive hours (exclusive of meal periods) worked by an
employee who normally begins work at a time specified in the
preceding paragraphs, shall be deemed to be worked by him on the
shift on which he begins work.
ARTICLE VII - VACATIONS
7.1 Each employee meeting all the requirements of Section 2 of
this Article shall be eligible for vacation in accordance with the
following schedule:
After completion of one (1) year of service with the
Company since the employee's last date of hire -- two (2)
weeks vacation during the year following the employee's
anniversary date.
After completion of five (5) years of service with the
Company since the employee's last date of hire -- three
(3) weeks vacation during the year following the
employee's anniversary date.
After completion of ten (10) years of service with the
Company since the employee's last date of hire -- four
(4) weeks of vacation during the year following the
employee's anniversary date.
Continuous service only for employees on the payroll December
1, 1988, shall include continuous service recognized with Lone
Star/Marquette.
7.2 An employee shall receive a vacation according to Section 1 of
this Article provided that such employee has actually worked at
least one thousand (1,000) hours during the year preceding his most
recent anniversary date.
7.3 Vacations will not be cumulative, but so far as practical will
be granted at times most desired by employees, with the final right
to allotment of vacation period exclusively reserved to the Company
in order to ensure the orderly operation of the mine. The Company
may schedule up to two (2) weeks per calendar year for a "vacation
shut-down" during which some or all employees will be required to
take up to two (2) weeks of the vacation time for which the
employees are eligible. However, employees eligible only for two
(2) weeks vacation may schedule one (1) week of vacation at times
other than the "vacation shut-down." When requested vacation
periods conflict, preference shall be given to the employee having
the most continuous service (including continuous service
accumulated with Lone Star/Marquette). In the event a paid holiday
falls during an employee's vacation period, the employee shall
receive holiday pay in addition to vacation pay. Every effort will
be made by the Company to insure that the week of Thanksgiving will
be one of the weeks and that a maximum number of employees will be
able to take vacation that week. To insure orderly operation of
the stone supply, a minimum crew may be scheduled to work said shut
down weeks.
7.4 No vacation may be taken prior to the employee's applicable
anniversary date. An employee must take his vacation within twelve
(12) months after he qualifies for it. An employee cannot
accumulate vacation time beyond the twelve (12) month period
following the employee's anniversary date. An employee must have
been actively employed (at work) at sometime during the calendar
year to be eligible for vacation pay during that calendar year.
Employees may request additional (unpaid) vacation time and
the Company will attempt to comply with such request. (Upon
voluntary termination, employees will be paid for all unused
vacation time and pay, provided that such employee has actually
worked one thousand (1,000) hours during the year preceding his
most recent anniversary date).
An employee may receive one week of vacation pay per year in
lieu of time off if requested. This may be extended to an
additional week with company approval.
ARTICLE VIII - PAID LEAVES
8.1 It is agreed that the Company shall make up the wage loss
incurred by a regular employee (as distinguished from a
probationary employee) because of jury service by payment of the
difference between the amount received for such jury service on the
day such employee would have been regularly scheduled to work and
his regular rate of pay computed on the same basis as vacation pay.
Any employee reporting for jury duty will not be required to work
his regular shift that calendar day. The employee will be excused
for the entire day without loss of pay. Hours spent on jury duty
service and paid for hereunder shall be considered as time actually
worked for all overtime purposes. Further as outlined above, the
Company shall make up the wage loss incurred by an employee when
subpoenaed as a witness in an action when the employee or the Union
or the Company are neither the plaintiff nor the defendant.
8.2 To receive pay from the Company under this provision, the
employee must provide the Company with a statement signed by an
official of the court certifying as to the employee's service as a
juror or court witness or appearance in court for such purposes,
the date or dates of attendance, and the compensation paid him
exclusive of any transportation and/or subsistence allowance.
8.3 Employees who are members of organized reserve components of
the Armed Forces, including the National Guard, will be allowed
leave of absence annually for the purpose of attending required
military training encampments or cruises. The Company will pay any
employee who goes on such leave of absence the difference between
the employee's straight time pay for up to two (2) weeks (ten (10)
working days) annually and the employee's military pay including
longevity pay but excluding all allowances such as rent,
subsistence, uniform, and travel. Payment will be made when the
employee returns from reserve training on presentation of
satisfactory proof of the amount of pay received.
ARTICLE IX - COPIES
9.1 The Labor Agreement, and Summary Plan Descriptions for the
Pension Plan, 401K, and Insurance Plan will be printed at Company
expense. The Company will provide each member with a copy of the
booklet.
ARTICLE X - GRIEVANCE PROCEDURE
10.1 Should differences arise during the term of this Agreement
between the Company and the Union, or an individual employed by the
Company, as to the meaning and application of the provisions of
this Agreement, an earnest effort shall be made by the parties to
settle such differences promptly and in the following manner:
(1) STEP I. The complaint, within seven (7) days of its
occurrence, or the occurrence of the matter out of which the
complaint arises, may be taken up by the employee involved, with or
without Union representation, with his management representative.
The employee shall state the specific article(s) and paragraph(s)
of the Contract that is alleged to have been violated in order for
the grievance to be considered and processed.
(2) STEP II. If no satisfactory settlement is reached in
Step I, the matter shall be reduced to writing and presented to the
Mine Manager and/or Plant Manager within five (5) days from the
date of the meeting with the management representative. The
employee shall state the specific article(s) and paragraph(s) of
the Contract that is alleged to have been violated in order for the
grievance to be considered and processed. At the time of
presentation, or within five (5) days, the Mine Manager and/or
Plant Manager or his designee will meet with the employee with the
assistance of a Union Representative if requested by the employee
to hear and discuss the grievance. The Company shall answer the
grievance in writing within five (5) days after said meeting.
(3) STEP III. If no agreement is reached in Step II, the
Committee may, within five (5) days of the receipt of the above
answer, refer the matter to higher officials of the Company and the
Union, who may attend a meeting to be held within thirty (30) days
upon request.
(4) STEP IV.
a. Any grievance not settled in Step III above may be
referred to arbitration. Notice to refer a grievance to
arbitration shall be given in writing within fifteen (15) days
after being notified of the decision rendered in Step III or the
matter will be considered closed. Only one (1) grievance may be
submitted to or under review by any one (1) Arbitrator at any one
(1) time unless by prior mutual written consent of the parties.
b. In the event the parties are unable to agree upon an
Arbitrator within seven (7) days after arbitration is invoked, then
they shall jointly petition the Federal Mediation and Conciliation
Service, which shall submit a panel of seven (7) qualified
arbitrators, and the parties shall select a single arbitrator from
such panel. The Arbitrator shall be appointed by mutual consent of
the parties hereto. If the arbitrators included in this panel are
unacceptable to either party, a second panel shall be requested
from the Federal Mediation and Conciliation Service and a single
arbitrator selected from this panel.
c. Any grievance referred to arbitration shall be heard
as soon as possible and a decision rendered within thirty (30) days
of the hearing or the date of postmark of the post hearing briefs.
The Arbitrator shall have no power to add to or subtract from or
change, modify or amend any of the provisions of this Agreement.
The decision rendered by the Arbitrator will be final and binding
upon the Union, the Company, the grievant, and all the employees
covered by this Agreement. The Arbitrator selected pursuant to
this Article shall interpret and apply the terms of this Agreement;
he/she shall not substitute his/her discretion and judgement for
that of the Company. If the Arbitrator finds that a dischargeable
offense was committed by the employee, he/she shall not substitute
his/her judgement for that of the Company as to whether discharge
or a more lenient penalty was appropriate in a particular case.
d. It is expressly agreed that no Arbitrator shall have
the authority to decide any matter involving the exercise of a
right reserved to management under this Agreement.
e. Each party hereto shall pay the expense incurred in
the presentation of its own case, and the expenses incident to the
services of the Arbitrator, including the cost of the transcript,
shall be shared equally by the Company and the Union.
10.2 The time limits referred to in the foregoing paragraphs
exclude Saturdays, Sundays and holidays.
10.3 Any grievance growing out of a discharge or suspension must be
submitted in writing by the aggrieved employee directly to the
Union and from the Union to the Director of Human Resources or
Plant Manger within forty-eight (48) hours of the discharge or
suspension or it will not be recognized and action taken shall be
final.
10.4 Any grievance not presented or appealed within the time limits
provided, unless mutually agreed to extend the time, shall be
considered settled on the basis of the decision which was not
appealed and shall be final and binding on the parties involved.
10.5 Grievances presented in any of the regular steps set forth and
not answered within the time specified or as the same may be
extended by mutual agreement shall be considered appealed to the
next step of the grievance procedure.
ARTICLE XI - OVERTIME LUNCH
11.1 Any employee who works more than ten (10) consecutive hours,
where such overtime hours are unscheduled, shall be given a lunch
or lunch allowance. No lunch or lunch allowance will be provided
if such overtime hours are scheduled with twelve (12) hours advance
notice. Any employee working fourteen consecutive hours, in a
working day, who has not already been provided an overtime lunch,
will be entitled to lunch.
ARTICLE XII - NON-BARGAINING UNIT EMPLOYEES
12.1 It is understood and agreed that during the normal course of
operations it may be necessary for non-bargaining unit employees to
perform some bargaining unit work from time to time. Such work
will be incidental to the normal duties of said non-bargaining unit
employees, as long as such work does not permanently displace or
replace a bargaining unit employee. Such work shall include work
involving corrective action which must be performed expeditiously;
instruction or training of employees; demonstration; inspection or
testing of equipment; work of an emergency nature; and development
work for new processes and/or procedures.
12.2 When equipment, expertise, facilities, and manpower are
available, work customarily performed by bargaining unit employees
will continue to be performed by these employees. Subcontracting
may be used as needed to supplement the work force.
ARTICLE XIII - STRIKES AND LOCKOUTS
13.1 The Union agrees that there shall be no picketing or strikes
by the Union or by its members, of any kind or degree whatsoever,
or walkout, suspension of work, slowdowns, limiting of production,
or any other interference or stoppage, total or partial, of the
Company's operations for any reason whatsoever, such reasons
including, but not limited to, unfair labor practices by the
Company or any other Employer. It is further agreed that neither
the Union or its members shall engage in the above prohibited
conduct in support of picketing, strikes or any labor dispute
actions engaged in by any other organization or person. In
addition to any other recourse or remedy available to the Company
for violation of the terms of this Article by the Union and/or any
Union member, the Company may discharge or otherwise discipline any
employee who authorizes, causes, engages in, sanctions, recognizes,
or assists in any violation of this Article. The Company will not
engage in any lockouts during the term of this Agreement.
ARTICLE XIV - HOLIDAYS
14.1 The Company recognizes the following nine (9) paid holidays
per year: New Year's Day, Good Friday, Memorial Day, 4th of July,
Labor Day, Thanksgiving, Day after Thanksgiving, Christmas Eve, and
Christmas Day.
14.2 Holiday pay will be equal to eight (8) hours pay at the
employee's straight time hourly rate. Such holiday pay will not be
paid if the employee is absent from work on the holiday if
scheduled to work on the holiday or if the employee is absent on
the scheduled day preceding or following the holiday unless such
absences are excused by Management. In no event shall a holiday be
paid for unless an employee has also actually worked at least one
(1) day during the fifteen (15) day period immediately preceding or
immediately following the holiday.
14.3 If an employee is required to work on a holiday, he will
receive eight (8) hours pay for the holiday (holiday pay) plus one
and one-half (1-1/2) times the employee's regular hourly rate for
hours up to eight (8) hours actually worked on the holiday.
All hours worked in excess of eight (8) hours on a holiday
will be paid at two (2) times the employees regular rate of pay.
14.4 Since the employee is receiving one and one-half (1-1/2) times
the employee's regular hourly rate for hours actually worked on the
holiday, such hours actually worked on the holiday shall not be
counted toward the calculation of overtime pay received for working
in excess of forty (40) hours per week.
14.5 The eight (8) hours holiday pay shall be counted toward the
calculation of overtime pay paid for working in excess of forty
(40) hours per week if the employee is off for the holiday, but not
on his/her regularly scheduled day off.
14.6 When a holiday falls on Sunday, it will normally be observed
on the following Monday. Under certain conditions the Company may
elect to observe the holiday on the preceding Friday in lieu of
Monday. This change may apply to some or all employees.
ARTICLE XI - SENIORITY
15.1 Seniority shall consist of an employee's length of continuous
service with the Company since the employee's last day of hire at
its facility located at Morgantown (Deckers Creek), West Virginia.
Continuous service only for employees employed by the Company
before December 1, 1988 shall include continuous service at Deckers
Creek, West Virginia recognized by Lone Star/Marquette.
15.2 Each new employee shall be considered as a probationary
employee for the first ninety (90) calendar days of full time
employment after which the employee's seniority shall date back to
his date of hire. There shall be no seniority among probationary
employees. Such employees shall not have recourse to the grievance
procedure of this Agreement and may be laid off or discharged as
exclusively determined by the Company.
15.3 An employee's seniority shall be lost and continuous service
shall be broken when an employee:
1. is discharged;
2. is terminated upon permanent shutdown of the Company's
facilities;
3. is laid off for a period of three (3) years or the length
of his seniority as of his last day of work, whichever
period is shorter;
4. voluntarily quits which shall be deemed to include:
a) failure to notify the Company of the employee's
intention to return to work after layoff within three (3)
working days, and to actually report to work within seven
(7) working days (unless this latter period is extended
in writing by the Company) after he has been notified by
certified mail (either by delivery or attempted delivery)
at his last address appearing on the Company's records to
report to work;
b) an absence from work for two (2) consecutive scheduled
work days without reporting to work unless excused by
Management in advance;
c) the employee fails to return to work on the first
regularly scheduled work day following the termination of
any leave of absence or any other leave approved by the
Company unless excused by Management.
5. retires.
15.4 When a vacancy occurs for which a laid off employee is
qualified, he will be given certified mail notice of recall at his
last address as shown on Company records. The employee must notify
the Company of the employee's intention to return to work after
layoff within three (3) working days and must actually report to
work within seven (7) working days (unless this latter period is
extended in writing by the Company) after he has been notified by
certified mail (either by delivery or attempted delivery).
15.5 An employee on continuous absence due to disability shall
accrue seniority and retain recall rights for a period not to
exceed thirty-six (36) months or the length of his seniority as of
his last day worked (minimum of twelve (12) months), whichever
period is shorter. An employee absent because of disability shall
only be recalled for a vacancy which occurs after he is physically
able to return to work. However, should such an employee be
declared totally and permanently disabled prior to thirty-six (36)
months, such employee's name shall be removed from the payroll and
a certified mail notice to this effect will be sent to his last
address as shown on Company records. This provision of this
Agreement applies to recall rights only.
15.6 If an incapacitated employee is released to return to work and
is not physically able to perform the job that the employee was
performing before the disability occurred, the released employee
shall be allowed, subject to mutual agreement between the company
and the union, to displace a less senior employee in a job that the
released employee is qualified and physically capable of
performing. The displaced employee shall be the least senior
person in the job classification. Qualification will be handled as
in the normal bidding procedure. If a less senior employee is
displaced form his/her job, the displaced employee, with the
ability and qualification to perform another job, shall be allowed
to also displace a less senior employee.
15.7 Should an employee in the bargaining unit after December 15,
1993, be promoted to a supervisory position outside the coverage of
this Agreement and within ninety (90) days after promotion be
demoted, his seniority will be reinstated in the amount he had
when promoted.
15.8 Seniority lists agreed to by and between the Company and the
Union shall be posted on the bulletin board as of May 1 and
November 1 of each year. Corrections shall be made in the
seniority lists when it is proved an employee is placed in the
wrong position on said list, but all requests for corrections must
be made within thirty (30) days from date of posting or the list
shall be valid as posted.
15.9 When the Company declares that a full time shift opening
exists (not including temporary openings), employees in the
classification and employees entering the classification may
exercise their seniority to choose established days off within the
classification. In order to balance the skills and training on
various shifts, the Company may delay certain changes in days off
for up to six (6) months from the time the opening is filled.
15.10 The Company recognizes that all employees shall retain
the right to seniority preference in cases of layoffs and recall.
The last employee hired shall be the first laid off and the last
laid off the first rehired. Such preferences in the cases of
layoffs and recall shall take into consideration the employee's
ability to perform the available work and the efficient operations
of the operation. It is recognized that, in periods where business
conditions necessitate that the level of production be reduced to
a point where only a minimum of employees is required, it shall be
necessary, in some cases, to deviate from strict plant seniority in
order that some positions be available to service and adjust the
equipment when production requirements increase. If the company
does not layoff in accordance with seniority, the Company will meet
with the Union to explain the reasons prior to the layoff.
15.11 In the event that an employee is displaced by the
installation of mechanical equipment, change in production methods,
the installation of new or larger equipment, the combining of jobs,
the elimination of jobs, or by a more senior person, the employee
may elect to exercise his/her plant seniority to displace the least
senior person in a position the employee is qualified to perform
within one week of being placed on the job.
ARTICLE XVI - JOB BIDDING
16.1 When the company determines a vacancy exists, other than a
minimum pay job, the Company will post a notice of such fact, such
notice to remain posted for a period of at least five (5) days, not
including Saturdays, Sundays, or holidays. This notice shall state
rates of pay, hours, and job requirements. The union will be
provided with a copy of each bid. All bids shall be considered in
the manner provided herein in Section 16.3 and the successful
applicant's name will be posted within seven (7) days after the
bids are opened, except where testing is required. Said delay will
not exceed ten (10) days, unless additional time is agreed to
between the Union and the Company. The successful bidder will be
placed on the job within as reasonable a time as possible from the
date of posting the award. In the event of the successful
applicant's failure to qualify in the opinion of the Company, then
it is understood that said employee is to be restored to his former
position and standing. Employees will submit their bid to the
supervisor and will be given a receipt for the bid.
The successful bidder will be placed on the job as soon as
possible unless an extension is agreed to by the company and the
union. The Company may choose to cancel the bid at any time. If
a successful bidder is not assigned to the new job within thirty
(30) working days following the awarding of the bid, the employee
shall receive the applicable starting rate of the new job. The
successful bidder may be disqualified by the Company within the
first 120 days of assignment to the new job at the sole discretion
of management. In the event of the successful applicants failure to
qualify in the opinion of the company, then it is understood that
said employee is to be restored to his former position and
standing.
16.2 If within twenty-four (24) months following his assignment to
a new job under this procedure, an employee applies for another new
job of equal or lower classification, the Company may, at its
discretion, disregard such application. After twenty-four (24)
months employees may only bid for promotional job opportunities
except by mutual agreement between the parties. This provision does
not apply to employees successfully bidding into the Entry Level
Mechanical, Electrical, or Instrument Training Program.
Lateral or down-bids for any position shall only be permitted
one time, per employee, during the course of this agreement.
16.3 The following factors shall apply in the awarding of all jobs:
(1) Qualifications of the Applicant (which shall include:
ability to perform the work, aptitude, skills,
experience, training for the job, and attendance);
(2) Physical Fitness of the Applicant;
(3) Seniority.
Where (1) and (2) are equal, (3) shall apply.
If the employee selected shall fail to qualify after a fair
trail period, in the exclusive judgement of the Company, he shall
be returned to his former position and the next bidder shall be
given consideration.
16.4 Temporary Reassignment. An employee who is temporarily
assigned by his supervisor to perform work of a higher paid job
classification will be paid the rate of such higher job
classification for time actually worked. An employee temporarily
assigned by his supervisor to perform work in an equal or lower
paid classification will be paid the base hourly wage rate of his
permanent classification.
16.5 In no event shall the Company be requested or required to post
any job temporarily vacated by reason of vacations, illness, or
injury. The Company, at its discretion, may create temporary jobs
not to exceed one hundred twenty (120) work days. Successful
bidders bidding down or laterally on such temporary jobs will be
placed in the labor classification upon completion of the job.
Should the Company determine that any temporary job become
permanent, the Company shall post the job as provided in this
Article.
16.6 Knowledge, training, skill and ability gained while holding
jobs under the bid system and seniority, will be given
consideration in making promotions, layoffs, or reductions in work
force.
16.7 If an employee bids on a higher rated job and is awarded the
job, that employee will be slotted at the starting progression rate
for the new job. However, if the transferring employee is leaving
a position with a rate of pay greater than the starting rate of the
new position, then the transferring employee will retain his/her
former rate of pay until the time
in the new classification allows the employee to move up to the
incremental increase in progression.
ARTICLE XVII - WORKWEEK AND OVERTIME
17.1 During the life of this Agreement it is understood that the
"normal work day" is the twenty-four (24) hour period beginning
with the start of the employee's shift. The "normal work day" is
eight (8) consecutive hours of work in a twenty-four (24) hour
period, broken by established meal periods, except as necessitated
to maintain efficient plant operations.
The "normal work week" is made up of five (5) consecutive
"normal work days" within a seven (7) day period beginning with the
morning shift on Mondays. The "normal work week" for certain
employees may begin on a day other than Monday. One and one half
(1 and 1/2) times the employees regular hourly rate will be paid for all
hours worked in excess of forty (40) hours per week or in excess of
eight (8) hours per day. The Company will notify the Union should
the need arise to deviate from the "normal work week".
17.2 Callouts.
(1) If an employee is called out after his regular shift and
after leaving the plant, or on off days, he shall be paid a minimum
of four (4) hours pay at one and one-half (1-1/2) times the
employee's regular rate. However, such hours shall not be counted
toward the calculation of overtime pay paid for working in excess
of forty (40) hours per week.
(2) If such employee is notified twelve (12) hours or more in
advance of his shift, the four (4) hour minimum will not apply.
17.3 Weekly manning schedule shall be posted not later than the end
of the day shift on Fridays barring unforeseen circumstances
outside the Company's control.
17.4 Insofar as practical, overtime will be equalized in each
department by classification. The current overtime distribution
policy will be posted by the Company. The overtime equalization
list will be updated weekly and posted.
ARTICLE XVIII - FUNERAL LEAVE
18.1 When an employee who has completed the probationary period is
absent from work solely to arrange for and/or attend the funeral of
his/her parent, stepfather, stepmother, wife or husband, son or
daughter, or stepchildren, brother, sister, grandfather,
grandmother, grandson, granddaughter, father-in-law or mother-in-
law, grandparents of spouse, son-in-law or daughter-in-law, the
Company will pay up to three (3) consecutive work days, or four (4)
consecutive work days if the employee is required to travel at
least five hundred miles to attend funeral services, of eight (8)
hours each, at the employee's regular hourly rate for each
scheduled workday the employee is absent with the permission of the
Company. The funeral leave must be taken within seven (7)
consecutive calendar days from the date of the death or funeral
services.
18.2 Funeral leave will be granted only for absences occurring on
the employee's regularly scheduled workdays and will not apply to
employees on vacation, layoff or other non-working status. Hours
paid under this Article will be counted as hours worked for the
purpose of computing overtime. To be eligible for benefit under
the Article, the employee must supply upon request reasonable
documentary evidence of covered death and family relationship and
must attend the funeral.
ARTICLE XIX - SAFETY AND HEALTH
19.1 A joint Safety and Health Committee will be established
consisting of members appointed by the Company and the Union. The
"Committee" will consist of two (2) members from the union and two
(2) members from the Company plus the Plant Manager or his
designee. Meetings will be held regularly to address safety and
health concerns and make recommendations to the plant management.
The "Committee" will establish an Accident Investigation Team.
Safety issues, complaints and/or disputes may be investigated by
the "Committee". Any safety and health issues not resolved by the
"Committee" will be addressed through the normal grievance
procedure. Employees will be required to properly use and maintain
all personal protective equipment supplied by the Company.
ARTICLE XX - BULLETIN BOARD
20.1 The Union agrees to post only notices concerning elections,
meetings, reports and other official Union business and notices of
social and recreational activities on the Company bulletin board.
A copy of each notice will be supplied to the Plant Manager at the
time of its posting. The Union agrees further that it will post no
matter which is in the disinterest of the Company. However,
notwithstanding the above, it is understood that the Company's
decision concerning the use of the bulletin board shall be final.
ARTICLE XXI - FURNISHING OF TOOLS
21.1 The Company shall furnish all special tools and equipment.
Maintenance employees shall furnish their own tools; in case of
breakage or loss, the Company will replace or repair such tools.
All breakage or loss shall be reported immediately to the Company.
ARTICLE XXII - DUES CHECK-OFF
22.1 Check-off: During the term of this Agreement, the Company
will continue to check off monthly dues, and initiation fees, each
as designated by the Treasurer of the Local Union, as membership
dues in the Union on the basis of and for the term of individually
signed check-off authorization cards, a copy of which is reproduced
below, or hereafter submitted to the Company. The Company shall
promptly remit any and all amounts so deducted to the Treasurer of
the Local Union with a list of the employees from whom the
deduction was checked off.
22.2 On or before the last Friday of each calendar month the Union
shall submit to the Company a summary list of cards transmitted in
each month.
22.3 Dues for a given month shall be deducted from the last payday
in that month; deductions on the basis of authorization cards
submitted to the Company shall commence with respect to dues for
the month in which the Company receives such authorization cards.
22.4 Unless the Company is otherwise notified, the only Union
membership dues to be deducted for payment to the Union from the
pay of the employee who has furnished an authorization shall be the
monthly Union dues. The Company will deduct initiation fees when
notified, by notation on the list referred to in 22.2 above, and
assessments as designated by the Treasurer of the Local Union.
22.5 The Union shall indemnify the Company and hold it harmless
against any and all suits, claims, demands and liabilities that
shall arise out of or by reason of any action that shall be taken
or not taken by the Company for the purpose of complying with the
foregoing provisions of this Article, or in reliance on any list or
certificate which shall have been furnished to the Company by the
Union under any such provisions.
22.6
CHECK-OFF AUTHORIZATION
FOR INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT DIVISION
Company
19
Plant Date
Pursuant to this authorization and assignment, please deduct
from my pay each month, while I am in employment within the
collective bargaining unit in the Company, monthly dues,
assessments and (if owing by me) an initiation fee each as
designated by the Treasurer of the Local Union, as my membership
dues in said Union.
The aforesaid membership dues shall be remitted promptly by
you to the Treasurer of the International Brotherhood of
Boilermakers, Cement, Lime, Gypsum and Allied Workers Division,
Local Lodge D532, or its successor.
This assignment and authorization shall be effective and can
be cancelled any time by written notice and cannot be reinstituted
for a twelve (12) month period or until the termination date of the
current collective bargaining agreement between the Company and the
Union, whichever occurs sooner.
Local Union No. D532
International Brotherhood of
Boilermakers, Cement Divisio Signature
Witness Date
ARTICLE XXIII - UNION SECURITY
23.1 All employees covered by this Agreement, who as of December
15, 1993, are members of the Union in good standing, and all
employees who thereafter become members, shall, as a condition of
continued employment, remain members of the Union in good standing
for the duration of the Agreement.
All new employees covered by the Agreement shall, as a
condition of employment, become members of the Union on or
immediately after the thirtieth (30th) calendar day following their
employment.
ARTICLE XXIV - LEAVE OF ABSENCE
24.1 Any employee elected or appointed to a full time position with
the International Brotherhood of Boilermakers, Cement, Lime, Gypsum
and Allied Workers Division may be granted a leave of absence up to
two (2) years provided thirty (30) days notice is given to the
Company prior to the beginning of such leave. During such leave,
seniority shall accumulate. Insurance benefits shall be suspended
upon the commencement of such leave and will be in effect the first
day of returning to work with the Company. Upon returning to work
such employee shall be reinstated to his former job providing it is
still in existence; if not, he should be eligible to apply for any
job within the bargaining unit by means of the then-existing
bidding procedure. The Company agrees to consent to the absence of
no more than one (1) employee at any time under this paragraph.
ARTICLE XXV - BENEFIT PLANS
25.1 During the term of this Agreement the Company will provide
employees with participation in the Southdown, Inc. Group Medical
Network Benefit Plan, the Southdown, Inc. Dental Plan, the
Southdown, Inc. Life Insurance and Accidental Death and
Dismemberment Plan, the Southdown, Inc. Long Term Disability Plan,
the Southdown, Inc. Pension Plan, the Southdown, Inc. Retirement
Savings Plan, the Southdown, Inc. Post Retirement Retiree Medical
Insurance Plan, and the Southdown, Inc. Voluntary Life Insurance
Plan, including all amendments and modifications to said plans
during the life of this Agreement, on the same basis as the
benefits and eligibility requirements are provided to Southdown,
Inc.'s salaried employees.
25.2 SICKNESS AND ACCIDENT BENEFITS
If an employee with at least one (1) year of service is absent from
work due to disability, sickness and accident benefits are payable.
The disability must prevent the employee from performing the duties
of the job because of a non-occupational sickness or injury. This
benefit is payable if confined to a hospital or home.
After a waiting period of one (1) week (waived if the employee is
hospitalized as an in-patient), the disability benefits are payable
at a rate of fifty-one dollars ($51) per day for a maximum of five
days per week. A disabled employee may receive weekly sickness and
accident benefits during the period of disability not to exceed
five (5) months. It is the employee's responsibility to make
application for this benefit and the attending physician must
document the nature of the disability and expected date of return
to work.
No benefits shall be payable for the following:
1. disability which you are not under the direct care of a
licensed physician.
2. sickness or injury which is purposefully self-inflicted
while sane or insane.
3. disability due to an injury arising out of the course of
employment.
4. disability due to disease which benefits are payable
under Worker's Compensation, Occupational Disease or
similar law.
This benefit terminates upon retirement or upon termination of
employment.
ARTICLE XXVI - TERMS OF AGREEMENT
26.1 After ratification by the members of the Local Union, this
Agreement shall become effective and remain in force and effect and
be binding upon the parties hereto from December 15, 1993, to and
including December 14, 1997, and it shall continue to be in full
force and effect thereafter from year to year until either party on
or before October 14, of any year, beginning October 14, 1997,
gives written notice to the other party of its desire or intention
either to alter and modify or terminate the same. If such notice
is given, the parties hereto shall begin negotiations not later
than November 15 in such year.
IN WITNESS WHEREOF, the Union has caused this Agreement to be
executed in its name, after due authorization by a vote of a
majority of its members, and the Company has caused it to be
executed in its name, by its duly authorized representatives.
INTERNATIONAL BROTHERHOOD OF KOSMOS CEMENT COMPANY
BOILERMAKERS, CEMENT, LIME,
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL LODGE NO. D532
By: By:
James Hickenbotham Bernard M. Reuland
By: By:
James Cantrell David E. Tiller
By: By:
Harlie Lowther Steven A. Wise
By: By:
Robert Wolfe William M. Clements
Signed this day of Signed this day of
, 19 , 19
<PAGE>
SCHEDULE A - PAY PROCEDURES
A1 - GAINSHARING: The employees will participate in a gainsharing
program developed by the Company. An oversight committee made up
of two (2) members from management and two (2) members from the
union will meet as needed and review published reports. Employees
will be encouraged to submit ideas to the committee.
A2 - RATE STRUCTURE: The rate structure shall consist of a
starting rate, one thousand (1,000) hour worked incremental rates
during the qualification period, and a qualified or "top" rate. An
employee becomes eligible for an increase for every one thousand
(1,000) hours worked up to the top rate.
A3 - JOB TRANSFERS: If an employee bids on a different job and is
awarded the job, his pay and training credits will be established
as follows. He will be evaluated by the foreman he has been
working for, the foreman he will be working for, and the Mine
Manager. They will review his skill, ability, education, and
experience in relationship to the job and place him within the
service schedule accordingly. If he has no skill, ability,
education, or experience to offer, he will begin at the starting
rate.
A4 - LEADPERSONS: Leadpersons will be paid $1 per hour in addition
to their normal rate of pay while they are designated as
leadpersons to perform certain quasi-supervisory tasks incidental
to their normal hands-on work.
A5 - SERVICE SCHEDULES
12/15/93 12/15/94 12/15/95 12/15/96
Contract wage increases $ .50 $ .40 $ .35 $ .30
Employees who received skills premium under the 1990 labor
agreement will be red circled at their 1993 rate of pay and will
receive no wage increases until the scheduled increases accumulate
more than the amount of the skills premium.
PRODUCTION GROUP
QUARRY PRODUCTION A
12/15/93 12/15/94 12/15/95 12/15/96
Starting Rate $10.00 $10.40 $ 10.75 $ 11.05
End 1,000 hours worked $10.60 $11.00 $ 11.35 $ 11.65
End 2,000 hours worked $11.20 $11.60 $ 11.95 $ 12.25
End 3,000 hours worked $11.80 $12.20 $ 12.55 $ 12.85
End 4,000 hours worked $12.40 $12.80 $ 13.15 $ 13.45
End 5,000 hours worked $13.00 $13.40 $ 13.75 $ 14.05
Fully qualified rate for Production A will include being trained
and able to do the job duties of: Blasters, driller helper, crusher
operator, mine truck driver.
QUARRY PRODUCTION B
12/15/93 12/15/94 12/15/95 12/15/96
Starting Rate $13.00 $13.40 $ 13.75 $ 14.05
End 1,000 hours worked $13.30 $13.70 $ 14.05 $ 14.35
End 2,000 hours worked $13.60 $14.00 $ 14.35 $ 14.65
End 3,000 hours worked $14.00 $14.40 $ 14.75 $ 15.05
Fully qualified rate for Production B will include being trained
and able to do the job duties of Production A and: Gradall
operator, barge loader, front-end loader, TT driver, driller,
scaler/bolter.
QUARRY MAINTENANCE GROUP
Starting Rate $11.25 $11.65 $ 12.00 $ 12.30
End 1,000 hours worked $11.65 $12.05 $ 12.40 $ 12.70
End 2,000 hours worked $12.05 $12.45 $ 12.80 $ 13.10
End 3,000 hours worked $12.45 $12.85 $ 13.20 $ 13.50
End 4,000 hours worked $12.85 $13.25 $ 13.60 $ 13.90
End 5,000 hours worked $13.25 $13.65 $ 14.00 $ 14.30
End 6,000 hours worked $13.65 $14.05 $ 14.40 $ 14.70
End 7,000 hours worked $14.05 $14.45 $ 14.80 $ 15.10
End 8,000 hours worked $14.45 $14.85 $ 15.20 $ 15.50
Employees working as repair helpers will progress to the 5,000
hours worked rate and shall not be required to furnish their own
tools.
KOSMOS CEMENT COMPANY
Neville Island - Pittsburgh, Pennsylvania
AGREEMENT
between
KOSMOS CEMENT COMPANY
and
INTERNATIONAL BROTHERHOOD OF BOILERMAKERS,
CEMENT, LIME, GYPSUM & ALLIED WORKERS DIVISION
Lodge D-592
1993 - 1997<PAGE>
AGREEMENT
This Agreement, dated December 15, 1993 is made by and between
the KOSMOS CEMENT COMPANY and the INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT, LIME, GYPSUM, AND ALLIED WORKERS DIVISION
LOCAL LODGE NO. D592, referred to respectively as the "Company" and
the "Union."
ARTICLE I - RECOGNITION
1.1 The Company recognizes the Union as the sole bargaining agent
for its employees as is defined in Section 2 who work at the
Company's plant at Neville Island, Pennsylvania, for the purpose of
collective bargaining with respect to rates of pay, hours, and
other conditions of employment.
1.2 The term "employee" as used in this Agreement shall include
all permanent production and maintenance employees including lead
men, and laboratory employees, but excluding all clerical
employees, guards and supervisors as defined in the Act and all
other employees.
1.3 Union officers and members shall refrain from any union
solicitation on Company time.
1.4 All provisions of this Agreement shall be applied to all
employees without regard to race, color, sex, religious creed, age
or national origin. The company and the union will comply with all
federal and state laws concerning the rights of workers including
the Americans with Disabilities Act and the Family and Medical
Leave Act.
ARTICLE II - UNION COOPERATION
2.1 The Union agrees that it will cooperate with the Company in
all matters of industrial relations including carrying out Equal
Employment Opportunity obligations and will support the Company's
efforts to assure a fair day's work on the part of its members and
that it will actively strive to eliminate absenteeism and other
practices which restrict production. It further agrees that its
members will abide by the rules of the Company in its effort to
prevent accidents, to eliminate waste in production, conserve
materials and supplies, improve the quality of workmanship, and
strengthen goodwill between the Company and its employees.
2.2 The Union agrees that it will use its best efforts to assist
the Company in enhancing the competitiveness of the Company, and
augmenting or increasing revenue generation.
2.3 The parties hereto intend by this Agreement to provide a
stabilized and mutually beneficial relationship between them and to
insure the production of quality products on schedule and at
competitive costs during the life of this Agreement. The Company
and the Union will also establish an active Employee Participation
Program to facilitate ideas and develop and implement programs to
improve the overall operations and enhance employee involvement.
ARTICLE III - THE CORE CONCEPT
3.1 The parties agree that the basic structure of the Company's
operation and the organization of its work force is based on the
"Core Concept." Under the Core Concept, employees will generally
perform the "core" of the work to be done at the plant with the
remainder to be performed by substantial but various numbers and
types of outside contractors. The parties recognize that the
Company is in the primary business of manufacturing cement and
other products requiring similar process (utilizing alternative
substitute fuels). The parties further recognize that the business
is limited in scope and that the Company should avoid, to the
extent possible, getting into other businesses such as special
projects, special maintenance other than routine preventive
maintenance, day to day labor pool work, janitorial work, trucking
and the like, where other business concerns may have more
expertise, competence, economies of scale or other advantages. The
Company has the right to subcontract these and other types of work
where in the Company's judgement such subcontracting is in the
economic best interest of the Company and its employees. It is
understood and agreed that the Core Concept does not require any
specific number of employees, nor does it cover any specific work
or job classifications. Rather, the Core Concept is a way of doing
business which is designed to increase productivity of the plant
and the job security of the employees. Subcontracting will not be
used to permanently replace bargaining unit employees.
ARTICLE IV - UNION ACTIVITY
4.1 The Company agrees that during all reasonable times when the
plant is operating a duly accredited representative of the Union
shall be entitled access to the plant during the regular working
hours for the purpose of assisting in the adjustment of pending
grievances, provided that the designated representative of the
Company is properly notified in advance and the Union
representative establishes proper identification. If it is
necessary to go into the work area of the plant (for example, to
view a particular operation relative to a pending grievance), then
the appropriate Company official shall accompany the Union
representative so that both parties see the same thing so as to aid
in resolving the grievance.
4.2 The Union Grievance Committee representing the employees in
matters other than negotiations shall consist of not more than
three (3) employees which will include the local president, the
grievance committee chairman and the department shop steward. The
Plant Manager or his designee will meet with the Committee within
five (5) days, excluding Saturdays, Sundays and holidays, of any
request by the President of the Local Union to the Plant Manager
for such a meeting.
4.3 Insofar as practical, meetings will be conveniently scheduled
by the company so as to complete all business within normal working
hours. Such employees attending meetings will be compensated at
their regular straight time rate of pay for hours normally
scheduled to work.
4.4 Employees receiving formal disciplinary action may request
that a union representative be present.
ARTICLE V - MANAGEMENT RIGHTS
5.1 The Union recognizes that the management of the plant, the
direction of the working forces, including the right to hire,
discipline for just cause, the right to make and change and enforce
(after posting) rules for the maintenance of discipline and safety;
the exclusive rights to determine partial or permanent
discontinuance or shutdown of operations (the Company's only
obligation when exercising this right is to bargain with the Union
over the effects of that decision); the right to promote, or
transfer employees; the right to transfer and relieve employees
from duty because of lack of work or other legitimate reason, and
the right to establish and change the working schedules and duties
of employees are vested in the Company, except as otherwise
provided in the Agreement. The listing of specific rights in this
Agreement is not intended to be nor shall be considered restrictive
of or a waiver of any of the rights of management not listed and
not specifically surrendered herein, whether or not such rights
have been exercised by the Company in the past.
ARTICLE VI - WAGES
6.1 It is agreed that for the duration of this Agreement, the wage
groups and the rates of pay shall be those set in Schedule "A".
6.2 For shift premium purposes only:
(1) All regularly scheduled work beginning between 6:00 A.M.
and 1:59 P.M. inclusive, shall be considered day shift work.
(2) All regularly scheduled work beginning between 2:00 P.M.
and 9:59 P.M. inclusive, shall be considered middle shift work.
(3) All regularly scheduled work beginning between 10:00 P.M.
and 5:59 A.M. inclusive, shall be considered night shift work.
6.3 Each employee regularly scheduled to work on the middle shift
shall be paid a premium of forty cents ($.40) for all hours worked
by him on that shift. Each employee regularly scheduled to work on
the night shift shall be paid fifty-five cents ($.55) for all hours
worked by him on that shift. These premium rates do not apply to
day workers even though they may work over into a premium pay
shift. If, however, the day worker is scheduled to take the place
of a regular scheduled shift worker, then the premium rate applies.
6.4 All consecutive hours (exclusive of meal periods) worked by an
employee who normally begins work at a time specified in the
preceding paragraphs, shall be deemed to be worked by him on the
shift on which he begins work.
ARTICLE VII - VACATIONS
7.1 Each employee meeting all the requirements of Section 2 of
this Article shall be eligible for vacation in accordance with the
following schedule:
After completion of one (1) year of service with the
Company since the employee's last date of hire -- two (2)
weeks vacation during the year following the employee's
anniversary date.
After completion of five (5) years of service with the
Company since the employee's last date of hire -- three
(3) weeks vacation during the year following the
employee's anniversary date.
After completion of ten (10) years of service with the
Company since the employee's last date of hire -- four
(4) weeks of vacation during the year following the
employee's anniversary date.
Continuous service only for employees on the payroll December
1, 1988, shall include continuous service recognized with Lone
Star/Marquette.
7.2 An employee shall receive a vacation according to Section 1 of
this Article provided that such employee has actually worked at
least one thousand (1,000) hours during the year preceding his most
recent anniversary date.
7.3 Vacations will not be cumulative, but so far as practical will
be granted at times most desired by employees, with the final right
to allotment of vacation period exclusively reserved to the Company
in order to ensure the orderly operation of the plant. When
requested vacation periods conflict, preference shall be given to
the employee having the most continuous service (including
continuous service accumulated with Lone Star/Marquette). In the
event a paid holiday falls during an employee's vacation period,
the employee shall receive holiday pay in addition to vacation pay.
7.4 No vacation may be taken prior to the employee's applicable
anniversary date. An employee must take his vacation within twelve
(12) months after he qualifies for it. An employee cannot
accumulate vacation time beyond the twelve (12) month period
following the employee's anniversary date. An employee must have
been actively employed (at work) at sometime during the calendar
year to be eligible for vacation pay during that calendar year.
Employees may request additional (unpaid) vacation time and
the Company will attempt to comply with such request. (Upon
voluntary termination, employees will be paid for all unused
vacation time and pay, provided that such employee has actually
worked one thousand (1,000) hours during the year preceding his
most recent anniversary date).
An employee may receive one week of vacation pay per year in
lieu of time off if requested. This may be extended to an
additional week with company approval.
7.5 Vacation periods will commence on the first day following the
employee's regular scheduled days off.
7.6 Scheduling of Vacations.
1. Prior to December 1 of each calendar year eligible
employees shall request vacation periods. Employee's request for
vacation will be put on a standard vacation form and will be posted
on or before December 15 showing vacation allotments for the
following year.
2. Employees with the most seniority will be given
preference for two (2) weeks as a first choice except in cases of
extenuating circumstances agreed to by the Company and the Union.
Second choice will be granted after every employee has completed
his first choice, then the employees with the most seniority will
pick the remainder of their vacation allotment.
3. The departments for vacation allotments will be as
follows: Production, Mechanical Maintenance, Electrical,
Laboratory, Packhouse, and General. The storeroom attendant will
be included in General.
ARTICLE VIII - PAID LEAVES
8.1 It is agreed that the Company shall make up the wage loss
incurred by a regular employee (as distinguished from a
probationary employee) because of jury service by payment of the
difference between the amount received for such jury service on the
day such employee would have been regularly scheduled to work and
his regular rate of pay computed on the same basis as vacation pay.
Any employee reporting for jury duty will not be required to work
his regular shift that calendar day. The employee will be excused
for the entire day without loss of pay. Hours spent on jury
service and paid for hereunder shall be considered as time actually
worked for all overtime purposes. Further as outlined above, the
Company shall make up the wage loss incurred by an employee when
subpoenaed as a witness in an action when the employee or the Union
or the Company are neither the plaintiff nor the defendant.
8.2 To receive pay from the Company under this provision, the
employee must provide the Company with a statement signed by an
official of the court certifying as to the employee's service as a
juror or court witness or appearance in court for such purposes,
the date or dates of attendance, and the compensation paid him
exclusive of any transportation and/or subsistence allowance.
8.3 Employees who are members of organized reserve components of
the Armed Forces, including the National Guard, will be allowed
leave of absence annually for the purpose of attending required
military training encampments or cruises. The Company will pay any
employee who goes on such leave of absence the difference between
the employee's straight time pay for up to two (2) weeks (ten (10)
working days) annually and the employee's military pay including
longevity pay but excluding all allowances such as rent,
subsistence, uniform, and travel. Payment will be made when the
employee returns from reserve training on presentation of
satisfactory proof of the amount of pay received.
ARTICLE IX - COPIES
9.1 The Labor Agreement, and Summary Plan Descriptions for the
Pension Plan, 401K, and Insurance Plan will be printed at Company
expense. The Company will provide each member with a copy of the
booklet.
ARTICLE X - GRIEVANCE PROCEDURE
10.1 Should differences arise during the term of this Agreement
between the Company and the Union, or an individual employed by the
Company, as to the meaning and application of the provisions of
this Agreement, an earnest effort shall be made by the parties to
settle such differences promptly and in the following manner:
(1) STEP I. The complaint, within seven (7) days of its
occurrence, or the occurrence of the matter out of which the
complaint arises, may be taken up by the employee involved, with or
without Union representation, with his management representative.
The employee shall state the specific article(s) and paragraph(s)
of the Contract that is alleged to have been violated in order for
the grievance to be considered and processed.
(2) STEP II. If no satisfactory settlement is reached in
Step I, the matter shall be reduced to writing and presented to the
Plant Manager and/or Director of Human Resources within five (5)
days from the date of the meeting with the management
representative. The employee shall state the specific article(s)
and paragraph(s) of the Contract that is alleged to have been
violated in order for the grievance to be considered and processed.
At the time of presentation, or within five (5) days, the Plant
Manager will meet with the employee with the assistance of a Union
Representative if requested by the employee to hear and discuss the
grievance. The Company shall answer the grievance in writing
within five (5) days after said meeting.
(3) STEP III. If no agreement is reached in Step II, the
Committee may, within five (5) days of the receipt of the above
answer, refer the matter to higher officials of the Company and the
Union, who may attend a meeting to be held within thirty (30) days
upon request.
(4) STEP IV.
a. Any grievance not settled in Step III above may be
referred to arbitration. Notice to refer a grievance to
arbitration shall be given in writing within fifteen (15) days
after being notified of the decision rendered in Step III or the
matter will be considered closed. Only one (1) grievance may be
submitted to or under review by any one (1) Arbitrator at any one
(1) time unless by prior mutual written consent of the parties.
b. In the event the parties are unable to agree upon an
Arbitrator within seven (7) days after arbitration is invoked, then
they shall jointly petition the Federal Mediation and Conciliation
Service, which shall submit a panel of seven (7) qualified
arbitrators, and the parties shall select a single arbitrator from
such panel. The Arbitrator shall be appointed by mutual consent of
the parties hereto. If the arbitrators included in this panel are
unacceptable to either party, a second panel shall be requested
from the Federal Mediation and Conciliation Service and a single
arbitrator selected from this panel.
c. Any grievance referred to arbitration shall be heard
as soon as possible and a decision rendered within thirty (30) days
of the hearing or the date of postmark of the post hearing briefs.
The Arbitrator shall have no power to add to or subtract from or
change, modify or amend any of the provisions of this Agreement.
The decision rendered by the Arbitrator will be final and binding
upon the Union, the Company, the grievant, and all the employees
covered by this Agreement. The Arbitrator selected pursuant to
this Article shall interpret and apply the terms of this Agreement;
he/she shall not substitute his/her discretion and judgement for
that of the Company. If the Arbitrator finds that a dischargeable
offense was committed by the employee, he/she shall not substitute
his/her judgement for that of the Company as to whether discharge
or a more lenient penalty was appropriate in a particular case.
d. It is expressly agreed that no Arbitrator shall have
the authority to decide any matter involving the exercise of a
right reserved to management under this Agreement.
e. Each party hereto shall pay the expense incurred in
the presentation of its own case, and the expenses incident to the
services of the Arbitrator, including the cost of the transcript,
shall be shared equally by the Company and the Union.
10.2 The time limits referred to in the foregoing paragraphs
exclude Saturdays, Sundays and holidays.
10.3 Any grievance growing out of a discharge or suspension must be
submitted in writing by the aggrieved employee directly to the
Union and from the Union to the Director of Human Resources or
Plant Manger within forty-eight (48) hours of the discharge or
suspension or it will not be recognized and action taken shall be
final.
10.4 Any grievance not presented or appealed within the time limits
provided, unless mutually agreed to extend the time, shall be
considered settled on the basis of the decision which was not
appealed and shall be final and binding on the parties involved.
10.5 Grievances presented in any of the regular steps set forth and
not answered within the time specified or as the same may be
extended by mutual agreement shall be considered appealed to the
next step of the grievance procedure.
ARTICLE XI - OVERTIME LUNCH
11.1 Any employee who works more than ten (10) consecutive hours,
where such overtime hours are unscheduled, shall be given a lunch
or lunch allowance. No lunch or lunch allowance will be provided
if such overtime hours are scheduled with twelve (12) hours advance
notice. Any employee working fourteen (14) consecutive hours, in
a working day, who has not already been provided an overtime lunch,
will be entitled to lunch.
ARTICLE XII - NON-BARGAINING UNIT EMPLOYEES
12.1 It is understood and agreed that during the normal course of
operations it may be necessary for non-bargaining unit employees to
perform some bargaining unit work from time to time. Such work
will be incidental to the normal duties of said non-bargaining unit
employees, as long as such work does not permanently displace or
replace a bargaining unit employee. Such work shall include work
involving corrective action which must be performed expeditiously;
instruction or training of employees; demonstration; inspection or
testing of equipment; work of an emergency nature; and development
work for new processes and/or procedures.
12.2 When equipment, expertise, facilities, and manpower are
available, work customarily performed by bargaining unit employees
will continue to be performed by these employees. Subcontracting
may be used as needed to supplement the work force.
ARTICLE XIII - STRIKES AND LOCKOUTS
13.1 The Union agrees that there shall be no picketing or strikes
by the Union or by its members, of any kind or degree whatsoever,
or walkout, suspension of work, slowdowns, limiting of production,
or any other interference or stoppage, total or partial, of the
Company's operations for any reason whatsoever, such reasons
including, but not limited to, unfair labor practices by the
Company or any other Employer. It is further agreed that neither
the Union or its members shall engage in the above prohibited
conduct in support of picketing, strikes or any labor dispute
actions engaged in by any other organization or person. In
addition to any other recourse or remedy available to the Company
for violation of the terms of this Article by the Union and/or any
Union member, the Company may discharge or otherwise discipline any
employee who authorizes, causes, engages in, sanctions, recognizes,
or assists in any violation of this Article. The Company will not
engage in any lockouts during the term of this Agreement.
ARTICLE XIV - HOLIDAYS
14.1 The Company recognizes the following nine (9) paid holidays
per year: New Year's Day, Good Friday, Memorial Day, 4th of July,
Labor Day, Thanksgiving, Day after Thanksgiving, Christmas Eve, and
Christmas Day.
14.2 Holiday pay will be equal to eight (8) hours pay at the
employee's straight time hourly rate. Such holiday pay will not be
paid if the employee is absent from work on the holiday if
scheduled to work on the holiday or if the employee is absent on
the scheduled day preceding or following the holiday unless such
absences are excused by Management. In no event shall a holiday be
paid for unless an employee has also actually worked at least one
(1) day during the fifteen (15) day period immediately preceding or
immediately following the holiday.
14.3 If an employee is required to work on a holiday, he will
receive eight (8) hours pay for the holiday (holiday pay) plus one
and one-half (1-1/2) times the employee's regular hourly rate for
hours up to eight (8) hours actually worked on the holiday.
All hours worked in excess of eight (8) hours on a holiday
will be paid at two (2) times the employees regular rate of pay.
14.4 Since the employee is receiving one and one-half (1-1/2) times
the employee's regular hourly rate for hours actually worked on the
holiday, such hours actually worked on the holiday shall not be
counted toward the calculation of overtime pay received for working
in excess of forty (40) hours per week.
14.5 The eight (8) hours holiday pay shall be counted toward the
calculation of overtime pay paid for working in excess of forty
(40) hours per week if the employee is off for the holiday, but not
on his/her regularly scheduled day off.
14.6 When a holiday falls on Sunday, it will normally be observed
on the following Monday. Under certain conditions the Company may
elect to observe the holiday on the preceding Friday in lieu of
Monday. This change may apply to some or all employees.
ARTICLE XV - SENIORITY
15.1 Seniority shall consist of an employee's length of continuous
service with the Company since the employee's last day of hire at
its facility located at Neville Island, Pennsylvania. Continuous
service only for employees employed by the Company before December
1, 1988 shall include continuous service at Neville Island,
Pennsylvania recognized by Lone Star/Marquette.
15.2 Each new employee shall be considered as a probationary
employee for the first ninety (90) calendar days of full time
employment after which the employee's seniority shall date back to
his date of hire. There shall be no seniority among probationary
employees. Such employees shall not have recourse to the grievance
procedure of this Agreement and may be laid off or discharged as
exclusively determined by the Company.
15.3 An employee's seniority shall be lost and continuous service
shall be broken when an employee:
1. is discharged;
2. is terminated upon permanent shutdown of the Company's
facilities;
3. is laid off for a period of three (3) years or the length
of his seniority as of his last day of work, whichever
period is shorter;
4. voluntarily quits which shall be deemed to include:
a) failure to notify the Company of the employee's
intention to return to work after layoff within three (3)
working days, and to actually report to work within seven
(7) working days (unless this latter period is extended
in writing by the Company) after he has been notified by
certified mail (either by delivery or attempted delivery)
at his last address appearing on the Company's records to
report to work;
b) an absence from work for two (2) consecutive scheduled
work days without reporting to work unless excused by
Management in advance;
c) the employee fails to return to work on the first
regularly scheduled work day following the termination of
any leave of absence or any other leave approved by the
Company unless excused by Management.
5. retires.
15.4 When a vacancy occurs for which a laid off employee is
qualified, he will be given certified mail notice of recall at his
last address as shown on Company records. The employee must notify
the Company of the employee's intention to return to work after
layoff within three (3) working days and must actually report to
work within seven (7) working days (unless this latter period is
extended in writing by the Company) after he has been notified by
certified mail (either by delivery or attempted delivery).
15.5 An employee on continuous absence due to disability shall
accrue seniority and retain recall rights for a period not to
exceed thirty-six (36) months or the length of his seniority as of
his last day worked (minimum of twelve (12) months), whichever
period is shorter. An employee absent because of disability shall
only be recalled for a vacancy which occurs after he is physically
able to return to work. However, should such an employee be
declared totally and permanently disabled prior to thirty-six (36)
months, such employee's name shall be removed from the payroll and
a certified mail notice to this effect will be sent to his last
address as shown on Company records. This provision of this
Agreement applies to recall rights only.
15.6 If an incapacitated employee is released to return to work and
is not physically able to perform the job that the employee was
performing before the disability occurred, the released employee
shall be allowed, subject to mutual agreement between the company
and the union, to displace a less senior employee in a job that the
released employee is qualified and physically capable of
performing. The displaced employee shall be the least senior
person in the job classification. Qualification will be handled as
in the normal bidding procedure. If a less senior employee is
displaced from his/her job, the displaced employee, with the
ability and qualification to perform another job, shall be allowed
to also displace a less senior employee.
15.7 Should an employee in the bargaining unit after December 15,
1993, be promoted to a supervisory position outside the coverage of
this Agreement and within ninety (90) days after promotion be
demoted, his seniority will be reinstated in the amount he had
when promoted.
15.8 Seniority lists agreed to by and between the Company and the
Union shall be posted on the bulletin board as of May 1 and
November 1 of each year. Corrections shall be made in the
seniority lists when it is proved an employee is placed in the
wrong position on said list, but all requests for corrections must
be made within thirty (30) days from date of posting or the list
shall be valid as posted.
15.9 When the Company declares that a full time opening exists (not
including temporary openings), employees in the classification and
employees entering the classification may exercise their seniority
to choose established days off within the classification. In order
to balance the skills and training on various shifts, the Company
may delay certain changes in days off for up to six (6) months from
the time the opening is filled.
15.10 The Company recognizes that all employees shall retain
the right to seniority preference in cases of layoffs and recall.
The last employee hired shall be the first laid off and the last
laid off the first rehired. Such preferences in the cases of
layoffs and recall shall take into consideration the employee's
ability to perform the available work and the efficient operations
of the operation. It is recognized that, in periods where business
conditions necessitate that the level of production be reduced to
a point where only a minimum of employees is required, it shall be
necessary, in some cases, to deviate from strict plant seniority in
order that some positions be available to service and adjust the
equipment when production requirements increase. If the company
does not layoff in accordance with seniority, the Company will meet
with the Union to explain the reasons prior to the layoff.
15.11 In the event that an employee is displaced by the
installation of mechanical equipment, change in production methods,
the installation of new or larger equipment, the combining of jobs,
the elimination of jobs, or by a more senior person, the employee
may elect to exercise his/her plant seniority to displace the least
senior person in a position the employee is qualified to perform
within one week of being placed on the job.
ARTICLE XVI - JOB BIDDING
16.1 When the Company determines a vacancy exists, other than a
minimum pay job, the Company will post a notice of such fact, such
notice to remain posted for a period of at least five (5) days, not
including Saturdays, Sundays, or holidays. This notice shall state
rates of pay, hours, and job requirements. The union will be
provided with a copy of each bid. All bids shall be considered in
the manner provided herein in Section 16.3 and the successful
applicant's name will be posted within seven (7) days after the
bids are opened, except where testing is required. Said delay will
not exceed ten (10) days, unless additional time is agreed to
between the Union and the Company. The successful bidder will be
placed on the job within as reasonable a time as possible from the
date of posting award. In the event of the successful applicant's
failure to qualify in the opinion of the Company, then it is
understood that said employee is to be restored to his former
position and standing. Employees will submit their bid to the
supervisor and will be given a receipt for the bid.
The successful bidder will be placed on the job as soon as
possible unless an extension is agreed to by the company and the
union. The Company may choose to cancel the bid at any time. If
a successful bidder is not assigned to the new job within thirty
(30) working days following the awarding of the bid, the employee
shall receive the applicable starting rate of the new job. The
successful bidder may be disqualified by the Company within the
first 120 days of assignment to the new job at the sole discretion
of management. In the event of the successful applicants failure to
qualify in the opinion of the company, then it is understood that
said employee is to be restored to his former position and
standing.
16.2 If within twenty-four (24) months following his assignment to
a new job under this procedure, an employee applies for another new
job of equal or lower classification, the Company may, at its
discretion, disregard such application. After twenty-four (24)
months employees may only bid for promotional job opportunities
except by mutual agreement between the parties. This provision does
not apply to employees successfully bidding into the Entry Level
Mechanical, Electrical, or Instrument Training Program.
Lateral or down-bids for any position shall only be permitted
one time, per employee, during the course of this agreement.
16.3 The following factors shall apply in the awarding of all jobs:
(1) Qualifications of the Applicant (which shall include:
ability to perform the work, aptitude, skills,
experience, training for the job, and attendance);
(2) Physical Fitness of the Applicant;
(3) Seniority.
Where (1) and (2) are equal, (3) shall apply.
If the employee selected shall fail to qualify after a fair
trail period, in the exclusive judgement of the Company, he shall
be returned to his former position and the next bidder shall be
given consideration.
16.4 Temporary Reassignment. An employee who is temporarily
assigned by his supervisor to perform work of a higher paid job
classification will be paid the rate of such higher job
classification for time actually worked. An employee temporarily
assigned by his supervisor to perform work in an equal or lower
paid classification will be paid the base hourly wage rate of his
permanent classification.
16.5 In no event shall the Company be requested or required to post
any job temporarily vacated by reason of vacations, illness, or
injury. The Company, at its discretion, may create temporary jobs
not to exceed one hundred twenty (120) work days. Successful
bidders bidding down or laterally on such temporary jobs will be
placed in the labor classification upon completion of the job.
Should the Company determine that any temporary job becomes
permanent, the Company shall post the job as provided in this
Article.
16.6 Knowledge, training, skill and ability gained while holding
jobs under the bid system and seniority, will be given
consideration in making promotions, layoffs, or reductions in work
force.
16.7 If an employee bids on a higher rated job and is awarded the
job, that employee will be slotted at the starting progression rate
for the new job. However, if the transferring employee is leaving
a position with a rate of pay greater than the starting rate of the
new position, then the transferring employee will retain his/her
former rate of pay until the time in the new classification allows
the employee to move up to the incremental increase in progression.
ARTICLE XVII - WORKWEEK AND OVERTIME
17.1 During the life of this Agreement it is understood that the
"normal work day" is the twenty-four (24) hour period beginning
with the start of the employee's shift. The "normal work day" is
eight (8) consecutive hours of work in a twenty-four (24) hour
period, broken by established meal periods, except as necessitated
to maintain efficient plant operations.
The "normal work week" is made up of five (5) consecutive
"normal work days" within a seven (7) day period beginning with the
morning shift on Mondays. The "normal work week" for certain
employees may begin on a day other than Monday. One and one half
(1 and 1/2) times the employees regular hourly rate will be paid for all
hours worked in excess of forty (40) hours per week or in excess of
eight (8) hours per day. The Company will notify the Union should
the need arise to deviate from the "normal work week".
17.2 Callouts.
(1) If an employee is called out after his regular shift and
after leaving the plant, or on off days, he shall be paid a minimum
of four (4) hours pay at one and one-half (1-1/2) times the
employee's regular rate. However, such hours shall not be counted
toward the calculation of overtime pay paid for working in excess
of forty (40) hours per week.
(2) If such employee is notified twelve (12) hours or more in
advance of his shift, the four (4) hour minimum will not apply.
17.3 Weekly manning schedule shall be posted not later than the end
of the day shift on Fridays barring unforeseen circumstances
outside the Company's control.
17.4 Insofar as practical, overtime will be equalized in each
department by classification. The current overtime distribution
policy will be posted by the Company. The overtime equalization
list will be updated weekly and posted.
ARTICLE XVIII - FUNERAL LEAVE
18.1 When an employee who has completed the probationary period is
absent from work solely to arrange for and/or attend the funeral of
his/her parent, stepfather, stepmother, wife or husband, son or
daughter, or stepchildren, brother, sister, grandfather,
grandmother, grandson, granddaughter, father-in-law or mother-in-
law, grandparents of spouse, son-in-law or daughter-in-law, the
Company will pay up to three (3) consecutive work days, or four (4)
consecutive work days if the employee is required to travel at
least five hundred miles to attend funeral services, of eight (8)
hours each, at the employee's regular hourly rate for each
scheduled workday the employee is absent with the permission of the
Company. The funeral leave must be taken within seven (7)
consecutive calendar days from the date of the death or funeral
services.
18.2 Funeral leave will be granted only for absences occurring on
the employee's regularly scheduled workdays and will not apply to
employees on vacation, layoff or other non-working status. Hours
paid under this Article will be counted as hours worked for the
purpose of computing overtime. To be eligible for benefit under
the Article, the employee must supply upon request reasonable
documentary evidence of covered death and family relationship and
must attend the funeral.
ARTICLE XIX - SAFETY AND HEALTH
19.1 A joint Safety and Health Committee will be established
consisting of members appointed by the Company and the Union. The
"Committee" will consist of two (2) members from the union and two
(2) members from the Company plus the Plant Manager or his
designee. Meetings will be held regularly to address safety and
health concerns and make recommendations to the plant management.
The "Committee" will establish an Accident Investigation Team.
Safety issues, complaints and/or disputes may be investigated by
the "Committee". Any safety and health issues not resolved by the
"Committee" will be addressed through the normal grievance
procedure. Employees will be required to properly use and maintain
all personal protective equipment supplied by the Company.
ARTICLE XX - BULLETIN BOARD
20.1 The Union agrees to post only notices concerning elections,
meetings, reports and other official Union business and notices of
social and recreational activities on the Company bulletin board.
A copy of each notice will be supplied to the Plant Manager at the
time of its posting. The Union agrees further that it will post no
matter which is in the disinterest of the Company. However,
notwithstanding the above, it is understood that the Company's
decision concerning the use of the bulletin board shall be final.
ARTICLE XXI - FURNISHING OF TOOLS
21.1 The Company shall furnish all tools and equipment for its
employees, except to maintenance employees, in which case these
employees shall furnish their own hand tools. In case of breakage
or loss, the Company will replace or repair such tools; such
breakage or loss shall be reported immediately to the Company.
"Hand Tools" as used herein shall not include socket sets, wrenches
more than twelve (12) inches long, and all other specialized tools
incident to the work of the mechanical, maintenance, and skilled
trades.
ARTICLE XXII - DUES CHECK-OFF
22.1 Check-off: During the term of this Agreement, the Company
will continue to check off monthly dues, and initiation fees, each
as designated by the Treasurer of the Local Union, as membership
dues in the Union on the basis of and for the term of individually
signed check-off authorization cards, a copy of which is reproduced
below, or hereafter submitted to the Company. The Company shall
promptly remit any and all amounts so deducted to the Treasurer of
the Local Union with a list of the employees from whom the
deduction was checked off.
22.2 On or before the last Friday of each calendar month the Union
shall submit to the Company a summary list of cards transmitted in
each month.
22.3 Dues for a given month shall be deducted from the last payday
in that month; deductions on the basis of authorization cards
submitted to the Company shall commence with respect to dues for
the month in which the Company receives such authorization cards.
22.4 Unless the Company is otherwise notified, the only Union
membership dues to be deducted for payment to the Union from the
pay of the employee who has furnished an authorization shall be the
monthly Union dues. The Company will deduct initiation fees when
notified, by notation on the list referred to in 22.2 above, and
assessments as designated by the Treasurer of the Local Union.
22.5 The Union shall indemnify the Company and hold it harmless
against any and all suits, claims, demands and liabilities that
shall arise out of or by reason of any action that shall be taken
or not taken by the Company for the purpose of complying with the
foregoing provisions of this Article, or in reliance on any list or
certificate which shall have been furnished to the Company by the
Union under any such provisions.
<PAGE>
22.6
CHECK-OFF AUTHORIZATION
FOR INTERNATIONAL BROTHERHOOD OF
BOILERMAKERS, CEMENT DIVISION
_______________________________
Company
_______________________________ _________________19____
Plant Date
Pursuant to this authorization and assignment, please deduct
from my pay each month, while I am in employment within the
collective bargaining unit in the Company, monthly dues,
assessments and (if owing by me) an initiation fee each as
designated by the Treasurer of the Local Union, as my membership
dues in said Union.
The aforesaid membership dues shall be remitted promptly by
you to the Treasurer of the International Brotherhood of
Boilermakers, Cement, Lime, Gypsum and Allied Workers Division,
Local Lodge D592, or its successor.
This assignment and authorization shall be effective and can
be canceled any time by written notice and cannot be reinstituted
for a twelve (12) month period or until the termination date of the
current collective bargaining agreement between the Company and the
Union, whichever occurs sooner.
Local Union No. D592
International Brotherhood of _____________________
Boilermakers, Cement Division Signature
_________________________ ____________________
Witness Date
<PAGE>
ARTICLE XXIII - UNION SECURITY
23.1 All employees covered by this Agreement, who as of December
15, 1993, are members of the Union in good standing, and all
employees who thereafter become members, shall, as a condition of
continued employment, remain members of the Union in good standing
for the duration of the Agreement.
All new employees covered by the Agreement shall, as a
condition of employment, become members of the Union on or
immediately after the thirtieth (30th) calendar day following their
employment.
ARTICLE XXIV - LEAVE OF ABSENCE
24.1 Any employee elected or appointed to a full time position with
the International Brotherhood of Boilermakers, Cement, Lime, Gypsum
and Allied Workers Division may be granted a leave of absence up to
two (2) years provided thirty (30) days notice is given to the
Company prior to the beginning of such leave. During such leave,
seniority shall accumulate. Insurance benefits shall be suspended
upon the commencement of such leave and will be in effect the first
day of returning to work with the Company. Upon returning to work,
such employee shall be reinstated to his former job providing it is
still in existence; if not, he should be eligible to apply for any
job within the bargaining unit by means of the then-existing
bidding procedure. The Company agrees to consent to the absence of
no more than one (1) employee at any time under this paragraph.
ARTICLE XXV - BENEFIT PLANS
25.1 During the term of this Agreement the Company will provide
employees with participation in the Southdown, Inc. Group Medical
Network Benefit Plan, the Southdown, Inc. Dental Plan, the
Southdown, Inc. Life Insurance and Accidental Death and
Dismemberment Plan, the Southdown, Inc. Long Term Disability Plan,
the Southdown, Inc. Pension Plan, the Southdown, Inc. Retirement
Savings Plan, the Southdown, Inc. Post Retirement Retiree Medical
Insurance Plan, and the Southdown, Inc. Voluntary Life Insurance
Plan, including all amendments and modifications to said plans
during the life of this Agreement, on the same basis as the
benefits and eligibility requirements are provided to Southdown,
Inc.'s salaried employees.
25.2 SICKNESS AND ACCIDENT BENEFITS
If an employee with at least one (1) year of service is absent from
work due to disability, sickness and accident benefits are payable.
The disability must prevent the employee from performing the duties
of the job because of a non-occupational sickness or injury. This
benefit is payable if confined to a hospital or home.
After a waiting period of one (1) week (waived if the employee is
hospitalized as an in-patient), the disability benefits are payable
at a rate of fifty-one dollars ($51) per day for a maximum of five
days per week. A disabled employee may receive weekly sickness and
accident benefits during the period of disability not to exceed
five (5) months. It is the employee's responsibility to make
application for this benefit and the attending physician must
document the nature of the disability and expected date of return
to work.
No benefits shall be payable for the following:
1. disability which you are not under the direct care of a
licensed physician.
2. sickness or injury which is purposefully self-inflicted
while sane or insane.
3. disability due to an injury arising out of the course of
employment.
4. disability due to disease which benefits are payable
under Worker's Compensation, Occupational Disease or
similar law.
This benefit terminates upon retirement or upon termination of
employment.
ARTICLE XXVI - TERMS OF AGREEMENT
26.1 After ratification by the members of the Local Union, this
Agreement shall become effective and remain in force and effect and
be binding upon the parties hereto from December 15, 1993, to and
including December 14, 1997, and it shall continue to be in full
force and effect thereafter from year to year until either party on
or before October 14, of any year, beginning October 14, 1997,
gives written notice to the other party of its desire or intention
either to alter and modify or terminate the same. If such notice
is given, the parties hereto shall begin negotiations not later
than November 15 in such year.
<PAGE>
IN WITNESS WHEREOF, the Union has caused this Agreement to be
executed in its name, after due authorization by a vote of a
majority of its members, and the Company has caused it to be
executed in its name, by its duly authorized representatives.
INTERNATIONAL BROTHERHOOD OF KOSMOS CEMENT COMPANY
BOILERMAKERS, CEMENT, LIME,
GYPSUM AND ALLIED WORKERS,
DIVISION LOCAL LODGE NO. D592
By: ___________________ By: ___________________
James Hickenbotham Bernard M. Reuland
By: ____________________ By:___________________
James Cantrell David E. Tiller
By: ____________________ By: ___________________
Mark Kelly Steven A. Wise
By: ____________________
Wayne G. Summers
By: ____________________
Beverly J. Rice
By: _____________________
James R. Reinstadtler
Signed this 15th day of Signed this 15th day of
December, 1993 December, 1993
<PAGE>
SCHEDULE A - PAY PROCEDURES
A1 - GAINSHARING: The employees will participate in a gainsharing
program developed by the Company. An oversight committee made up
of two (2) members from management and two (2) members from the
union will meet monthly and publish a report. Employees will be
encouraged to submit ideas to the committee.
A2 - RATE STRUCTURE: The rate structure shall consist of a
starting rate, one thousand (1,000) hour worked incremental rates
during the qualification period, and a qualified or "top" rate. An
employee becomes eligible for one thousand (1,000) hour worked
incremental rates by being evaluated as showing satisfactory
progress.
A3 - LEADPERSONS: Leadpersons will be paid $1 per hour in addition
to their normal rate of pay while they are designated as
leadpersons to perform certain quasi-supervisory tasks incidental
to their normal hands-on work.
A4 - SERVICE SCHEDULES
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Contract wage increases $ .50 $ .40 $ .35 $ .30
Employees who received skills premium under the 1990 labor
agreement will be red circled at their 1993 rate of pay and will
receive no wage increases until the scheduled increases accumulate
more than the amount of the skills premium.
GENERAL GROUP
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LABORER
Starting Rate $ 8.00 $ 8.40 $ 8.75 $ 9.05
End of 1,000 hours worked $ 9.30 $ 9.70 $ 10.05 $ 10.35
PACKHOUSE OPERATORS
UTILITY (Packhouse personnel, including the pumpman*)
Starting Rate $ 9.50 $ 9.90 $ 10.25 $ 10.55
End of 1,000 hours worked $ 11.60 $ 12.00 $ 12.35 $ 12.65
BULKLOADER
Starting Rate $ 9.75 $ 10.15 $ 10.50 $ 10.80
End of 1,000 hours worked $ 11.85 $ 12.25 $ 12.60 $ 12.90
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LAB GROUP
LAB TECHNICIANS
Starting Rate $ 11.40 $ 11.80 $ 12.15 $ 12.45
End of 1,000 hours worked $ 11.98 $ 12.38 $ 12.73 $ 13.03
End of 2,000 hours worked $ 12.56 $ 12.96 $ 13.31 $ 13.61
End of 3,000 hours worked $ 13.14 $ 13.54 $ 13.89 $ 14.19
End of 4,000 hours worked $ 14.90 $ 15.30 $ 15.65 $ 15.95
MAINTENANCE GROUP
STOREROOM ATTENDANT
Starting Rate $ 11.40 $ 11.80 $ 12.15 $ 12.45
End of 1,000 hours worked $ 11.85 $ 12.25 $ 12.60 $ 12.90
End of 2,000 hours worked $ 12.30 $ 12.70 $ 13.05 $ 13.35
LUBEPERSON**
Starting Rate $ 11.40 $ 11.80 $ 12.15 $ 12.45
End of 1,000 hours worked $ 11.85 $ 12.25 $ 12.60 $ 12.90
End of 2,000 hours worked $ 12.30 $ 12.70 $ 13.05 $ 13.35
End of 3,000 hours worked $ 12.75 $ 13.15 $ 13.50 $ 13.80
MECHANICAL REPAIRMAN
Starting Rate $ 11.40 $ 11.80 $ 12.15 $ 12.45
End of 1,000 hours worked $ 11.85 $ 12.25 $ 12.60 $ 12.90
End of 2,000 hours worked $ 12.30 $ 12.70 $ 13.05 $ 13.35
End of 3,000 hours worked $ 12.75 $ 13.15 $ 13.50 $ 13.80
End of 4,000 hours worked $ 13.20 $ 13.60 $ 13.95 $ 14.25
End of 5,000 hours worked $ 13.65 $ 14.05 $ 14.40 $ 14.70
End of 6,000 hours worked $ 14.10 $ 14.50 $ 14.85 $ 15.15
End of 7,000 hours worked $ 14.55 $ 14.95 $ 15.30 $ 15.60
End of 8,000 hours worked $ 15.00 $ 15.40 $ 15.75 $ 16.05
<PAGE>
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ELECTRICAL REPAIRMAN
Starting Rate $ 11.40 $ 11.80 $ 12.15 $ 12.45
End of 1,000 hours worked $ 11.85 $ 12.25 $ 12.60 $ 12.90
End of 2,000 hours worked $ 12.30 $ 12.70 $ 13.05 $ 13.35
End of 3,000 hours worked $ 12.75 $ 13.15 $ 13.50 $ 13.80
End of 4,000 hours worked $ 13.20 $ 13.60 $ 13.95 $ 14.25
End of 5,000 hours worked $ 13.65 $ 14.05 $ 14.40 $ 14.70
End of 6,000 hours worked $ 14.10 $ 14.50 $ 14.85 $ 15.15
End of 7,000 hours worked $ 14.55 $ 14.95 $ 15.30 $ 15.60
End of 8,000 hours worked $ 15.00 $ 15.40 $ 15.75 $ 16.05
INSTRUMENT TECHNICIAN
(Requires Electrical Repairman Training)
Starting Rate $ 15.00 $ 15.40 $ 15.75 $ 16.05
End of 1,000 hours worked $ 15.17 $ 15.57 $ 15.92 $ 16.22
End of 2,000 hours worked $ 15.34 $ 15.74 $ 16.09 $ 16.39
End of 3,000 hours worked $ 15.51 $ 15.91 $ 16.26 $ 16.56
End of 4,000 hours worked $ 15.70 $ 16.10 $ 16.45 $ 16.75
PRODUCTION GROUP
PRODUCTION OPERATORS (Crane Operator, Material Handler, Endloader)
Starting Rate $ 11.60 $ 12.00 $ 12.35 $ 12.65
End of 1,000 hours worked $ 12.08 $ 12.48 $ 12.83 $ 13.13
End of 2,000 hours worked $ 12.56 $ 12.96 $ 13.31 $ 13.61
End of 3,000 hours worked $ 13.04 $ 13.44 $ 13.79 $ 14.09
End of 4,000 hours worked $ 13.52 $ 13.92 $ 14.27 $ 14.57
PROCESS ATTENDANT
Starting Rate $ 11.60 $ 12.00 $ 12.35 $ 12.65
End of 1,000 hours worked $ 12.08 $ 12.48 $ 12.83 $ 13.13
End of 2,000 hours worked $ 12.56 $ 12.96 $ 13.31 $ 13.61
End of 3,000 hours worked $ 13.04 $ 13.44 $ 13.79 $ 14.09
End of 4,000 hours worked $ 14.50 $ 14.90 $ 15.25 $ 15.55
CONTROL ROOM OPERATOR (Requires Process Attendant or Lab
Technician Training)
Starting Rate $ 14.50 $ 14.90 $ 15.25 $ 15.55
End of 1,000 hours worked $ 14.80 $ 15.20 $ 15.55 $ 15.85
End of 2,000 hours worked $ 15.10 $ 15.50 $ 15.85 $ 16.15
End of 3,000 hours worked $ 15.40 $ 15.80 $ 16.15 $ 16.45
End of 4,000 hours worked $ 15.70 $ 16.10 $ 16.45 $ 16.75
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CONTROL ROOM OPERATOR (Without Process Attendant or Lab Technician
Training)
Starting Rate $ 13.55 $ 13.95 $ 14.30 $ 14.60
End of 1,000 hours worked $ 13.90 $ 14.30 $ 14.65 $ 14.95
End of 2,000 hours worked $ 14.25 $ 14.65 $ 15.00 $ 15.30
End of 3,000 hours worked $ 14.60 $ 15.00 $ 15.35 $ 15.65
End of 4,000 hours worked $ 14.95 $ 15.35 $ 15.70 $ 16.00
End of 5,000 hours worked $ 15.30 $ 15.70 $ 16.05 $ 16.35
End of 6,000 hours worked $ 15.70 $ 16.10 $ 16.45 $ 16.75
* The packhouse pumpman will receive an additional $1 dollar per
hour on a temporary upgrade while performing repair work provided
the pumpman is qualified to perform the repair work.
** The lubeperson shall receive the Mechanical Repairman 4000 hours
level rate on a temporary upgrade while performing repair work.
A5 - INCENTIVE FOR PACKHOUSE EMPLOYEES
The Company will continue the current practice of providing an
incentive to the two (2) packers, one (1) pumpman and one (1) lift
truck driver of $3/1000 bags of product packed per day.
