SCHEDULE 14A
Information Required in Proxy Statement
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
(AMENDMENT NO. )
Filed by the Registrant: [X]
Filed by a Party other than the Registrant: [ ]
Check the appropriate box:
[X] Preliminary Proxy Statement
[ ] Confidential, For use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
CAPITAL INDUSTRIES, INC.
(Name Of Registrant As Specified In Its Charter)
(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6-(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 [set forth the
amount on which the filing fee is calculated and state how it
was determined]: (4) Proposed maximum aggregate value of
transactions:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the
offsetting fee was paid previously. Identify the previous filing by
registration statement number, or the Form or Schedule and the date of
its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
CAPITAL INDUSTRIES, INC.
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
(317) 844-3722
NOTICE OF THE ANNUAL MEETING OF
SHAREHOLDERS To Be Held on March 6, 1996
The annual meeting of the shareholders of Capital Industries, Inc., an
Indiana corporation ("the Company"), will be held at the offices of the Company,
8900 Keystone Crossing, Suite 1150, Indianapolis, Indiana on March 6, 1996, at
10:00 A.M., Indianapolis (Eastern Standard) Time, for the following purposes:
(1) To elect a Board of seven Directors.
(2) To approve the dissolution of the Company and the plan
for dissolution and complete liquidation of the Company (the
"Plan").
(3) To elect trustees of a liquidating trust to be
established under the Plan.
(4) To act on such other business as may properly come
before the annual meeting or any adjournment thereof.
The Board of Directors of the Company has fixed the close of business
on January 22, 1996, as the record date for the determination of shareholders
entitled to receive notice of and to vote at the annual meeting and any
adjournment thereof.
Whether or not you expect to be present at the annual meeting, please
complete, date and sign the enclosed form of proxy and return it promptly in the
enclosed envelope, which requires no postage if mailed in the United States.
By Order of the Board of Directors
PAUL A. SHIVELY, Secretary
Indianapolis, Indiana
February 7, 1996
<PAGE>
PROXY STATEMENT
The enclosed proxy is solicited by the Board of Directors of Capital
Industries, Inc., an Indiana corporation ("the Company"), the principal
executive offices of which are located at 8900 Keystone Crossing, Suite 1150,
Indianapolis, Indiana 46240, for use at the annual meeting of the Company's
shareholders to be held on March 6, 1996, and at any adjournment thereof. A copy
of the Company's Annual Report on Form 10-K is being mailed with this Proxy
Statement to all shareholders of the Company entitled to vote at the annual
meeting.
The purposes of the annual meeting are: (i) to elect seven Directors, (ii)
to approve the dissolution of the Company and the plan for dissolution and
complete liquidation of the Company (the "Plan"), (iii) to elect trustees of a
liquidating trust to be established under the Plan, and (iv) to transact such
other business as may properly come before the meeting.
VOTING RIGHTS AND PROXIES
The Board of Directors has fixed the close of business on January 22, 1996,
as the record date for determining which shareholders are entitled to notice of,
and to vote at, the annual meeting. Only holders of shares of the Company's
Common Stock of record on the books of the Company at the close of business on
January 22, 1996, will be entitled to vote at the annual meeting or any
adjournment thereof.
As of January 22, 1996, there were 273,879 shares of the Company's Common
Stock outstanding. Each share of the Company's Common Stock entitles the holder
thereof to one vote on each matter to be considered at the annual meeting.
Any shareholder executing a proxy may revoke it at any time before it is
exercised either by delivering to the Corporate Secretary of the Company a duly
executed written instrument expressly revoking the proxy or a later dated proxy,
or by attending the annual meeting and voting in person. Attendance at the
meeting will not of itself revoke a proxy. EACH PROPERLY EXECUTED PROXY RECEIVED
PRIOR TO THE ANNUAL MEETING AND NOT REVOKED WILL BE VOTED AS SPECIFIED THEREIN
OR, IN THE ABSENCE OF SPECIFIC INSTRUCTIONS TO THE CONTRARY, WILL BE VOTED IN
FAVOR OF THE ELECTION OF THE NOMINEES AND THE PROPOSALS TO BE CONSIDERED.
Under the Company's By-Laws, the aggregate number of votes entitled to be
cast by all record shareholders present in person or by proxy at the annual
meeting, whether those shareholders vote "for", "against" or "abstain" from
voting will be counted for purposes of determining whether a quorum is present.
Abstentions shall be counted as neither FOR nor AGAINST a matter or nominee.
The Board of Directors of the Company does not know, as of the date of the
mailing of this Proxy Statement, of any business to be brought before the annual
meeting other than as set forth herein. However, if any matters other than those
referred to in this Proxy Statement should properly come before the meeting, it
is intended that the persons named as proxies in the enclosed proxy may vote the
proxy on those matters in accordance with their best judgment in light of the
conditions then prevailing.
The entire cost of soliciting proxies will be borne by the Company. Proxies
will be solicited by mail and may further be solicited for no additional
compensation by officers, Directors or employees of the Company by
correspondence, telephone, telegraph or in person.
This Proxy Statement is being mailed to shareholders of record of the
Company on or about February 7, 1996.
<PAGE>
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
The following table shows the number and percentage of shares of the
Company's Common Stock owned beneficially on January 22, 1996, by each person
who owned beneficially more than 5 % of the issued and outstanding shares of the
Company's Common Stock on that date and by all officers and Directors as a
group. Except where otherwise indicated, each person listed has sole voting and
investment power with respect to the shares listed as beneficially owned by the
shareholder.
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
- ---------------- --------- -----
Claridge Associates 35,612 (1) 13.00%
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
John B. Gray, Jr. 83,515 30.49%
8160 Beech Knoll
Indianapolis, Indiana 46256
Charles E. Lanham 29,831 (2) 10.89%
8900 Keystone Crossing
Suite 1200
Indianapolis, Indiana 46240
O.U. Mutz 49,029 (3) 17.90%
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
Amount and
Nature of
Name and Address of Beneficial Percent of
Beneficial Owner Ownership Class
- ---------------- --------- -----
J. Fred Risk 18,018 (4) 6.58%
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
John T. Risk 14,624 (5) 5.34%
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
Sovereign Group, Inc. 17,410 (6) 6.35%
8900 Keystone Crossing
Suite 1150
Indianapolis, Indiana 46240
All Directors and officers as 204,718 (7) 74.75%
a group (9 persons)
(1) Claridge Associates ("Claridge") is a partnership in which O.U. Mutz is
a general partner.
(2) This figure includes 34 shares owned by Athena Development Corporation
("Athena"), a corporation in which Mr. Lanham owns all of the outstanding
shares. The shares shown in the table do not include 417 shares owned by B. V.
Henderson Trust, of which Mr. Lanham is the trustee.
(3) This figure includes (i) 752 shares that Mr. Mutz's wife owns, in
respect of which Mr. Mutz disclaims beneficial ownership, (ii) 692 shares owned
by Caleb Associates, a partnership in which Mr. Mutz is a general partner, and
(iii)35,612 shares owned by Claridge. This figure does not include 17,410 shares
owned by Sovereign Group, Inc.("Sovereign"), in which Mr. Mutz has a
28.4%interest.
(4) This figure includes 2,002 shares that Mr. Risk's wife owns, in respect
of which Mr. Risk disclaims beneficial ownership. The shares shown in the table
do not include 17,410 shares owned by Sovereign, in which Mr. Risk has a 29.6%
interest.
(5) This figure includes (i) 1,250 shares that Mr. Risk's wife owns, in
respect of which Mr. Risk disclaims beneficial ownership and (ii) 2,115 shares
owned by Canterbury Corporation in which Mr. Risk has a 45 % interest. John T.
Risk is the son of J. Fred Risk.
(6) See notes (3) and (4) above for information concerning the ownership of
Sovereign.
(7) This figure includes 17,410 shares owned by Sovereign.
<PAGE>
PROPOSAL I -- ELECTION OF DIRECTORS
Nominees for Election as Directors
The following table and the narrative which follow it lists the
nominees for election as Directors of the Company, their ages and principal
occupations at present and for the last five years, and the number and percent
of shares of the Company's Common Stock each nominee owned directly or
indirectly as of January 22, 1996:
Served Shares
as a Beneficially
Director Owned as of Percent
Name Since Age January 22, 1996 of Class
- ---- ----- --- ---------------- --------
John B. Gray, Jr. 1986 61 83,515 30.49%
Charles E. Lanham 1983 63 29,831 (1) 10.89%
O.U. Mutz 1975 67 49,029 (2) 17.90%
John D. Peterson 1983 61 3,000 (3) 1.10%
Robert H. Reynolds 1986 58 1,165 (4) 0.43%
J. Fred Risk 1976 67 18,018 (5) 6.58%
Paul A. Shively 1992 52 2,579 0.94%
(1) This figure includes 34 shares owned by Athena, a corporation in which Mr.
Lanham owns all of the outstanding shares. The shares shown in the table do not
include 417 shares owned by B.V. Henderson Trust, of which Mr. Lanham is the
trustee.
(2) This figure includes (i) 752 shares that Mr. Mutz's wife owns, in respect of
which Mr. Mutz disclaims beneficial ownership, (ii) 692 shares owned by Caleb
Associates, a partnership in which Mr. Mutz is a general partner, and (iii)
35,612 shares owned by Claridge. This figure does not include 17,410 shares
owned by Sovereign, in which Mr. Mutz has a 28.4% interest.
(3) This figure includes 2,000 shares owned beneficially by City Securities
Corporation, a corporation of which Mr. Peterson is the Chairman of the Board.
(4) Mr. Reynolds is a partner of Barnes & Thornburg, a law firm that provides
legal services to the Company and its subsidiaries. (5) This figure includes
2,002 shares that Mr. Risk's wife owns, in respect of which Mr. Risk disclaims
beneficial ownership. This figure does not include 17,410 shares owned by
Sovereign, in which Mr. Risk has a 29.6% interest.
<PAGE>
The business experience of each director nominee
Mr. Gray served as the President of the Company from 1986 to 1991.
Mr. Lanham is the Chairman of Klipsch, Lanham & Associates, Inc. since
1989; Chairman of Overhead Door Company of Indianapolis, Inc., since prior to
1988; and a Director of Consolidated Products, Inc. a corporation engaged in
the family restaurant business.
Mr Mutz has served as the Chairman of the Board and Chief Executive
Officer of the Company since 1984. He served as the President and a Director of
Forum Group, Inc. (Forum) from prior to 1983 to 1991. Forum filed a voluntary
petition for protection under Chapter 11 of the Federal bankruptcy laws on
February 19, 1991.
Mr. Peterson has served as the Chairman of the Board of City Securities
Corporation since prior to 1988. He also serves as a Director of Lilly
Industries, Inc., and of Duke Realty Investments, Inc., a real estate investment
trust.
Mr. Reynolds has served as a partner of the law firm of Barnes &
Thornburg, since prior to 1988.
Mr. Risk has served as the Vice Chairman of the Board of the Company
since 1984; Chairman of the Board of Sovereign. He is also a director of
Consolidated Products, Inc., and was the Chairman of the Board of Forum from
prior to 1983 to 1991. Forum filed a voluntary petition for protection under
Chapter 11 of the Federal bankruptcy laws on February 19, 1991.
Mr. Shively has served as the Secretary of the Company since prior to
1988 and was a Director of Capital from 1975-1983. He was a Senior Vice
President and Treasurer of Forum from 1984 to 1995. Forum filed a voluntary
petition for protection under Chapter 11 of the Federal bankruptcy laws on
February 19, 1991.
Seven Directors will be elected at the annual meeting. Unless
authorization is withheld, the enclosed proxy will be voted in favor of electing
as Directors the nominees listed above, each of whom is now a Director whose
present term of office will expire upon completion of the election at the
meeting. If any nominee is unable to serve, the proxy will be voted for a
substitute nominee selected by the Board of Directors. It is not expected that
the Company will hold any more annual meetings after March 6, 1996 if the
proposed dissolution described herein is approved by the shareholders. As such,
the Directors to be elected hereby will be expected to complete the dissolution
and liquidation of the Company as described in the Plan.
<PAGE>
Meetings and Committees
The Board of Directors of the Company held four meetings during the
fiscal year ended March 31, 1995. During that fiscal year, each incumbent
director attended 75% or more of the aggregate of the total number of meetings
of the Board of Directors and the total number of meetings held by all
committees of the Board of Directors on which he served.
The Board of Directors has standing Audit, Nominating, Executive and
Stock Option and Compensation Committees, the memberships of which are as
follows:
Audit Nominating
Committee Committee
Paul A. Shively, Chairman J. Fred Risk, Chairman
John B. Gray, Jr. John B. Gray, Jr.
Charles E. Lanham O.U. Mutz
John D. Peterson
Executive Stock Option and
Committee Compensation Committee
O. U. Mutz, Chairman Robert H. Reynolds, Chairman
John D. Peterson Charles E. Lanham
Robert H. Reynolds J. Fred Risk
J. Fred Risk Paul A. Shively
The Audit Committee, determines the scope of the audit function to be
provided and reviews the audited financial statements.
The Nominating Committee, which held one meeting during the last fiscal
year, reviews the performance of Directors and others and makes recommendations
concerning individuals to be nominated as Directors and to be elected as
officers of the Company. The Nominating Committee will consider nominees
recommended by shareholders, but, in order to have a nominee considered for
election at the next annual meeting of shareholders, if any, a shareholder must
submit his nomination, accompanied by a resume of the proposed nominee's
qualifications, to the Company (8900 Keystone Crossing, Suite 1150,
Indianapolis, Indiana 46240, Attn: Corporate Secretary) so that it is received
no later than May 15, 1996.
The Executive Committee, which held one meeting during the last fiscal
year, exercises substantially all of the powers of the Board of Directors during
the intervals between the meetings of the Board.
The Stock Option and Compensation Committee, which held one meeting
during the last fiscal year, determines annual salaries and bonuses of senior
management personnel.
<PAGE>
Compensation of Executive Officers and Directors
The following table shows the compensation paid during the last three
fiscal years to O.U. Mutz, the Chairman and Chief Executive Officer of the
Company and H. William Mutz, Vice President.
SUMMARY COMPENSATION TABLE
401(k) Matching
Year Salary Bonus Contribution
O.U. Mutz 1995 $ 75,000 -- $1,928
Chairman 1994 75,000 -- 2,044
Chief Executive Officer 1993 32,250 $85,000 1,622
H. William Mutz 1995 $127,741 $18,000 $2,921
Vice President 1994 123,461 -- 2,052
1993 117,415 -- 2,288
During fiscal 1996, in addition to their base salaries, O.U. Mutz has
received $100,000 representing severance compensation and a bonus for his
efforts in completing the asset sale involving Truckpro Parts & Service, Inc,
and H. William Mutz received a $25,000 bonus for his efforts in completing the
asset sale and a bonus of $15,000 for his performance in running Truckpro Parts
& Service, Inc. until the completion of the asset sale.
Compensation of Directors
For the year ended March 31, 1995, each non-employee Director was
compensated at the rate of $5,000 per year plus $500 per board meeting attended
and $250 per committee meeting not held in conjunction with a board meeting.
Interest of Management and Others in Certain Transactions
Truckpro Parts & Service, Inc., a subsidiary of the Company, leases an 11,000
square foot retail and service facility and certain equipment from Breckenridge
Corporation at a combined annual rent of $54,600. Breckenridge Corporation is a
100% subsidiary of Keystone Group.
The Company and its subsidiaries are represented by Barnes & Thornburg, a law
firm in which Robert H. Reynolds, a Director of the Company, is a partner. Legal
fees paid to Barnes & Thornburg during the fiscal year ended March 31, 1995 were
$5,032.00.
See "--- Compensation of Directors" above.
<PAGE>
Performance Graph
Because the Company's stock is not actively traded it is unable to
obtain any information regarding the pricing of its securities and is therefore
unable to provide a performance graph.
New Transfer Agent
The Company has recently changed its stock transfer agent to American
Stock Transfer & Trust Co., 40 Wall Street, New York, NY 10005. Shareholders may
also reach the transfer agent by calling (800) 937-5449.
PROPOSAL II -- DISSOLUTION AND LIQUIDATION OF THE COMPANY
On December 16, 1995, the Board of Directors approved the dissolution
of the Company pursuant to the Plan and recommended ratification of the Plan by
the shareholders. The primary reason the Board of Directors wishes to dissolve
the Company is that the Company no longer has any operating businesses following
the sale of its last business, Truckpro Parts & Service ("Truckpro"), which was
completed effective September 30, 1995. The Plan, which is attached hereto as
Exhibit A provides that the officers shall wind up the business of the Company,
liquidate its assets, satisfy its liabilities and form a liquidating trust
("Liquidating Trust") to succeed to the assets and liabilities of the Company
which cannot be liquidated in an expeditious manner.
The Liquidating Trust will be organized pursuant to the terms of a
liquidating trust agreement in the form attached hereto as Exhibit B (the
"Liquidating Trust Agreement") and will be funded with assets sufficient to
liquidate the known liabilities of the Company which the trust will assume. The
Liquidating Trust will also be funded with a reasonable reserve for unliquidated
claims which may hereafter be asserted against the Company. Any funds of the
Company which are not placed into the Liquidating Trust will be distributed to
the shareholders pursuant to the Plan. Another purpose of the Liquidating Trust
will be to succeed to the rights of the Company of certain escrow or reserve
funds (the "Escrow") from the sale of the assets of Truckpro to Haygood Limited
Partnership (the "Asset Sale"). The terms of the Asset Sale provide that the
funds in the Escrow may be released over time. However, the Escrow will continue
until at least September 1998 if no claims exist against the Escrow at that
time. Accordingly, the term of the Liquidating Trust will continue at least as
long as the Escrow.
<PAGE>
Each of the shareholders of the Company will receive a beneficial interest
in the assets of the Liquidating Trust represented by the shareholders' number
of shares of the Company Common Stock relative to the total number of shares of
the Company, and the shareholders will be the "Beneficiaries" of the Liquidating
Trust. SUCH BENEFICIAL INTERESTS IN THE LIQUIDATING TRUST SHALL NOT BE
TRANSFERABLE BY THE BENEFICIARIES, EXCEPT BY DEATH, AND OPERATION OF LAW. The
Liquidating Trust, by its terms, is required to distribute as much as possible
to the Beneficiaries and retain only what is needed and cannot be distributed to
the Beneficiaries (such as the Escrow). It is anticipated that the public
reporting by the Company as required by the Securities and Exchange Act of 1934
will be discontinued upon the capitalization of the Liquidating Trust, and that
the Liquidating Trust will have no ongoing filing requirements with the
Securities and Exchange Commission. However, the trustees of the Liquidating
Trust will have annual tax and informational reporting obligations to the
Beneficiaries pursuant to the provisions of the Liquidating Trust Agreement.
It is not known when the Company will make distributions to the
shareholders and fund the Liquidating Trust, but the liquidation will be
completed as quickly as is reasonably advisable under the circumstances existing
at the time.
The Liquidating Trust Agreement may be amended or terminated by the
Beneficiaries upon a favorable vote of two-thirds of the Beneficiaries, provided
however, that a termination of the Liquidating Trust by the Beneficiaries does
not result in a breach of any obligation of the Liquidating Trust.
Because the Liquidating Trust is intended to protect the shareholders
by providing a fund to satisfy any existing liabilities of the Company, it is
possible that the Beneficiaries of the Liquidating Trust may receive less than
their proportionate interests as distributions of the Liquidating Trust if the
assets of the Liquidating Trust are necessary to satisfy the obligations of the
Company for unliquidated claims and liabilities. Additionally, because the
primary asset of the Liquidating Trust will be the Company's interest in the
Escrow from the Asset Sale of Truckpro, the entire amount of such Escrow may be
required to satisfy claims against the Company for breaches of its
representations and warranties under the Asset Sale.
The Plan is intended to qualify as a complete liquidation of the
Company pursuant to Sections 331 and/or 346(a) of the Internal Revenue Code of
1986, as amended, such that the distributions received by shareholders and the
beneficial interests in the Liquidating Trust to be received by the shareholders
should be treated as distributions in complete liquidation of a corporation.
Shareholders should consult with their tax advisors with respect to the income
tax treatment to the shareholders of the distributions to be received from the
Company. The Company will provide information to the shareholders at the time
that distributions will be made and the Liquidating Trust is funded to enable
the shareholders to report the proceeds of the liquidation of the Company.
The Plan may be revoked by the Board, if the Board would deem such
revocation advisable or necessary under the circumstances. The Company believes
that it is unlikely that it would be necessary for the Board to revoke the Plan
after the Plan has been approved by the shareholders.
The foregoing is merely a summary of certain terms of the Plan and the
Liquidating Trust Agreement. Shareholders are encouraged to review the full text
of both of these documents which are attached hereto as Exhibits A and B,
respectively.
Indiana law does not provide an appraisal remedy or any other remedy to
shareholders who vote against approval of the Plan, or abstain from voting. The
Plan will be approved by the shareholders if a majority of all of the votes
eligible to be cast are voted in favor of approving the Plan.
THE BOARD OF DIRECTORS RECOMMENDS APPROVAL OF THE DISSOLUTION OF THE COMPANY AND
THE PLAN FOR DISSOLUTION AND COMPLETE LIQUIDATION.
<PAGE>
PROPOSAL III -- ELECTION OF TRUSTEES
The Liquidating Trust, by its terms, provides for the appointment of
three trustees by the shareholders (the "Trustees"). The Board of Directors
nominated O.U. Mutz, John B. Gray, Jr. and Paul A. Shively as the Trustees. Each
of the Trustee nominees is presently a Director of the Company and their
qualifications are set forth herein under "Election of Directors." Trustees may
be removed by the Beneficiaries upon an affirmative vote of two-thirds thereof
(as represented by the proportionate beneficial interest of the Beneficiaries).
Replacement Trustees shall be selected by the remaining Trustees.
The Trustees will be compensated for their responsibilities by
receiving $100 per hour for their services provided to the Liquidating Trust.
The Company believes that this is commensurate with the level of service which
the Trustees shall provide.
The Trustees will be indemnified by the Liquidating Trust for any
liabilities, expenses, legal fees, judgements, fines and penalties resulting
from the Trustees actions in the capacity as a Trustee hereunder, provided that
such Trustee has not acted in bad faith, willfully, or recklessly.
THE BOARD OF DIRECTORS RECOMMENDS THE FOREGOING TRUSTEE NOMINEES FOR ELECTION BY
THE SHAREHOLDERS.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
Coopers & Lybrand served as the independent accountants to audit the
financial statements of the Company for the fiscal year ended March 31, 1995.
Representatives of Coopers & Lybrand are expected to be present at the annual
meeting with the opportunity to make a statement if they desire to do so, and to
be available to respond to appropriate questions.
SHAREHOLDER PROPOSALS
Any proposal which a shareholder desires to present at the annual
meeting of shareholders to be held in 1996, if any, will be included in the
Company's proxy statement and form of proxy relating to that meeting only if the
proposal is received by the Company at its executive offices, located at 8900
Keystone Crossing, Suite 1150, Indianapolis, Indiana 46240, no later than May
15, 1996. Any proposal should be sent to the attention of the Corporate
Secretary of the Company.
<PAGE>
FILINGS UNDER SECTION 16(a) OF THE 1934 ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires that the Company's officers and directors and persons who own more than
10% of the Company's Common Stock file reports of ownership and changes in
ownership with the Securities and Exchange Commission (the "SEC"). Officers,
directors and greater than 10% shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms that they file.
Based solely on its review of the copies of such forms received by it,
and/or written representations from certain reporting persons that no Forms 5
were required for those persons, the Company believes that during the fiscal
year ended March 31, 1995, all filing requirements applicable to its officers,
directors and greater than 10% beneficial owners with respect to Section 16(a)
of the 1934 Act were complied with.
<PAGE>
EXHIBIT A
PLAN OF COMPLETE LIQUIDATION
AND VOLUNTARY DISSOLUTION OF
CAPITAL INDUSTRIES, INC.
1. General: This Plan shall apply to the complete liquidation and voluntary
dissolution of CAPITAL INDUSTRIES, INC. (the "Corporation"), under
and pursuant to IND. CODE ss. 23-1-45.
2. Effective Date: This Plan shall become effective following its adoption
by the shareholders of the Corporation. 3. The Plan Following the
Effective Date:
a. The Corporation shall cease to engage in the business for which
it was formed.
b. The officers of the Corporation shall file a copy of Form 966 of
the Internal Revenue Service with the Internal Revenue Service,
the Indiana Department of Revenue and the Indiana Department of
Employment and Training Services within 30 days after the date
this Plan is adopted, and a copy of same to be filed with the
Indiana Attorney General within 10 days after the date this Plan
is adopted.
c. The officers of the Corporation shall execute and deliver
Articles of Dissolution to the Indiana Secretary of State for
filing.
d. The officers shall notify known creditors in writing of the
dissolution, if any, in accordance with IND. CODE ss. 23-1-45.
e. The officers shall cause notice of the dissolution to be
published in a newspaper of general circulation in Marion County,
Indianapolis, Indiana. Such notice shall request persons with
claims against the Corporation to present them in accordance with
the notice, and shall describe the information that must be
included in a claim, provide a mailing address to which the claim
may be sent, and state that a claim will be barred unless a
proceeding is brought within two years of publication of the
notice.
f. The Corporation shall not carry on any business except that
appropriate to wind up and liquidate its business and affairs.
<PAGE>
g. The officers shall collect all assets of the Corporation and
reduce them to possession, conveying and transferring them as
necessary to convert them into forms suitable for distribution to
the shareholders, including the real property, if any, owned by
the Corporation in Jacksonville, Florida.
h. The officers shall pay and discharge the debts and liabilities of
the Corporation, if any, or make adequate provision therefor.
i. The officers of the Corporation shall distribute all of the
assets of the Corporation (less those assets, if any, which the
officers determine are required to be retained to satisfy claims
against the Corporation and which are set apart for such purpose)
to the shareholders upon surrender of the shareholders'
certificates evidencing the outstanding shares of the Corporation
and in complete cancellation thereof. For this purpose the
officers of the Corporation shall establish a liquidating trust
to be named the Capital Industries Liquidating Trust (the
"Liquidating Trust") in substantially the form attached hereto as
Annex 1.
j. The Liquidating Trust will be funded by the Corporation with an
amount of funds or liquid assets sufficient to satisfy any
remaining liabilities of the Corporation, plus an additional
amount which is intended to fund prospective and contingent
liabilities of the Corporation which the trust shall assume
concurrently with the final cash distribution to the shareholders
of the Corporation, the Corporation's interest in the HCT
Security Trust, and any other assets, whether tangible or
intangible, which have not been converted to cash at the time of
the final liquidation of the Corporation.
k. The officers of the Corporation shall take such other necessary
actions and execute, file and deliver all other returns, reports
and instruments necessary or advisable to carry out this Plan and
to liquidate the Corporation.
4. Revocation of Plan: This Plan shall be subject to revocation pursuant to
IND. CODE ss. 23-1-45-4, under which the Board of Directors may revoke the
Plan without shareholder action.
<PAGE>
EXHIBIT B
CAPITAL INDUSTRIES, INC.
LIQUIDATING TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST dated _______ by and between Capital
Industries, Inc., an Indiana corporation (the "Corporation"), and
- ---------------,
______________________, and __________________ (together, the "Trustees").
WHEREAS, on December 16, 1995, the Board of Directors of the
Corporation voted to submit to the shareholders of the Corporation a Plan of
Complete Liquidation and Dissolution of the Corporation in accordance with
Section 336 of the Internal Revenue Code of 1986 (the "Plan");
WHEREAS, the Plan was adopted by the shareholders of the Corporation at
a special meeting thereof held on __________, 1996. Pursuant to the Plan, the
Board of Directors of the Corporation has determined that it is appropriate to
create this liquidating trust; and
WHEREAS, the Plan and approval thereof provided that the aforementioned
Trustees shall be the initial Trustees of the Trust established hereunder.
NOW THEREFORE, in consideration of the premises, the Corporation hereby
grants, releases, assigns, transfers, conveys and delivers unto the Trustees for
the benefit of the shareholders of the Corporation as of the Record Date (as
hereinafter defined) and their permitted successors and assigns as herein
provided (the "Beneficiaries"), all of the Corporation's right, title and
interest in and to the assets listed on Schedule I hereto (the "Trust Assets"),
in trust for the uses and purposes stated herein, subject to the terms and
provisions set out below, and the Trustees hereby accept the Trust Assets and
such Trust, subject to the terms and provisions hereof.
<PAGE>
ARTICLE I
NAME AND DEFINITIONS
1.1 Name. This trust shall be known as the Capital Industries, Inc.
Liquidating Trust.
1.2 Certain Terms Defined. For all purposes of this instrument, unless the
context otherwise requires:
(a) "Beneficial Interest" shall mean the proportionate share of each
Beneficiary in the Trust Estate determined by the ratio of the
number of issued and outstanding Shares held by each Beneficiary
on the close of business on the Record Date to the number of each
issued and outstanding Shares held on such date by all
Shareholders.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Effective Date" shall mean the date of this Agreement, being the
date on which the distribution of the Trust Assets from the
Corporation to the Trustees occurs.
(d) "Record Date" shall mean ______.
(e) "Reserve Fund" shall mean the amount of Cash and time deposits of
the Corporation to be distributed herewith to the Trust in order
to fund the Corporation's expected and continuing liabilities
pursuant to the Plan, which amount is $________ [TO BE
COMPLETED].
(f) "Shareholders" shall mean the holders of record of the
outstanding Shares at the close of business on the Record Date.
(g) "Shares" shall mean the shares of Common Stock, no par value, of
the Corporation.
<PAGE>
(h) "Trust" shall mean the Trust created by this Agreement.
(i) "Trust Estate" shall mean all the property held from time to time
by the Trustees under this Agreement, including, without
limitation, the Trust assets and, in addition, shall thereafter
include all dividends, rents, royalties, income, proceeds and
other receipts of or from the Trust Estate.
(j) "Trustees" shall mean the initial Trustees and their successors.
(k) "Unlocated Beneficiaries" shall mean the Shareholders which the
Corporation has been unable to locate or provide a liquidation
distribution, the names and last known addresses of such persons
are attached hereto on Schedule 1.2(k), and any Shareholders
which may hereafter become Unlocated Beneficiaries.
(l) "Unlocated Beneficiaries Distributions" are the distributions
which the Corporation and/or the Trustees have been unable to
provide to the Unlocated Beneficiaries which amount is initially
$________, and which sum is distributed to the Trust hereby.
<PAGE>
ARTICLE II
NATURE OF TRANSFER
2.1 Purpose of Trust. The sole purpose of this Trust is to liquidate the
Trust Estate in a manner calculated to conserve and protect the Trust Estate,
and to collect and distribute the income and proceeds therefrom to the
Beneficiaries in as prompt and orderly a fashion as possible after the payment
of, or provision for, expenses and liabilities.
2.2 Instruments of Further Assurance. After the liquidation and termination
of the Corporation, such persons as have the rights and power to so act, will,
upon reasonable request of the Trustees, execute, acknowledge, and deliver such
further instruments and do such further acts as may be necessary or proper to
effectively carry out the purposes of this Agreement, to transfer to the
Trustees any property intended to be covered hereby, and to vest in the
Trustees, their successors and assigns, the estate, powers, instruments or funds
in trust hereunder.
2.3 Payment of Corporation Liabilities. The Trustees hereby assumes the
claims, liabilities and obligations (including unascertained or contingent
liabilities and expenses) of the Corporation and expenses for which payment or
discharge has been provided pursuant to the Reserve Fund. Should any other
liability be asserted against the Trustees as the transferees of the Trust
Estate or as a result of the assumption made in this paragraph, the Trustee may
use such part of the Trust Estate as may be necessary in contesting any such
liability or in payment thereof, but in no event shall the Trustees,
Beneficiaries or employees or agents of the Trust be personally liable, nor
shall resort be had to the private property of such persons, in the event the
Trust Estate is not sufficient to satisfy the liabilities of the Trust.
2.4 Incidents of Ownership. The Shareholders shall be the Beneficiaries of
the Trust created by this Agreement and the Trustees shall retain only such
incidents of ownership as are necessary to undertake the actions and
transactions authorized herein.
2.5 Unlocated Beneficiaries. The Trustees hereby accept the Unlocated
Beneficiaries Distributions and agree to hold such amounts in trust for such
persons, to continue the Corporation's obligations, if any, under Indiana law to
continue to locate and distribute to such persons, and to dispose of the
Unlocated Shareholder Distributions upon termination of the Trust in compliance
with applicable law.
2.6 HCT Security Trust. The Trustees hereby accept the rights and
obligations of the Corporation as a trustee under that certain HCT Security
Trust Agreement among the Corporation, Truckpro Parts & Service, Inc. (a
subsidiary of the Corporation) and Haygood Limited Partnership, an Arkansas
limited partnership.
<PAGE>
ARTICLE III
BENEFICIARIES
3.1 Beneficial Interests. (a) The Beneficial Interest of each Shareholder
as a Beneficiary hereof shall be determined by the Trustees in accordance with a
certified copy of the Corporation's shareholder list as of the Record Date which
list is being delivered by the Corporation to the Trustees herewith. For ease of
administration, the Trustees may, if they so elect, express the Beneficial
Interest of each Shareholder in terms of units.
(b) When the Trustees have determined the Beneficial Interests of the
Shareholders, they shall notify each Shareholder of the amount of his
Beneficial Interest and, in the Trustee's discretion, shall advise him
(if he has not previously done so) to surrender his certificates for
Shares in exchange for the rights of a Beneficiary herein.
(c) All liquidating distributions and other payments due any Shareholder
who has failed to surrender his certificates representing Shares shall
be retained by the Trustees for his benefit until his certificates for
such Shares are surrendered or until he furnishes the Trustees with
(i) evidence satisfactory to them of the loss, theft or destruction of
certificates for such Shares and (ii) a surety bond satisfactory to
them, in such amount as they shall specify, or such security or
indemnity as may be required by them, in which event the Trustees
shall release all liquidating distributions due such Shareholder as a
Beneficiary to him.
(d) Any Beneficiary whose certificates for Shares are cancelled subsequent
to the Record Date shall be entitled to the benefits of this Agreement
equally and ratably with all Beneficiaries. If required by the
Trustees, any such Beneficiary may also be required, as a condition
precedent to the release of any liquidating distributions due him, to
pay all reasonable costs, expenses and attorneys' fees incurred in
connection with proof of his ownership and cancellation of his
certificates for shares.
3.2 Rights of Beneficiaries. Each Beneficiary shall be entitled to
participation in the rights and benefits due to a Beneficiary hereunder
according to his Beneficial Interest. Each Beneficiary shall take and hold the
same subject to all the terms and provisions of this Agreement. The interest of
the Beneficiary hereby is declared and shall be in all respects personal
property and upon the death of an individual Beneficiary his interest shall be
in all respects personal property and upon the death of an individual
Beneficiary his interest shall pass as personal property to his legal
representative and such death shall in no way terminate or affect the validity
of this Agreement. A Beneficiary shall have no title to, right to, possession
of, management of, or control of, the Trust Estate except as herein expressly
provided. No widower, widow, heir, or devisee of any person who may be a
Beneficiary shall have any right of dower, homestead, or inheritance, or of
partition, or of any other right, statutory or otherwise, in any property
whatever forming a part of the Trust Estate, but the whole title to all the
Trust Estate shall be vested in the Trustees and the sole interest of the
Beneficiaries shall be the rights and benefits given to such persons under this
Agreement.
<PAGE>
3.3 No Transfer of Interests of Beneficiaries. The Beneficial Interests of
the Beneficiaries of the Trust shall not be transferable, except by will,
intestate succession or by operation of law.
The Beneficial Interests of the Beneficiaries hereunder shall not be
subject to attachment, execution, sequestration or any order of any court, nor
shall such interests be liable for the contracts, debts, obligations,
engagements or liabilities of any Beneficiary, but the interest of a Beneficiary
shall be paid by the Trustees to the Beneficiary free and clear of all
assignments, attachments, anticipations, levies, executions, decrees and
sequestrations except as may exist pursuant to a distribution of "remaining
assets" under Section 4.1 hereof, and shall become the property of the
Beneficiary only when actually received by such Beneficiary.
3.4 Trustees as Beneficiaries. Each Trustee, either individually or in a
representative or fiduciary capacity, may be a Beneficiary to the same extent as
if he were not a Trustee hereunder and have all the rights of a Beneficiary,
including, without limitation, the right to vote and to receive distributions,
to the same extent as if he were not a Trustee hereunder.
<PAGE>
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.1 Duration. The existence of this Trust shall continue until the first to
occur of (a) the complete distributions of the Trust Estate or (b) the
expiration of 36 months from the Effective Date, unless an earlier termination
is required by the applicable laws of the State of Indiana or by the action of
the Beneficiaries as provided in Section 4.2. Any remaining assets will be
distributed to the Beneficiaries, subject to any remaining claims, liabilities,
debts and obligations. If any portion of the Trust Estate is not duly claimed,
such assets will be disposed of in accordance with applicable Indiana law.
Notwithstanding the foregoing, if necessary to provide for the settlement,
prosecution or defense of any litigation or claim, the Trust may continue for a
period of more than 36 months solely for the purpose of resolving such
litigation or claim provided that such resolution will be completed as
expeditiously as is reasonably possible.
4.2 Termination by Beneficiaries. The Trust may be terminated at any time
by the action of Beneficiaries having an aggregate Beneficial Interest of at
least two thirds of the total Beneficial Interests as evidenced in the manner
provided in Article XII; provided, however, that such termination would not
result in a breach of any obligation of the Trust.
4.3 Continuance of Trust for Winding Up. After the termination of this
Trust and solely for the purpose of liquidating and winding up the affairs of
this Trust, the Trustees shall continue to act as such until their duties have
been duly performed. Upon distribution of all the Trust Estate, the Trustees
shall retain the books, records, shareholder lists, certificates for Shares and
files which shall have been delivered to or created by the Trustees. At the
Trustee's discretion, all of such records and documents may be destroyed at any
time after seven years from the distribution of all the Trust Estate. Except as
otherwise specifically provided herein, upon the distribution of all the Trust
Estate, the Trustees shall have no further duties or obligations hereunder
except to account as provided in Section 5.5.
<PAGE>
ARTICLE V
ADMINISTRATION OF TRUST ESTATE
5.1 Sale of Trust Estate. The Trustees at such times as they may deem
appropriate, may transfer, assign, or otherwise dispose of all or any part of
the Trust Estate as they deem appropriate at public auction or at private sale
for cash, securities or upon credit (either secured or unsecured as the Trustees
shall determine).
5.2 Payment of Claims, Expenses and Liabilities. The Trustees shall collect
the assets of and hold the Trust Estate without provision for, or the obligation
to make payment of, any interest thereon to any Beneficiary. The Trustees shall
pay from the Trust Estate all claims, expenses, liabilities, charges and
obligations of the Trust Estate and all liabilities and obligations which the
Trustees specifically assume and agree to pay pursuant to this Agreement and
such transferee liabilities which the Trustees may be obligated to pay as
transferees of the Trust Estate, including, without limitation, interest,
penalties, taxes, assessments, and public charges of every kind and nature and
the costs, charges and expenses connected with the execution of administration
of this Trust and such other payments and disbursements as are provided in this
Agreement or which may be determined to be a proper charge against the Trust
Estate by the Trustees. Notwithstanding a termination of the Trust for any
reason, the Trustees may, in their discretion, make provisions by reserve or
otherwise, out of the Trust Estate, for such amount as the Trustees in good
faith may determine to be necessary to meet present or future claims and
liabilities of the Trust, whether fixed or contingent.
5.3 Interim Distributions. At least annually, and on such other times as
may be determined by them, the Trustees shall distribute, or cause to be
distributed, to the Beneficiaries of record on the close of business on such
record date as the Trustees may determine, in proportion to their respective
Beneficial Interests, as much cash or non-cash assets comprising a portion of
the Trust Estate as the Trustees may in their sole discretion determine may be
distributed without detriment to the conservation and protection of the Trust
Estate. As soon as reasonably practicable, upon sale of all or any significant
portion of the Trust Estate, the Trustees shall distribute, or cause to be
distributed, to the Beneficiaries such portion of the proceeds of such sale as
the Trustees in their sole discretion may determine is not required to satisfy
the claims, expenses, liabilities and similar charge against the Trust Estate.
5.4 Final Distribution. If the Trustees determine that all claims,
expenses, charges, liabilities and obligations of the Trust have been paid or
discharged, or if the existence of the Trust shall terminate pursuant to
Sections 4.1 or 4.2, the Trustees shall, as expeditiously as is consistent with
the conservation and protection of the Trust Estate, distribute the Trust Estate
to the Beneficiaries, in proportion to their interests therein. The Trustees
shall hold in the Trust and thereafter make disposition of all liquidating
distributions and other payments due any Unlocated Beneficiaries or who have not
surrendered their certificates for Shares for cancellation pursuant to Section
3.1, in accordance with Indiana law and subject to applicable state laws
regarding escheat and abandoned property.
<PAGE>
5.5 Reports to Beneficiaries. As soon as practicable after the end of each
calendar year and after termination of the Trust, the Trustees shall submit a
written report and account to the Beneficiaries showing (i) the assets and
liabilities of the Trust at the end of such period or upon termination and the
receipts and disbursements of the Trustees for such period, certified by an
independent certified public accountant, (ii) any changes in the Trust Estate
which they have not previously reported, and (iii) any action taken by the
Trustees in the performance of their duties under this Agreement which they have
not previously reported and which, in their opinion, materially affects the
Trust Estate. The Trustees may submit similar reports for such interim periods
during the calendar year as they deem advisable.
5.6 Federal Income Tax Information. As soon as practicable after the close
of the calendar year, the Trustees shall mail to each Beneficiary at the close
of the year, a statement estimating on a unit basis the dates and amounts of all
distributions made by the Trustees, depreciation allowances, if any, and such
other information as is reasonably available to the Trustees which may be
helpful in determining the amount of taxable income from the Trust that such
Beneficiary should include in his federal income tax return for the preceding
year. In addition, after receipt of a request in good faith, or in their
discretion without such a request, the Trustees may furnish to any person who
has been a Beneficiary at any time during the preceding year a statement
containing such further information as is reasonably available to the Trustees
which may be helpful in determining the amount of taxable income which such
person should include in his federal income tax return.
<PAGE>
ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEES
6.1 Limitations on Trustees. The Trustees shall not at any time, on behalf
of the Trust or Beneficiaries, enter into or engage in any trade or business,
and no part of the Trust Estate shall be used or disposed of by the Trustees in
furtherance of any trade or business. Additionally, the Trustees are hereby
further restricted as follows:
(a) The Trustees shall be restricted to the holding and collection of the
assets in the Trust Estate and the payment and distribution thereof
for the purposes set forth in this Agreement and to the conservation
and protection of the Trust estate and the administration thereof in
accordance with the provisions of this Agreement.
(b) In no event shall the Trustees receive any property, make any
distribution, satisfy or discharge any claims, expenses, charges,
liabilities and obligations or otherwise take any action which is
inconsistent with a complete liquidation of the Corporation as that
term is used and interpreted by Sections 346, 336 and 331 of the Code,
regulations promulgated thereunder, and rulings, decisions and
determinations of the Internal Revenue Service and courts of competent
jurisdiction or any action which would jeopardize the status of the
Trust as a "liquidating trust" for Federal income tax purposes within
the meaning of Treasury Regulation Section 301.7701-4. This limitation
shall apply irrespective of whether the conduct of any such trade or
business is deemed by the Trustees to be necessary or proper for the
conservation and protection of the Trust Estate.
(c) The Trustees shall not retain cash or non-cash assets except as may be
reasonably necessary to satisfy expected liabilities of the Trust.
(d) The Trustees shall not receive 80 percent or more of the capital stock
of an unlisted company or any general or limited partnership
interests.
<PAGE>
6.2 Specific Powers of Trustees. Subject to the provisions of Section 6.1,
the Trustees shall have the following specific powers in addition to any powers
conferred upon them by any other Section or provision of this Agreement or any
statutory laws of the State of Indiana, provided, however, that the enumeration
of the following powers shall not be considered in any way to limit or control
the power of the Trustees to act as specifically authorized by any other Section
or provision of this Agreement and to act in such a manner as the Trustees may
deem necessary or appropriate to conserve and protect the Trust Estate or to
confer on the Beneficiaries the benefits intended to be conferred upon them by
this Agreement:
(a) To perform any and all acts necessary or desirable to carry out the
purpose of the Trust, including, but not limited to, any and all acts
necessary or desirable to conserve, maintain and manage the assets in
the Trust Estate pending their sale or liquidation, and to engage
counsel and to sue for and defend the Trust and settle or compromise
claims in favor of or against the assets of the Trust Estate;
(b) To retain sufficient cash, including if necessary a portion of the
cash proceeds realized from the sale of the assets in the Trust
Estate, in one or more commercial and/or saving accounts or
temporarily to invest and reinvest such cash in temporary investments
such as short-term certificates of deposit, provided that such
deposits are deposited in a bank or savings institution which is
federally insured, or Treasury bills, solely to meet the Trustees'
reasonable and good faith estimate of claims and unascertained or
contingent liabilities or contingent expenses (other than claims of
Shareholders with respect to their Shares), which would have been
payable by the Corporation, had it not dissolved, and have not been
adequately provided for by the Reserve Fund or an assumption by a
subsidiary of the Corporation, and to meet any and all expenses
reasonably expected to be incurred in determining or contesting such
claims, but not to otherwise invest or reinvest any such proceeds;
(c) To make withdrawals from such accounts or deposits to pay such claims
and expenses upon receipt of evidence reasonably satisfactory to them
as to the validity thereof; (d) To determine which assets in the Trust
should be sold and which assets in the Trust should be distributed in
kind to the Beneficiaries;
(e) To distribute to the Beneficiaries in accordance with section 5.3, at
such times as the Trustees deem appropriate, assets not required to be
retained to meet claims or expenses assumed pursuant to section 2.3
hereof;
(f) To distribute to the Beneficiaries, at such times as the Trustee deems
appropriate, the net cash proceeds from the sale of the assets in the
Trust Estate or income from investments (to the extent not required to
be set aside to meet claims and related expenses), and to make
distributions to the Beneficiaries from time to time and upon
termination of the Trust of assets not required to be retained to meet
claims or expenses;
<PAGE>
(g) To maintain adequate records with respect to Trust activities;
(h) To deposit distributed assets as provided by applicable law for any
Beneficiary who cannot be located;
(i) To sell, exchange or otherwise dispose of any property at any time
held or acquired hereunder at public or private sale, for cash or on
terms, without the necessity of court approval or advertisement;
(j) To register any stock, bond or other security in the name of a
nominee, with or without disclosure of any fiduciary relationship, and
to convey title to any real property to a nominee and to hold title to
real property in the name of a nominee, with or without disclosure of
any fiduciary relationship; but accurate records shall be maintained
showing that such security or real property is a Trust asset;
(k) To vote any securities held by the Trust;
(l) To rescind or modify any contract affecting the Trust;
(m) To borrow money in such amounts as the Trustees deem advisable for
Trust purposes;
(n) To employ agents, auditors, attorneys, brokers and investment
counselors and to pay them reasonable compensation;
(o) To select an annual accounting period, to charge any expense, tax,
repair or replacement either to income or principal, or apportion the
same between income and principal, to apportion the sales price of any
asset between income and principal, to determine in its sole
discretion whether to amortize any premium or accumulate any discount
on obligations purchased or sold, and to provide or fail to provide a
reasonable reserve against depreciation or obsolescence for any asset
which at any time is a part of the Trust Estate; and
(p) To serve without making and filing inventory and appraisement, without
filing any annual or other returns or reports to any court, and
without giving bond; but the Trustee shall furnish after the end of
the calendar year with reasonable promptness an annual report
including a statement of receipts and disbursements to the
Beneficiaries, and to render an account to each of the Beneficiaries
at the time of the termination of the Trust.
<PAGE>
ARTICLE VII
CONCERNING THE TRUSTEES,
BENEFICIARIES, EMPLOYEES AND AGENTS
7.1 Generally. The Trustees accept and undertake to discharge the trusts
created by this Agreement, upon the terms and conditions hereof. The Trustees
shall exercise such of the rights and powers vested in them by this Agreement,
and use the same degree of care and skill in their exercise as a prudent man
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Agreement shall be construed to relieve the Trustees from
liability for their own grossly negligent action, their own grossly negligent
failure to act, or their own willful misconduct, except that:
(a) No Trustee shall be responsible for the acts or omissions of any other
Trustee if done or omitted without his knowledge or consent unless it
shall be proved that such Trustee was negligent in ascertaining the
pertinent facts, and no successor Trustee shall be in any way
responsible for the acts or omissions of any Trustees in office prior
to the date on which he becomes a Trustee.
(b) No Trustee shall be liable except for the performance of such duties
and obligations as are specifically set forth in this Agreement and no
implied covenants or obligations shall be read into this Agreement
against the Trustees.
(c) In the absence of bad faith on the part of the Trustees, the Trustees
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Trustees and conforming to the
requirements of this Agreement; but in the case of any such
certificates or opinions which are specifically required to be
furnished to the Trustees by any provision hereof, the Trustees shall
be under a duty to examine the same to determine whether or not they
conform to the requirements of this Agreement.
(d) No Trustee shall be liable for any error or judgment made in good
faith.
(e) No Trustee shall be liable with respect to any action taken or omitted
to be taken by him in good faith in accordance with the direction of
Beneficiaries having an aggregate Beneficial Interest of more than 50%
relating to the time, method, and place of conducting any proceeding
for any remedy available to the Trustees, or exercising any trust or
power conferred upon the Trustees under this Agreement.
<PAGE>
7.2 Reliance by Trustees. Except as otherwise provided in Section 7.1:
(a) The Trustees may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, or other paper or document believed
by them to be genuine and to have been signed or presented by the
proper party or parties.
(b) The Trustees may consult with legal counsel to be selected by them,
including firms of which a Trustee may be a member, and the advice or
opinion of such counsel shall be full and complete personal protection
to all Trustees, employees and agents of the Trust in respect of any
action taken or suffered by them in good faith and in reliance on, or
in accordance with, such advice or opinion.
(c) Persons dealing with Trustees shall look only to the Trust Estate to
satisfy any liability incurred by the Trustees to such person in
carrying out the terms of this Trust, and the Trustees shall have no
personal or individual obligation to satisfy any such liability.
(d) As far as practicable, the Trustees shall cause any written instrument
creating an obligation of the Trust to include a reference to this
Agreement of Trust to provide that neither the Beneficiaries, the
Trustees nor their agents shall be liable thereunder and that the
other parties to such instrument shall look solely to the Trust Estate
for the payment of any claim thereunder or the performance thereof;
provided, however, that the omission of such provision from any such
instrument shall not render the Beneficiaries, Trustees, or their
agents liable nor shall the Trustees be liable to anyone for such
omission.
7.3 Liability to Third Persons. No beneficiary shall be subject to any
personal liability whatsoever, in tort, contract or otherwise, to any person in
connection with the Trust Estate or the affairs of this Trust; and no Trustee,
employee or agent of this trust shall be subject to any personal liability
whatsoever, in tort, contract or otherwise, to any person in connection with the
Trust Estate of the affairs of this Trust, except for his own willful
misconduct, knowingly and intentionally committed in bad faith; and all such
other Persons shall look solely to the Trust Estate for satisfaction of claims
of any nature arising in connection with the affairs of this Trust. The
Trustees, in their discretion, shall be entitled to maintain insurance for the
protection of the Trust Estate, its Beneficiaries, Trustees, employees and
agents in such amount as the Trustee shall deem adequate to cover all
foreseeable liability to the extent available at reasonable rates.
<PAGE>
7.4 Recitals. Any written instrument creating an obligation of this Trust
shall be conclusively taken to have been executed or done by Trustee, employee
or agent of this Trust only in his capacity as Trustee under this Agreement or
in his capacity as employee or agent of the Trust. Any written instrument
creating an obligation of the Trust shall refer to this Agreement and contain a
recital to the effect that obligations thereunder are not personally binding
upon, nor shall resort to be had to the private property of, any of the
Trustees, Beneficiaries, employees or agents of the Trust, but the Trust Estate
or a specific portion thereof only shall be bound, but the omission of such
recital shall not operate to impose personal liability on any of the Trustee,
Beneficiaries, employees or agents of the Trust.
7.5 Indemnification. Each Trustee, employee and agent shall be indemnified
out of the Trust Estate against all liabilities and expenses, including amounts
paid in satisfaction of judgments, in compromise or as fines and penalties, and
counsel fees, reasonably incurred by him in connection with the defense or
disposition of any action, suit or other proceeding by the Trust or any other
person, whether civil or criminal, in which he may be involved or with which he
may be threatened, while in office or thereafter by reason of his being or
having been such a Trustee, employee or agent, provided that he shall not be
entitled to have such indemnification in respect of any matter as to which he
shall have been adjudicated to have acted in bad faith or with willful
misfeasance, gross negligence, or in reckless disregard of his duties, provided
that, as to any matter disposed of by a compromise payment by such trustee,
employee or agent, pursuant to a consent decree or otherwise, no indemnification
either for said payment or for any other expenses shall be provided unless the
Trust shall have received a written opinion from independent counsel approved by
the Trustees to the effect that if the foregoing matters had been adjudicated,
such Trustee, employee or agent would not have been found to have acted in bad
faith or with willful misfeasance, gross negligence, or in reckless disregard of
his duties. The rights accruing to any Trustee, employee or agent under these
provisions shall not exclude any other right to which he may be lawfully
entitled; provided, however, that no Trustee, employee or agent may satisfy any
right of indemnity or reimbursement granted herein or to which he may be
otherwise entitled except out of the Trust Estate, and no Beneficiary shall be
personally liable to any person with respect to any claim for indemnity or
reimbursement or otherwise. The Trustees may make advance payments in connection
with indemnification under this Section, provided that the indemnified Trustee,
employee or agent shall have given a written undertaking to repay any amount
advanced to him and to reimburse the Trust in the event it is subsequently
determined that he is not entitled to such indemnification. The Trustees may
purchase such insurance as they determine, in the exercise of their discretion,
adequately insures that each of the Trustees, employees and agents of the Trust
shall be indemnified against any such loss, liability or damage pursuant to this
Section. The rights accruing to any person by reason of the foregoing shall not
be deemed to exclude any other right to which he may legally be entitled nor
shall anything else contained herein restrict the right of the Trustees to
indemnify or reimburse such person in any proper case even though not
specifically provided for herein, nor shall anything contained herein restrict
the right of any such person to contribution under applicable law.
<PAGE>
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
8.1 Action by Trustee. All action required or permitted to be taken by the
Trustees shall require the approval of each Trustee.
8.2 Reliance on Statement by Trustees. Any person dealing with the Trustees
shall be fully protected in relying upon the Trustees' certificate signed by any
one or more of the Trustees that they have authority to take any action under
this Trust. Any person dealing with the Trustees shall be fully protected in
relying upon the Trustees' certificate setting forth the facts concerning the
calling of any meeting of Beneficiaries, the giving of notice thereof, and the
action taken at such meeting, including the aggregate Beneficial Interest of
Beneficiaries taking such action.
ARTICLE IX
COMPENSATION OF TRUSTEES
9.1 Amount of Compensation. In lieu of commissions or other
compensation fixed by law for trustees, the Trustees shall receive as
compensation for services hereunder $100 per hour spent in the performance of
the Trustees duties hereunder.
9.2 Expenses. Each Trustee shall be reimbursed from the Trust Estate
for all expenses reasonably incurred by him in the performance of his duties in
accordance with this Agreement.
9.3 Reporting of Compensation Due and Expenses. Each Trustee shall be
responsible for providing regular invoices to the Trust for his services
and expenses hereunder.
<PAGE>
ARTICLE X
TRUSTEES AND SUCCESSOR TRUSTEES
10.1 Number of Trustees. Subject to the provisions of Section 10.3 relating
to the period ending the appointment of a successor Trustee, there shall always
be at least three Trustees of this Trust, each of whom shall be a citizen and
resident of, or a corporation which is incorporated under the laws of, a state
of the United States and, if a corporation, it shall be authorized to act as a
corporate fiduciary under the laws of the State of Indiana.
10.2 Resignation and Removal. Any Trustee may resign and be discharged from
the trusts hereby created by giving written notice thereof to the remaining
Trustee or Trustees and by mailing such notice to the Beneficiaries at their
respective addresses as they appear in the records of the Trustees in the event
that there are no remaining Trustees. Such resignation shall become effective on
the day specified in such notice or upon the appointment of such Trustee's
successor and such successor's acceptance of such appointment, whichever is
earlier. Any Trustee may be removed at any time, with or without cause, by
Beneficiaries having an aggregate Beneficial Interest of at least two-thirds of
the total Beneficial Interest.
10.3 Appointment of Successor. Should at any time a Trustee resign or be
removed, or die or become mentally incompetent (as determined by a majority of
the remaining Trustees in their sole discretion) or bankrupt or insolvent, a
vacancy shall be deemed to exist and a successor shall be appointed by the
remaining Trustees. If such a vacancy is not filled by the remaining Trustees or
Trustee within 30 days, the Beneficiaries may, pursuant to Article XII hereof,
call a meeting to appoint a successor Trustee by Beneficiaries owning a majority
of the Beneficial Interests represented at the meeting. Pending the appointment
of a successor Trustee, the remaining Trustees then serving may take any action
in the manner set forth in Section 8.1
10.4 Acceptance of Appointment by a Successor Trustee. Any successor
Trustee appointed shall execute an instrument accepting such appointment
hereunder and shall deliver one counterpart thereof to each of the other
Trustees and, in case of a resignation, to the retiring Trustee. Thereupon, such
successor Trustee shall, without any further act, become vested with all the
estates, properties, rights, powers, trusts and duties of predecessor in the
Trust hereunder with like effect as if originally named therein; but the
retiring Trustee shall nevertheless, when requested in writing by the successor
Trustee or by the remaining Trustees, execute an instrument or instruments
conveying and transferring to such successor Trustee upon the trust herein
expressed, all the estates, properties, rights, powers and trusts of such
retiring Trustee, and shall duly assign transfer and deliver to such successor
Trustee all property and money held by him hereunder.
10.5 Bonds. Unless required by the Board of Directors of the
Corporation prior to the Effective Date, or unless a bond is required by law, no
bond shall be required of any original or successor Trustee hereunder. If a bond
is required by law, no surety or security with respect to such bond shall be
required unless required by law and such requirement cannot be waived by or with
approval of the Beneficiaries or unless required by the Board of Directors of
the Corporation. If a bond is required by the Board of Directors of the
Corporation or by a majority vote of the Trustees, the Board of Directors of the
Corporation or the Trustees, as the case may be, shall determine whether, and to
what extent, a surety or security with respect to such bond shall be required.
<PAGE>
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.1 Limitation on Suits by Beneficiaries. No Beneficiary shall have any
right by virtue of any provisions of this Agreement to institute any action or
proceeding at law or in equity against any party other than the Trustees upon or
under or with respect to the Trust Estate or the agreements relating to or
forming part of the Trust Estate, and the Beneficiaries do hereby waive any such
right, unless Beneficiaries having an aggregate Beneficial Interest of 25% shall
have made written request upon the Trustees to institute such action or
proceeding in their own names as Trustees hereunder and shall have offered to
the Trustees reasonable indemnity against the costs and expenses to be incurred
therein or thereby, and the Trustees for 30 days after their receipt of such
notice, request, and offer of indemnity shall have failed to institute any such
action or proceeding.
11.2 Requirements of Undertaking. The Trustees may request any court to
require, and any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
Trustees for any action taken or omitted by them as Trustees, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit, and
such court may in its discretion assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by any such party
litigant, provided that the provisions of this Section shall not apply to any
suit by the Trustee.
ARTICLE XII
MEETING OF BENEFICIARIES
12.1 Purpose of Meetings. A meeting of the Beneficiaries may be called at
any time and from time to time pursuant to the provisions of this article for
the purposes of taking any action which the terms of this Agreement permit
Beneficiaries having a specified aggregate Beneficial Interest to take either
acting alone or with the Trustees.
12.2 Meeting Called by Trustees. The Trustees may at any time call a
meeting of the Beneficiaries to be held at such time and such place within or
outside of the State of Indiana, as the Trustees shall determine. Written notice
of every meeting of the Beneficiaries shall be given by the Trustees (except as
provided in Section 12.3), which written notice will set forth the time and
place of such meeting and in general terms the action proposed to be taken at
such meeting, and shall be mailed not more than 60 days before the date of such
meeting. The notice shall be directed to the Beneficiaries at their respective
addresses as they appear in the records of the Trust.
12.3 Meeting Called on Request of Beneficiaries. Within 30 days after
written request to the Trustees by Beneficiaries having an aggregate Beneficial
Interest of 25% to call a meeting of all the Beneficiaries, which written
request shall specify in reasonable detail the action proposed to be taken, the
Trustees shall proceed under the provisions of Section 12.2 to call a meeting of
the Beneficiaries. If the Trustees fail to call such a meeting within such
30-day period then such meeting may be called by Beneficiaries having an
aggregate Beneficial Interest of 25% or their designated representative.
<PAGE>
12.4 Persons Entitled to Vote at Meeting of Beneficiaries. All
Beneficiaries appearing at any meeting of the Beneficiaries shall be entitled to
vote in person or by proxy. Each Beneficiary shall be entitled to vote on such
propositions presented to the Beneficiaries based upon such Beneficiary's
Beneficial Interest.
12.5 Quorum. At any meeting of Beneficiaries, the presence of
Beneficiaries, in person or by proxy, having an aggregate Beneficial Interest
sufficient to take action on any matter for the transaction of which such
meeting was called shall be necessary to constitute a quorum; but if less than a
quorum be present, Beneficiaries having an aggregate Beneficial Interest of more
than 50% of the aggregate Beneficial Interest of all Beneficiaries represented
at the meeting may adjourn such meeting with the same effect and for all intents
and purposes as though a quorum had been present. Any meeting of Beneficiaries
may be adjourned from time to time and a meeting may be held at such adjourned
time and place without further notice.
12.6 Conduct of Meetings. The Trustees shall appoint the Chairman and the
Secretary of the meeting. The vote upon any resolution submitted to any meeting
of Beneficiaries shall be by written ballot. Two Inspectors of Votes, appointed
by the Chairman of the meeting, shall count all votes cast at the meeting for or
against any resolution and shall make and file with the Secretary of the meeting
their verified written report.
12.7 Record of Meeting. A record of the proceedings of each meeting of
Beneficiaries shall be prepared by the Secretary of the meeting. The record
shall be signed and verified by the Secretary of the meeting and shall be
delivered to the Trustees to be preserved by them. Any record so signed and
verified shall be conclusive evidence of all the matters therein stated.
<PAGE>
ARTICLE XIII
AMENDMENTS
13.1 Consent of Beneficiaries. At the discretion or with the consent of
Beneficiaries having an aggregate Beneficial Interest of at least two thirds of
the total Beneficial Interest, the Trustees shall promptly make and execute a
declaration amending this Agreement for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or amendments thereto, provided, however, that no such amendment shall permit
the Trustees hereunder to engage in any activity prohibited by Section 6.1 or
affect the Beneficiaries' rights to receive their pro rata shares of the Trust
Estate at the time of distribution.
13.2 Notice and Effect to Amendment. Promptly after the execution by the
Trustees of any such declaration of amendment, the Trustees shall give notice of
the substance of such amendment to the Beneficiaries or, in lieu thereof, the
Trustees may send a copy of the amendment to each Beneficiary. Upon the
execution of any such declaration of amendment by the Trustees, this Agreement
shall be deemed to be modified and amended in accordance therewith and the
respective rights, limitations of rights, obligations, duties, and immunities of
the Trustees and the Beneficiaries under this Agreement shall thereafter be
determined, exercised and enforced hereunder subject in all respects to such
modification and amendments, and all the terms and conditions of any such
amendment shall be thereby deemed to be part of the terms and conditions of this
Agreement for any and all purposes.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 Filing Documents. This Agreement shall be filed or recorded in such
other office or offices as the Trustees may determine to be necessary or
desirable. A copy of this Agreement and all amendments thereof shall be on file
in the office of each Trustee and shall be available at all times during regular
business hours for inspection by any Beneficiary or his duly authorized
representative. The Trustees shall file or record any amendment of this
Agreement in the same place where the original Agreement is filed or recorded.
The Trustees shall file or record any instrument which relates to any change in
the office of Trustees in the same places where the original Agreement is filed
or recorded.
14.2 Intention of Parties to Establish Trust. this Agreement is not
intended to create and shall not be interpreted as creating a corporation,
association, partnership, or joint venture of any kind for purposes of federal
income taxation or for any other purpose. Except as otherwise contemplated by
Section 3.3 hereof, this Agreement is intended to create a trust without
transferable shares and the trust created hereunder shall be governed and
construed in all respects as a trust.
<PAGE>
14.3 Laws as to Construction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Indiana, the Trustees, and
the Beneficiaries (by their vote with respect to the Plan of Complete
Liquidation and Dissolution and/or their acceptance of any distributions made to
them pursuant to this Agreement) consent and agree that this Agreement shall be
governed by and construed in accordance with such laws.
14.4 Severability. In the event any provision of this Agreement or the
application thereof to any Person or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
provision of this Agreement shall be valid and enforced to the fullest extent
permitted by law.
14.5 Notices. Any notice or other communication by the Trustees to any
Beneficiary shall be deemed to have been sufficiently given, for all purposes,
if given by being deposited, postage prepaid, in a post office or letter box
addressed to such person at his address as shown in the records of the Trustees.
14.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, this ____day of ________, 1996.
CAPITAL INDUSTRIES, INC.
- ------------------------------
By: O.U. Mutz, Chairman
TRUSTEES:
- ------------------------------
- ------------------------------
- ------------------------------
<PAGE>
CAPITAL INDUSTRIES, INC.
PROXY CARD FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD March 6, 1996
The undersigned appoints O.U. Mutz and Paul A. Shively, or either of them, with
full power of substitution, as proxies to vote all shares of COMMON STOCK held
by the undersigned at the Annual Meeting of Shareholders of Capital Industries,
Inc. (the "Company") to be held March 6, 1996, at 10:00 a.m., Indianapolis time,
and at any adjournment thereof, on the matters outlined on the reverse.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED BY THE
UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN, THE SHARES WILL BE VOTED
"FOR" THE ELECTION OF THE NOMINEES AND THE MATTERS LISTED ON THE OTHER SIDE OF
THIS PROXY CARD. IF ANY DIRECTOR NOMINEE OR TRUSTEE NOMINEE SHOULD BE UNABLE TO
SERVE, THE SHARES WILL BE VOTED FOR A SUBSTITUTE NOMINEE SELECTED BY THE BOARD
OF DIRECTORS. IF ANY OTHER BUSINESS COMES BEFORE THE MEETING, THE SHARES
REPRESENTED BY THIS PROXY WILL BE VOTED IN FAVOR OF THE ACTION RECOMMENDED BY
THE BOARD OF DIRECTORS OF THE COMPANY AND, IN THE ABSENCE OF A RECOMMENDATION,
IN ACCORDANCE WITH THE BEST JUDGMENT OF THE PROXY HOLDERS.
IMPORTANT - This Proxy must be signed and dated on the reverse side.
<PAGE>
1. ELECTION OF DIRECTORS
[_] FOR all seven nominees listed below (except as marked to the
contrary below)
[_] WITHHOLDING AUTHORITY to vote for all nominees listed below
O.U. Mutz, Paul A. Shively, John B. Gray, Jr., Charles E. Lanham, John
D. Peterson, Robert H. Reynolds and J. Fred Risk. (INSTRUCTION: To
withhold authority to vote for any nominee, write that nominee's name
on the line below.)
------------------------------------------------------
2. APPROVAL OF THE DISSOLUTION OF THE COMPANY AND THE PLAN
FOR DISSOLUTION AND COMPLETE LIQUIDATION (THE "PLAN")
[_] FOR approval of the Plan
[_] AGAINST approval of the Plan
[_] ABSTAIN
3. ELECTION OF THE TRUSTEE NOMINEES OF THE CAPITAL INDUSTRIES
LIQUIDATING TRUST
[_] FOR
[_] AGAINST
[_] ABSTAIN
4. In their discretion, upon such other business (none of which is
known to Capital Industries, Inc. as of the mailing date of this
proxy) as may properly come before the meeting.
THE UNDERSIGNED ACKNOWLEDGES RECEIPT FROM THE COMPANY, PRIOR TO THE EXECUTION OF
THIS PROXY, OF NOTICE OF THE MEETING, A PROXY STATEMENT AND A FORM 10-K OF THE
COMPANY(SERVING AS AN ANNUAL REPORT).
PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY PROMPTLY IN THE
ENCLOSED ENVELOPE.
Sginature ________________________ _________________________ Dated_____, 1996
NOTE: Please sign exactly and as fully as shown below. When shares are held by
two or more persons, all of them should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
