-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, bBxgOiWBOEPO4euTxFJ8IjMYERF+AmDOIKh5YIRDc8KsDD4CHNgM1tWoC4ooCMOF QKMyx9oIyKCCnhmomOMTyw== 0000868635-94-000001.txt : 19940407 0000868635-94-000001.hdr.sgml : 19940407 ACCESSION NUMBER: 0000868635-94-000001 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 12 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940331 DATE AS OF CHANGE: 19940405 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ROBERTSON CECO CORP CENTRAL INDEX KEY: 0000868635 STANDARD INDUSTRIAL CLASSIFICATION: 3442 IRS NUMBER: 363479146 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: 34 SEC FILE NUMBER: 001-10659 FILM NUMBER: 94519977 BUSINESS ADDRESS: STREET 1: 222 BERKELEY STREET CITY: BOSTON STATE: MA ZIP: 02116 BUSINESS PHONE: 617-424-55 MAIL ADDRESS: STREET 1: 222 BERKELEY STREET STREET 2: FLOOR 20 CITY: BOSTON STATE: MA ZIP: 02116 FORMER COMPANY: FORMER CONFORMED NAME: CECO CORP DATE OF NAME CHANGE: 19901108 10-K 1 10-K MAIN DOCUMENT SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K Annual report ("Report") pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 for the fiscal year ended December 31, 1993 Commission file number 1-10659 ROBERTSON-CECO CORPORATION - - --------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Delaware 36-3479146 - - ------------------------------- ------------------------------------ (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 222 Berkeley Street, Boston, Massachusetts 02116 - - ---------------------------------------------------- ------------ (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (617) 424-5500 -------------- Securities registered pursuant to Section 12(b) of the Act: NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------------------- --------------------- Common Stock, par value, $0.01 per share New York Stock Exchange - - ---------------------------------------- ----------------------- Securities registered pursuant to Section 12(g) of the Act: None - - --------------------------------------------------------------------- (Title of Class) The aggregate market value of the voting stock held by non-affiliates of the Registrant was $20,157,100 based upon the closing sales price of Registrant's common stock on the New York Stock Exchange on March 14, 1994. (The value of shares of common stock held by executive officers and directors of the Registrant and their affiliates has been excluded.) 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 ----- ----- Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K. [ ] As of March 14, 1994, 16,287,586 shares of common stock of the Registrant were outstanding. Portions of the Registrant's definitive proxy statement for Registrant's 1993 annual meeting of stockholders to be filed with the Commission not later than 120 days after the end of Registrant's fiscal year covered by this report ("Report") are incorporated by reference into Part III. -1- ROBERTSON-CECO CORPORATION Table of Contents PART I Page ----------------------------------------------------------- Item 1. Business . . . . . . 3 Item 2. Properties . . . . . . . . . . . . . . . . . 8 Item 3. Legal Proceedings. . . . . . . . . . . . . . 9 Item 4. Submission of Matters to a Vote of Security Holders. . . 10 Item 4.1 Executive Officers of the Registrant . . . . 11 PART II ----------------------------------------------------------- Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters . . . . . . . . . . . . . 13 Item 6. Selected Financial Data. . . . . . . . . . . 14 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . . . . . . . . . . 16 Item 8. Financial Statements and Supplementary Data. 26 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. . . . 60 PART III ----------------------------------------------------------- Item 10. Directors and Executive Officers of the Registrant . . . 61 Item 11. Executive Compensation . . . . . . . . . . . 61 Item 12. Security Ownership of Certain Beneficial Owners and Management. . . . . . . . . . . . . . . . 61 Item 13. Certain Relationships and Related Transactions . . . . . 61 PART IV ----------------------------------------------------------- ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K . . . . . . . . . . . . . 62 Signatures. . . . . . . . . . . . . . . . . . . 64 -2- ITEM 1. BUSINESS -------- THE COMPANY Robertson-Ceco Corporation (the "Company") was formed on November 8, 1990 by the merger (the "Combination") of H. H. Robertson ("Robertson") and Ceco Industries, Inc. ("Ceco Industries") with and into The Ceco Corporation ("Ceco"), a wholly-owned subsidiary of Ceco Industries, with Ceco continuing as the surviving corporation under the name Robertson-Ceco Corporation. The Combination was accounted for using the purchase method, with Robertson deemed the acquiror. Accordingly, the assets, liabilities and results of operations of Ceco Industries are included in the Company's consolidated financial statements only for periods subsequent to November 1, 1990. The Company and its subsidiaries operate in three segments: (1) the Metal Buildings Group, which is engaged in the manufacture, sale and installation of pre-engineered metal buildings for commercial and industrial users; (2) the Building Products Group, which provides construction services and at certain locations is engaged in the manufacture, sale and installation of non- residential building components, including wall, roof and floor systems; and (3) the Concrete Construction Group, which is engaged in the provision of subcontracting services for forming poured-in-place, reinforced concrete buildings. Most of the products and services which the Company manufactures and sells are used in the construction of buildings, including commercial and industrial buildings, schools, offices, hospitals and multi-family dwellings. The Company considers all aspects of its business to be highly competitive. The Company's business is both seasonal and cyclical in nature and, as a consequence, has certain working capital needs which are characteristic of the industry in which the Company conducts its business. At a time of increased construction activity, the Company has a need for increased working capital which traditionally has been funded principally by short-term bank borrowings and letters of credit. When construction activity declines on a temporary basis, the Company tends to increase its liquidity position and reduce its accounts receivable, inventories and accounts payable. As a result of the significant, negative impact on operations and liquidity caused by the severe recession in the worldwide non-residential construction markets, and the unlikelihood that a turnaround in the economy would occur in the near future, during the third quarter of 1991, the Company began to develop a restructuring plan designed to improve its operational and financial performance. In connection with this restructuring plan, during the first quarter of 1992, the Company sold (a) certain of its domestic building products and construction businesses, including the operations of the Ceco Door Products, the Ceco Entry Systems and the Ceco/Windsor Door operating units of the Company (collectively, the "Door Business"), acquired as part of the Combination, and the portion of the Company's H. H. Robertson Company (USA) operating unit engaged in the design, fabrication, marketing, sale and erection of industrial and architectural wall, roof and other building products systems (the "X-1 Business") for approximately $135 million, (b) its floor and deck business (the "Floor Business") for $2.4 million and (c) its subsidiary located in South Africa (the "South African Subsidiary") and, together with the X-1 Business and the Floor Business, the "Sold Businesses") for $5.3 million. The Company's 1990 results of operations were reclassified to reflect the Door Business as a discontinued operation. The X-1 Business, the Floor Business and the South African Subsidiary, which were recorded as held for sale at December 31, 1991, represent a portion of a segment and operated as part of the Company's Building Products Group. In November of 1993, the Company sold its subsidiary located in the United Kingdom (the "U.K. Subsidiary") which also operated as part of the Company's Building Products Group. In addition to the sale of the Door Business, the Sold Businesses and the U.K. Subsidiary discussed above, a series of other operational restructuring actions were taken in 1991, 1992 and 1993. Operational restructuring actions which have taken place include downsizing the corporate headquarters, closing -3- excess plants and redistributing manufacturing operations and equipment from closed operations, consolidating and improving capacity and cost effectiveness at remaining plants, closing sales and district offices, relocating certain product lines, reducing work force levels and consolidating certain financial and administrative functions. The Company is continuing to pursue a variety of further operational restructuring options, including further consolidation and redistribution of operations and equipment and withdrawal from unprofitable and nonstrategic businesses through sale or closure. The significant financial restructuring actions which were completed during 1993 include: the completion of the Company's exchange offer for the Company's 15.5% Discount Subordinated Debentures due 2000 for new debt and common stock and the exchange of the Company's outstanding cumulative convertible preferred stock for common stock; replacement of the Company's domestic credit facility; significant reductions in outstanding letters of credit; renegotiation and settlement of certain operating leases in connection with the Company's downsizing activities; retirement of a $4.0 million facility fee note through the issuance of 1,374,292 shares of common stock; and the sale of 3,333,333 newly issued shares of the Company's common stock and the transfer of all assets, claims and rights under a foreign project to an outside investor which is indirectly controlled by a director of the Company for $10.0 million. METAL BUILDINGS The Company owns and operates three pre-engineered metal building companies: Ceco Building Systems, Star Building Systems, and H. H. Robertson Building Systems (Canada). Pre-engineered metal buildings have traditionally accounted for a significant portion of the market for commercial and industrial buildings under 150,000 sq. ft. in size that are built in North America. Historically aimed at the one-story small to medium building market, the use of the product is expanding to large (up to 1 million sq. ft.), more complex, and multi-story (up to 4 floors) buildings. The product provides the customer with a custom designed building at generally a lower cost than conventional construction and is generally faster to job completion from concept. The Company's pre-engineered metal buildings are designed and manufactured at plants in California, Iowa, Mississippi, North Carolina, and in Ontario, Canada. The buildings are sold through builder/dealers located throughout the U.S. and Canada. In addition to sales in North America, in recent years the Company has been selling its buildings to a growing Asian market. Sales to these markets are made both through local unaffiliated dealers and by Company salespersons. The principal materials used in the manufactured buildings are hot and cold rolled steel products that are readily available from many sources. The buildings consist of four components: primary structural steel, secondary structural steel, cladding, and accessories (doors, windows, flashing, etc.). The buildings are erected by the dealer network supplemented by subcontractors and, in certain cases, by Company erection crews. The Company believes it is an important manufacturer of pre-engineered buildings, although it faces competition from other manufacturers. Price and service are the primary competitive features in this market. The Metal Buildings Group accounted for 31%, 47% and 57% of the Company's revenue (before intersegment eliminations) in 1991, 1992 and 1993, respectively. -4- BUILDING PRODUCTS The Building Products Group provides construction services and at certain locations, manufactures products, and provides construction services with respect to, (a) insulated and non-insulated roofing, siding and exterior wall panels; (b) fluted steel roofs and decks and fluted and cellular steel floor and deck and related supplies and accessories; (c) louvers and ventilators; and (d) architectural wall systems. In connection with an agreement pursuant to which the Company sold the Door Business and the X-1 Business, the Company (a) sold its United States building products businesses, other than its architectural wall operations located at its Cupples Products Division ("Cupples") in St. Louis, Missouri, and (b) agreed not to compete in the United States with respect to the building products businesses which were sold. Cupples continues to design, engineer and manufacture architectural wall systems. The principal materials used by the Company in the manufacture of its building products are coiled steel (both galvanized and prepainted), coiled and sheet aluminum, ingot aluminum, glass synthetic resins and metal fastening devices. These materials are readily available from multiple sources. Cupples markets and sells its products both in the United States and throughout the rest of the world. The principal geographic areas in which the Company's other building products are sold are Continental Europe, Australia, Canada, New Zealand and Southeast Asia. The Company's building products compete on a worldwide basis with a number of manufacturers of metal building products which are similar to those fabricated by the Company. Further competition comes from manufacturers using other materials such as concrete, brick, gypsum products, glass and reinforced plastics. Price, service, warranty and product and installation performance each affect competition for the Company's building products. The Building Products Group accounted for 56%, 36% and 26% of the Company's revenues (before intersegment eliminations) in 1991, 1992 and 1993, respectively. CONCRETE CONSTRUCTION The Concrete Construction Group provides a subcontracting service for forming poured-in-place, reinforced concrete buildings. The forms are used to mold the site-case concrete floors, roofs, walls and other miscellaneous parts of buildings, and generally are removed for repeated use on the same structure or on other buildings. After the forms are in place, other parties provide material and labor for reinforcement and concrete. In selected markets, the Company provides additional services which may include material and labor for concrete and reinforcing steel, as well as project management for construction of the entire concrete structural frame or skeleton of a building. The Company's primary market is the non-residential building segment of the U.S. construction market, including commercial, industrial and institutional buildings, as well as water storage and treatment plants, and other similar public programs. The Concrete Construction Group maintains storage facilities for its forming and other equipment at locations throughout the United States. The yards are located regionally to reduce transportation costs in servicing of construction markets located throughout the country. In addition, the Company currently operates two remanufacturing facilities which are equipped to recondition forms, as required for repeated use. Construction services are provided by the Company's own employees or by subcontractors. Although the number of workers employed in this business varies because of the cyclical and seasonal nature of construction activity, the supply of labor is considered to be adequate. Concrete forming services are sold to general building contractors and others through the regional sales offices. At December 31, 1993, there were concrete construction sales offices in 21 cities throughout the continental United States. The Company believes that it is the largest organization performing such services in the United States; however, there are a number of local and regional general building contractors, concrete subcontractors and forming subcontractors offering -5- competitive services, often with lower transportation costs and overhead than the Company. The Company competes with these firms through a regional marketing network, preconstruction services (such as design consulting and project scheduling) and national name-recognition. The Company's experience and volume allow it to maintain cost advantages with respect to certain aspects of the services offered. The Concrete Construction Group accounted for 13%, 17% and 17% of the Company's revenues (before intersegment eliminations) in 1991, 1992 and 1993, respectively. CUSTOMERS The Company serves a wide variety of customers, virtually all of which are in the construction industry, and there is no dependence upon a single customer, group of related customers or a few large customers. INVENTORY AND BACKLOG Virtually all sales of pre-engineered metal buildings and building products are for specific projects, and the Company maintains a minimum inventory of finished products. Shipments of pre-engineered metal buildings and building products are generally made directly from the manufacturing plant to the building sites. Raw materials are largely comprised of steel-related materials which are susceptible to price increases, especially during periods of strong economic expansion. Historically, the Company and the related industries with which it competes have been successful in passing on such price increases to purchasers. Due to the wide availability of the necessary raw materials and the generally short delivery lead times, the Company generally has been able to minimize its risk with respect to price increases in the raw materials used to make its products. To the extent that the Company has quoted a fixed-price sales contract and has not locked in the related cost of the raw materials, the Company is at risk for price increases in such raw materials. An inventory of reusable forms for concrete construction in standard sizes and shapes is maintained at locations throughout the United States. Special sizes and shapes may be required for specific jobs and are scrapped after use. The Company believes that it has an adequate supply of standard forms to meet current and foreseeable demand and that any specialized forms are readily available from multiple sources. For material, backlog is determined primarily based upon receipt of a letter of intent or purchase order from the customer and with respect to erection work, backlog is determined based primarily on receipt of the customer contract or letter of intent. The Company reduces its backlog upon recognition of the related revenue. At December 31, 1993, the backlog of unfilled orders believed to be firm for the Company's ongoing businesses was approximately $151 million. On a comparable basis, adjusted for the sale of the U.K. Subsidiary, which had at December 31, 1992 backlog of approximately $26 million, the order backlog was approximately $143 million at December 31, 1992. Approximately $10 million of the December 31, 1993 backlog is expected to be performed after 1994. FACILITIES During 1993, the Company's facilities for manufacturing pre-engineered metal buildings generally operated on a two-shift work schedule five days each week, while the Company's facilities for manufacturing building products generally operated on a one-shift work schedule five days each week. Should the need to fill additional orders for its products occur, the Company believes it could institute additional working shifts or work days. The majority of the Company's pre-engineered metal buildings and building products are manufactured for -6- specific projects, and its forms for concrete construction are often standard shapes and sizes which can be reused. Quantitative determination of total production capacity and of utilization thereof is therefore not meaningful. The Company believes its existing manufacturing facilities and labor force are adequate to serve the present and reasonably foreseeable future needs of its business. PATENTS The Company owns a number of patents with varying expiration dates extending beyond the year 2000. None of these patents is believed to be a major factor in the competitive position of the Company. The Company has entered into various licensing arrangements relating to the Company's patents, trademarks and 'know-how,' but the revenues received from these arrangements, in the aggregate, are not significant. RESEARCH AND DEVELOPMENT The Company conducts limited research activities for the purpose of developing new products and improvements to, and new applications for, existing products. Research and development expenditures were approximately $2.0 million in 1991, $.7 million in 1992, and $.5 million in 1993. The decline in research and development expenditures is primarily a result of the exclusion of businesses which have been sold. ENVIRONMENTAL CONTROLS The Company's manufacturing activities have generated and continue to generate materials classified as hazardous wastes. The Company devotes considerable resources to compliance with legal and regulatory requirements relating to (a) the use of these materials, (b) the proper disposal of such materials classified as hazardous wastes and (c) the protection of the environment. These requirements include clean-ups at various sites. The Company's policy is to accrue environmental and clean-up related costs of a non-capital nature when it is probable that a liability has been incurred and such liability can be reasonably estimated. Based upon currently available information, including the reports of third parties, management does not believe that the reasonable possible loss in excess of the amounts accrued in the Company's consolidated financial statements would be material. However, no assurance can be given that any future discovery of new facts and the retroactive application of the Company's legal and regulatory requirements to those facts would not be material and would not change the Company's estimate of costs it could be required to pay in any particular situation. EMPLOYEES At December 31, 1993, the Company employed approximately 3,103 persons worldwide and was a party to collective bargaining agreements with various labor unions covering approximately 785 U.S. employees and 119 foreign employees. Work stoppages are generally a possibility in connection with the negotiation of collective bargaining agreements, although the Company believes that its employee relations are generally satisfactory. -7- FOREIGN OPERATIONS As described above, the Company owns subsidiaries or directly conducts operations in several foreign countries. For the year ended December 31, 1993, foreign operations accounted for 25% of the Company's revenues before inter-area eliminations, and at December 31, 1993, foreign operations accounted for 22% of the Company's total assets (before adjustments and eliminations). The Company's foreign investments and businesses result in several risks to the Company's financial condition and results of operations, including potential losses through currency exchange rate fluctuations, expropriation of assets, restrictions upon the repatriation of capital and profits, and foreign governmental regulations discriminating against non-domestic companies. The Company intends to comply with United States laws and Treasury Department and Commerce Department regulations concerning boycotts, which compliance could adversely affect the Company's business in countries which impose boycott requirements. ITEM 2. PROPERTIES ---------- The Company maintains and operates manufacturing plants world-wide to produce the products and materials required by its business activities. The listing below identifies those manufacturing facilities which are currently used in the Company's business and identifies the business segments that use the properties. Facilities not indicated as "leased" are owned in fee by the Company. Substantially all of the Company's domestic manufacturing facilities are pledged as collateral in connection with the Company's domestic credit facility. MANUFACTURING PLANT BUSINESS SEGMENT - - ------------------- ---------------- Monticello, Iowa Metal Buildings Lockeford, California Metal Buildings Mt. Pleasant, Iowa Metal Buildings Rocky Mount, North Carolina Metal Buildings Columbus, Mississippi Metal Buildings Hamilton, Ontario, Canada Metal Buildings St. Louis, Missouri (leased) Building Products Granollers, Spain Building Products Broenderslev, Denmark Building Products Revesby, N.S.W., Australia Building Products Each of the Company's manufacturing plants is an operating facility, designed to produce particular items. The productive capacities of these plants are adequate to serve the Company's business needs at a volume at least equal to that achieved in 1993. -8- ITEM 3. LEGAL PROCEEDINGS ----------------- LAWSUITS Three related lawsuits were filed by or against the Company in 1990 and 1991 and are pending in the Supreme Court of the State of New York (Cupples Product Division of H. H. Robertson Company v. Morgan Guaranty Trust Company of New York, et al; Ace Contracting Company, a Division of Cell-San Construction Company, Inc. v. Morgan Guaranty Trust Company of New York, et al; H. Sand & Co., Inc. v. Morgan Guaranty Trust Company of New York). The lawsuits arise out of the construction of new headquarters for Morgan Guaranty Trust Company of New York ("Morgan") at 60 Wall Street, New York, New York. Cupples acted as a subcontractor for the provision and erection of custom curtainwall for the building. Morgan and Tishman Construction Company of New York ("Tishman"), the general contractors for the project, have claimed that the Company and Federal Insurance Company ("Federal"), as issuer of a performance bond in connection with the Company's work, are liable for $29.9 million in excess completion costs and delay damages due to the Company's alleged failure to perform its obligations under its subcontract. The Company has taken action to enforce a $5.0 million mechanic's lien against the building and seeks to recover more than $10.0 million in costs and damages caused by Tishman's breach of the subcontract with the Company. The Company and Federal believes there are meritorious defenses to those claims against them and are vigorously defending and prosecuting these actions. In February 1994, the Company filed suit in state court in Iowa against Alaska Industrial Development and Export Authority ("AIDEA"), Olympic Pacific Builders, Inc. ("OPB") and Strand Hunt Corp. ("Strand Hunt") and others alleging breach of contract, tortious interference with contractual relations, negligence and misrepresentation, and seeking payment of amounts owed to the Company and other damages in connection with a pre-engineered metal building in Anchorage, Alaska. The Company fabricated the building for OPB, which in turn supplied the building to Strand Hunt, as general contractor for AIDEA. In March 1994, Strand Hunt filed suit in the Superior Court for the State of Alaska against a number of parties, including the Company and its surety. Strand Hunt has alleged against the Company breach of contract, breach of implied warranties, misrepresentation and negligence in connection with the fabrication of the building and seeks damages in excess of $10 million. The Company believes that it is entitled to payment and that it has meritorious defenses against the claims of Strand Hunt. Two separate, but related lawsuits have been filed by or against the Company in connection with a $2.4 million subcontract performed by Cupples for the supply and erection of custom curtainwall on a commercial office building project known as the 3DI Tower in Houston, Texas. On January 29, 1991, Harvey Construction Company ("Harvey"), the general contractor, filed suit in federal court in Houston asserting claims for the owner/developer of the project as well as attempting to enforce a $4.0 million state court judgment against Cupples by virtue of the indemnity provisions in the subcontract (Harvey Construction Co. v. Robertson Ceco Corp.). On January 30, 1991, without knowledge of the action filed by Harvey the previous day, Cupples filed an action in federal court in St. Louis seeking a declaratory judgment that it is not liable under the indemnity provisions or for any of the owner/developer's claims that were assigned to Harvey (Cupples Products Division of Robertson Ceco Corp. v. Harvey Construction Co.). Harvey has filed a counterclaim in the St. Louis action, seeking to enforce the state court judgment as well as the assigned claims. Other than demanding indemnity for the $4.0 million state court judgment, Harvey's counterclaims seek unspecified damages. The Company believes it has meritorious defenses to Harvey's claims against Cupples and is vigorously defending and prosecuting these actions. There are various other proceedings pending against or involving the Company which are ordinary or routine given the nature of the Company's business. While -9- the outcome of the Company's legal proceedings cannot at this time be predicted with certainty, management does not expect that these matters will have a material adverse effect upon the consolidated financial condition or results of operations of the Company. During 1993 and through February 1994, the Company resolved and settled certain litigation relating to matters of alleged employment discrimination and alleged breaches of real estate leases by the Company. These settlements did not have a material adverse effect on the Company's 1993 Consolidated Statement of Operations. ENVIRONMENTAL MATTERS The Company has completed its investigation with respect to the remediation of two owned disposal sites formerly used by Robertson to dispose of plant wastes from the Company's former Ambridge, Pennsylvania, manufacturing facility. The Company has submitted its reports of findings to the Pennsylvania Department of Environmental Resources ("PDER") and it is now in the process of submitting work plans for remedial activities for both sites to the PDER for its consideration and approval. The Company also is in the process of negotiating a Consent Order and Agreement to memorialize the agreed upon approach to remediate these sites. In another matter, the Company has submitted a proposal to the Illinois Environmental Protection Agency ("IEPA) regarding an appropriate modified closure plan for a hazardous waste storage facility for electric arc furnace dust at Ceco's former Lemont, Illinois, steel mill facility. Environmental closure at this site is substantially complete. A closure unit has been constructed and a post-closure groundwater monitoring well system has been installed and is currently in operation. The Company has entered into discussions with the IEPA regarding what further conditions they will require to secure final closure. The Company has recorded reserves in amounts which it considers to be adequate to cover the probable and reasonably estimable costs which may be incurred in relation to these matters. However, no guarantee can be made that the relevant governmental authorities will accept the remediation plans or actions proposed by the Company or the position taken by the Company as to its legal responsibilities and therefore that more costly remediation efforts will not be required. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- During the fourth quarter of the fiscal year covered by this report no matter was submitted to a vote of security holders. -10- ITEM 4.1. EXECUTIVE OFFICERS OF THE REGISTRANT ------------------------------------ The following table sets forth certain information regarding the executive officers of the Company as of March 14, 1994.
Name Age Position ---- --- --------- Andrew G. C. Sage, II 68 Chairman Michael E. Heisley 57 Chief Executive Officer, Vice Chairman Denis N. Maiorani 45 President John T. Baker 34 Vice President, Financial Planning Stephen P. Bishop 37 Vice President and Treasurer Douglas P. Gernert 36 Corporate Senior Vice President and President, Cupples Products George S. Pultz 42 Vice President, General Counsel and Secretary Gerardo Rodriguez 54 Corporate Vice President, and President, Building Products- Europe Ronald W. Schuster 43 Corporate Vice President, and President, Ceco Concrete Construction John C. Sills 38 Vice President and Controller
Mr. Andrew G. C. Sage, II is Chairman (since July 1993) of the Company. Mr. Sage also served as President (from November 1992 until July 1993) and Chief Executive Officer (from November 1992 until December 1993) of the Company. Mr. Sage is also President of Sage Capital Corporation ("Sage Capital"), a general business and financial management corporation specializing in business restructuring and problem solving. Prior to the formation of Sage Capital in 1989, Mr. Sage was a consultant to and a director of RJR Nabisco, Heico, Inc., Pettibone Corporation and USIF Real Estate. Mr. Sage is a director of Computervision Corporation, Fluid Conditioning Products, Heico, Inc. and Pettibone Corporation. Mr. Heisley is Chief Executive Officer and Vice Chairman (since December 1993) of the Company. Mr. Heisley is Chairman of the following companies: Heico, Inc. (since 1978), a diversified manufacturing company; Pettibone Corporation (since 1988), a manufacturer of heavy equipment; Davis Wire Corporation (since 1991), a manufacturer of steel wire; Steelastic Company (since 1991), a manufacturer of tire making equipment; Tom's Foods, Inc. (since 1993), a manufacturer and distributor of snack foods; Newbury Industries, Inc. (since 1993), a manufacturer of injection molding equipment for the plastics industry, and Nutri/System, Inc. (since 1993), a national weight maintenance company. He is also a director of Envirodyne, Inc. (since 1994). Mr. Maiorani is President (since July 1993) of the Company. Prior to being elected President, Mr. Maiorani served in various senior management positions with the Company including Executive Vice President and Chief Administrative Officer (from November 1992 until July 1993), Chief Financial Officer (from March 1992 until July 1993) and Senior Vice President (from March 1992 until November 1992). Prior to joining the Company, Mr. Maiorani was Senior Vice President and Chief Financial Officer (1988-1992) of M/A-COM, Inc., a manufacturer of electronic semi-conductors, components and subsystems. Mr. Baker is Vice President of Financial Planning (since March 1993) of the Company. Previously, Mr. Baker was Director of Financial Planning (from April -11- 1992 until March 1993) of the Company. From 1990 to 1992, Mr. Baker was Vice President of Sixx Holdings, Incorporated, an investment corporation. From 1988 to 1990, Mr. Baker was Vice President of The Thompson Company, an investment company. Mr. Bishop is Vice President and Treasurer (since August 1992) of the Company. Prior to that date, Mr. Bishop was Assistant Treasurer (1983-1992) of General Cinema Corporation (now known as Harcourt General). Mr. Gernert is Corporate Senior Vice President (since July 1993) of the Company and President, Cupples Products Division (since January 1993). Mr. Gernert also served as Senior Vice President, Corporate Planning and Development (from March 1992 until July 1993). Prior to that time, Mr. Gernert was Founder and Managing Director (1991) of Counterpoint Management, a management consulting business. From 1989 to 1990, Mr. Gernert was Vice President and Assistant to the President and, from 1988-1989, was Vice President-Corporate Development of HMK Enterprises, a diversified holding company. Mr. Pultz is Vice President, General Counsel and Secretary (since January 1993) of the Company. Previously, Mr. Pultz was Assistant General Counsel and Assistant Secretary (1990-1993) and Assistant Corporate Counsel (1985-1990) of M/A-COM Inc. In addition, Mr. Pultz served as director (1988-1990) of Meteor Message Corporation, a start-up global positioning and messaging services provider. Mr. Pultz was also Clerk (1989-1993) of Filcom Microwave Inc., a microwave filter assembly maker. Mr. Rodriguez is Corporate Vice President and President, Building Products - - - Europe (since March 1993) of the Company. Prior to that date, Mr. Rodriguez was a private consultant (1990 to 1993) for various companies in the engineering, pharmaceutical and food industries in the United Kingdom, France and Spain. From 1988 to 1990, Mr. Rodriguez was Vice President, in London, England, of International Nabisco Brands, Inc. Mr. Schuster is Vice President of the Company and President of Robertson-Ceco Concrete Construction Group (since January 1993). Prior to that time, Mr. Schuster held various senior level positions with the Company, including Regional Manager, Northern Region (1991-1992), Regional Manager, North Central Region (1990-1991), and District Manager/Operations Manager, Chicago (1988-1990). Mr. Sills is Vice President and Controller (since May 1992) of the Company. Previously, Mr. Sills was an independent consultant to a commercial bank and was a Senior Audit Manager (1981-1991) at Price Waterhouse, a public accounting firm. -12- PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS -------------------------------------------------------------------- COMMON STOCK The Company's Common Stock is listed for trading on the New York Stock Exchange ("NYSE") under the symbol "RHH". The following table sets forth the high and low sale prices per share of the Common Stock as reported on the NYSE Composite Transaction Reporting System during the calendar periods indicated. Under the terms of the Company's domestic credit facility, the Company is restricted from paying cash dividends on its Common Stock. The Company did not pay cash dividends on the Common Stock during the periods set forth below.
High (1) Low (1) ---------- ---------- Calendar 1992 First Quarter. . . . . . . . . . . . . . $74 1/4 $39 3/16 Second Quarter . . . . . . . . . . . . . 37 1/815 15/32 Third Quarter. . . . . . . . . . . . . . 20 5/815 15/32 Fourth Quarter . . . . . . . . . . . . . 20 5/8 9 9/32 Calendar 1993 First Quarter. . . . . . . . . . . . . . $11 11/32 $ 6 3/16 Second Quarter . . . . . . . . . . . . . 9 9/32 3 3/32 Third Quarter. . . . . . . . . . . . . . 4 7/8 4 1/8 Fourth Quarter . . . . . . . . . . . . . 3 5/8 2 1/2 (1) On July 23, 1993, a 1 for 16.5 reverse stock split of the Company's Common Stock became effective. This reverse stock split followed the issuance as of July 14, 1993 of 10,178,842 shares, after giving effect to the reverse stock split, in exchange for $63,733,867 principal amount of the Company's 15.5% Subordinated Debentures due 2000 and 500,000 shares of the Company's Preferred Stock pursuant to an exchange offer for such debentures and preferred stock consummated on this date (See Note 10 to the Consolidated Financial Statements). The high and low sales prices per share of Common Stock prior to July 23, 1993 are adjusted for the above reverse stock split.
There were approximately 2,844 holders of record of the Company's Common Stock as of March 14, 1994. Included in the number of stockholders of record are stockholders who held shares in "nominee" or "street" name. The closing price per share of the Company's Common Stock as of March 14, 1994, as reported under the NYSE Composite Transaction Reporting System was $3.125. -13- ITEM 6. SELECTED FINANCIAL DATA Set forth below are historical financial data concerning the Company at December 31, 1989, 1990, 1991, 1992 and 1993 and for each of the five years in the period ended December 31, 1993. These data have been derived from the audited consolidated financial statements of the Company for such periods, some of which are presented elsewhere herein. The following information should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the Company's consolidated financial statements and the notes thereto appearing elsewhere in this Report. Statements of Operations Data (a)(b)(c)(d): (In thousands, except share data)
Year Ended December 31 -------------------------------------------------- 1989 1990 1991 1992 1993 (e) ----- -------- --------- -------- -------- Net revenues . . . . . . $540,512 $551,905 $ 651,453 $400,953 $379,906 ------- -------- --------- -------- -------- Costs and expenses: Cost of Sales. . . . . 459,447 474,771 577,482 352,816 323,619 Selling, general and administrative . . . 69,059 78,457 101,929 79,188 59,190 Restructuring expense (income) . . . . . . - (2,105) 34,776 11,858 - -------- -------- --------- -------- -------- Total costs and expenses . . .528,506 551,123 714,187 443,862 382,809 -------- -------- --------- -------- -------- Operating income (loss). 12,006 782 (62,734)(42,909) (2,903) Interest expense . . . . (10,655) (11,861)(20,910) (15,319)(10,762) Gain (loss) on businesses sold/held for sale . . 1,211 - (25,371) (1,132) (9,700) Other income (expense), net. . . 5,619 2,893 2,012 (6,783) 771 -------- -------- --------- -------- -------- Income (loss) from continuing operations before income taxes . . . . . 8,181 (8,186) (107,003)(66,143) (22,594) Income taxes . . . . . . 2,689 2,552 2,030 1,205 9 -------- -------- --------- -------- -------- Income (loss) from continuing operations. 5,492 (10,738) (109,033)(67,348) (22,603) Income (loss) from discontinued operations. . . . (1,148) (1,944)(15,769) (3,797) (2,500) Extraordinary gain on debt exchange. . . . . - - - - 5,367 Cumulative effect of accounting change (f). - - - - (1,200) -------- -------- --------- -------- -------- Net income (loss). . . .$ 4,344 $(12,682) $(124,802) $(71,145) $(20,936) ======== ======== ========= ======== ======== Earnings (loss) per common share(d): Continuing operations. $ 13.70 $ (23.93) $ (124.49) $ (76.69) $ (3.65) Discontinued operations. . . . (2.97) (4.29) (17.95) (4.31) (.40) Extraordinary item . . - - - - .86 Cumulative effect of accounting change (f). . . . - - - - (.20) -------- -------- --------- -------- -------- Net income (loss) per common share . . . .$ 10.73 $ (28.22) $ (142.44) $ (81.00) $ (3.39) ======== ======== ========= ======== ======== Weighted average number of common shares outstanding. . . 384 457 878 880 6,217 ======== ======== ========= ======== ======== Cash dividends declared per common share . . . . . - - - - - ======== ======== ========= ======== ======== -14-
Balance Sheet Data (a)(b)(c): (Thousands)
December 31 -------------------------------------------------- 1989 1990 1991 1992 1993(e) -------- --------- -------- --------- -------- Working capital surplus (deficiency) . . . . . $ 59,289$ 63,602 $ 51,377$(101,200) $ 4,708 Total assets . . . . . . 307,850 539,340 422,937 232,370 181,823 Long-term debt (current portion) (g) . . . . . 4,382 3,476 65,964 67,420 390 Long-term debt (excluding current portion) . . . 46,885 108,056 69,897 1,426 45,084 Stockholders' equity (deficiency) . . . . . 81,502 155,545 39,874 (34,189) (16,663) (a) The consolidated financial data reflect the results of operations and assets and liabilities of Ceco Industries subsequent to November 1, 1990. See Note 3 of the Notes to Consolidated Financial Statements. (b) The consolidated statements of operations data exclude the results of operations of the Sold Businesses subsequent to December 31, 1991. For purposes of the consolidated balance sheet data, the Sold Businesses were recorded as net assets held for sale at December 31, 1991. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 3 of the Notes to Consolidated Financial Statements. (c) The consolidated statements of operations data exclude the results of operations of the Company's sold U.K. Subsidiary for periods subsequent to September 30, 1993. The consolidated balance sheet data exclude the assets and liabilities of the sold U.K. Subsidiary for all years subsequent to December 31, 1992. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Note 3 of the Notes to Consolidated Financial Statements. (d) On July 23, 1993, a 1 for 16.5 reverse split of the Company's common stock became effective. All common stock share amounts and per share data are restated to reflect the reverse split. (e) The consolidated financial information as of and for the year ended December 31, 1993 includes the effects of the Company's Exchange Offer which was consummated on July 14, 1993. See "Management's Discussion and Analysis of Financial Condition and Results of Operations" and Notes 2 and 10 of the Notes to Consolidated Financial Statements. (f) In the fourth quarter of 1993, the Company adopted Statement of Accounting Standards No. 112 "Employers' Accounting for Post Employment Benefits". See "Management's Discussion and Analysis of Financial Conditions and Results of Operations" and Note 19 of the Notes to Consolidated Financial Statements. (g) As a result of a default under the indenture, the amount of long-term debt (current portion) at December 31, 1992 includes $63,347,000, classified as current related to the Company's 15.5% Discount Subordinated Debentures due 2000. See Note 10 of the Notes to Consolidated Financial Statements.
-15- ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ----------------------------------------------------------- AND RESULTS OF OPERATIONS ------------------------- RESULTS OF OPERATIONS YEAR ENDED DECEMBER 31, 1993 COMPARED WITH YEAR ENDED DECEMBER 31, 1992 During the past several years, the Company has been adversely affected by the worldwide recession in the construction industry and as a result has incurred significant operating losses and has experienced severe liquidity problems. To address these problems, the Company has developed and either implemented or is in the process of implementing a number of operational and financial restructuring plans for the Company, including reducing operating costs to meet current and expected levels of demand, liquidating or divesting of operations which do not meet the Company's strategic direction or where the amount of cash required to restructure the business exceeds the expected return within a reasonable period of time, and investing in remaining businesses, where appropriate, to realize their potential. The significant operational restructuring actions which were completed during 1992 and 1993 include: staff reductions at Corporate; closure of three high-cost manufacturing plants and consolidation and rationalization at the remaining manufacturing plants at the Metal Buildings Group; sales and closure of certain businesses; exiting markets and manufacturing operations at certain locations and other reductions in fixed costs primarily through headcount reductions at the Building Products Group and closure of unprofitable sales offices; closure of equipment yards and reconditioning centers; closure of the forms manufacturing facility and reductions in operating and administrative personnel at the Concrete Construction Group. In addition, there are currently a number of restructuring programs which are ongoing and under consideration, including further reductions in work force levels and rationalization through sales, redistribution or closure of unprofitable businesses and facilities. The significant financial restructuring actions which were completed during 1993 include: the completion of the Company's exchange offer for the Company's 15.5% Discount Subordinated Debentures due 2000 (the "15.5% Subordinated Debentures") for new debt and common stock and the exchange of the Company's outstanding cumulative convertible preferred stock (the "Preferred Stock") for common stock (together with the exchange of the 15.5% Subordinated Debentures, the "Exchange Offer"); replacement of the Company's domestic credit facility; significant reductions in outstanding letters of credit; renegotiation and settlement of certain operating leases in connection with the Company's downsizing activities; retirement of a $4.0 million facility fee note through the issuance of 1,374,292 shares of common stock; and the sale of 3,333,333 newly issued shares of the Company's common stock and the transfer of all assets, claims and rights under a foreign construction project to an outside investor indirectly controlled by a director of the Company for $10.0 million. The operating results and financial condition of the sold U.K. Subsidiary are excluded from the Company's financial statements for all periods subsequent to September 30, 1993, which was determined to be the effective date of the sale. On July 23, 1993, a 1 for 16.5 reverse split of the Company's common stock became effective. All common stock share amounts and per share data are restated to reflect the reverse split. OVERVIEW OF RESULTS OF OPERATIONS. Revenue for the year ended December 31, 1993 of $379.9 million decreased $21.0 million or 5.2% compared to 1992. Excluding the effect of the sold U.K. Subsidiary, revenues declined $10.4 million or 2.8%. The remaining decrease reflects lower sales at the Company's Building Products and Concrete Construction Groups offset in part by higher sales volumes at the Company's Metal Buildings Group. -16- The Company's gross margin percentage was approximately 14.8% in 1993 compared with 12.0% in 1992 with each of the Company's business segments reporting improvements over 1992. The increase reflects primarily restructuring activities at the Company's Building Products Group and Concrete Construction Group and higher sales levels at the Company's Metal Buildings Group. Selling, general and administrative expenses decreased by $20.0 million in 1993 compared with 1992. Excluding the effect of the sold U.K. Subsidiary, selling, general and administrative expenses decreased $18.5 million. The remaining decline represents primarily reductions in operating expenses in the Building Products Group and Concrete Construction Group resulting from restructuring actions, reductions in consulting, legal and other professional fees at Corporate, offset in part by higher selling and advertising costs at the Company's Metal Buildings Group. Additionally, amounts for 1993 include a credit to selling, general and administrative expense of $2.8 million as a result of favorable settlements of certain litigation, and results for 1992 include a charge of $3.5 million relating to environmental matters and a charge of $1.3 million relating to severances. For the year ended December 31, 1993 losses from continuing operations were $22.6 million compared with $67.3 million during the same period in 1992. Losses from continuing operations for 1993 include a $9.7 million loss from the sale of businesses and losses from continuing operations for 1992 include losses from the sale of businesses of $1.1 million and restructuring charges of $11.9 million. Exclusive of the 1993 and 1992 losses from sold businesses, the 1992 restructuring charges and the effect of the operating results of the sold U.K. Subsidiary which recorded a loss of $4.4 million in 1993 compared with a loss of $13.2 million in 1992, the Company's loss from continuing operations decreased by $32.6 million. As further discussed below, results for the year ended December 31, 1993 include a charge for discontinued operations of $2.5 million, an extraordinary gain of $5.4 million from the Company's Exchange Offer and a charge of $1.2 million for the cumulative effect of an accounting change. The following sections highlight the Company's operating income (loss) on a segment basis and provide information on non-operating income and expenses. METAL BUILDINGS GROUP. For the year end December 31, 1993, Metal Buildings Group revenues increased by $30.9 million or 16.5% compared to 1992. The increase in 1993 reflects primarily improved market conditions in the United States. For the year ended December 31, 1993 operating income was $7.2 million compared with $4.2 million in 1992. The improved operating results are primarily attributable to higher levels of sales offset, in part, by higher per unit material costs and higher selling and advertising expenditures associated with the development of international markets. BUILDING PRODUCTS GROUP. For the year ended December 31, 1993, Building Product Group revenues decreased by $47.1 million or 32.6%. Excluding the effect of the sold U.K. Subsidiary, Building Products Group revenues decreased $36.5 million or 33%. The decline reflects weak market conditions and pressures on selling prices at both the Company's U.S. and foreign operations. For the year ended December 31, 1993, the Building Products Group reported an operating loss of $6.7 million compared with $18.1 million in 1992. The 1993 and 1992 operating losses include operating losses before restructuring charges of $3.9 million and $7.6 million, respectively, from the sold U.K. Subsidiary. The 1992 operating losses also include restructuring charges of $7.6 million. Exclusive of these items, the operating results for the Building Products Group were losses of $2.8 million in 1993 compared with losses of $2.9 million in 1992. The decrease in operating losses is primarily a result of downsizing and restructuring actions which have decreased operating and fixed costs, offset, in part, by a significant decline in revenues. -17- CONCRETE CONSTRUCTION GROUP. For the year ended December 31, 1993, Concrete Construction Group revenues decreased by $4.8 million or 7.0% compared to 1992. The decline reflects decreases resulting from the closure of unprofitable sales offices and from weaknesses in the U.S. non-residential construction markets. For the year ended December 31, 1993, the Concrete Construction Group reported operating income of $4.5 million compared with an operating loss of $4.7 million in 1992. The operating loss for 1992 includes a restructuring charge of $2.7 million. The improvement in the operating results reflects better job executions, savings from restructuring activities and other reductions in operating costs, including reductions in worker's compensation and other insurance costs. At December 31, 1993, the backlog of unfilled orders believed to be firm for the Company's ongoing businesses was approximately $151 million. On a comparable basis, adjusted for the sale of the U.K. Subsidiary, which had at December 31, 1992 backlog of approximately $26 million, the order backlog was approximately $143 million at December 31, 1992. Approximately $10 million of the December 31, 1993 backlog is expected to be performed after 1994. OTHER INCOME (EXPENSES). Interest expense for the year ended December 31, 1992 and 1993 totalled $15.3 million and $10.8 million, respectively. The decrease in interest expense of $4.5 million for 1993 compared with 1992 is primarily due to the completion of the Exchange Offer which became effective July 14, 1993. On a proforma basis, assuming that the Exchange Offer had occurred on January 1 of 1992 and 1993, reported interest expense for the years ended 1992 and 1993 would have been reduced by $10.7 million and $6.5 million, respectively. On November 9, 1993, the Company sold its U.K. Subsidiary and in connection with the sale recorded a charge of $9.7 million in the third quarter of 1993. The Company's decision to sell the U.K. Subsidiary was based on the current negative economic outlook for the entity's operation which was not expected to improve in the foreseeable future and the estimated cost to continue to support and to further restructure and downsize the business. Other income (expense)-net for the year ended December 31, 1993, totalled $.8 million compared to $(6.8) million for 1992. The 1992 expense includes charges of approximately $6.2 million associated with operating losses and the writedown of an equity investment and foreign exchange losses of $1.1 million. INCOME TAXES. The Exchange Offer has resulted in a "Change in Ownership", as defined by Section 382 of the Internal Revenue Code. The effect of this transaction is to limit the Company's ability to utilize its unused U.S. tax loss carryforwards which existed prior to the Change in Ownership. At December 31, 1993, the Company has worldwide net operating loss carryforwards of $38.2 million for tax reporting purposes which are available to offset future income without limitation. Approximately $17.8 million of the tax net operating loss carryforwards relate to domestic operations and are available for use until expiration in the year 2009. The foreign net operating loss carryforwards at December 31, 1993 were $20.4 million and expire at various dates in the years 1995 through 2004. Should another "Change in Control" occur, the Company's current domestic loss carryforwards would be further limited. DISCONTINUED OPERATIONS. During the year ended December 31, 1993, the Company recorded a charge of $2.5 million reflecting primarily provisions for costs associated with the settlement of claims and disputes associated with the Company's discontinued custom curtainwall operations which were discontinued in 1988. -18- ACCOUNTING CHANGES. Effective January 1, 1993, the Company adopted SFAS No. 106 "Employers' Accounting for Postretirement Benefits Other Than Pensions" for its U.S. plans and SFAS No. 109 "Accounting for Income Taxes". The adoption of these statements did not have a material impact on the Company's Consolidated Balance Sheets or Statements of Operations and the financial statements of prior periods have not been restated. Also, in the fourth quarter of 1993, the Company adopted the provisions of SFAS No. 112, "Employers' Accounting for Postemployment Benefits". The cumulative effect of the adoption of SFAS No. 112 was a charge of $1.2 million and has been recorded in the 1993 Consolidated Statement of Operations as a cumulative effect of accounting change. The Company believes that the adoption of the above accounting standards, exclusive of the cumulative effect associated with the adoption of SFAS No. 112, would not have a material effect on reported operating results for 1991, 1992 and 1993. OTHER ACCOUNTING PRONOUNCEMENTS. In May 1993, the Financial Accounting Standards Board issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities". SFAS No. 114 and No. 115 are effective for fiscal years beginning after December 15, 1994 and December 15, 1993, respectively. The Company will implement these statements as required. The future adoption of these standards is not expected to have a material effect on the Company's Consolidated Balance Sheet or Statement of Operations. The Company is also required to adopt the provisions of SFAS No. 106 with respect to its foreign postretirement benefit plans for fiscal years beginning after December 15, 1994. The Company plans to adopt this standard as required, and is currently evaluating its impact. LITIGATION. Several contracts related to the Company's discontinued custom curtainwall operations continue to be the subject of litigation. In one of the actions, the owner and the general contractor for the project have claimed the Company and Federal Insurance Company, as issuer of a performance bond in connection with the Company's work, are liable for $29.9 million in excess completion costs and delay damages due to the Company's alleged failure to perform its obligations under its subcontract. The Company has taken action to enforce a $5.0 million mechanic's lien against the building and seeks to recover more than $10.0 million in costs and damages caused by the general contractor's breach of the subcontract with the Company. The Company filed suit in state court in Iowa against the owner, general contractor and a subcontractor seeking payment of amounts owed to the Company and other damages in connection with a pre-engineered metal building project in Anchorage, Alaska. The general contractor subsequently filed suit in state court in Alaska against a number of parties, including the Company and its surety, alleging against the Company breach of contract, breach of implied warranties, misrepresentation and negligence in connection with the fabrication of the building and seeking damages in excess of $10.0 million. The Company believes that it is entitled to payment under its contract and that it has meritorious defenses against the claims of the general contractor. Two separate, but related lawsuits have been filed against the Company in connection with a $2.4 million subcontract performed by the Company to supply custom curtainwall on a commercial office building. On January 29, 1991, the general contractor filed suit in federal court in Houston, Texas, asserting claims for the owner/developer of the project as well as attempting to enforce indemnification for a $4.0 million state court judgement against the general contractor by virtue of the indemnity provisions in the subcontract. The Company has filed an action in the federal court in St. Louis, Missouri, seeking a declaratory judgement that it is not liable under the indemnity provision or for -19- any of the owner/developer's claims. The general contractor has filed a counterclaim, seeking to enforce its indemnification claim as well as the assigned claims. The general contractor's counterclaim seeks indemnity of $4.0 million and unspecified damages. There are various other proceedings pending against or involving the Company which are ordinary or routine given the nature of the Company's business. The Company has recorded a liability related to litigation where it is both probable that a loss has been incurred and the amount of the loss can be reasonably estimated. While the outcome of the Company's legal proceedings cannot at this time be predicted with certainty, management does not expect that these matters will have a material adverse effect on the Consolidated Balance Sheets or Statement of Operations of the Company. During 1993 and through February 1994, the Company resolved and settled certain litigation relating to matters of alleged employment discrimination and alleged breaches of real estate leases by the Company. These settlements did not have a material adverse effect on the Company's 1993 Consolidated Statement of Operations. ENVIRONMENTAL MATTERS. The Company has been identified as a potentially responsible party by various federal and state authorities for clean-up at various waste disposal sites. While it is often extremely difficult to reasonably quantify future environmental related expenditures, the Company has engaged various third parties to perform feasibility studies and assist in estimating the cost of investigation and remediation. The Company's policy is to accrue environmental and clean-up related costs of a non-capital nature when it is both probable that a liability has been incurred and that the amount can be reasonably estimated. Based upon currently available information, including the reports of third parties, management does not believe that the reasonably possible loss in excess of the amounts accrued would be material to the consolidated financial statements. YEAR ENDED DECEMBER 31, 1992 COMPARED WITH YEAR ENDED DECEMBER 31, 1991 In connection with the Company's operational restructuring plans, on February 3, 1992, the Company sold certain of its domestic building products and construction businesses including the Company's door businesses (the "Door Businesses") and certain of the Company's U.S. building products businesses (the "X-1 Businesses") for $135 million (the "Disposition"). Additionally, during the first quarter of 1992, the Company sold its U.S. floor and deck businesses (the "Floor Business") and its subsidiary located in South Africa (the "South African Subsidiary") for $2.4 million and $5.3 million, respectively. As the Door Business represented a segment of the Company, the results of operations for the year ended December 31, 1991, have been reclassified to reflect the Door Business as a discontinued operation. The X-1 Businesses, the Floor Business and the South African Subsidiary (collectively, the "Sold Businesses"), which were held for sale at December 31, 1991 represent a portion of a business segment. Accordingly, the results of operations for the year ended December 31, 1991, include the Sold Businesses while results of operations for the year ended December 31, 1992 exclude the Sold Businesses. The net assets of the Door Business and the Sold Businesses were reflected as net assets held for sale (current) at December 31, 1991. OVERVIEW OF RESULTS OF OPERATIONS. During fiscal 1992, each of the Company's businesses continued to be adversely effected by the weak worldwide conditions in most major nonresidential construction markets. For the year ended December 31, 1992, revenues were $401.0 million, a decrease of $250.5 million or 38% compared to the same period in 1991. Approximately $157.3 million or 24% -20- represents 1991 revenues associated with the Sold Businesses. The remaining decrease of 14% reflects primarily lower sales volumes resulting from continued weak conditions experienced in most major non-residential construction markets and competitive market pressures on selling prices. The Company's gross margin percentage was approximately 12.0% in 1992 compared with 11.4% in 1991. The slight improvement was a result of the exclusion of the Sold Businesses which had a gross margin in 1991 of approximately 8.3% offset by declining margins in the Company's Building Products Group and Concrete Construction Group resulting primarily from market pressures on selling prices and unabsorbed fixed costs. The Company's Metal Buildings Group gross margin percentage was unchanged from 1991 to 1992. Selling, general and administrative expenses decreased by $21.4 million in 1992 compared with 1991. Approximately $19.7 million of the decline resulted from the exclusion of Sold Businesses. The remaining decline represents reductions in costs at the operating units resulting from the restructuring actions offset by higher expenses at the Corporate Group related primarily to environmental matters, consulting, legal and other professional fees, severances and other costs. For the year ended December 31, 1992, losses from continuing operations were $67.3 million compared with $109.0 million during the same period in 1991. Operating results for the year ended December 31, 1992 include restructuring expense of $11.9 million compared with restructuring expense of $34.8 million in 1991. Exclusive of the 1992 and 1991 restructuring expenses, the losses recorded on the sale of businesses, and the effect of the Sold Businesses, which recorded a loss from operations of $7.8 million, net of a $1.9 million restructuring charge in 1991, the Company's loss from continuing operations increased $13.2 million. The continued operating losses were primarily a result of unabsorbed fixed costs at the Company's operations which have been affected by significant declines in revenue during 1992 and 1991 and certain non-operating expenses incurred in 1992 which are further described in the Other Income (Expenses) section below. The Company did not anticipate that there would be a significant improvement in most of the existing markets for the Company's products and services during 1993. As a result, the Company took restructuring actions to appropriately size its unprofitable operations to meet existing and expected levels of demand and sought to expand products and markets, as appropriate. The following sections highlight the Company's operating income (loss) on a segment basis and provide information on non-operating income and expenses and discontinued operations. METAL BUILDINGS GROUP. Metal Buildings Group revenues declined by $12.6 million or 6% for the year ended December 31, 1992, compared to 1991. The decline in revenues was primarily due to the soft U.S. and Canadian markets for the group's products, and to consolidation and restructuring activities which resulted in temporary delays in shipments during the reorganization. For the year ended December 31, 1992, operating income was $4.2 million, compared to a $5.7 million operating loss in 1991. The improved operating results, despite the decline in revenues were primarily attributable to restructuring actions implemented during the first quarter of 1992 which resulted in plant closures and cost reductions attributable to redistributing manufacturing operations and equipment from closed operations and improved capacity and cost effectiveness at remaining operations. BUILDING PRODUCTS GROUP. For the year ended December 31, 1992, Building Products Group revenues decreased by $223.7 million or 61% compared to 1991. Approximately $157.3 million or 43% represents the 1991 revenues of the Sold Businesses. The remaining decline reflected lower activity at the Company's -21- operations, primarily in the United Kingdom, United States and Canada, due to overall market weaknesses. For the year ended December 31, 1992, the Building Products Group recorded an operating loss of $18.1 million compared with an operating loss of $36.0 million in 1991. The 1992 loss included a restructuring provision of $7.6 million related to charges taken to recognize impairment of asset values and costs to restructure the foreign subsidiaries. The 1991 operating loss included restructuring expenses of $18.4 million. Exclusive of the 1992 and 1991 restructuring expense and the effect of the Sold Businesses which recorded an operating loss of $7.8 million in 1991, the operating loss of the Building Products Group increased by $.7 million during the year ended December 31, 1992, compared to 1991. The 1992 operating losses were primarily due to unabsorbed fixed costs attributable to lower revenue levels and project losses at the Company's subsidiaries in the United Kingdom, Canada and Australia. CONCRETE CONSTRUCTION GROUP. For the year ended December 31, 1992, Concrete Construction Group revenues declined $15.9 million or 19% compared to 1991. The decline in revenues reflected the continued weakness in the U.S. non- residential construction markets, pressure on sales prices and management's selectivity in accepting projects. For the year ended December 31, 1992, the operating loss was $4.7 million compared with an operating loss of $.7 million in 1991. The 1992 and 1991 operating losses included restructuring charges of $2.7 million and $1.6 million, respectively. Exclusive of the effect of the restructuring charges recorded in 1992 and 1991, operating losses for this group increased $2.9 million for the year ended December 31, 1992 compared to 1991. The 1992 increase in operating losses reflected lower levels of revenue and competitive pricing pressures, partially offset by cost reductions resulting from restructuring activities which have included closures of sales offices, consolidations in regional facilities and reductions in work force levels. As a result of the continued weakness in the U.S. non residential building market, the Company took actions to further size operations to forecasted demand and in connection therewith, recorded a $2.7 million restructuring charge during the fourth quarter of 1992. OTHER INCOME (EXPENSES). Interest expense for the year ended December 31, 1992 totaled $15.3 million, compared to $20.9 million for 1991. The decrease in interest expense was primarily due to the Company's repayment of debt with proceeds from the Disposition. The Company recorded charges associated with trailing liabilities of the Sold Businesses of $1.1 million for the year ended December 31, 1992. Other income (expense)-net for the year ended December 31, 1992 totaled $(6.8) million, compared to $(2.0) million for 1991. Interest income increased from $.9 million in 1991 to $1.7 million in 1992 as a result of higher levels of short-term investments, due to proceeds from the Disposition. The remaining increase in other expense in 1992 was primarily attributable to 1992 charges reflecting operating losses and write-offs aggregating $6.2 million relating to the Company's equity investment and to foreign exchange losses of $1.1 million. INCOME TAXES. Income tax expense represents primarily taxes on foreign earnings which could not be offset by loss carryforwards. DISCONTINUED OPERATIONS. During the year ended December 31, 1992, the Company recorded a charge of $3.9 million reflecting primarily provisions for the settlement of contract disputes and litigation, and the write-off of related accounts receivable determined to be uncollectible associated with the Company's discontinued custom curtainwall operation. -22- LIQUIDITY AND CAPITAL RESOURCES The Company has incurred significant losses from continuing operations during the past several years, including the first three quarters of 1993. The combination of these operating losses, along with the funding required for restructuring activities, trailing liabilities associated with sold and discontinued businesses and substantial financing expenses have placed a strain on the Company's liquidity. To respond to this situation, the Company has taken a number of operational and financial restructuring actions which are designed to improve the Company's profitability and liquidity. The status of the Company's financial activities, as well as the Company's liquidity and capital resources is summarized below. During the year ended December 31, 1993, the Company used approximately $20.2 million of cash, including amounts which were previously restricted, to fund its operating activities. Of this amount approximately $14.5 million was used for restructuring related activities, $2.8 million was paid in connection with the new domestic credit facility and the Exchange Offer, and $1.7 million was used to fund the operating activities of the sold U.K. Subsidiary. Funding of this operating deficit was provided primarily through cash which was previously restricted under the Company's former domestic credit facility. In addition, during the year the Company spent approximately $5.5 million on capital expenditures, most of which were directed toward upgrading and improving manufacturing equipment and data processing systems at the Company's Metal Buildings Group and manufacturing operations at the Building Products Group . Funding of investing activities was largely offset by proceeds received from sales of property and equipment and assets held for sale which aggregated $4.5 million for the year. Cash provided by financing activities during the year consisted of borrowings of $5.0 million provided under the Company's new domestic credit facility and $7.0 million which was provided through the sale of common stock. Also during the year, the Company paid down approximately $2.3 million of long-term debt which consisted primarily of industrial revenue bonds and an outstanding real estate mortgage. As a result, primarily of the financing activities discussed above, unrestricted cash and cash equivalents at December 31, 1993 increased by $8.4 million over December 31, 1992. At December 31, 1993, the Company had $15.7 million of unrestricted cash and cash equivalents which consisted of $2.9 million of cash and short-term investments located at foreign subsidiaries which is available to fund local working capital requirements and $12.8 million of cash located in the U.S. which was available for general business purposes. On April 12, 1993, the Company entered into a new credit agreement (the "Credit Facility") with Foothill Capital Corporation ("Foothill"). Under the terms of the Credit Facility, Foothill agreed to provide the Company with a term loan and a revolving line of credit of up to a maximum amount of $35.0 million. The initial funding of the Credit Facility occurred on May 3, 1993 (the "Closing Date"). Under the terms of the Credit Facility, the revolving line of credit is determined based on a percentage of eligible (as defined and subject to certain restrictions) accounts receivable and inventory, plus an amount equal to $10.0 million (which is reduced by $166,667 per month commencing six months after the Closing Date), plus the amount provided by the Company as cash collateral, if any, less the amount of $5.0 million required to be outstanding under the term loan (each together the "Borrowing Base"). The Credit Facility requires that the Company borrow $5.0 million under the term loan and provides for additional borrowings and or issuances of commercial or standby letters of credit or guarantees of payment with respect to such letters of credit in an aggregate amount not to exceed $30.0 million, based upon availability under the Borrowing Base. At December 31, 1993, the amount of the Borrowing Base was approximately $30.0 million and was used to support outstanding letters of credit of $29.4 million. The Credit Facility required payment on the Closing Date of a facility note in an amount equal to $4.0 million (the "Facility Note"). On November 30, 1993 -23- the Company paid in full the Facility Note, plus accrued interest, and in settlement thereof, issued 1,374,292 shares of the Company's common stock to Foothill. In addition to the Credit Facility, borrowing arrangements are in place at certain international locations to assist in supporting local working capital requirements. The outstanding balance of such short-term loans payable at December 31, 1993 was $1.1 million. At December 31, 1993 the Company had in place at its international locations unused lines of credit of $1.0 million and letter of credit and guarantee facilities of $8.9 million of which $4.4 million was outstanding. In connection with the Company's financial restructuring plan, during 1993, the Company reduced its letter of credit guarantees which were outstanding at December 31, 1992 under its domestic credit facilities by $12.6 million. On July 14, 1993 the Company consummated its Exchange Offer. Pursuant to the Exchange Offer, $63.7 million principal amount of the Company's 15.5% Subordinated Debentures plus accrued but unpaid interest of approximately $17.1 million were exchanged for an aggregate of $17.9 million principal amount of the Company's 10%-12% Senior Subordinated Notes due 1999 and 10,041,812 shares of the Company's common stock, and all 500,000 outstanding shares of the Company's Preferred Stock were exchanged for an aggregate of 137,030 shares of the Company's common stock. Interest on the 10%-12% Senior Subordinated Notes is payable semi-annually on May 31 and November 30 of each year. Interest accruing on the 10%-12% Senior Subordinated Notes through and including May 31, 1995 may, at the Company's option, be paid in cash or additional 10%-12% Senior Subordinated Notes, and thereafter will be paid in cash. Interest accrues on the 10%-12% Senior Subordinated Notes from May 31, 1993 through and including November 30, 1994 at the rate of 10% per annum if paid in cash and 12% per annum if paid in additional 10%-12% Senior Subordinated Notes, and thereafter accrues at 12% per annum. The November 30, 1993 interest payment was paid by the Company in additional 10%-12% Senior Subordinated Notes. At December 31, 1993, the 15.5% Subordinated Debentures consisted of principal of $5.2 million and unamortized discount of $.4 million. The 15.5% Subordinated Debentures, which accrete in value at the rate of 17.4% per annum, began to accrue cash interest December 9, 1991. The Company did not make its scheduled interest payments on its 15.5% Subordinated Debentures which were due on May 31, 1992, November 30, 1992, May 31, 1993 and November 30, 1993, and consequently was in default under the indenture. On February 15, 1994, the Company paid all past due interest, including interest on past due interest, which in the aggregate approximated $1.8 million, thereby curing the event of default under the indenture. The payment of this interest payment was largely offset by the receipt of a $1.7 million settlement payment in February of 1994 for an old backcharge claim related to a job completed in 1989. On December 9, 1993, the Company entered into an agreement with an investor, indirectly controlled by a member of the Company's board of directors, which provided the Company with an additional $10.0 million of liquidity. In consideration for the $10.0 million, the Company agreed to issue to the investor 3,333,333 shares of the Company's common stock and to transfer all assets, claims and rights under a foreign construction project under which the developer has been placed in insolvency. OUTLOOK. Operating profits, along with bookings and backlog at the Company's Metal Buildings Group, Concrete Construction Group and certain of the Company's Building Products businesses, in particular, the Company's Asia/Australia operations, have shown significant improvements throughout 1993, and in the fourth quarter of 1993 the Company recorded income from continuing operations of $662,000. The Company's North American and European Building Products operations continue to be adversely affected by weak market conditions and severe competition and as a result are continuing to experience declines in -24- revenue and incur operating losses. In November of 1993 the Company sold its U.K. subsidiary which had accounted for a significant portion of the Company's Building Product Group's operating losses and cash flow deficit during 1993. At each of the remaining Building Products businesses which continue to operate unprofitably, the Company is evaluating various alternatives and has been and is continuing to implement restructuring and other actions. The Company expects that demands on its liquidity and credit resources will continue to be significant throughout most of 1994 as a result of the anticipated funding required for seasonal operating losses during the first quarter of 1994, expected requirements for working capital in connection with business growth and bonding requirements, and funding requirements for restructuring programs, nonrecurring cash obligations and trailing liabilities associated with sold and discontinued businesses. The Company expects to meet these requirements through a number of sources, including available cash which was $15.7 million at December 31, 1993, reductions in letter of credit requirements for certain obligations, availability under domestic and foreign credit facilities, and to a lesser extent, through proceeds from asset sales and settlements of certain outstanding claims. To further assist in funding anticipated working capital growth requirements, on March 30, 1994, the Company received a commitment letter from Foothill Capital Corporation, the current lender under the Company's domestic credit facility, which under its terms, would amend the Company's existing domestic credit facility by temporarily increasing the Company's maximum availability under the facility by $10 million from the current level of $35 million to $45 million through June 30, 1994 and would expand the definition of the borrowing base (upon which availability is determined) to include certain assets of the Company's Canadian operations. Under the Foothill Capital Corporation proposal, the Company would have a one time option of extending the increase in the maximum availability to $45 million through November 30, 1994 and to $40 million through December 31, 1994. The Company is currently negotiating with an outside commercial bank to participate with Foothill Capital Corporation in the credit facility and to extend the maximum availability to $45 million through the entire term of the credit facility. Based upon the Company's current assumptions, the Company believes that available liquidity and credit will be sufficient to meet its needs at least through the end of the year. In the event that the Company's business growth exceeds expectations, improvements in operating cash flow do not meet anticipated levels, or anticipated sources of liquidity and credit as described above do not meet expectations, the Company may be required to restrict such growth and/or may seek to raise additional capital through the sale of businesses, through further expansion of existing credit facilities or through new credit facilities, through a possible debt or equity offering or a combination of the above. -25- ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ROBERTSON-CECO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except share data)
For the Years Ended December 31 ------------------------------- 1991 1992 1993 ---- ---- ---- REVENUE Net product sales. . . . . . . . . . . . $ 452,108 $287,592 $277,367 Construction and other services. . . . . 199,345 113,361 102,539 --------- -------- Total . . . . . . . . . . . . . . . 651,453 400,953 379,906 --------- -------- -------- COST AND EXPENSES Product costs. . . . . . . . . . . . . . 399,114 244,373 237,685 Construction and other services. . . . . 178,368 108,443 85,934 --------- -------- -------- Cost of sales . . . . . . . . . . . 577,482 352,816 323,619 Selling, general and administrative. . . 101,929 79,188 59,190 Restructuring expense. . . . . . . . . . 34,776 11,858 - --------- -------- -------- Total . . . . . . . . . . . . . . . 714,187 443,862 382,809 --------- -------- -------- OPERATING INCOME (LOSS). . . . . . . . . (62,734)(42,909) (2,903) --------- -------- -------- OTHER INCOME (EXPENSE) Interest expense . . . . . . . . . . . . (20,910)(15,319) (10,762) Gain (loss) on businesses sold/held for sale . . .(25,371) (1,132) (9,700) Other income (expense) - net . . . . . . 2,012 (6,783) 771 --------- -------- -------- Total . . . . . . . . . . . . . . . (44,269)(23,234) (19,691) --------- -------- -------- Income(loss) from continuing operations before provision for taxes on income. . . . . (107,003)(66,143) (22,594) Provision for taxes on income. . . . . . 2,030 1,205 9 --------- -------- -------- INCOME (LOSS) FROM CONTINUING OPERATIONS (109,033)(67,348) (22,603) --------- -------- -------- Loss from discontinued operations. . . . (15,769) (3,797) (2,500) --------- -------- -------- INCOME (LOSS) BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF ACCOUNTING CHANGE. . . . . (124,802)(71,145) (25,103) --------- -------- -------- Extraordinary gain on debt exchange. . . - - 5,367 --------- -------- -------- Cumulative effect of accounting change . - - (1,200) --------- -------- -------- NET INCOME (LOSS). . . . . . . . . . . . $(124,802)$(71,145) $(20,936) ========= ======== ======== EARNINGS (LOSS) PER COMMON SHARE Continuing operations. . . . . . . . . . $ (124.49)$ (76.69) $ (3.65) Discontinued operations. . . . . . . . . (17.95) (4.31) (.40) Extraordinary item . . . . . . . . . . . - - .8 Cumulative effect of accounting change . - - (.20) --------- -------- -------- NET INCOME (LOSS). . . . . . . . . . . . $ (142.44)$ (81.00) $ (3.39) ========= ======== ======== Weighted average number of common shares outstanding. . . . . . . . . . . . . . 878 880 6,217 ========= ======== ========
See Notes to Consolidated Financial Statements. -26- ROBERTSON-CECO CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands)
December 31 ----------------------- 1992 1993 ---- ---- ASSETS CURRENT ASSETS Cash and cash equivalents. . . . . . . . . . $ 7,220 $ 15,666 Restricted cash. . . . . . . . . . . . . . . - 3,138 Accounts and notes receivable, less allowance for doubtful accounts: 1992, $4,653; 1993, $3,255 . 72,931 58,062 Inventories. . . . . . . . . . . . . . . . . 28,041 21,417 Other current assets . . . . . . . . . . . . 5,154 3,218 -------- -------- Total current assets. . . . . . . . . . 113,346 101,501 -------- -------- RESTRICTED CASH. . . . . . . . . . . . . . . 23,962 - PROPERTY - AT COST Land and land improvements . . . . . . . . . 3,510 3,074 Buildings and building equipment . . . . . . 20,692 14,382 Machinery and equipment. . . . . . . . . . . 64,714 42,210 Construction in progress . . . . . . . . . . 4,749 3,065 -------- -------- Total . . . . . . . . . . . . . . . . . 93,665 62,731 Less accumulated depreciation. . . . . . . . 49,064 29,658 -------- -------- Property - net. . . . . . . . . . . . . 44,601 33,073 -------- -------- ASSETS HELD FOR SALE . . . . . . . . . . . . 7,607 4,289 -------- -------- EXCESS OF COST OVER NET ASSETS OF ACQUIRED BUSINESSES, LESS ACCUMULATED AMORTIZATION: 1992, $2,601; 1993, $3,430 . . . . . . . . 29,923 29,094 -------- -------- OTHER NON-CURRENT ASSETS . . . . . . . . . . 12,931 13,866 -------- -------- Total assets. . . . . . . . . . . . . . $232,370 $181,823 ======== ========
See Notes to Consolidated Financial Statements. -27- ROBERTSON-CECO CORPORATION CONSOLIDATED BALANCE SHEETS (In thousands, except share data)
December 31 ----------------------- 1992 1993 ---- ---- LIABILITIES CURRENT LIABILITIES Loans payable. . . . . . . . . . . . . . . . $ 8,024 $ 1,054 Current portion of long-term debt. . . . . . 67,420 390 Accounts payable, principally trade. . . . . 42,831 36,480 Insurance liabilities. . . . . . . . . . . . 16,434 11,225 Other accrued liabilities. . . . . . . . . . 79,837 47,644 --------- --------- Total current liabilities . . . . . . . 214,546 96,793 --------- --------- LONG-TERM DEBT, LESS CURRENT PORTION . . . . 1,426 45,084 --------- --------- LONG-TERM INSURANCE LIABILITIES. . . . . . . 11,990 14,770 --------- --------- LONG-TERM PENSION LIABILITIES. . . . . . . . 9,992 16,881 --------- --------- RESERVES AND OTHER LIABILITIES . . . . . . . 28,605 24,958 --------- --------- COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY (DEFICIENCY) PREFERRED STOCK, CUMULATIVE CONVERTIBLE Par value per share: $.01 Authorized shares: 5,500,000 Issued shares: 1992 - 500,000; 1993 - 0;. . 5 - COMMON STOCK Par value per share $.01 Authorized shares: 30,000,000 Issued shares: 1992 - 880,553; 1993 - 16,336,655. . . 145 163 CAPITAL SURPLUS. . . . . . . . . . . . . . . 129,128 172,682 WARRANTS . . . . . 6,042 6,042 RETAINED EARNINGS (DEFICIT). . . . . . . . . (156,583) (177,519) EXCESS OF ADDITIONAL PENSION LIABILITY OVER UNRECOGNIZED PRIOR SERVICE COST. . . . . . (1,711) (8,139) DEFERRED COMPENSATION. . . . . . . . . . . . - (1,551) FOREIGN CURRENCY TRANSLATION ADJUSTMENTS . . (11,215) (8,341) --------- --------- Stockholders' equity (deficiency). . . . . (34,189) (16,663) --------- --------- Total liabilities and stockholders' equity (deficiency). . . . . . . . . $ 232,370 $ 181,823 ========= =========
See Notes to Consolidated Financial Statements. -28- ROBERTSON-CECO CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
For the Years Ended December 31 ------------------------------- 1991 1992 1993 ---- ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss). . . . . . . . . . . . . . $(124,802)$(71,145)$(20,936) Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities: Depreciation and amortization . . . . . . 11,212 7,458 6,694 Amortization of discount on debentures and debt issuance costs . . . . . . . . 8,759 303 1,008 Loss on businesses sold/held for sale . . 25,371 1,132 9,700 Cumulative effect of accounting change. . - - 1,200 Extraordinary gain on debt exchange . . . - - (5,367) (Income) loss on sale of business segment 16,587 (133) - Provisions for: Bad debts and losses on erection contracts. . . . 3,684 3,526 2,658 Rectification and other costs . . . . . 8,179 3,719 4,203 Restructuring expense . . . . . . . . . 34,776 11,858 - (Income) loss from and writedown of equity investment . . . . . . . . . . . . . . (20) 6,161 - Loss on discontinued operations . . . . 8,165 3,930 2,500 Changes in assets and liabilities, net of divestitures: Decrease in accounts and notes receivable . . . .12,560 22,463 2,698 Decrease in inventories . . . . . . . . 6,117 5,967 2,765 (Increase) decrease in restricted cash. 1,988 (23,962) 20,824 Increase (decrease) in accounts payable, principally trade. . . . . . . . . . . . . . . . . (11,726) (1,955) 2,672 Net changes in other assets and liabilities . . .(11,593) (43,762) (29,962) --------- -------- -------- NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES (10,743) (74,440) 657 --------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Capital expenditures . . . . . . . . . . . . (8,218) (3,221) (5,503) Proceeds from sales of property, plant and equipment . 2,686 736 2,986 Proceeds from sales of businesses. . . . . . - 142,707 - Proceeds from sales of assets held for sale. 1,473 4,072 1,563 --------- -------- -------- NET CASH PROVIDED BY (USED FOR) INVESTING ACTIVITIES (4,059) 144,294 (954) --------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Net payments on short-term borrowings. . . . (7,556) (3,885) (624) Proceeds from long-term debt borrowings. . . 4,698 - 5,000 Payments on revolving credit arrangements. . (126,938) (64,300) - Proceeds from revolving credit arrangements. 145,538 5,200 - Payments on long-term debt borrowings. . . . (4,634) (7,680) (2,283) Proceeds from common stock issued. . . . . . 247 10 7,000 Preferred stock dividends paid . . . . . . . (281) - - --------- -------- -------- NET CASH PROVIDED BY (USED FOR) FINANCING ACTIVITIES 11,074 (70,655) 9,093 --------- -------- -------- Effect of foreign exchange rate changes on cash. . . . 207 (727) (350) --------- -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . . . . . . . . . . . . (3,521) (1,528) 8,446 CASH AND CASH EQUIVALENTS - BEGINNING OF PERIOD . . 12,269 8,748 7,220 --------- -------- -------- CASH AND CASH EQUIVALENTS - END OF PERIOD $ 8,748 $ 7,220 $ 15,666 ========= ======== ======== SUPPLEMENTAL CASH FLOW DATA Cash payments made for: Interest. . . . . . . . . . . . . . . . . $ 11,458 $ 3,387 $ 2,301 ========= ======== ======== Income taxes. . . . . . . . . . . . . . . $ 3,045 $ 572 $ 627 ========= ======== ========
See Notes to Consolidated Financial Statements. -29- ROBERTSON-CECO CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY) (In thousands except share data)
Excess of Additional Pension Liability Cumulative Over Unrecognized Foreign Convertible Retained Prior Currency Preferred Common Capital Earnings Service Deferred Translation Stock Stock Surplus Warrants (Deficit) Cost Compensation Adjustments BALANCE DECEMBER 31, 1990. $ 5 $144 $129,097 $6,042 $39,589 $(825)$ - $(18,507) Net loss for the year. . (124,802) Cash dividends on preferred stock, $.56 per share . . . . (56) (225) Stock issued for employee stock purchase and savings plans (3,103 shares) . . . . 1 196 Stock issued to directors (809 shares) . . . . . 50 Change in excess of additional pension liability over unrecognized prior service cost . . . . . (2,785) Foreign currency translation Adjustments for the year . 929 Writedown of investment. . 11,021 ---- ---- -------- ------ --------- ------- ------- --------- BALANCE DECEMBER 31, 1991. . 5 145 129,287 6,042 (85,438) (3,610) - (6,557) Net loss for the year. . (71,145) Dividends payable on preferred stock, $.34 per share . . . . (169) Stock issued to directors (410 shares) . . . . . 10 Change in excess of additional pension liability over unrecognized prior service cost . . . . . 1,899 Foreign currency translation adjustments for the year . (4,658) ---- ---- -------- ------ --------- ------- ------- --------- BALANCE DECEMBER 31, 1992. .5 145 129,128 6,042 (156,583) (1,711) - (11,215) Net loss for the year. . (20,936) Dividends payable on preferred stock, $.23 per share . . . . (112) Stock issued to directors (5,635 shares) . . . . 25 Exchange Offer . . . . . (5) (35) 31,022 Conversion of Facility Note (1,374,292 shares) . . 14 4,107 Stock issued (3,333,333 shares) 33 6,967 Change in excess of additional pension liability over unrecognized prior service cost . . . . . (6,428) Issuances under employee plans, net . . . . . . 6 1,545 (1,551) Foreign currency translation Adjustments for the year . (1,705) Writedown from sale of the U.K. Subsidiary. . . 4,579 ---- ---- -------- ------ --------- ------- ------- -------- BALANCE DECEMBER 31, 1993 . . . .$ - $163$172,682$6,042 $(177,519)$(8,139)$(1,551) $ (8,341) ===== ==== ======== ====== ========= ======= ======= ========
See Notes to Consolidated Financial Statements. -30- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1991, 1992 AND 1993 1. SUMMARY OF ACCOUNTING POLICIES Basis of presentation The consolidated financial statements include the accounts of Robertson- Ceco Corporation (the "Company") and all majority-owned subsidiaries. All significant intercompany balances and transactions have been eliminated. Investments in affiliates owned 20% to 50% are accounted for under the equity method. Certain previously reported amounts have been reclassified to conform to the 1993 presentation. Foreign currency translation Asset and liability accounts of foreign subsidiaries and affiliates are translated into U.S. dollars at current exchange rates. Income and expense accounts are translated at average rates. Any unrealized gains or losses arising from the translation are charged or credited to the foreign currency translation adjustments account included in stockholders' equity (deficiency). Foreign currency gains and losses resulting from transactions, except for intercompany debt of a long-term investment nature, are included in other income (expense)-net and amounted to $(320,000), $(1,088,000), and $(382,000) respectively, for the years ended December 31, 1991, 1992 and 1993. Inventories Inventories are valued at the lower of cost or market. Cost is determined using the last-in, first-out ("LIFO") method for certain inventories and the first- in, first-out ("FIFO") method for other inventories. Property Property is stated at cost. Depreciation is computed for financial statement purposes by applying the straight-line method over the estimated lives of the property. For federal income tax purposes, assets are generally depreciated using accelerated methods. Amortization of assets under capital leases is included with depreciation expense. Estimated useful lives used in computing depreciation for financial statement purposes are as follows: Land improvements . . . . . . . . . . . 10-25 years Buildings and building equipment. . . . 25-33 years Machinery and equipment . . . . . . . . 3-16 years Income taxes The provision for income taxes is based on earnings reported in the financial statements. Deferred tax assets, when considered realizable, and deferred tax liabilities are recorded to reflect temporary differences between the tax bases of assets and liabilities for financial reporting and tax purposes. Revenue Revenue from product sales is recognized generally upon passage of title, acceptance at a job site, or when affixed to a building. Revenue from construction services is recognized generally using the percentage-of-completion method which recognizes income ratably over the period during which contract costs are incurred. -31- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued A provision for loss on construction services in progress is made at the time a loss is determinable. Insurance Liabilities The Company is self-insured in the U.S. for certain health insurance, worker's compensation, general liability and automotive liability, subject to specific retention levels. Insurance liabilities consist of liabilities incurred but not yet paid for such amounts. Deferred Revenues Billings in excess of revenues earned on construction contracts are reflected in other accrued liabilities as deferred revenues. Revenues earned in excess of billings are included in accounts receivable as unbilled receivables. Excess of Cost Over Net Assets of Acquired Businesses The excess of cost over the net assets of acquired businesses relates to the Company's acquisitions of metal building businesses. Such costs are being amortized on a straight-line basis over a period of 40 years. Cash and cash equivalents As used in the consolidated statements of cash flows, cash equivalents represent those short-term investments that can be easily converted into cash and that have original maturities of three months or less. Earnings (Loss) per Common Share Earnings (loss) per common share is based on the weighted average number of common shares and common share equivalents outstanding during each period. Warrants to purchase common stock, outstanding stock options and restricted stock are included in earnings (loss) per share computations if the effect is not antidilutive. Earnings (loss) used in the computation, is earnings (loss), plus dividends paid or payable on preferred stock. On July 23, 1993, a 1 for 16.5 reverse split (the "Reverse Split") of the Company's common stock became effective. All common stock share amounts and per share data presented herein are restated to reflect the Reverse Split. Recent Accounting Pronouncements In May 1993, the Financial Accounting Standards Board issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan" and SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities". SFAS No. 114 and SFAS No. 115 are effective for fiscal years beginning after December 15, 1994 and December 15, 1993, respectively. The Company will implement these statements as required. The future adoption of these standards is not expected to have a material effect on the Company's consolidated financial position or results of operations. 2. RESTRUCTURING ACTIONS During the past several years, the Company has been adversely affected by the worldwide recession in the construction industry and as a result has incurred significant operating losses and has experienced severe liquidity problems. The Company's defaults under its loan and capital lease agreements at December 31, 1992, and its inability to generate adequate unrestricted cash to meet its current and anticipated operating requirements, along with the Company's recurring losses from operations, negative working capital, and stockholders' deficiency raised -32- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued substantial doubt at December 31, 1992 about the Company's ability to continue as a going concern. To address these problems, the Company has developed and either implemented or is in the process of implementing a number of operational and financial restructuring plans for the Company, including reducing operating costs to meet current and expected levels of demand, liquidating or divesting of operations which do not meet the Company's strategic direction or where the amount of cash required to restructure the business exceeds the expected return within a reasonable period of time, and investing in remaining businesses, where appropriate, to realize their potential. In connection with these restructuring plans, the Company recorded restructuring charges of $34,776,000 or $39.60 per share and $11,858,000 or $13.47 per share in 1991 and 1992, respectively. The significant operational restructuring actions which were completed during 1992 and 1993 include: staff reductions at Corporate; closure of three high- cost manufacturing plants and consolidation and rationalization at the remaining manufacturing plants at the Metal Buildings Group; sales and closure of certain businesses; exiting markets and manufacturing operations at certain locations and other reductions in fixed costs primarily through headcount reductions at the Building Products Group and closure of unprofitable sales offices; closure of equipment yards and reconditioning centers; closure of the forms manufacturing facility and reductions in operating and administrative personnel at the Concrete Construction Group. In addition, there are currently a number of restructuring programs which are ongoing and under consideration, including further reductions in work force levels and rationalization through sales, redistribution or closure of unprofitable businesses and facilities. The significant financial restructuring actions which were completed during 1993 include: the completion of the Company's exchange offer for the Company's 15.5% Discount Subordinated Debentures due 2000 (the "15.5% Subordinated Debentures") for new debt and common stock and the exchange of the Company's outstanding cumulative convertible preferred stock (the "Preferred Stock") for common stock (together with the exchange of the 15.5% Subordinated Debentures, the "Exchange Offer"); replacement of the Company's domestic credit facility (the initial funding of the credit facility occurred on May 3, 1993); significant reductions in outstanding letters of credit; renegotiation and settlement of certain operating leases in connection with the Company's downsizing activities; retirement of a $4,000,000 facility fee note through issuance of 1,374,292 shares of the Company's common stock; and the sale of 3,333,333 shares of the Company's common stock and the transfer of all assets, claims and rights under a foreign construction project to an outside investor indirectly controlled by a director of the Company for $10,000,000. Outlook Operating profits, along with bookings and backlog at the Company's Metal Buildings Group, Concrete Construction Group and certain of the Company's Building Products businesses, in particular, the Company's Asia/Australia operations, have shown significant improvements throughout 1993, and in the fourth quarter of 1993 the Company recorded income from continuing operations of $662,000. The Company's North American and European Building Products operations continue to be adversely affected by weak market conditions and severe competition and as a result are continuing to experience declines in revenue and incur operating losses. As discussed more fully in Note 3, in November of 1993 the Company sold its U.K. subsidiary which had accounted for a significant portion of the Company's Building Product Group's operating losses and cash flow deficit during 1993. At each of the remaining Building Products businesses which continue to operate unprofitably, the Company is evaluating various alternatives and has been and is continuing to -33- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued implement restructuring and other actions. The Company expects that demands on its liquidity and credit resources will continue to be significant throughout most of 1994 as a result of the anticipated funding required for seasonal operating losses during the first quarter of 1994, expected requirements for working capital in connection with business growth and bonding requirements, and funding requirements for restructuring programs, nonrecurring cash obligations and trailing liabilities associated with sold and discontinued businesses. The Company expects to meet these requirements through a number of sources, including available cash which was $15,666,000 at December 31, 1993, reductions in letter of credit requirements for certain obligations, availability under domestic and foreign credit facilities, and to a lesser extent, through proceeds from asset sales and settlements of certain outstanding claims. To further assist in funding anticipated working capital growth requirements, on March 30, 1994, the Company received a commitment letter from Foothill Capital Corporation, the current lender under the Company's domestic credit facility (Note 10), which under its terms, would amend the Company's existing domestic credit facility by temporarily increasing the Company's maximum availability under the facility by $10 million from the current level of $35 million to $45 million through June 30, 1994 and would expand the definition of the borrowing base (upon which availability is determined) to include certain assets of the Company's Canadian operations. Under the Foothill Capital Corporation proposal, the Company would have a one time option of extending the increase in the maximum availability to $45 million through November 30, 1994 and to $40 million through December 31, 1994. The Company is currently negotiating with an outside commercial bank to participate with Foothill Capital Corporation in the credit facility and to extend the maximum availability to $45 million through the entire term of the credit facility. Based upon the Company's current assumptions, the Company believes that available liquidity and credit will be sufficient to meet its needs at least through the end of the year. In the event that the Company's business growth exceeds expectations, improvements in operating cash flow do not meet anticipated levels, or anticipated sources of liquidity and credit as described above do not meet expectations, the Company may be required to restrict such growth and/or may seek to raise additional capital through the sale of businesses, through further expansion of existing credit facilities or through new credit facilities, through a possible debt or equity offering or a combination of the above. 3. ACQUISITIONS AND DIVESTITURES On November 8, 1990, H.H. Robertson Company ("Robertson") and Ceco Industries, Inc. ("Ceco Industries") merged into The Ceco Corporation ("Ceco"), a wholly- owned subsidiary of Ceco Industries, hereinafter referred to as the "Combination," with Ceco continuing as the surviving corporation under the name Robertson-Ceco Corporation (the "Company"). The Combination was accounted for using the purchase method of accounting, with Robertson deemed to be the acquiror. On February 3, 1992, the Company sold its door businesses (the "Door Business"), acquired as part of the Combination discussed above, and certain of its U.S. domestic building products and construction businesses (the "X-1 Business") for $135,000,000 (the "Disposition"). Additionally, during the first quarter of 1992, the Company sold its floor and deck business and its South African Subsidiary for $2,400,000 and $5,300,000, respectively. The loss on the sale of the Door Business is reflected as a discontinued operation and the sale of the X-1 Business, the floor and deck business and the Company's South African Subsidiary (collectively the "Sold Businesses") are reflected as disposals of portions of a segment of a business. Revenue of the Door Business was $158,000,000 for 1991. Revenue associated with the Sold Businesses was $157,311,000 in 1991 and loss from operations was $(9,701,000) in 1991. -34- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued In the fourth quarter of 1993, the Company settled in a noncash transaction certain purchase price calculation disputes arising out of the Disposition. In connection therewith, the Company transferred to the purchaser certain real estate previously recorded as assets held for sale which had an approximate fair value of $1,900,000. This transaction had no effect on the 1993 Consolidated Statement of Operations. On November 9, 1993, the Company sold, for no cash consideration, its subsidiary located in the United Kingdom (the "U.K. Subsidiary") which operated as part of the Company's Building Products Group. In connection with the sale, the Company recorded a charge of $9,700,000 in the quarter ended September 30, 1993. The operating results and cash flows of the U.K. Subsidiary are included in the accompanying financial statements for 1991 and 1992 and for the period January 1, 1993 through September 30, 1993, which was determined to be the effective date of the sale. After completion of the sale of the U.K. Subsidiary, the Company remains contingently liable under a $1,800,000 letter of credit guarantee which secures the former subsidiary's banking line; under an equipment lease which had an outstanding balance of $1,900,000 at December 31, 1993; and under certain performance guarantees which arose prior to the sale. During 1991, 1992 and the nine month period ended September 30, 1993, the U.K. Subsidiary recorded revenues of $63,600,000, $33,700,000 and $23,100,000, respectively, and losses from continuing operations of $12,000,000, $13,200,000 and $4,400,000, respectively. The assets and liabilities of the U.K. Subsidiary at September 30, 1993, the effective date of the sale, were as follows:
September 30 1993 ------------ (Thousands) Accounts and notes receivable . . . . . . . . . . . $ 7,542 Inventories . . . . . . . . . . . . . . . . . . . . 3,089 Property, net . . . . . . . . . . . . . . . . . . . 8,745 Other assets. . . . . . . . . . . . . . . . . . . . 1,860 Loans payable and debt. . . . . . . . . . . . . . . (8,288) Accounts payable. . . . . . . . . . . . . . . . . . (7,391) Other liabilities . . . . . . . . . . . . . . . . . (2,007) ------- $ 3,550 =======
The components of the $9,700,000 charge include the write-off of the net assets noted above, provisions and expenses related to the sale of $1,500,000 and a charge of $4,579,000 reflecting the write-off of the cumulative foreign currency translation adjustment which previously was recorded as a component of stockholders' equity in accordance with SFAS No. 52. During 1988, the Company adopted a formal plan to discontinue its fixed- price custom curtainwall operations. During 1989, the existing contracts related to the discontinued operation were substantially physically completed; however, several of the contracts are the subject of various disputes and litigation relating to performance, scope of work and other contract issues. The charges recorded in 1991, 1992 and 1993 relate to costs incurred to provide for the settlement of contract disputes, litigation and rectification costs and to write-off related accounts receivable determined to be uncollectible. Such provisions are made when it is probable that a loss has been incurred and the amount of the loss can be estimated. As discussed in Note 14, the Company continues to be involved in litigation related to certain of these discontinued operations. -35- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued The transactions described above are included in the Consolidated Statements of Operations as follows:
Years Ended December 31 ------------------------------ 1991 1992 1993 ---- ---- ---- (Thousands) Gain (loss) on businesses sold/held for sale X-1 Business. . . . . . . . . . . .$(12,195) $(1,132) $ - South African Subsidiary. . . . . . (12,400) - - U.K. Subsidiary . . . . . . . . . . - - (9,700) Other . . . . . . . . . . . . . . . (776) - - -------- ------- -------- Total . . . . . . . . . .$(25,371) $(1,132) $ (9,700) ======== ======= ======== Discontinued operations Income (loss) from discontinued operations Fixed price custom curtainwall . . . . $ (8,165)$(3,930) $(2,500) Door Business. . . . . . . . . 8,983 - - -------- -------- -------- Total . . . . . . . . . . 818 (3,930) (2,500) Income (loss) on sale of Door Business. . . (16,587) 133 - -------- ------- -------- Total . . . . . . . . . .$(15,769) $(3,797) $ (2,500) ======== ======= ========
The following unaudited proforma financial information shows the results of operations of the Company assuming that the sale of the Sold Businesses, sale of the U.K. Subsidiary and the Exchange Offer (see Notes 2 and 10) had occurred at the beginning of the periods presented. These results are not necessarily indicative of what results would have been if such transactions had occurred at the beginning of the periods presented and are not necessarily indicative of the financial condition or results of operations for any future date or period. -36- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
Years Ended December 31 ----------------------------- 1991 1992 1993 ---- ---- ---- (Unaudited) (Thousands, except per share data) Revenue . . . . . . . . . . . . . .$430,563 $367,211 $356,758 ======== ======== ======== Income (loss) from continuing operations . . . . . . . . . . .$(54,177)$(42,310) $ (1,975) ======== ======== ======== Income (loss) from continuing operations per common share. . $ (4.90)$ (3.83) $ (.17) ======== ======== ========
4. EQUITY INVESTMENT The Company had a 40% equity interest in Spectrum Glass Products, Inc. ("Spectrum") which was accounted for under the equity method. On February 25, 1993, Spectrum filed a petition under Chapter 11 of the United States Bankruptcy Code and on March 19, 1993, the Bankruptcy Court approved the sale of substantially all of Spectrum's assets to an unrelated third party. At December 31, 1993, the Company is contingently liable for approximately $881,000 under a guarantee relating to an equipment lease which was previously held by Spectrum which was assumed by the new owner. In connection with this guarantee, the Company has pledged a mortgage interest in certain of the Company's real estate. Operating results and writedowns recognized by the Company related to its investment in Spectrum were $20,000 in 1991 and $(6,161,000) in 1992 and are included in other income (expense)-net in the accompanying Consolidated Statements of Operations. There was no income (expense) related to Spectrum recognized in 1993. 5. CASH AND RELATED MATTERS Cash and cash equivalents consisted of the following:
December 31 ----------------- 1992 1993 ---- ---- (Thousands) Cash . . . . . . . . . . . . . $5,311 $ 2,146 Time deposits and certificates of deposit. . . 1,909 13,520 ------ ------- Total. . . . . . . . $7,220 $15,666 ====== =======
At December 31, 1993, restricted cash of $459,000 was pledged primarily to support various borrowing agreements and guarantees and $2,679,000 related to the Disposition was held in escrow (see Note 10). 6. ACCOUNTS RECEIVABLE The Company grants credit to its customers, substantially all of which are involved in the construction industry. At December 31, 1992 and 1993 the Company's accounts receivable due from customers located outside of the United States totalled $32,594,000, and $20,599,000, respectively. Accounts receivable included unbilled -37- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued retainages and unbilled accounts receivable relating to construction contracts of $6,582,000 and $1,404,000, respectively, at December 31, 1992 and $3,624,000 and $1,463,000, respectively, at December 31, 1993. At December 31, 1992 other non- current assets included $1,175,000 of retainages due beyond one year. There were no retainages due beyond one year at December 31, 1993. 7. INVENTORIES Inventories consisted of the following:
December 31 -------------------- 1992 1993 ---- ---- (Thousands) Finished goods . . . . . . . . $ 1,462 $ 150 Work in process. . . . . . . . 14,102 6,701 Materials and supplies . . . . 12,477 14,566 ------- ------- Total . . . . . . . . . . . . $28,041 $21,417 ======= =======
At December 31, 1992 and 1993, approximately 22% and 75%, respectively, of inventories were valued on the LIFO method. The LIFO value for those inventories approximates their FIFO value at December 31, 1992 and 1993. 8. ASSETS HELD FOR SALE Assets held for sale consists principally of land, buildings and equipment which are held for sale as a result of restructuring actions and other operating decisions. Such assets are recorded at their estimated net realizable value. 9. OTHER ACCRUED LIABILITIES Other accrued liabilities consisted of the following:
December 31 --------------------- 1992 1993 ---- ---- (Thousands) Payroll and related benefits. . $10,289 $11,496 Warranty and backcharge reserves. . . . . . . . . 5,896 4,634 Deferred revenues . . . . . . . 9,512 8,892 Reserves for restructuring. . . 23,497 6,039 Accrued interest. . . . . . . . 12,125 2,042 Other . . . . . . . . . . . . . 18,518 14,541 ------- ------- Total . $79,837 $47,644 ======= =======
-38- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued 10. DEBT Long-term debt consisted of the following:
December 31 ------------------- 1992 1993 ---- ---- (Thousands) Foothill Term Loan. . . . . . . . . . . . $ - $ 5,000 10%-12% Senior Subordinated Notes due November 1999: Face amount . . . . . . . . . . . . - 18,921 Future interest payments. . . . . . - 15,783 15.5% Discount Subordinated Debentures due November 2000 . . . . . . . . . . . . 63,347 4,812 Obligations incurred under industrial development bonds with interest from 4% to 6%. 1,139 - Debt of foreign subsidiaries with interest from 6.5% to 20% due 1994 to 2007 . . . . . 3,378 699 Other debt with interest of 10% due 1994 to 1995. 982 259 ------- ------- Total . . . . . . . . . . . . . . 68,846 45,474 Less current portion. . . . . . . 67,420 390 ------- ------- Long-term debt. . . . . . . . . . $ 1,426 $45,084 ======= =======
The aggregate maturities of long-term debt at December 31, 1993 were as follows:
(Thousands) 1994. . . . . . . . . . . . . . . . . . . $ 390 1995. . . . . . . . . . . . . . . . . . . 1,555 1996. . . . . . . . . . . . . . . . . . . 2,806 1997. . . . . . . . . . . . . . . . . . . 2,820 1998. . . . . . . . . . . . . . . . . . . 7,729 1999 and later. . . . . . . . . . . . . .30,556 ------- Total maturities of long-term debt. . . 45,856 ------- Less unamortized discount on 15.5% Discount Subordinated Debentures . . 382 ------- Total carrying value of long-term debt. $45,474 =======
As described below, in connection with the Exchange Offer, all future interest payments on the Company's 10%-12% Senior Subordinated Notes have been capitalized. For purposes of determining the debt maturities of the 10%-12% Senior Subordinated Notes, the table above assumes that interest will be paid in additional notes through May 31, 1995 and subsequent interest payments are considered maturities of long-term debt when currently due. On April 12, 1993, the Company entered into a new domestic credit facility (the -39- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued "Credit Facility") with Foothill Capital Corporation ("Foothill"). Under the terms of the Credit Facility, Foothill agreed to provide the Company with a term loan and a revolving line of credit of up to a maximum amount of $35.0 million. The initial funding of the Credit Facility occurred on May 3, 1993 (the "Closing Date"). Prior to entering into the Credit Facility, the Company had in place a domestic borrowing facility with Wells Fargo (the "Old Credit Agreement"). The Company was in default of certain financial covenants of the Old Credit Agreement from March 31, 1992 through the Closing Date of the Credit Facility. Under the terms of the Credit Facility, the revolving line of credit is determined based on a percentage of eligible (as defined and subject to certain restrictions) accounts receivable and inventory, plus an amount equal to $10,000,000 (which is reduced by $166,667 per month commencing six months after the Closing Date), plus the amount provided by the Company as cash collateral, if any, less the amount of $5,000,000 required to be outstanding under the term loan (each together the "Borrowing Base"). At December 31, 1993, the amount of the Borrowing Base was $30,000,000 and was used to support outstanding letters of credit of $29,400,000. The Credit Facility requires that the Company borrow $5,000,000 under the term loan and provides for additional borrowings and or issuances of commercial or standby letters of credit or guarantees of payment with respect to such letters of credit in an aggregate amount not to exceed $30,000,000, based upon availability under the Borrowing Base. The term loan is evidenced by a term loan note that bears interest which is payable monthly at a rate equal to twenty-four percentage points above the reference rate (the reference rate is equivalent to the prime rate at designated institutions). All other obligations, excluding undrawn letters of credit and letter of credit guarantees (for which there is no interest charge), bear interest at the higher of three percent above the reference rate or nine percent per annum. The Credit Facility matures five years from the Closing Date. The Credit Facility required payment of a $350,000 commitment fee, and required on the Closing Date that the Company deliver a facility note in an amount equal to $4,000,000 (the "Facility Note"). The Facility Note was originally payable on October 31, 1993 with interest payable at the higher of the reference rate or six percent. The Company had a one time option of discharging its obligations under the Facility Note, in cash, in common stock having an equivalent fair market value at the maturity date equal to the Facility Note plus accrued interest, or any combination of cash and common stock. The original settlement date was subsequently extended to November 30, 1993, at which time, the Facility Note, plus accrued interest which combined were $4,123,000 were paid in full in a noncash transaction through the issuance of 1,374,292 shares of the Company's common stock to Foothill. As collateral for its obligations under the Credit Facility, the Company granted to Foothill a continuing security interest in and lien on substantially all of the Company's assets. The Credit Facility contains certain financial covenants with respect to the Company's tangible net worth and current ratio. In addition, there are covenants which prohibit the Company from paying dividends on or acquiring any of its capital stock and which either restrict or limit the Company's ability with respect to actions involving other indebtedness, liens, mergers, acquisitions, consolidations, dispositions, investments, capital expenditures, guarantees, prepayment of debt, transactions with affiliates and other matters. In addition to the Credit Facility, borrowing arrangements are in place at certain international locations to assist in supporting local working capital requirements. These arrangements are generally reviewed annually with the local banks and do not require significant commitment fees. The outstanding balance of such short-term loans payable and the weighted average interest rate at December 31, was $8,024,000 and 8.77% in 1992 and $1,054,000 and 13.07% in 1993. At December 31, 1993, the Company had in place at its international locations unused lines of credit of $961,000 and letter of credit and guarantee facilities of $8,851,000 of which $4,355,000 was outstanding. -40- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued At December 31, 1993 the Company had outstanding combined letters of credit and bank guarantees of $33,736,000 and performance guarantees of $4,577,000. Of these amounts, approximately $25,384,000 support reported liabilities and $12,929,000 relate to contingent liabilities. In connection with the Disposition, the Company entered into a Letter of Credit and Reimbursement Agreement and an Escrow Agreement, whereby the purchaser provided the Company with a letter of credit to guarantee certain of the Company's worker's compensation and general insurance liabilities and the Company placed certain funds in escrow. At December 31, 1993, the amount of the outstanding letter of credit which was put in place by the purchaser was $4,171,000 and the amount held in escrow by the Company was $2,679,000. Under the terms of the current agreement with the purchaser, the Company will have access to certain of the escrow cash based upon certain conditions, including reductions in the face amount of the letter of credit either through replacement of the letter of credit by the Company or reductions in the letter of credit requirements which will occur through reduction of the underlying obligations. On February 2, 1994, based upon the Company's partial reduction and replacement of $1,171,000 of the face amount of the purchaser's letter of credit, the Company was granted access to $1,080,000 of cash which was recorded as restricted at December 31, 1993. On July 14, 1993, the Company consummated its Exchange Offer. Under the terms of the Exchange Offer, the 15.5% Subordinated Debenture holders other than Sage RHH (see Note 16) who tendered their bonds each received $407.57 in principal amount of the Company's 10%-12% Senior Subordinated Notes due 1999, plus 111.4 shares of the Company's common stock for each $1,000 aggregate principal amount of 15.5% Subordinated Debentures. Sage RHH, an investor which controlled approximately 29% of the 15.5% Subordinated Debentures and 33.8% of the Company's common stock received approximately 260.4 shares of the Company's common stock for each $1,000 aggregate principal amount of 15.5% Subordinated Debentures tendered. The Company's Preferred Stock holder received 54.8 shares of common stock for each 200 shares of Preferred Stock plus accrued but unpaid dividends, which in the aggregate totaled $281,250 for all of the Preferred Stock. Pursuant to the Exchange Offer, $63,734,000 principal amount of 15.5% Subordinated Debentures plus accrued but unpaid interest of $17,128,000 were exchanged for an aggregate of $17,850,000 principal amount of the Company's 10%-12% Senior Subordinated Notes and 10,041,812 shares of the Company's common stock, and all 500,000 outstanding shares of the Preferred Stock were exchanged for an aggregate of 137,030 shares of the Company's common stock. Interest on the 10%-12% Senior Subordinated Notes is payable semi- annually on May 31 and November 30 of each year. Interest accruing on the 10%-12% Senior Subordinated Notes through and including May 31, 1995 may, at the Company's option, be paid in cash or additional 10%-12% Senior Subordinated Notes, and thereafter will be paid in cash. Interest accrues on the 10%-12% Senior Subordinated Notes from May 31, 1993 through and including November 30, 1994 at the rate of 10% per annum if paid in cash and 12% per annum if paid in additional 10%-12% Senior Subordinated Notes, and thereafter accrues at 12% per annum. The November 30, 1993 interest payment was paid by the Company in additional 10%-12% Senior Subordinated Notes. The 10%-12% Senior Subordinated Notes will mature November 30, 1999, and are redeemable at the Company's option, at any time in whole or from time to time in part, at the principal amount thereof plus accrued interest to the redemption date. Indebtedness under the 10%-12% Senior Subordinated Notes is senior to the Company's 15.5% Subordinated Debentures, and subordinate to the extent provided in the indenture to all indebtedness under the Company's Credit Facility with Foothill and any other indebtedness which by its terms provides that it shall be senior to the 10%-12% Senior Subordinated Notes. -41- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued During the third quarter of 1993, the Company recorded an extraordinary gain from the exchange of the 15.5% Subordinated Debentures of $5,367,000. In accordance with SFAS No. 15, all future interest payments which are due on the 10%-12% Senior Subordinated Notes have been recorded as part of long-term debt, and, as a result, the Company has deferred the related economic gain and will not record any future interest expense related to the 10%-12% Senior Subordinated Notes. On a proforma basis, assuming that the Exchange Offer occurred at the beginning of the period, interest expense for the years ended December 31, 1991, 1992 and 1993 would have been reduced by $8,545,000, $10,733,000 and $6,491,000, respectively. The effect of the Exchange Offer, which was a noncash transaction, on the assets, liabilities and stockholders' equity of the Company, was recorded in the 1993 Consolidated Balance Sheet as of the date of the Exchange Offer, and is summarized as follows:
(Thousands) Reduction in 15.5% Subordinated Debentures, net of discount. . . . . . . . . . . . . . . . . . $ 58,743 Reduction in accrued interest. . . . . . . . . . . . 17,128 Reduction in dividends payable . . . . . . . . . . . 281 Charge-off of debt and equity issuance costs. . . . . . . . . . . . . . . . . . (4,960) Issuance of 10%-12% Senior Subordinated Notes. . . .(34,704) -------- Increase in stockholders' equity. . . . . . . . . $ 36,488 ========
At December 31, 1993, the 15.5% Subordinated Debentures consisted of principal of $5,194,000 and unamortized discount of $382,000. The 15.5% Subordinated Debentures, which accrete in value at the rate of 17.4% per annum, began to accrue cash interest December 9, 1991. The Company did not make its scheduled interest payments on its 15.5% Subordinated Debentures which were due on May 31, 1992, November 30, 1992, May 31, 1993 and November 30, 1993, and consequently was in default under the indenture. On February 15, 1994, the Company paid all past due interest, including interest on past due interest which in the aggregate approximated $1,829,000, thereby curing the event of default under the indenture. At December 31, 1992, the 15.5% Subordinated Debentures were classified as currently due and at December 31, 1993, as a result of the curing of the event of default, are classified as long-term in the Consolidated Balance Sheets. 11. RENTAL AND LEASE INFORMATION The Company leases certain facilities and equipment under operating leases. Total rental expense charged to the Consolidated Statements of Operations for continuing operations on operating leases was $9,031,000, $7,104,000 and $4,063,000 for 1991, 1992 and 1993, respectively. In addition, sublease rental income of $202,000, $218,000 and $140,000 respectively, was netted against rental expense in 1991, 1992, and 1993, respectively. During the years ended December 31, 1991, 1992 and 1993, the Company charged $906,000, $2,293,000 and $4,529,000 respectively, to previously established restructuring reserves related to rentals and lease settlements associated with properties which were no longer used in operations. -42- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Future minimum rental commitments under operating leases at December 31, 1993 were as follows: (Thousands) 1994. . . . . . . . . . . . . . . $3,740 1995. . . . . . . . . . . . . . . 2,986 1996. . . . . . . . . . . . . . . 2,249 1997. . . . . . . . . . . . . . . 1,190 1998. . . . . . . . . . . . . . . 727 1999 and later. . . . . . . . . . 122 ------- Total . . . . . . . . . . . . $11,014 ======= Minimum rental commitments have not been reduced by minimum sublease rentals of $2,963,000 at December 31, 1993 which are due in the future under noncancellable subleases. The above amounts do not include rent payable under escalation clauses as the amounts are not determinable. 12. FINANCIAL INSTRUMENTS In December 1991, the Financial Accounting Standards Board issued SFAS No. 107, "Disclosures about Fair Value of Financial Instruments". This statement requires the Company to disclose estimated fair values for its financial instruments, as well as the underlying methods and assumptions used in estimating fair value. The Company enters into various types of financial instruments in the normal course of business. The estimated fair value of amounts have been determined \ based on available market information and based in certain cases on assumptions concerning the amount and timing of estimated future cash flows and assumed discount rates reflecting varying degrees of perceived risk. Accordingly, the fair values may not represent actual values of the financial instruments that could have been realized as of year end or that will be realized in the future. Fair values for cash and cash equivalents, restricted cash, and loans payable approximate carrying value at December 31, 1993 due to the relatively short maturity of these financial instruments. The fair value of long-term debt, including the current portion of long-term debt at December 31, 1993 was estimated to be $25,900,000 compared to a carrying value of $45,474,000. 13. TAXES ON INCOME Effective January 1, 1993, the Company changed its method of accounting for income taxes to the method required by SFAS No. 109, "Accounting for Income Taxes". As permitted under the new standard, the Company has not restated the prior years' financial statements which had been reported using SFAS No. 96, "Accounting for Income Taxes". The adoption of SFAS No. 109 did not have a material impact on the Company's Consolidated Balance Sheets or Statements of Operations. -43- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Income (loss) from continuing operations before provision (credit) for taxes on income from continuing operations consisted of the following:
Year Ended December -------------------------------- 1991 1992 1993 ---- ---- ---- (Thousands) Income (loss) from continuing operations before provision for taxes on income: Domestic. . . . . . . . . . . . $ (69,684) $(53,472) $(18,657) Foreign . . . . . . . . . . . . (37,319) (12,671) (3,937) --------- -------- -------- Total . . . . . . . . . . . . $(107,003) $(66,143) $(22,594) ========= ======== ======== Provision (credit) for taxes on income from continuing operations: Current: Foreign . . . . . . . . . . . . $ 1,961 $ 1,205 $ 9 --------- -------- -------- Total . . . . . . . . . . . . 1,961 1,205 9 --------- --------- -------- Deferred: Foreign . . . . . . . . . . . . 69 - - --------- -------- -------- Total . . . . . . . . . . . . 69 - - --------- -------- -------- Total . . . . . . . . . . $ 2,030 $ 1,205 $ 9 ========= ======== ========
A reconciliation between taxes computed at the U.S. statutory federal income tax rate and the provision for taxes on income from continuing operations reported in the Consolidated Statements of Operations follows:
Year Ended December 31 ------------------------------ 1991 1992 1993 ---- ---- ---- (Thousands) Tax provision (credit) at U.S. statutory rate .$(36,381)$(22,489)$(7,908) Operating losses that could not be offset against taxable income. . . . . . . . 34,033 23,912 7,655 Differences between foreign and domestic tax rates . . . . . . . . . . . . . . 217 (257) 139 Disposition of foreign subsidiary . . . 4,387 - - Other . . . . . . . . . . . . . . . . . (226) 39 123 -------- -------- -------- Provision for taxes on income . . . . . $ 2,030 $ 1,205 $ 9 ======== ======== ========
-44- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued The following is a summary of the significant components of the Company's net deferred tax liability at December 31, 1993: Deferred tax assets: Insurance . . . . . . . . . . . . . . $ 9,098 Interest on 10%-12% Senior Subordinated Notes. . . . . . . . . 5,372 Pensions. . . . . . . . . . . . . . . 3,563 Warranties, backcharges and job losses. . . . 3,362 Other expenses not currently deductible . . . 13,149 Unlimited operating loss carryforwards. . . . 9,754 Limited operating loss carryforwards. 1,181 -------- Total tax assets . . . . . . . . . 45,479 -------- Deferred tax liabilities: Accelerated depreciation. . . . . . . (6,679) Other items . . . . . . . . . . . . . (2,920) -------- Total tax liabilities. . . . . . . (9,599) -------- Deferred tax asset valuation allowance . . (36,780) -------- Net deferred tax liability . . . . $ (900) ========
At December 31, 1993, the Company has worldwide net operating loss carryforwards of $38,180,000 for tax reporting purposes which are available to offset future income without limitation. Approximately $17,758,000 of the net operating loss carryforwards relate to domestic operations and are available for use until expiration in the year 2009. The foreign net operating loss carryforwards at December 31, 1993 were $20,422,000 and expire at various dates in the years 1995 through 2004. In addition to the above, the Company has tax net operating loss carryforwards of $134,244,000, as well as a general business credit carryforward of $1,000,000, that existed as of the date of the Exchange Offer, whose use has been limited due to a "Change in Ownership", as defined in Section 382 of the Internal Revenue Code. The Company's ability to utilize such carryforwards and credits is restricted to an aggregate potential availability of $3,375,000, with an annual limitation of approximately $225,000 through the year 2008. Additionally, these carryforwards can be used to offset income generated by the sale of certain assets to the extent the gain existed at the time of the exchange. This amount and the Company's unlimited, domestic net operating loss carryforwards could be further limited should another "Change in Ownership" occur. Undistributed earnings of consolidated foreign subsidiaries at December 31, 1993, amounted to approximately $3,520,000. No provision for income taxes has been made because the Company intends to invest such earnings permanently. If the Company were to repatriate all undistributed earnings, withholding taxes assessed in the local country would not be material to the Consolidated Financial Statements at December 31, 1993. 14. CONTINGENT LIABILITIES Several contracts related to the discontinued custom curtainwall operations continue to be the subject of litigation. In one of the actions, the owner and the general contractor for the project have claimed the Company and Federal Insurance -45- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Company, as issuer of a performance bond in connection with the Company's work, are liable for $29.9 million in excess completion costs and delay damages due to the Company's alleged failure to perform its obligations under its subcontract. The Company has taken action to enforce a $5.0 million mechanic's lien against the building and seeks to recover more than $10.0 million in costs and damages caused by the general contractor's breach of the subcontract with the Company. The Company filed suit in state court in Iowa against the owner, general contractor and a subcontractor seeking payment of amounts owed to the Company and other damages in connection with a pre-engineered metal building project in Anchorage, Alaska. The general contractor subsequently filed suit in state court in Alaska against a number of parties, including the Company and its surety, alleging against the Company breach of contract, breach of implied warranties, misrepresentation and negligence in connection with the fabrication of the building and seeking damages in excess of $10.0 million. The Company believes that it is entitled to payment under its contract and that it has meritorious defenses against the claims of the general contractor. Two separate, but related lawsuits have been filed against the Company in connection with a $2.4 million subcontract performed by the Company to supply custom curtainwall on a commercial office building. On January 29, 1991, the general contractor filed suit in federal court in Houston, Texas, asserting claims for the owner/developer of the project as well as attempting to enforce indemnification for a $4.0 million state court judgement against the general contractor by virtue of the indemnity provisions in the subcontract. The Company has filed an action in the federal court in St. Louis, Missouri, seeking a declaratory judgement that it is not liable under the indemnity provision or for any of the owner/developer's claims. The general contractor has filed a counterclaim, seeking to enforce its indemnification claim as well as the assigned claims. The general contractor's counterclaim seeks indemnity of $4.0 million and unspecified damages. There are various other proceedings pending against or involving the Company which are ordinary or routine given the nature of the Company's business. The Company has recorded a liability related to litigation where it is both probable that a loss will be incurred and the amount of the loss can be reasonably estimated. While the outcome of the Company's legal proceedings cannot at this time be predicted with certainty, management does not expect that these matters will have a material adverse effect on the consolidated financial condition or results of operations of the Company. During 1993 and through February 1994, the Company resolved and settled certain litigation relating to matters of alleged employment discrimination and alleged breaches of real estate leases by the Company. These settlements did not have a material adverse effect on the Company's 1993 Consolidated Statement of Operations. The Company has been identified as a potentially responsible party by various federal and state authorities for clean-up at various waste disposal sites. While it is often extremely difficult to reasonably quantify future environmental related expenditures, the Company has engaged various third parties to perform feasibility studies and assist in estimating the cost of investigation and remediation. The Company's policy is to accrue environmental and clean-up related costs of a non-capital nature when it is both probable that a liability has been incurred and that the amount can be reasonably estimated. Based upon currently available information, including the reports of third parties, management does not believe that the reasonably possible loss in excess of the amounts accrued would be material to the Consolidated Financial Statements. -46- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued 15. INCENTIVE PLANS, STOCK OPTIONS, WARRANTS 1986 Stock Option Plan and 1976 Stock Option Plan Options to purchase common stock of the Company have been granted under the Company's 1986 Stock Option Plan (the "1986 Plan") and the 1976 Stock Option Plan (the "1976 Plan"). The 1986 Plan terminated by its terms effective May 6, 1991, and the 1976 Plan terminated by its terms effective December 31, 1986. No more options may be granted under the 1986 Plan or the 1976 Plan. Stock options, including stock options with stock appreciation rights granted in conjunction therewith, which were outstanding on the respective termination dates of the 1986 Plan and the 1976 Plan, continue in effect in accordance with their terms. There were no stock appreciation rights on stock options outstanding at December 31, 1993. A summary of stock option transactions under each of the Company's plans follows:
Year Ended December 31 ------------------------------- 1991 1992 1993 ---- ---- ---- Options outstanding, January 1. . . 26,807 31,959 21,815 Granted . . . . . . . . . . . . . . 15,152 - - Cancelled . . . . . . . . . . . . . (10,000) (10,144) (21,330) -------- -------- --------- Options outstanding at end of period. . . . 31,959 21,815 485 ======== ======== ========= Options price range at end of period. . . . $33-$636 $33-$391 $184-$391 ======== ======== ========= Options exercisable at end of period. . . . 17,232 8,997 485 ======== ======== =========
All options granted under the plans are at prices which were not less than 100% of the fair value of the Company's common stock on the date the options were granted. Stock options outstanding at December 31, 1993 expire at various dates from 1995 to 1999. Long-Term Incentive Plan The Company's 1991 Long-Term Incentive Plan, (the "Long Term Incentive Plan"), as amended and restated in 1993, provides for the grant of both cash-based and stock-based awards to eligible employees of, and persons or entities providing services to the Company and its subsidiaries and provides for one-time, automatic stock awards to non-employee members of the Board of Directors. Under the Long-Term Incentive Plan, the Company may provide awards in the form of stock options, stock appreciation rights, restricted shares, performance awards, and other stock based awards. Currently up to 1,400,000 shares of common stock are issuable under the Long-Term Incentive Plan, subject to appropriate adjustment in certain events. Shares issued pursuant to the Long-Term Incentive Plan may be authorized and unissued shares, or shares held in treasury. Awards may be granted under the Long- Term Incentive Plan through March 19, 2001, unless the plan is terminated earlier by action of the Board of Directors. At December 31, 1993, there were 829,146 shares under the Long-Term Incentive Plan which were available for grant. On December 22, 1993, the Company granted awards (the "1993 Awards") of 564,000 restricted shares of the Company's common stock to certain executive officers and key employees. The awards are designed to incentivize management in a manner which -47- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued would enhance shareholder value by tying vesting provisions to achievement of performance targets representing increases in the average market value of the Company's common stock. In summary, the accelerated vesting provisions include comparison of future share prices to a pre-determined base price, each measured on a 60-day average basis , cumulative market value appreciation targets over a three year period, and a requirement of continued employment with the Company except in certain specific circumstances. The base price for the 1993 Awards is $3.41 per share. The 1993 Awards also provide that if performance targets are not achieved by August 10, 1996, all unvested shares not forfeited will vest automatically on August 10, 2003, provided the holder is still an employee of the Company as defined in the plan. The 1993 Awards also provide for immediate vesting if a change in the control of the Company occurs, as defined, and under certain circumstances, upon the termination of one of the Company's executive officers. The fair market value of the restricted shares, based on the market price at the date of the grant, is recorded as deferred compensation, as a component of stockholders' equity and deferred compensation expense is amortized over the period benefited. Warrants In connection with the Combination, the Company assumed 1,470,000 of outstanding warrants of Ceco Industries. Each warrant, which is exercisable on or before December 9, 1996, provides for the right to purchase one stock unit at a price of $6.02 per unit, a unit being a fraction (as determined under the warrants) of a share. The warrants currently provide the holders with the right to acquire an aggregate of 90,249 shares of the Company's common stock at an exercise price of $98.11 per share. The Company has reserved 90,249 shares of its common stock for issuance upon exercise of the warrants. These warrants are reflected in the accompanying Consolidated Balance Sheets at their fair value at the date of acquisition. 16. RELATED PARTY TRANSACTIONS On September 15, 1992, Mulligan Partnership ("Mulligan") sold 297,655 shares of the Company's common stock, representing approximately 33.8% of the Company's then outstanding common stock, and $19,831,000 aggregate principal amount of the Company's 15.5% Subordinated Debentures, representing approximately 29% of the outstanding principal amount of such 15.5% Subordinated Debentures, to Sage Capital Corporation ("Sage Capital"), a Wyoming corporation. The rights of Frontera S.A., ("Frontera") an affiliate of Mulligan, under the Stockholders Agreement dated as of June 8, 1990 among the Company, Frontera and certain other stockholders, including the right to nominate certain members of the Company's Board of Directors, terminated upon the sale by Mulligan to Sage Capital. Mulligan has assigned to Sage Capital, Mulligan's rights under the terms of a registration rights agreement dated as of November 8, 1990 between the Company and Frontera. On November 18, 1992, the Company elected the President of Sage Capital as President and Chief Executive Officer and as a Director, and the Managing Director of Sage Capital as a Director. On December 30, 1992, Sage Capital transferred its shares of common stock and the 15.5% Subordinated Debentures to Sage RHH, a partnership, with Sage Capital retaining an 80% ownership in Sage RHH. As described in Note 10, Sage RHH tendered all of its 15.5% Subordinated Debentures in connection with the Exchange Offer. On December 2, 1993, the Company and its wholly owned subsidiary Robertson -48- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Espanola, S.A. entered into an agreement (the "Agreement") with RC Holdings, Inc. ("RC Holdings") (formerly Heico Acquisitions, Inc.) which is indirectly controlled by a member of the Company's Board of Directors. Pursuant to the Agreement, RC Holdings, through an affiliate entity acquired 3,333,333 newly issued shares of the Company's common stock and certain inventory and interests related to the project in Madrid, Spain known as Puerta de Europa, for which the Company had been providing the curtainwall system and the owner had been placed in insolvency. The shares issued represented approximately 21.4% of the then outstanding shares of the Company after issuance of such shares. The Company received an aggregate of $10 million in cash for the shares and assets. The Agreement also provides that, if RC Holdings is able to realize any proceeds in connection with the Puerta de Europa project, all receipts in excess of $5 million plus expenses incurred for completion and collection, will be split equally between RC Holdings and the Company. The Agreement provides that, until the earlier of (i) December 2, 1998, (ii) the date on which RC Holdings and its affiliates no longer hold 10% of the Company's outstanding common stock or (iii) the date on which the current President of RC Holdings ceases to be a controlling person with respect to RC Holdings and its affiliates, the Board of Directors of the Company shall not elect a chief executive officer without the prior written consent of RC Holdings. On December 9, 1993, the Board of Directors appointed the President and sole stockholder of RC Holdings as its chief executive officer and vice chairman of the Board of Directors. The Company has employment agreements and severance payment plans with respect to certain of its executive officers and certain other management personnel. These agreements generally provide for salary continuation for a specified number of months under certain circumstances. Certain of the agreements provide the employees with certain additional rights after a change of control of the Company, as defined, occurs. 17. INDUSTRY SEGMENT AND GEOGRAPHIC INFORMATION The Company's operations are classified into three business segments: the Metal Buildings Group, the Building Products Group, and the Concrete Construction Group. The Metal Buildings Group designs and manufactures complete pre-engineered metal buildings for commercial and industrial users. The Building Products Group provides construction services and at certain locations fabricates, sells and erects the components for roof, walls and floors of non-residential buildings. The Concrete Construction Group provides a subcontracting service for forming poured-in-place, reinforced concrete buildings. Summarized financial information for each of the Company's business segments and geographic areas of operations for the years ended December 31, 1991, 1992, and 1993 is presented below. -49- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Information on Segments 1991 1992 1993 ---- ---- ---- (Thousands) Revenue: Metal Buildings Group. . . . .$200,017 $187,465 $218,338 Building Products Group . . . 368,085 144,426 97,319 Concrete Construction Group . 84,943 69,062 64,249 Intersegment eliminations. . . (1,592) - - -------- -------- -------- Total. . . . . . . . .$651,453 $400,953 $379,906 ======== ======== ======== Operating income (loss): Metal Buildings Group. . . . .$ (5,672) $ 4,179 $ 7,212 Building Products Group . . . (36,012) (18,146) (6,685) Concrete Construction Group . (692) (4,702) 4,518 Corporate. . . . . . . . . . . (20,358) (24,240) (7,948) -------- -------- -------- Total. . . . . . . . .$(62,734) $(42,909) $ (2,903) ======== ======== ======== Identifiable assets: Metal Buildings Group. . . . .$ 98,732 $ 84,448 $ 96,665 Building Products Group . . . 142,460 90,705 42,839 Concrete Construction Group . 30,776 22,055 22,736 Businesses held for sale . . . 143,812 - - Corporate. . . . . . . . . . . 23,686 38,462 25,934 Adjustments and eliminations . (16,529) (3,300) (6,351) -------- -------- -------- Total. . . . . . . . .$422,937 $232,370 $181,823 ======== ======== ======== Capital expenditures: Metal Buildings Group. . . . .$ 1,143 $ 948 $ 2,955 Building Products Group . . . 5,906 1,371 1,614 Concrete Construction Group . 945 649 899 Corporate. . . . . . . . . . . 224 253 35 -------- -------- -------- Total. . . . . . . . .$ 8,218 $ 3,221 $ 5,503 ======== ======== ======== Depreciation: Metal Buildings Group. . . . .$ 3,305 $ 2,510 $ 2,419 Building Products Group . . . 5,654 3,106 2,348 Concrete Construction Group . 979 963 1,004 Corporate. . . . . . . . . . . 454 63 94 -------- -------- -------- Total. . . . . . . . .$ 10,392 $ 6,642 $ 5,865 ======== ======== ======== -50- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Information on Geographic Areas 1991 1992 1993 ---- ---- ---- (Thousands) Revenue: United States. . . . . . . . .$434,504 $274,027 $287,802 Canada . . . . . . . . . . . . 47,053 29,099 22,063 Europe . . . . . . . . . . . . 130,292 86,939 52,498 Other. . . . . . . . . . . . . 55,444 24,843 21,681 Inter-area eliminations. . . . (15,840) (13,955) (4,138) -------- -------- -------- Total. . . . . . . . .$651,453 $400,953 $379,906 ======== ======== ======== Operating income (loss): United States. . . . . . . . .$(20,196) $ (3,601) $ 7,347 Canada . . . . . . . . . . . . (14,449) (2,829) 1,099 Europe . . . . . . . . . . . . (11,914) (11,131) (5,054) Other. . . . . . . . . . . . . 4,183 (1,108) 1,653 Corporate. . . . . . . . . . . (20,358) (24,240) (7,948) -------- -------- -------- Total. . . . . . . . .$(62,734) $(42,909) $ (2,903) ======== ======== ======== Identifiable assets: United States. . . . . . . . .$146,315 $127,786 $125,689 Canada . . . . . . . . . . . . 24,407 16,716 15,013 Europe . . . . . . . . . . . . 84,670 52,896 13,088 Other. . . . . . . . . . . . . 16,684 12,104 13,431 Businesses held for sale . . . 143,812 - - Corporate. . . . . . . . . . . 23,686 38,462 25,934 Adjustments and eliminations . (16,637) (15,594) (11,332) -------- -------- -------- Total. . . . . . . . .$422,937 $232,370 $181,823 ======== ======== ======== Identifiable assets in each segment or geographic area include the assets used in the Company's operations and the excess of the purchase price over the fair value of assets acquired. Corporate assets consist primarily of cash and cash equivalents, income tax refunds receivable, restricted cash, property and equipment, assets held for sale and deferred costs related to the Credit Facility. Inter-area sales are generally recorded at prices which are intended to approximate prices charged to unaffiliated customers. 18. RETIREMENT BENEFITS The Company and its subsidiaries have various defined contribution and defined benefit pension plans covering substantially all of its U.S. employees and employees in certain foreign countries. In connection with the Company's restructuring plan, the Company merged certain of its U.S. defined benefit plans effective June 1, 1992 into an existing pension plan of the Company which was amended to provide future retirement benefits to all of the Company's U.S. eligible salary and hourly employees. Certain U.S. employees are covered by a defined contribution plan which provides for contributions based primarily on compensation levels. The Company also participates in numerous multi-employer plans which are administered by unions and provide defined benefits to employees covered under industry collective bargaining agreements. Benefits provided under the Company's defined benefit pension plans are primarily based on years of service and the employee's compensation. The Company's funding policy is to contribute an amount annually based upon actuarial and economic assumptions designed to achieve adequate funding of projected benefit obligations. -51- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Plan assets are invested in broadly diversified portfolios of government obligations, mutual funds, stocks, bonds and fixed income and equity securities. The Company funds its contributions to the defined contribution plan as accrued. Plan assets are invested in mutual funds. Contributions under the various union- sponsored, multi-employer plans are determined in accordance with the provisions of negotiated labor contracts and generally are based on the number of hours worked. Such contributions are charged against operations as incurred. U.S. and Canadian Defined Benefit Plans Net pension cost (income) consisted of the following:
Year Ended December 31 ----------------------------- 1991 1992 1993 ---- ---- ---- (Thousands) Service cost-benefits earned during the year $ 1,311 $1,293 $ 926 Interest cost on projected benefit obligation. . . . . 4,288 5,744 5,222 Actual return on assets. . . . . . . (5,486) (6,928) (5,536) Net amortization and deferral. . . . 955 543 1,355 ------- ------ ------- Net pension cost . . . . . . . . . . $ 1,068 $ 652 $ 1,967 ======= ====== =======
The following table sets forth the aggregate funded status of the U.S. and Canadian defined benefit plans:
December 31, 1992 December 31, 1993 Plans With Plans With ----------------------- ----------------------- Assets Accumulated Assets Accumulated Exceeding Benefits Exceeding Benefits Accumulated Exceeding Accumulated Exceeding Benefits Assets Benefits Assets ----------- ----------- ----------- ----------- (Thousands) Actuarial present value of benefit obligation: Vested benefit obligation. . $ 8,942 $ 50,068 $8,619 $ 58,222 Non-vested benefit obligation. . . . 793 764 35 787 ------- -------- ------- -------- Accumulated benefit obligation . . . 9,735 50,832 8,654 59,009 Excess of projected benefit obligation over accumulated benefit obligation . . . . 952 184 442 595 ------- -------- ------- -------- Projected benefit obligation . 10,687 51,016 9,096 59,604 Plan assets at fair value. . . 17,934 39,423 15,182 40,296 ------- -------- ------- -------- Projected benefit obligation (in excess of) or less than plan assets. . . . . . . . . 7,247 (11,593) 6,086 (19,308) Unrecognized net (gain) loss . 411 2,157 225 9,380 Remaining unrecognized net transition (asset) obligation. . . . (1,402) 569 (614)531 Adjustment required to recognize minimum liability. . . . . . - (2,542) - (9,315) ------- -------- ------- -------- Prepaid (accrued) pension cost recognized in the consolidated balance sheets . . . . . . . $ 6,256 $(11,409) $5,697 $(18,712) ======= ======== ======= ========
-52- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued Actuarial assumptions used for the U.S. and Canadian plans were as follows:
Year Ended December 31 ---------------------------- 1991 1992 1993 ---- ---- ---- Assumed discount rate U.S. plans . . . . . . 8.5% 8.5% 7.25% Assumed discount rate Canadian plan. . . . . 8.5 9.5 8.0 Assumed rate of compensation increase. . . . 4-5.5 4-5.5 4.5-5.5 Expected rate of return on plan assets . . . 9.0 9-10 9.0
Other Foreign Defined Benefit Plans The amounts reported below relating to other foreign defined benefit plans exclude in 1993 the plan of the sold U.K. Subsidiary. Net pension cost (income) consisted of the following:
Year Ended December 31 --------------------------- 1991 1992 1993 ---- ---- ---- (Thousands) Service cost-benefits earned during the year. $ 948 $ 1,049 $ 690 Interest cost on projected benefit obligation 3,996 3,385 2,249 Actual return on assets . . . . . . . (6,000)(5,342) (2,394) Net amortization and deferral . . . . 1,226 2,143 196 ------- ------- ------- Net pension cost (income) . . . . . . $ 170 $ 1,235 $ 741 ======= ======= =======
-53- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued The following table sets forth the aggregate funded status of other foreign defined benefit plans:
December 31 Plans with Assets Exceeding Accumulated Benefits ------------------ 1992 1993 ---- ---- (Thousands) Actuarial present value of benefit obligation Vested benefit obligation . . . . . . . $27,245 $1,949 Non-vested benefit obligation . . . . . 109 14 ------- ------ Accumulated benefit obligation. . . . . 27,354 1,963 Excess of projected benefit obligation over accumulated benefit obligation. 6,112 74 ------- ------ Projected benefit obligation . . . . . . . 33,466 2,037 Plan assets at fair value. . . . . . . . . 28,859 2,150 ------- ------ Projected benefit obligation less than (greater than) plan assets . . . . . . . . . . . . . . (4,607) 113 Unrecognized net gain. . . . . . . . . . . 10,931 1,489 Remaining unrecognized net transition asset. . . . (3,817) (515) ------- ------ Prepaid pension cost recognized in the consolidated balance sheets. . . . . . . . . . . . . $ 2,507 $1,087 ======= ======
Actuarial assumptions used for the other foreign defined benefit plans were as follows:
Year Ended December 31 ----------------------------- 1991 1992 1993 ---- ---- ---- Assumed discount rate. . 9.5-18% 9.5-10.5% 7.0% sumed rate of compensation increase. . .7-15 7-7.5 4.5 Expected rate of return on plan assets . . 11-19 11-13 7.5
Pension expense also included the following amounts:
Year Ended December 31 ---------------------------- 1991 1992 1993 ---- ---- ---- (Thousands) U.S. defined contribution plan . $4,258 $1,241 $ 830 ====== ====== ====== Multi-employer plans . . $5,664 $1,444 $1,455 ====== ====== ====== -54- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued As a result of the Disposition discussed in Note 3, the Company recognized during 1991 curtailment gains of $159,000 and during 1992, settlement gains of $1,733,000, which are reflected in the Consolidated Statement of Operations as a component of the loss from discontinued operations, and curtailment losses of $849,000 in 1991 which are reflected in the Consolidated Statement of Operations as a component of gain (loss) on businesses sold/held for sale. Due primarily to changing the assumed discount rate for the Company's U.S. defined benefit plans from 8.5% at December 31, 1992 to 7.25% at December 31, 1993, the amount reported within Stockholders' Equity as Excess of Additional Pension Liability Over Unrecognized Prior Service Cost increased by $6,428,000 in 1993 compared with 1992. The change in discount rate was also the primary reason for the increase in Long-term Pension Liabilities, as reported in the Consolidated Balance Sheets. 19. POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS OTHER THAN PENSIONS Effective January 1, 1993 the Company adopted SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions" for its U.S. plans. SFAS No. 106 requires measurement of the obligations of an employer to provide future postretirement benefits and the accrual of costs during the years that the employee provides services. The Company provides postretirement health and life insurance benefits under unfunded plans to a select group of retired U.S. employees. The Company has fixed its per retiree cost of providing these benefits to a majority of these participants. The accumulated postretirement benefit obligation at adoption was approximately $21,501,000 and is being recognized over the expected payment period of 14 years. The adoption of SFAS No. 106 did not have a material impact on the Company's Statements of Operations or Cash Flows. Prior to the adoption of SFAS No. 106, the Company expensed the net cost of providing such benefits to retired employees on a pay-as-you-go basis. The Company is also required to adopt the provisions of SFAS No. 106 with respect to its foreign postretirement benefit plans for fiscal years beginning after December 15, 1994. The Company plans to adopt this standard as required, and is currently evaluating its impact.
The following table sets forth the U.S. plans' funded status reconciled with the amount recognized in the Company's Consolidated Balance Sheets.
December 31, 1993 ----------------- (Thousands) Accumulated Postretirement Benefit Obligation: Retired employees . . . . . . . . . . $(21,068) ======== Unfunded accumulated benefit obligation in excess of plan assets. . . . . . $(21,068) Unrecognized net (gain)/loss. . . . . 1,004 Unrecognized transition obligation. . 19,934 -------- Accrued postretirement benefit cost . $ (130) ========
For the purposes of measuring the December 31, 1993 accumulated postretirement benefit obligation, the per capita cost of covered health care benefits was assumed to increase at 12.25% from 1993 to 1994 for retirees not in the Company's fixed cost plan. The rate was assumed to decrease gradually down to 4.75% by 2002 and remain at that level thereafter. Because the health care cost trend rate assumption affects relatively few participants, there is no significant effect on the amounts reported. Increasing assumed health care cost trend rates by one percentage point in each year would increase the accumulated postretirement benefit obligation as of -55- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued December 31, 1993 by $468,000, or 2.2%. The weighted average discount rate used in determining the accumulated postretirement benefit obligation at December 31, 1993 was 7.25%. Net periodic postretirement benefit cost for 1993 included the following components:
Year Ended December 31, 1993 ----------------- (Thousands) Interest cost. . . . . . . . . . . . . . . $1,716 Net amortization and deferral. . . . . . . 1,567 ------ Net periodic postretirement benefit cost . $3,283 ======
For purposes of measuring the 1993 net periodic postretirement benefit cost, the per capita cost of covered health care benefits was assumed to increase at 13.5% from 1993 to 1994 for retirees not in the fixed cost plans. The rate was assumed to decrease gradually down to 6.0% by 2002 and remain level thereafter. Because the health care cost trend rate assumption affects relatively few participants, increasing assumed health care cost trend rates by one percentage point each year would increase the aggregate of the service and interest cost components of the net periodic postretirement benefit cost for fiscal 1993 by $22,000, or 0.7%. The weighted average discount rate used in determining the 1993 expense was 8.5%. In the fourth quarter of 1993, the Company adopted SFAS No. 112, "Employers' Accounting for Postemployment Benefits". This statement requires an accrual method of recognizing postemployment benefits. The cumulative effect of adopting SFAS No. 112 was $1,200,000. Prior to the adoption of SFAS No. 112, the Company expensed the net cost of providing these benefits on a pay-as-you-go basis. Amounts recognized in prior years Statements of Operations were not material. 20. QUARTERLY FINANCIAL INFORMATION (UNAUDITED) Quarterly financial data is summarized as follows:
First Second Third Fourth ----- ------ ----- ------ 1993 (a) Revenue. . . . . . . . . . . . . . $ 80,431 $ 93,955 $106,043 $ 99,477 Cost of sales. . . . . . . . . . . 71,187 78,683 89,333 84,416 Income (loss) from continuing operations . . . . . . . . . . . (8,615) (3,772) (10,878) 662 Net income (loss). . . . . . . . . (8,615) (3,772) (5,511) (3,038) Income (loss) per share from continuing operations. . . . . . $ (9.85)$ (4.35)$ (1.16) $ .05 Net income (loss) per common share . . . . $ (9.85)$ (4.35)$ (.59) $ (.22) 1992 (b) Revenue. . . . . . . . . . . . . . $ 88,618 $ 97,511 $102,485 $112,339 Cost of sales. . . . . . . . . . . 79,396 87,193 89,743 96,484 Income (loss) from continuing operations . . . . . . . . . . . (32,632) (16,603) (3,261) (14,852) Net income (loss). . . . . . . . . (32,632) (18,203) (5,458) (14,852) Income (loss) per share from continuing operations. . . . . . $ (37.07)$ (18.93)$ (3.77) $ (16.93) Net income (loss) per common share . . . . $ (37.07)$ (20.74)$ (6.26) $ (16.93)
-56- ROBERTSON-CECO CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued (a) In the third quarter of 1993, the Company recorded a charge of $9,700,000 for the sale of the Company's U.K. Subsidiary (Note 3) and an extraordinary gain of $5,367,000 resulting from the completion of the Company's Exchange Offer (Note 10). In the fourth quarter of 1993, the Company recorded a charge for discontinued operations of $2,500,000 (Note 3) and a charge of $1,200,000 for the cumulative effect of an accounting change (Note 19). As discussed in Note 3, fourth quarter results for 1993 exclude the operations of the sold U.K. Subsidiary. (b) As discussed in Note 2, during 1992, the Company took certain actions with respect to the operational and financial restructuring of the Company. As a result of the restructuring plan, the Company was required to provide for the estimated costs associated with the restructuring, as well as losses on businesses held for sale. These estimates resulted in charges (credits) to the first, second, third and fourth quarters of 1992 as follows: $20,502,000, $3,000,000, $(9,932,000), and $3,108,000, respectively. In the second quarter of 1992, the Company provided $3,500,000 for various environmental matters and in the third quarter of 1992, the Company provided $4,167,000 to write-off its equity investment (Note 4) and $3,900,000 to recognize a loss from discontinued operations (Note 3). The second quarter's sales and cost of sales reflect a reclassification resulting from the Company's decision, in the third quarter, to retain certain foreign businesses. Such reclassifications had no effect on loss from continuing operations or on net loss. -57- Independent Auditors' Report To the Board of Directors and Stockholders of Robertson-Ceco Corporation In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, stockholders' equity (deficiency) and cash flows present fairly, in all material respects, the financial position of Robertson-Ceco Corporation and its subsidiaries (the "Company") at December 31, 1993, and the results of their operations and their cash flows for the year then ended in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for the opinion expressed above. The financial statements of Robertson-Ceco Corporation for the years ended December 31, 1992 and 1991 were audited by other independent accountants whose report dated February 25, 1993 (May 3, 1993 as to Note 2) expressed an unqualified opinion on those statements and included an explanatory paragraph that described the substantial doubt about the Company's ability to continue as a going concern. As discussed in Note 19 to the financial statements, the Company changed its method of accounting for postemployment benefits in 1993 by adopting Statement of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits Other than Pensions" and Statement of Financial Accounting Standards No. 112, "Employers' Accounting for Postemployment Benefits". In addition, as discussed in Note 13 to the financial statements, the Company changed its method of accounting for income taxes in 1993 by adopting Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes". /s/ Price Waterhouse PRICE WATERHOUSE Boston, Massachusetts March 30, 1994 -58- Independent Auditors' Report To the Stockholders of Robertson-Ceco Corporation: We have audited the accompanying consolidated balance sheet of Robertson-Ceco Corporation and its subsidiaries as of December 31, 1992 and the related consolidated statements of operations, stockholders' equity (deficiency), and cash flows for each of the two years in the period ended December 31, 1992. Our audits also included the financial statement schedules as of December 31, 1992 and for each of the two years in the period ended December 31, 1992 listed in Item 14. These financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the financial statements and financial statement schedules based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Robertson-Ceco Corporation and its subsidiaries at December 31, 1992 and the results of their operations and their cash flows for each of the two years in the period ended December 31, 1992 in conformity with generally accepted accounting principles. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly in all material respects the information set forth therein. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company's defaults under its loan and capital lease agreements and its inability to generate adequate unrestricted cash to meet its current and anticipated operating requirements, along with the Company's recurring losses from operations, negative working capital, and stockholders' deficiency raise substantial doubt about its ability to continue as a going concern. Management's plans concerning these matters are also discussed in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ Deloitte & Touche DELOITTE & TOUCHE Boston, Massachusetts February 25, 1993 (May 3, 1993 as to Note 2) -59- ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND --------------------------------------------------------------- FINANCIAL DISCLOSURE -------------------- On September 14, 1993, the Board of Directors of Robertson Ceco Corporation, acting upon the recommendation of its Audit Committee, authorized the engagement of the firm of Price Waterhouse as its independent accountants to audit the financial statements of the Company for the fiscal year ending December 31, 1993. Price Waterhouse replaced the firm of Deloitte & Touche, whose engagement as independent accountants of the Company terminated September 14, 1993. The reports of Deloitte & Touche on the Company's financial statements for the years ended December 31, 1991 and 1992, except as noted below, did not contain an adverse opinion or a disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles. The report of Deloitte & Touche on the Company's financial statements for the year ended December 31, 1992 contained an explanatory paragraph with respect to a substantial doubt about the ability of the Company to continue as a going concern. During the years ended December 31, 1991 and 1992 and in the period from January 1, 1993 through September 14, 1993, there were no disagreements with Deloitte & Touche on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure which, if not resolved to the satisfaction of Deloitte & Touche, would have caused Deloitte & Touche to make reference to the matter in connection with its reports on the Company's financial statements with respect to such periods. Also, during the years ended December 31, 1991 and 1992 and in the period from January 1, 1993 through September 14, 1993, there were no "reportable events" as defined in subparagraph (a)(1)(v) of Item 304 of Regulation S-K. During the years ended December 31, 1991 and 1992 and in the period from January 1, 1993 through September 14, 1993, which was prior to the engagement of Price Waterhouse, neither the Company nor anyone else on its behalf consulted Price Waterhouse regarding either (i) the application of accounting principles to a specified transaction, either completed or proposed, or (ii) the type of audit opinion that might be rendered on the Company's financial statements. -60- PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT -------------------------------------------------- (a) Information concerning the Registrant's directors is incorporated by reference to the section entitled "Election of Directors" in the registrant's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 3, 1994, to be filed pursuant to Regulation 14A. (b) Information concerning executive officers of the Registrant is set forth in Item 4.1 of Part I at pages 11 to 12 of this Report under the heading "EXECUTIVE OFFICERS OF THE REGISTRANT". ITEM 11. EXECUTIVE COMPENSATION ---------------------- Information concerning executive compensation is incorporated by reference to the section entitled "Executive Compensation" in the registrant's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 3, 1994, to be filed pursuant to Regulation 14A. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT -------------------------------------------------------------- Information concerning security ownership of certain beneficial owners and management is incorporated by reference to the section entitled "Security Ownership" in the registrant's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 3, 1994, to be filed pursuant to Regulation 14A. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ---------------------------------------------- Information concerning certain relationships and related transactions is incorporated by reference to the section entitled "Certain Relationships and Related Transactions" in the registrant's definitive proxy statement for the Annual Meeting of Stockholders to be held on May 3, 1994, to be filed pursuant to Regulation 14A. -61- PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, --------------------------------------- AND REPORTS ON FORM 8-K ----------------------- PAGE NO. The following documents are filed as part of this Report: (a)1. Consolidated Financial Statements of Robertson- Ceco Corporation. Consolidated Statements of Operations for the three years ended December 31, 1993. 26 Consolidated Balance Sheets at December 31, 1992 and 1993. 27 Consolidated Statements of Cash Flows for the three years ended December 31, 1993. 29 Consolidated Statements of Stockholders' Equity (Deficiency) for the three years ended December 31, 1993. 30 Notes to Consolidated Financial Statements, including Selected Quarterly Financial Data as required by Item 302 of Regulation S-K. 31 Independent Auditors' Reports. Price Waterhouse 58 Deloitte & Touche 59 (a)2.Financial Statement Schedules for the Three Years Ended December 31, 1993. SCHEDULE VIII - Valuation and Qualifying Accounts 65 SCHEDULE IX - Short Term Borrowings 67 SCHEDULE X - Supplementary Income Statement 68 Information All other schedules are omitted because they are not applicable or not required. Report of Independent Accountants on Financial Schedules Price Waterhouse - as of and for the year ended December 31, 1993 69 (a)3.List of Exhibits. Exhibits filed or incorporated by reference in connection with this Report are listed in the Exhibit Index starting on page 70. (b) Reports on Form 8-K On November 22, 1993 the Company filed a Form 8-K reporting the sale of all of the common stock of H.H. Robertson (U.K.) Limited on November 9, 1993 in a noncash transaction to Capella Investments Limited. The U.K. Subsidiary had operated as part of the Company's Building Products Group. -62- On December 22, 1993 the Company filed a Form 8-K reporting the completion of an investment transaction with RC Holdings, Inc. on December 14, 1993. RC Holdings, Inc. is owned by Michael E. Heisley, a director of Robertson-Ceco Corporation since July 1993. The Company also reported that, on December 9, 1993, the Board of Directors of the Company appointed Michael E. Heisley as Chief Executive Officer, replacing Andrew G.C. Sage II who continues as Chairman of the Board. Mr. Heisley was also elected as Vice Chairman of the Board. -63- SIGNATURES Pursuant to the requirements of Section 10 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the city of Boston, The Commonwealth of Massachusetts, on this 31st day of March, 1994. ROBERTSON-CECO CORPORATION By /s/ John C. Sills ------------------------------ Vice President and Controller (Principal Accounting Officer) Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed by the following persons in the capacities and as of the 31st day of March, 1994. Each person whose signature appears below hereby authorizes each of Andrew G. C. Sage, II, Denis N. Maiorani and George S. Pultz and appoints each of them singly his or her attorney-in-fact, each with full power of substitution, to execute in his name, place and stead, in any and all capacities, any or all further amendments to this Report and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, making such further changes in this Report as the Company deems appropriate. SIGNATURE /s/ Michael E. Heisley /s/ Andrew G. C. Sage, II - - ---------------------------------- ------------------------------- Chief Executive Officer Andrew G. C. Sage, II and Director Chairman (Principal Executive Officer) /s/ Denis N. Maiorani /s/ John C. Sills - - ---------------------------------- ------------------------------- Denis N. Maiorani John C. Sills President and Director Vice President and Controller (Principal Financial Officer) (Principal Accounting Officer) /s/ Frank A. Benevento /s/ Stanley G. Berman - - ---------------------------------- ------------------------------- Frank A. Benevento Stanley G. Berman Director Director /s/ Mary Heidi Hall Jones /s/ Kevin E. Lewis - - ---------------------------------- ------------------------------- Mary Heidi Hall Jones Kevin E. Lewis Director Director /s/ Leonids Rudins /s/ Gregg C. Sage - - ---------------------------------- ------------------------------- Leonids Rudins Gregg C. Sage Director Director -64- ROBERTSON-CECO CORPORATION SCHEDULE VIII VALUATION AND QUALIFYING ACCOUNTS (Thousands)
=============================================================================== COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E - - ------------------------------------------------------------------------------- ADDITIONS BALANCE ---------------------- BALANCE AT CHARGED TO CHARGED TO AT BEGINNING COSTS AND OTHER DEDUC- END OF DESCRIPTION OF PERIOD EXPENSES ACCOUNTS TIONS PERIOD - - ------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1993 Deducted from Asset Accounts: Allowance for Doubtful Accounts . . $ 4,653 $ 1,707 $ 57(a) $ 2,887(b) 76(f) 351(g) $ 3,255 ======= ======= ======= ======= ======= Reserves for Discon- tinued Operations.(l) $ 4,938 $ 2,500 $ 2,192(e) $ 5,246 ======= ======= ======= ======= ======= Not Deducted from Asset Accounts: Insurance liabilities - current . . . . . . . $16,434 $11,884 $ 680(f) $17,772(e) $11,226 ======= ======= ======= ======= ======= Insurance liabilities - long term . . . . . . $11,990 $ 3,100 $ 320(e) $14,770 ======= ======= ======= ======= ======= Other - current. . .(k) $30,967 $ 6,164 $ 83(f) $23,635(e) 221(g) 790(f) $12,568(m) ======= ======= ======= ======= ======= Other - non-current.(l) $22,652 $ 110 $ 9,064(e) 82(f) $13,616 ======= ======= ======= ======= ======= YEAR ENDED DECEMBER 31, 1992 Deducted from Asset Accounts: Allowance for Doubtful Accounts . . $ 3,582 $ 2,671 $ 203(a) $ 1,617(b) 855(n) 678(f) 363(d) $ 4,653 ======= ======= ======= ======= ======= Reserves for Discon- tinued Operations.(l) $ 3,326 $ 3,968 $ 2,356(e) $ 4,938 ======= ======= ======= ======= ======= Not Deducted from Asset Accounts: Insurance liabilities - current . . . . . . . $16,986 $10,950 $11,502(e) $16,434 ======= ======= ======= ======= ======= Insurance liabilities - long term . . . . . . $19,743 $ 4,781 $12,534(e) $11,990 ======= ======= ======= ======= ======= Other - current . . (k) $44,932 $16,932 $ 806(f) $29,537(e) 1,848(f) 318(d) $30,967(m) ======= ======= ======= ======= ======= Other - non-current.(l) $15,055 $ 5,500 $ 5,422(f) $ 3,325(e) $22,652 ======= ======= ======= ======= =======
-65- ROBERTSON-CECO CORPORATION SCHEDULE VIII VALUATION AND QUALIFYING ACCOUNTS (Continued) (Thousands)
=============================================================================== COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E - - ------------------------------------------------------------------------------- ADDITIONS BALANCE ---------------------- BALANCE AT CHARGED TO CHARGED TO AT BEGINNING COSTS AND OTHER DEDUC- END OF DESCRIPTION OF PERIOD EXPENSES ACCOUNTS TIONS PERIOD - - ------------------------------------------------------------------------------- YEAR ENDED DECEMBER 31, 1991 Deducted from Asset Accounts: Allowance for Doubtful Accounts . . $ 4,282 $ 3,684 $ 89(a) $ 2,134(b) 2,334(c) 5(d) $ 3,582 ======= ======= ======= ======= ======= Reserves for Discon- tinued Operations . . $ 2,264 $ 4,000 $ 2,938(e) $ 3,326 ======= ======= ======= ======= ======= Not Deducted from Asset Accounts: Insurance liabilities - current . . . . . . . $12,555 $42,179 $37,748(e) $16,986 ======= ======= ======= ======= ======= Insurance liabilities - long term . . . . . . $24,563 $ 4,820(e) $19,743 ======= ======= ======= ======= ======= Other - current . . . . $31,931 $44,606 $ 1,209(c) 20,105(e) 10,220(f) 72(d) $44,931 ======= ======= ======= ======= ======= Other - non-current . . $ 7,190 $ 6,094 $ 1,771(f) $ - $15,055 ======= ======= ======= ======= ======= NOTES: (a) Represents recovery of accounts receivable previously written off as uncollectible. (b) Accounts receivable written off as uncollectible. (c) Transfer to net assets held for sale. (d) Other adjustments. (e) Represents charges to the accounts for their intended purposes. (f) Represents transfer of reserves. (g) Represents reserves of sold business. (j) The reserves are included in the captions "Other Current Assets and Other Non-Current Assets" in the Consolidated Balance Sheets. (k) The reserves are included in the caption "Other Accrued Liabilities" in the Consolidated Balance Sheets. (l) The reserves are included in the caption "Reserves and Other Liabilities" in the Consolidated Balance Sheets. (m) The reserves include warranty and backcharge reserves, reserves for restructuring, and job loss reserves of $1,895 and $1,574 at December 31, 1993 and 1992, respectively, included in the caption "Other Accrued Liabilities" in the Consolidated Balance Sheets. See Notes to Consolidated Financial Statements. (n) Included in the income statement in the caption "Restructuring expense (income)-net."
-66- ROBERTSON-CECO CORPORATION SCHEDULE IX SHORT-TERM BORROWINGS (Thousands)
- - --------------------------------------------------------------------------- COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F - - --------------------------------------------------------------------------- MAXIMUM AVERAGE WEIGHTED CATEGORY OF WEIGHTED AMOUNT AMOUNT AVERAGE AGGREGATE BALANCE AVERAGE OUTSTANDING OUTSTANDING INTEREST SHORT-TERM AT END OF INTEREST DURING THE DURING THE RATE DURING BORROWINGS(a) PERIOD RATE PERIOD PERIOD (b) THE PERIOD(c) - - --------------------------------------------------------------------------- YEAR-ENDED DECEMBER 31, 1993 Short-term bank loans $ 1,054 13.07% $ 8,683 $ 5,533 13.01% ======= ====== ======= ======= ====== YEAR-ENDED DECEMBER 31, 1992 Short-term bank loans $ 8,024 8.77% $14,627 $11,582 15.93% ======= ====== ======= ======= ====== YEAR ENDED DECEMBER 31, 1991 Short-term bank loans $13,766 11.52% $24,056 $17,401 15.15% ======= ====== ======= ======= ====== NOTES: (a) The Company and its subsidiaries have various short-term borrowing arrangements with foreign banks that include no material commitment fees. These arrangements are generally reviewed annually with the banks and adjusted as appropriate. (b) The average amount of short-term borrowings outstanding represents an average of borrowings prevailing at each month end. Short-term borrowings of foreign subsidiaries are translated at current exchange rates. (c) The weighted average interest rate during the year was computed by dividing the actual interest expense by average short-term debt outstanding. Interest expense related to foreign subsidiary borrowings is translated at average rates.
-67- SCHEDULE X ROBERTSON-CECO CORPORATION SUPPLEMENTARY INCOME STATEMENT INFORMATION (Thousands)
- - ---------------------------------------------------------------------- COLUMN A COLUMN B - - ---------------------------------------------------------------------- CHARGED TO COSTS AND EXPENSES YEAR ENDED DECEMBER 31 ITEM 1993 1992 1991 - - ---------------------------------------------------------------------- Maintenance and repairs from continuing operations . . . . . . . $3,146 $3,495 $9,504 ====== ====== ======
NOTE - Other items have not been shown either because they have been included in the Consolidated Financial Statements or because the individual amounts do not exceed 1% of total revenues from continuing operations. -68- Report of Independent Accountants on Financial Statement Schedules To the Board of Directors of Robertson-Ceco Corporation Our audit of the consolidated financial statements referred to in our report dated March 30, 1994 appearing on page 58 of the 1993 Annual Report on Form 10-K of Robertson-Ceco Corporation also included an audit of the Financial Statement Schedules which are as of and for the year ended December 31, 1993 listed in Item 14(a) of this Form 10-K. In our opinion, these Financial Statement Schedules present fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. /s/ Price Waterhouse Price Waterhouse Boston, Massachusetts March 30, 1994 -69- Exhibit Index Exhibit Sequential No. Description Page No. 3.1 Registrant's Second Restated Certificate of Incorporation, effective July 23, 1993, filed as Exhibit 3 to Registrant's report on Form 8-K dated July 14, 1993 (File No. 1-10659), and incorporated herein by reference thereto . . . 3.2 Bylaws of Registrant, effective November 8, 1990, and as Amended on November 12, 1991, August 27, 1992 and December 16, 1993 . . . . . . . . . 77 4.1 Registrant's Second Restated Certificate of Incorporation, effective July 23, 1993 referred to in Exhibit 3.1 above . 4.2 Bylaws of Registrant, effective November 8, 1990, and as Amended on November 12, 1991, August 27, 1992 and December 16, 1993 referred to in Exhibit 3.2 above . . . . 4.3 Indenture, dated December 9, 1986, by and between M C Co. (a predecessor of Registrant) and Mellon Bank, N.A. relating to Ceco Industries, Inc. 15.5% Discount Subordinated Debentures Due 2000 filed as Exhibit 4(b) to Ceco Industries, Inc.'s report on Form 10-K for the year ended December 31, 1986 (File No. 33-10181), and incorporated herein by reference thereto . . . . 4.4 First Supplemental Indenture, dated as of December 9, 1986 between M C Co. (a predecessor of Registrant) and Mellon Bank, N.A. filed as Exhibit 4.5 to Registration Statement of The Ceco Corporation on Form S-4, Registration No. 33- 37020, and incorporated herein by reference thereto . . 4.5 Second Supplemental Indenture, dated November 8, 1990, between Registrant and Bank One, Columbus, N.A. (as successor Trustee to Mellon Bank, N.A.) filed as Exhibit 4.6 to Registrant's report on Form 8-K dated as of November 8, 1990 (File No. 1-10659), and incorporated herein by reference thereto . . . . . . . . 4.6 Third Supplemental Indenture, dated July 14, 1993, between Registrant and Bank One, Columbus, N.A. (as successor Trustee to Mellon Bank, N.A.) filed as Exhibit 2 to Registrant's report on Form 8-K (File No. 1-10659) dated July 14, 1993, and incorporated herein by reference thereto . 4.7 Amended and Restated Stockholders Agreement dated as of July 12, 1990 by and among the principal stockholders of Ceco Industries, Inc., H.H. Robertson Company and Registrant (formerly known as The Ceco Corporation) filed as Exhibit 4.2 to Registration Statement of The Ceco Corporation on Form S-4, Registration Statement No. 33 -37020, and incorporated herein by reference thereto . . 4.8 Stock Purchase Agreement and related Registration Rights Agreement dated as of June 8, 1990 by and among H.H. Robertson Company, Ceco Industries, Inc. and Frontera S.A. filed as Exhibit 10(a) to Ceco Industries, Inc.'s report on Form 8-K (File No. 33-10181), dated as of June 5, 1990, and incorporated herein by reference thereto . . . . -70- 4.9 Agreement, dated as of June 8, 1990, by and among Frontera S.A., First City Financial Corporation Ltd., Hornby Trading Inc., Frill Trading Inc., the principal stockholders of Ceco Industries, Inc. and H.H. Robertson Company and related letter agreement dated as of June 8, 1990, among the principal stockholders of Ceco Industries, Inc., and Frontera S.A. filed as Exhibit 28(b) to Ceco Industries, Inc.'s report on Form 8-K (File No. 33-10181), dated as of June 5, 1990, and incorporated herein by reference thereto . . . . . . . . 4.10 Warrant Agreement, dated December 9, 1986, by and among Registrant (formerly known as The Ceco Corporation), Ceco Industries, Inc. (a predecessor of Registrant) and Continental Illinois National Bank and Trust Company of Chicago (now known as Continental Bank N.A.), filed as Exhibit 4(c) to Ceco Industries, Inc.'s Form 10-K (File No. 33-10181), for the year ended December 31, 1986, and incorporated herein by reference thereto together with Supplement to Warrant Agreement dated as of November 8, 1990 between Registrant and Continental Bank, N.A. filed as Exhibit 4.6 to Registrant's report on Form SE (File No. 1-10659), dated November 16, 1990, and incorporated herein by reference thereto . . . . . . 4.11 Registration Rights Agreement, dated December 9, 1986, by and among Registrant (formerly known as The Ceco Corporation), Ceco Industries, Inc., and the Purchasers listed on the Signature Pages of the Purchase Agreement dated December 9, 1986, between the Ceco Corporation, Ceco Industries, Inc., and the Purchasers of the Subordinated Notes of The Ceco Corporation and the Warrants of Ceco Industries, Inc. filed as Exhibit 4(d) to Ceco Industries, Inc.'s Form 10-K (File No. 33-10181), for the year ended December 31, 1986, and incorporated herein by reference thereto . . . . . . . . . 4.12 Registration Rights Agreement dated May 17, 1993 by and among the Registrant and Sage RHH filed as Exhibit 10.27 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . . . . 4.13 Registration Rights Agreement dated November 23, 1993 by and among the Registrant and Foothill Capital Corporation . 92 4.14 Registration Rights Agreement dated December 14, 1993 by and among the Registrant and Heico Acquisitions, Inc. . . 102 4.15 Indenture dated as of July 14, 1993 among the Registrant and IBJ Schroder Bank and Trust Company, Trustee, relating to the Registrant's 10-12% Senior Subordinated Notes due 1999 together with specimen certificate therefor filed as Exhibit 1 to the Registrant's report on Form 8-K (File No. 1-10659), dated July 14, 1993, and incorporated herein by reference thereto . . . . . . . . -71- 4.16 Specimen certificate for Common Stock, par value $.01 per share, of Registrant filed as Exhibit 4.9 to the Registration Statement of The Ceco Corporation on Form S-4, Registration No. 33-37020, and incorporated herein by reference thereto . . . . . . . . 10.1 Borrower Security Agreement dated as of November 8, 1990 by Registrant in favor of Wells Fargo Bank, N.A., as Agent, filed as Exhibit 10.6 to Registrant's report on Form 10-K for the year ended December 31, 1990 (File No. 1-10659), and incorporated herein by reference thereto . . . 10.2 Subsidiary Security Agreement dated as of November 8, 1990 among Ceco Dallas Co., Ceco Houston Co., Ceco San Antonio Co., M C Durham Co., M C Wathena Co., M C Windsor Co., Meyerland Co., R.P.M. Erectors, Inc. and Quantum Constructors, Inc. in favor of Wells Fargo Bank, N.A., as Agent, filed as Exhibit 10.7 to Registrant's report on Form 10-K for the year ended December 31, 1990 (File No. 1- 10659), and incorporated herein by reference thereto . . 10.3 Subsidiary Guarantee dated as of November 8, 1990 among Ceco Dallas Co., Ceco Houston Co., Ceco San Antonio Co., M C Durham Co., M C Wathena Co., M C Windsor Co., Meyerland Co., R.P.M. Erectors and Quantum Constructors, Inc. in favor of Wells Fargo Bank, N.A. as Agent, filed as Exhibit 10.8 to Registrant's report on Form 10-K for the year ended December 31, 1990 (File No. 1-10659), and incorporated herein by reference thereto . . . . . . 10.4 Underwriting and Continuing Indemnity Agreement dated November 8, 1990 among the Registrant, R.P.M. Erectors, Inc., Quantum Constructors, Inc., H.H. Robertson (U.K.) Limited and Reliance Insurance Company, United Pacific Insurance Company and Planet Insurance Company, filed as Exhibit 10.20 to Registrant's report on Form 10-K for the year ended December 31, 1990 (File No. 1-10659), and incorporated herein by reference thereto . . . . 10.5 Intercreditor Agreement dated as of November 8, 1990 between Wells Fargo Bank, N.A., as Agent and Reliance Insurance Company, filed as Exhibit 10.19 to Registrant's report on Form 10-K for the year ended December 31, 1990 (File No. 1-10659), and incorporated herein by reference thereto . . . . . . . . . 10.6 1976 Option Plan of H.H. Robertson Company (a predecessor of Registrant), as adopted and approved by H.H. Robertson Company's shareholders on May 2, 1978 and on May 6, 1980 and as further amended by H.H. Robertson Company's Board of Directors on August 11, 1981, February 9, 1982 and September 14, 1982, filed as Exhibit 10.5 to the report of H.H. Robertson Company on Form 10-K for the fiscal year ended December 31, 1987 (File No. 1-5697), and incorporated herein by reference thereto . . . . . . 10.7 1986 Stock Option Plan of H.H. Robertson Company (a predecessor of Registrant), as adopted and approved by H.H. Robertson Company's shareholders on May 6, 1986, as amended by H.H. Robertson Company's Board of Directors on March 24, 1987 and as further amended by H.H. Robertson Company's Board of Directors on February 22, 1989, filed as Exhibit 19 to the report of H.H. Robertson Company on Form 10-Q of -72- H.H. Robertson Company for the quarter ended September 30,1989, (File No. 1-5697), and incorporated herein by reference thereto . . . . . . . . 10.8 Text of Executive Separation Plan of H.H. Robertson Company (a predecessor of Registrant) effective May 1, 1989, filed as Exhibit 19 to H.H. Robertson Company's report on Form 10-Q for the quarter ended June 30, 1989 (File No. 1-5697), and incorporated herein by reference thereto . . . 10.9 Agreement and Purchase of Sale of Assets by and between United Dominion Industries, Inc., and Robertson-Ceco Corporation dated December 20, 1991, with letter amendment dated January 24, 1992, filed as Exhibit 2.1 to Registrant's report on Form 8-K dated as of February 3, 1992 (File No. 1-10659), and incorporated herein by reference thereto . 10.10 Loan and Security Agreement dated as of April 12, 1993 between the Registrant and Foothill Capital Corporation, filed as Exhibit 10.15 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . 10.11 Amendment No. 1 to Loan and Security Agreement dated April 30, 1993 between the Registrant and Foothill Capital Corporation, filed as Exhibit 10.16 to Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . 10.12 Consulting and Services Agreement dated as of September 15, 1992 between Registrant and Sage Capital Corporation, filed as Exhibit 10.17 to the Registrant's Annual Report on Form 10-K for the year ended December 31, 1992 (File No. 1- 10659), and incorporated herein by reference thereto . . 10.13 Amended and Restated Consulting and Services Agreement dated as of July 15, 1993 between Registrant and Sage Capital Corporation . . . . . . . 113 10.14 Continuing Guaranty dated as of April 30, 1993 between M C Durham Co. & Foothill Capital Corporation, filed as Exhibit 10.19 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto. . . . . . . 10.15 Continuing Guaranty dated as of April 30, 1993 between Ceco-San Antonio Co. and Foothill Capital Corporation, filed as Exhibit 10.20 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . 10.16 Continuing Guaranty dated as of April 30, 1993 between Meyerland Co. and Foothill Capital Corporation, filed as Exhibit 10.21 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . . -73- 10.17 Security Agreement - Stock Pledge (Domestic Subsidiaries) dated as of April 30, 1993 between the Registrant and Foothill Capital Corporation, filed as Exhibit 10.22 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . . . . 10.18 Security Agreement - Stock Pledge (Foreign Subsidiaries) dated as of April 30, 1993 between the Registrant and Foothill Capital Corporation, filed as Exhibit 10.23 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . . . . 10.19 Intercreditor Agreement dated as of April 30, 1993 among the Registrant, Foothill Capital Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.24 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . 10.20 Intercreditor Agreement dated as of April 30, 1993 among Foothill Capital Corporation, Reliance Insurance Co., United Pacific Insurance Company, Planet Insurance Company and the Registrant, filed as Exhibit 10.25 to the Registrant's Registration Statement on Form S-4, Registration Statement No. 33-58818, and incorporated herein by reference thereto . . . . . . . 10.21 Asset Purchase and Stock Subscription Agreement among Heico Acquisitions, Inc., Registrant and Robertson Espanola, S.A. dated December 2, 1993, filed as Exhibit 28 to Registrant's report on Form 8-K dated December 14, 1993 (File No. 1-10659), and incorporated herein by reference thereto . . 10.22 Employment Agreement between Registrant and Denis N. Maiorani dated July 15, 1993 . . . . . . 115 10.23 Employment Agreement between Registrant and Andrew G. C. Sage, II dated July 15, 1993 . . . . . . 122 10.24 Agreement Regarding Debtor in Possession Financing and Use of Cash Collateral dated as of April 30, 1993 among the Registrant, Foothill Capital Corporation and Wells Fargo Bank, N.A., filed as Exhibit 10.28 to Registrant's report on Form 8-K dated December 14, 1993 (File No. 1-10659), and incorporated herein by reference thereto . . . . 10.25 Letter of Credit by and among Registrant, Wells Fargo Bank, N.A. and Foothill Capital Corporation dated as of April 30, 1993, filed as Exhibit 10.29 to Registrant's report on Form 8-K dated December 14, 1993 (File No. 1-10659), and incorporated herein by reference thereto . . . . 10.26 Amended and Restated 1991 Long Term Incentive Plan, filed as Exhibit 4.1 to Registrant's Form S-8 Registration Statement No. 33-51665 dated December 22, 1993, and incorporated herein by reference thereto . . . . 10.27 Agreement by and among Registrant, Capella Investments Limited and H. H. Robertson (U.K.) Limited dated November 9, 1993, filed as Exhibit 2.1 to the Registrant's report on Form 8-K dated November 22, 1993, and incorporated herein by reference thereto. . . . . . . . -74- 10.28 Indenture, dated December 9, 1986, by and between M C Co. (a predecessor of Registrant) and Mellon Bank, N.A. relating to Ceco Industries, Inc. 15.5% Discount Subordinated Debentures Due 2000 referred to in Exhibit 4.3 above . . . . . . . . . . 10.29 First Supplemental Indenture, dated as of December 9, 1986 between M C Co. (a predecessor Registrant) and Mellon Bank, N.A. referred to in Exhibit 4.4 above . . . . 10.30 Second Supplemental Indenture, dated November 8, 1990, between Registrant and Bank One, Columbus, N.A. (as successor Trustee to Mellon Bank, N.A.) referred to in Exhibit 4.5 above . . . . . . . . 10.31 Third Supplemental Indenture, dated July 14, 1993, between Registrant and Bank One, Columbus, N.A. (as successor Trustee to Mellon Bank, N.A.) referred to in Exhibit 4.6 above . . . . . . . . . . 10.32 Amended and Restated Stockholders Agreement dated as of July 12, 1990 by and among the principal stockholders of Ceco Industries, Inc., H.H. Robertson Company and Registrant (formerly known as The Ceco Corporation) referred to in Exhibit 4.7 above . . . . . . . . 10.33 Stock Purchase Agreement and related Registration Rights Agreement dated as of June 8, 1990 by and among H.H. Robertson Company, Ceco Industries, Inc. and Frontera S.A. referred to in Exhibit 4.8 above . . . . . 10.34 Agreement, dated as of June 8, 1990, by and among Frontera S.A., First City Financial Corporation Ltd., Hornby Trading Inc., Frill Trading Inc., the principal stockholders of Ceco Industries, Inc. and H.H. Robertson Company and related letter agreement dated as of June 8, 1990, among the principal stockholders of Ceco Industries, Inc., and Frontera S.A. referred to in Exhibit 4.9 above . . . 10.35 Warrant Agreement, dated December 9, 1986, by and among Registrant (formerly known as The Ceco Corporation), Ceco Industries, Inc. (a predecessor of Registrant) and Continental Illinois National Bank and Trust Company of Chicago (now known as Continental Bank N.A.) referred to in Exhibit 4.10 above . . . . . . . 10.36 Supplement dated as of November 8, 1990 to Warrant Agreement referred to in Item 4.5 above between Registrant and Continental Bank, N.A. referred to in Exhibit 4.10 above . . . . . . . . . . 10.37 Registration Rights Agreement, dated December 9, 1986, by and among Registrant (formerly known as The Ceco Corporation), Ceco Industries, Inc., and the Purchasers listed on the Signature Pages of the Purchase Agreement dated December 9, 1986, between the Ceco Corporation, Ceco Industries, Inc., and the Purchasers of the Subordinated Notes of The Ceco Corporation and the Warrants of Ceco Industries, Inc. referred to in Exhibit 4.11 above . . -75- 10.38 Registration Rights Agreement dated May 17, 1993 by and among the Registrant and Sage RHH referred to in Exhibit 4.12 above . . . . . . . . . 10.39 Registration Rights Agreement dated November 23, 1993 by and among the Registrant and Foothill Capital Corporation referred to in Exhibit 4.13 above . . . . . 10.40 Registration Rights Agreement dated December 14, 1993 by and among the Registrant and Heico Acquisitions, Inc. referred to in Exhibit 4.14 above . . . . . 10.41 Indenture dated as of July 14, 1993 among the Registrant and IBJ Schroder Bank and Trust Company, Trustee, relating to the Registrant's 10-12% Senior Subordinated Notes due 1999 together with specimen certificate therefor referred to in Exhibit 4.15 above . . . . . . . 10.42 Specimen certificate for Common Stock, par value $.01 per share, of Registrant referred to in Exhibit 4.16 above . 11 Statement re Computation of Earnings (Loss) Per Common Share . . . . . . . . . . 129 16 Letter dated September 20, 1993 from Deloitte & Touche to the Securities and Exchange Commission filed as Exhibit 16 to Registrant's report on Form 8-K dated September 14, 1993 (File No. 1-10659), and incorporated herein by reference thereto . . . . . . . . . 21 List of subsidiaries of Registrant . . . . . 131 23.1 Consent of Deloitte & Touche . . . . . . 132 23.2 Consent of Price Waterhouse . . . . . . 133 -76- EX-3 2 EXHIBIT 3.2 EXHIBIT 3.2 BYLAWS OF ROBERTSON-CECO CORPORATION Effective November 8, 1990 and As Amended on November 12, 1991, August 27, 1992 and December 16, 1993 -77- BYLAWS OF ROBERTSON-CECO CORPORATION TABLE OF CONTENTS Page ARTICLE I OFFICES 1 Section 1.1. Registered Office and Agent 1 Section 1.2. Principal Office 1 Section 1.3. Other Offices 1 ARTICLE II MEETINGS OF STOCKHOLDERS 1 Section 2.1. Place of Meetings 1 Section 2.2. Annual Meetings 1 Section 2.3. Special Meetings 1 Section 2.4. Notice of Meetings 2 Section 2.5. Record Date 2 Section 2.6. Organization 2 Section 2.7. Quorum 2 Section 2.8. Action by Stockholders; Voting 3 ARTICLE III DIRECTORS 3 Section 3.1. Powers of Directors and Compensation 3 Section 3.2. Number and Term of Office 3 Section 3.3. Vacancies 3 Section 3.4. Meetings of Directors 4 Section 3.5. Informal Action 4 Section 3.6. Telephone Participation in Meetings 4 Section 3.7. Standing Committees 4 Section 3.8. Other Committees 4 Section 3.9. Committee Procedure 5 Section 3.10. Committee Meetings 5 Section 3.11. Committee Records and Reports 5 Section 3.12. Term of Committees 5 ARTICLE IV OFFICERS 5 Section 4.1. Executive Officers 5 Section 4.2. The Chairman 5 Section 4.3. The Vice Chairman 5 Section 4.4 The Chief Executive Officer 6 Section 4.5. The President 6 Section 4.6. Vice Presidents 6 Section 4.7. The Secretary and Assistant Secretaries 6 Section 4.8. The Treasurer and Assistant Treasurers 6 Section 4.9. The Controller and Assistant Controllers 7 Section 4.10. General Counsel and Assistant General Counsel 7 Section 4.11. Additional and Assistant Officers, Agents and Employees 7 Section 4.12. Vacancies 7 Section 4.13. Employment Contracts 8 Section 4.14. Term and Compensation 8 ARTICLE V INDEMNIFICATION 8 Section 5.1. Directors and Officers 8 Section 5.2. Payment of Expenses 8 Section 5.3. Permissive Indemnification and Advancement of Expenses 8 Section 5.4. Basis of Rights; Other Rights 9 Section 5.5. Determination of Indemnification 9 Section 5.6. Insurance 9 Section 5.7. Powers of the Board 10 Section 5.8. Definition - Corporation 10 Section 5.9. Definition - Authorized Representative 10 -78- ARTICLE VI SHARES OF CAPITAL STOCK 10 Section 6.1. Share Certificates 10 Section 6.2. Transfer of Stock 11 Section 6.3. Transfer Agents and Registrars 11 Section 6.4. Lost, Stolen, Destroyed, or Mutilated Certificates 11 Section 6.5. Regulations 11 Section 6.6. Holders of Record 11 Section 6.7. Treasury Shares 11 Section 6.8. Fixing of Record Date 11 ARTICLE VII LOAN, NOTES, CHECKS, CONTRACTS AND OTHER INSTRUMENTS 12 Section 7.1. Loans 12 Section 7.2. Notes, Checks, Etc. 12 Section 7.3. Execution of Instruments Generally 12 ARTICLE VIII GENERAL PROVISIONS 12 Section 8.1. Corporate Seal 12 Section 8.2. Fiscal Year 12 Section 8.3. Authorization 12 Section 8.4. Reports to Stockholders 13 Section 8.5. Effect of Bylaws 13 Section 8.6. Notices to Stockholders and Waivers of Notices 13 Section 8.7. Interested Directors; Quorum 13 ARTICLE IX AMENDMENTS 14 -79- BYLAWS OF ROBERTSON-CECO CORPORATION ARTICLE I OFFICES Section 1.1. Registered Office and Agent. The name of the Corporation's registered agent and the address of its registered office in the State of Delaware are as follows: The Corporation Trust Company Corporation Trust Center 1209 Orange Street Wilmington, Delaware 19801 Section 1.2. Principal Office. The address of the principal office of the Corporation is as follows: 222 Berkeley Street Boston, Massachusetts 02116 Section 1.3. Other Offices. The Corporation may also have an office or offices at such other place or places, within or without the State of Delaware, as the Board of Directors may from time to time designate or the business of the Corporation may require. ARTICLE II MEETINGS OF STOCKHOLDERS Section 2.1. Place of Meetings. Meetings of the stockholders shall be held at such place within or without the State of Delaware as shall be designated by the Board of Directors or the person or persons calling the meeting. Section 2.2. Annual Meetings. The annual meeting of the stockholders for the election of directors and the transaction of such other business as may properly come before the meeting shall be held on the first Tuesday after May 1 of each calendar year or after the close of such other date and at such time as shall be designated by the Board of Directors. Section 2.3. Special Meetings. Special meetings of the stockholders may be called at any time by the Chairman or the Board of Directors, and shall be called by the Chairman, President or Secretary at the request in writing of stockholders owning at least twenty percent (20%) of the issued and outstanding shares of stock of the Corporation entitled to vote. Section 2.4. Notice of Meetings. A written notice stating the place, date, and hour of each meeting of stockholders and, in the case of a special meeting, the purpose or purposes for which the meeting is called shall be given by, or at the direction of, the Secretary or the person or persons authorized to call the meeting to each stockholder of record entitled to vote at such meeting, not less than ten (10) days nor more than sixty (60) days before the date of the meeting, unless a greater period of time is required by law in a particular case. Section 2.5. Record Date. In order to determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or to express consent to corporate action in writing without a meeting, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty (60) nor less than ten (10) days before the date of such meeting, nor more than sixty (60) days prior to any other action. If no record date is fixed: (i) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of -80- business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (ii) the record date for determining stockholders entitled to express consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is necessary, shall be the day on which the first written consent is expressed. A determination of stockholders of record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board of Directors may fix a new record date for the adjourned meeting. Section 2.6. Organization. Meetings of the stockholders shall be presided over by the Chairman, or if he is not present, by the President, or if neither the Chairman nor the President is present, by a chairman to be chosen by a majority of stockholders entitled to vote who are present in person or by proxy at the meeting. The Secretary of the Corporation, or in his or her absence, an Assistant Secretary, shall act as secretary of every meeting of the stockholders but, if neither the Secretary nor an Assistant Secretary is present, the stockholders shall choose any person present at the meeting to act as secretary of the meeting. Section 2.7. Quorum. A stockholders' meeting duly called shall not be organized for the transaction of business unless a quorum in present. A majority of the outstanding shares entitled to vote, present in person or represented by proxy, shall constitute a quorum. Once a quorum has been established, the stockholders present in person or represented by proxy at a duly organized meeting can continue to do business until adjournment, notwithstanding the withdrawal of enough stockholders to leave less than a quorum. If any meeting of stockholders cannot be organized because of lack of quorum, those present in person or by proxy shall have the power, except as otherwise provided by statute, to adjourn the meeting to such time and place as they may determine, but in the case of any meeting called for the election of directors, the shares present in person or represented by proxy at the second of such adjourned meetings, consisting of at least one-third (1/3) of the outstanding shares entitled to vote, shall nevertheless constitute a quorum for the purpose of electing directors. Section 2.8. Action by Stockholders; Voting. (a) Except as may be otherwise provided by statute, the Certificate of Incorporation or these Bylaws, (i) each holder of record of the issued and outstanding common stock of the Corporation entitled to vote shall be entitled, at every stockholders' meeting, to one vote in person or by proxy for each share of common stock having voting power standing in the name of such stockholder on the books of the Corporation, (ii) each holder of record of issued and outstanding preferred stock of the Corporation entitled to vote shall be entitled, at every stockholders' meeting, to vote in person or by proxy that number of votes or a fraction of a vote per share to which the respective series of preferred stock held by the stockholder is entitled to vote; and (iii) the affirmative vote of a majority of the voting power present in person or represented by proxy at a duly organized meeting and entitled to vote on the subject matter shall be the act of the stockholders. (b) Voting by the stockholders on any matter may but need not be by written ballot. ARTICLE III DIRECTORS Section 3.1. Powers of Directors and Compensation. The business and affairs of the Corporation shall be managed by or under the direction of the Board of Directors, which shall exercise all powers that may be exercised or performed by the Corporation and that are not by statute, the Certificate of Incorporation or these Bylaws directed to be exercised or performed by the -81- stockholders. The Board of Directors has the authority to fix the compensation of Directors. Section 3.2. Number and Term of Office. (a) Number. The Board of Directors shall consist of not less than 1 nor more than 13 members as may be fixed from time to time by a resolution of the Board of Directors. (b) Eligibility, Term and Resignation. Directors need not be stockholders of the Corporation. Each Director shall hold office until his or her successor shall be duly elected and qualified or until his or her earlier resignation or removal. A Director may resign at any time upon written notice to the Corporation. Section 3.3. Vacancies. Vacancies occurring for any reason may be filled by a majority vote of the Directors then in office, although less than a quorum, or by a sole remaining Director. The occurrence of a vacancy which is not filled by action of the Board of Directors shall constitute a determination by the Board of Directors that the number of Directors is reduced so as to eliminate such vacancy, unless the Board of Directors shall specify otherwise. When one or more Directors shall resign from the Board, effective at a future date, a majority of the Directors then in office, including those who have so resigned, shall have power to fill such vacancy or vacancies, the vote thereon to take effect when such resignation or resignations shall become effective. Section 3.4. Meetings of Directors. Regular meetings of the Board of Directors shall be held at such time and place as the Board of Directors shall from time to time by resolution appoint; two (2) days written or oral notice shall be required to be given of any such regular meeting. A special meeting of the Board of Directors may be called by the Chairman or any Director by giving two (2) days' notice to each Director by letter, telegram, telephone or other oral message. Except as otherwise provided by these Bylaws, a majority of the total number of Directors shall constitute a quorum for the transaction of business, and the vote 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. The business to be transacted at and the purpose of any meeting of the Board of Directors shall be specified in the notice or waiver of the meeting. Section 3.5. Informal Action. Any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee. Section 3.6. Telephone Participation in Meetings. Members of the Board of Directors, or any committee of the Board of Directors, may participate in a meeting of the Board of Directors or such committee by means of conference telephone or similar communications equipment by means of which all person participating in the meeting can hear each other, and participation in a meeting pursuant to this Section shall constitute presence in person at such meeting. Section 3.7. Standing Committees. The Standing Committees of the Board of Directors shall be an Audit Committee, a Compensation Committee and a Nominating Committee, each Standing Committee to have at least three (3) members. The Board of Directors shall appoint members of each Standing Committee, but no member of the Audit Committee or Compensation Committee shall be an officer or employee of the Corporation. Each Standing Committee of the Board shall have and exercise such powers and authority of the Board of Directors in the management of the business and affairs of the Corporation to the extent provided in these Bylaws and in resolutions adopted by the Board of Directors. The Board may designate one or more Directors as alternate members of any Standing Committee, who may replace any absent or disqualified member at any meeting of the committee. -82- Section 3.8. Other Committees. The Board of Directors may by resolution passed by a majority of the whole Board, designate one or more other committees, each of which shall consist of one (1) or more Directors. The Board may designate one or more Directors as alternate members of any committee, who may replace any absent or disqualified member at any meeting of the committee. Each such committee shall have and may exercise such powers and authority of the Board of Directors in the management of the business and affairs of the Corporation as the Board shall provide in the resolution designating such committee except as otherwise provided by statute. Section 3.9. Committee Procedure. The Board of Directors may establish reasonable rules and regulations for the conduct of the proceedings of any committee and may appoint a chairman of the committee who need not be a member thereof and a secretary of the committee who need not be a member thereof. To the extent that the Board shall not exercise such powers, they may be exercised by the committee, subject always to the power of the Board to change such action. Section 3.10. Committee Meetings. Each committee shall meet at the call of its chairman or any two (2) regular members of such committee upon 48 hours' written or oral notice to each member of such committee. The presence or telephone participation of members (regular or alternate) of any committee equal in number to a majority of the members of a committee shall constitute a quorum for the transaction of business, and the vote of a majority of the members present at or so participating in any meeting at which a quorum is present shall be the act of the committee. Section 3.11. Committee Records and Reports. Each committee shall keep appropriate records of its proceedings. At each regular meeting of the Board of Directors, each committee shall report to the Board the substance of all action taken by such committee since the date of its last report to the Board. Each report shall be filed with the minutes of the meeting of the Board of Directors to which it is presented, as part of the corporate records. Section 3.12. Term of Committees. Each committee of the Board of Directors and each committee member shall serve at the pleasure of the Board. ARTICLE IV OFFICERS Section 4.1. Executive Officers. The Executive Officers of the Corporation shall be a Chairman, a President, such number of Vice Presidents as may be determined by the Board of Directors, a Secretary, a Treasurer, a Controller and a General Counsel, all of whom shall be elected by the Board of Directors to serve at the pleasure of the Board of Directors. Any two or more offices may be held by the same person except that the same person may not hold the offices of President and Secretary. The compensation of each officer elected by the Board of Directors following each Annual Meeting of Stockholders and any other officers designated by the President or the Board of Directors shall be fixed from time to time by the Compensation Committee. Section 4.2. The Chairman. The Chairman shall be a Director, shall preside at meetings of the Board of Directors and of the stockholders, and in the absence of the President will assume and execute all the responsibilities of that officer. Section 4.3. The Vice Chairman. The Vice Chairman shall be a Director, and shall direct and have responsibility for such business and affairs of the Corporation and its subsidiaries as, from time to time, shall be established by resolution of the Board of Directors or delegated by the Chairman in a writing filed with the Secretary of the Corporation. In the absence of the Chairman, the Vice Chairman shall preside at meetings of the Board of Directors and of the stockholders. -83- Section 4.4. The Chief Executive Officer. The Board of Directors shall designate either the Chairman or the President to be the Chief Executive Officer of the Corporation. The Chief Executive Officer shall direct and have responsibility for all the business and affairs of the Corporation and its subsidiaries and shall implement the policies and programs adopted or approved by the Board of Directors. Section 4.5. The President. The President shall supervise and direct the business operations of the Corporation, subject to the control of the Board of Directors and the Chairman when the Chairman has been designated as Chief Executive Officer. The President shall undertake such other responsibilities and duties as may be assigned from time to time by the Board of Directors or by a Chairman who has been designated as Chief Executive Officer. Section 4.6. Vice Presidents. The seniority of Vice Presidents shall be in the order of their election or in such other order as may be designated by the Board of Directors. Each Vice President shall have and exercise such powers and duties as from time to time may be conferred upon the Vice President by the Board of Directors, the Chairman or the President. Section 4.7. The Secretary and Assistant Secretaries. The Secretary shall give notice of all meetings of the shareholders and, when required by these Bylaws, of meetings of the Board of Directors; shall be present at all such meetings to keep a record of the proceedings thereof; and shall have charge of the corporate seal of the Corporation. The Secretary shall be the custodian of all corporate records and indicia of title and shall perform such other duties as may be assigned to the Secretary from time to time by the Board of Directors or the Chief Executive Officer. One or more Assistant Secretaries may be appointed by the Board of Directors or the Chief Executive Officer and shall assist the Secretary in the performance of his duties and shall also exercise such further powers and duties as from time to time may be conferred upon or assigned to them by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Secretary, an Assistant Secretary or Secretary Protempore shall perform the duties of the Secretary Section 4.8. The Treasurer and Assistant Treasurers. The Treasurer shall be the principal officer in charge of financial matters and shall have charge and custody of and be responsible for the safe keeping of all funds and securities of the Corporation; shall receive and give receipts for monies due and payable to the Corporation from any source whatsoever and deposit all such monies in the name of the Corporation in such banks, trust companies or other depositories as shall be selected by the Board of Directors; and shall perform such other duties as may be assigned to him from time to time by the Board of Directors or the Chief Executive Officer. One or more Assistant Treasurers may be appointed by the Board of Directors or the Chief Executive Officer and shall assist the Treasurer in the performance of his duties and shall also exercise such further powers and duties as from time to time may be conferred upon or assigned to them or any of them by the Board of Directors or the Chief Executive Officer. In the absence or disability of the Treasurer, an Assistant Treasurer shall perform the duties of the Treasurer. Section 4.9. The Controller and Assistant Controllers. The Controller shall be the principal officer in charge of accounting matters and shall maintain adequate records of all assets, liabilities and transactions of the Corporation and its subsidiaries; shall render reports as to the financial position and operations of the Corporation as may be required by the Board of Directors or the Chief Executive Officer; and shall perform such other duties as may be assigned to him from time to time by the Board of Directors or the Chief Executive Officer. One or more Assistant Controllers may be appointed by the Board of -84- Directors or the Chief Executive Officer and shall assist the Controller in the performance of his duties as from time to time may be conferred upon or assigned to them by the Board of Directors or by the Chief Executive Officer. At the direction of the Controller or in his absence or disability, as Assistant Controller shall perform the duties of the Controller. Section 4.10. General Counsel and Associate General Counsel. The General Counsel shall be the chief legal officer of the Corporation; shall have supervisory responsibility over all legal matters; and shall perform such other duties as may from time to time be prescribed by the Board of Directors or the Chief Executive Officer. One or more Associate General Counsels, if appointed by the Board of Directors or the Chief Executive Officer, shall assist the General Counsel in the performance of his duties and, at the direction of General Counsel or in his absence, as Associate General Counsel shall perform the duties of General Counsel. Section 4.11. Additional and Assistant Officers, Agents and Employees. The Board of Directors from time to time may appoint such additional officers, and such assistant officers, agents and employees, to serve at will or for such periods, and to have such authority and perform such duties, as shall be determined by the Board of Directors. Subject to the power of the Board of Directors, the Chairman or President may appoint from time to time division Vice Presidents, and such other agents and employees as may be deemed advisable for the prompt and orderly transaction of the business of the Corporation, prescribe their authority and duties and the conditions of their employment, and dismiss them; provided, however, that the powers and duties so delegated shall not conflict with the provisions of the Certificate of Incorporation, these Bylaws, or with the powers and duties of any Executive Officer. Section 4.12. Vacancies. Vacancy in any office or position by reason of death, resignation, removal, disqualification or any other cause shall be filed in the manner provided in this Article IV for regular election or appointment to such office. Section 4.13. Employment Contracts. The Board of Directors may authorize the Corporation to enter into employment contracts with any officer or other employee, upon such terms and conditions, including the duration of employment (which may be for any period more or less than one year) and the amount and nature of compensation, as the Board of Directors may approve as being in the best interests of the Corporation. Section 4.14. Term and Compensation. Officers shall be elected by the Board of Directors from time to time, to serve at the pleasure of the Board. Each officer shall hold office until his or her successor is elected and qualified, or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Corporation. The compensation of all officers shall be fixed by, or pursuant to authority delegated by, the Board of Directors from time to time. ARTICLE V INDEMNIFICATION Section 5.1. Directors and Officers. The Corporation shall have the power to indemnify and shall indemnify, to the fullest extent now or hereafter permitted by law, each Director or officer (including each former Director or officer) of the Corporation and each director (including each former director) of a wholly-owned subsidiary of the Corporation who was or is a party to or witness in or is threatened to be made a party to or a witness in any threatened, pending or completed action, suit or proceeding, whether civil, criminal, -85- administrative or investigative, by reason of the fact that he is or was an authorized representative of the Corporation, against all expenses (including attorneys' fees and disbursements), judgments, fines (including excise taxes and penalties) and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. Section 5.2. Payment of Expenses. The Corporation shall pay expenses (including attorneys' fees and disbursements) incurred by a Director or officer of the Corporation or director of a wholly-owned subsidiary of the Corporation referred to in Section 5.1 hereof in defending or appearing as a witness in any civil or criminal action, suit or proceeding. The expenses incurred by such Director or officer of the Corporation or director of a wholly-owned subsidiary of the Corporation in his capacity as a Director or officer of the Corporation or director of a wholly-owned subsidiary of the Corporation shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding only upon receipt of an undertaking by or on behalf of such Director or officer of the Corporation or director of a wholly-owned subsidiary of the Corporation to repay all amounts advanced if it shall ultimately be determined that he is not entitled to be indemnified by the Corporation because he has not met the standard or conduct set forth in the first sentence of Section 5.5 hereof. Section 5.3. Permissive Indemnification and Advancement of Expenses. The Corporation may, as determined by the Board of Directors from time to time, indemnify to the fullest extent now or hereafter permitted by law, any person who was or is a party to or a witness in or is threatened to be made a party to or a witness in, or is otherwise involved in, any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative, by reason of the fact that he is or was an authorized representative of the Corporation, against all expenses (including attorneys' fees and disbursements), judgments, fines (including excise taxes and penalties), and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit or proceeding. Subject to Section 5.2 hereof, the Corporation may, as determined by the Board of Directors from time to time, pay expenses incurred by any such person by reason of his participation in an action, suit or proceeding referred to in this Section 5.3 in advance of the final disposition of such action, suit or proceeding. Section 5.4. Basis of Rights; Other Rights. Each Director and officer of the Corporation and director of a wholly-owned subsidiary of the Corporation shall be deemed to act in such capacity in reliance upon such rights of indemnification and advancement of expenses as are provided in this Article. The rights of indemnification and advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which any person seeking indemnification or advancement of expenses may be entitled under any agreement, vote of stockholders or disinterested Directors, statute or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding such office or position, and shall continue as to a person who has ceased to be an authorized representative of the Corporation and shall inure to the benefit of the heirs, executors and administrators of such person. Section 5.5. Determination of Indemnification. Any indemnification under this Article shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification of the authorized representative is proper in the circumstances because such person has acted in good faith and in a manner 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 no reasonable cause to believe his conduct was unlawful. 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 a quorum of disinterested Directors so directs, by independent legal counsel in a written opinion, or (3) by the stockholders. The -86- termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which such person 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 such person's conduct was unlawful. Section 5.6. Insurance. The Corporation shall purchase and maintain insurance on behalf of each Director and officer against any liability asserted against or incurred by such Director or officer in any capacity, or arising out of such Director's or officer's status as such, whether or not the Corporation would have the power to indemnify such Director or officer against such liability under the provisions of this Article. The Corporation shall not be required by these Bylaws to maintain such insurance if it is not available on terms satisfactory to the Board of Directors or if, in the business judgment of the Board of Directors either (i) the premium cost for such insurance is substantially disproportionate to the amount of coverage, or (ii) the coverage provided by such insurance is so limited by exclusions that there is insufficient benefit from such insurance. The Corporation may purchase and maintain insurance on behalf of any person referred to in Section 5.3 hereof against any liability asserted against or incurred by such person in any capacity, whether or not the Corporation would have the power to indemnify such persons against such liability under the provisions of this Article. Section 5.7. Powers of the Board. The Board of Directors, without approval of the stockholders, shall have the power to borrow money on behalf of the Corporation, including the power to pledge the assets of the Corporation, from time to time to discharge the Corporation's obligations with respect to indemnification, the advancement and reimbursement of expenses, and the purchase and maintenance of insurance referred to in this Article V. Section 5.8. Definition - Corporation. For purposes of this Article, references to "the Corporation" shall include, in addition to the Corporation, any and all predecessors and constituent entities directly or indirectly merged or consolidated into the Corporation or any predecessor or constituent entity of any such entity. Section 5.9. Definition - Authorized Representative. For the purposes of this Article, the term "authorized representative" shall mean a Director, officer, employee or agent of the Corporation or of any subsidiary of the Corporation, or a trustee, custodian, administrator, committeeman or fiduciary of any employee benefit plan established and maintained by the Corporation or by any subsidiary of the Corporation, or a person serving another corporation, partnership, joint venture, trust or other enterprise in any of the foregoing capacities at the request of the Corporation. ARTICLE VI SHARES OF CAPITAL STOCK Section 6.1. Share Certificates. Every holder of stock in the Corporation shall be entitled to a certificate or certificates, to be in such form as the Board of Directors may from time to time prescribe, signed by the Chairman or President and by the Secretary, sealed with the seal of the Corporation, and where signed by a transfer agent or by a registrar the signatures of the President and Secretary may be facsimile. Each certificate shall exhibit the name of the registered holder thereof, the number and class of shares and the designation of the series, if any, which the certificate represents. The Board of Directors may, if it so determines, direct that certificates for shares of stock of the Corporation be signed by a transfer agent and/or registered by a registrar, in which case such certificates shall not be -87- valid until so signed and/or registered. The Board of Directors may authorize the issuance of certificates for fractional shares or, in lieu thereof, scrip or other evidence of ownership, which may (or may not) as determined by the Board of Directors entitle the holder thereof to voting, dividends or other rights of shareholders. In case any officer of the Corporation who shall have signed, or whose facsimile signature shall have been used, on any such certificate shall cease to be such an officer, whether because of death, resignation or otherwise, before or after such certificate shall have been delivered by the Corporation, such certificates shall nevertheless be deemed to have been adopted by the Corporation and may be issued and delivered though the person who signed such certificate or whose facsimile signature shall have been used thereon had not ceased to be such officer. Section 6.2. Transfer of Stock. Shares of capital stock of the Corporation shall be transferred only on the books of the Corporation, by the holder of record in person or by the holder's duly authorized representative, upon surrender to the Corporation of the certificate for such shares duly endorsed for transfer, together with such other documents (if any) as may be required to effect such transfer. Section 6.3. Transfer Agents and Registrars. The Board of Directors may appoint any one or more qualified banks, trust companies or other corporations organized under any law of any state of the United States or under the laws of the United States as agent or agents for the Corporation in the transfer of the stock of the Corporation and likewise may appoint any one or more qualified banks, trust companies or other corporations as registrar or registrars of the stock of the Corporation. Section 6.4. Lost, Stolen, Destroyed, or Mutilated Certificates. New stock certificates may be issued to replace certificates alleged to have been lost, stolen, destroyed, or mutilated, upon such terms and conditions, including proof of loss or destruction, and the giving of a satisfactory bond of indemnity, as the Board of Directors from time to time may determine. Section 6.5. Regulations. The Board of Directors shall have power and authority to make all such rules and regulations not inconsistent with these Bylaws as it may deem expedient concerning the issue, transfer, and registration of shares of capital stock of the Corporation. Section 6.6. Holders of Record. The Corporation shall be entitled to treat the holder of record of any share or shares of capital stock of the Corporation as the holder and owner in fact thereof for all purposes and shall not be bound to recognize any equitable or other claim to, or right, title, or interest in, such share or shares on the part of any other person, whether or not the Corporation shall have express or other notice thereof, except as otherwise provided by the laws of the State of Delaware. Section 6.7. Treasury Shares. Shares of the Corporation's stock held in its treasury shall not be voted, directly or indirectly, at any meeting. Section 6.8. Fixing of Record Dates. The Board of Directors may fix a date, not more than sixty days prior to the date of the date fixed for the payment of any dividend or distribution, or the date for the allotment of rights, or the date when any change or conversion of exchange of shares will be made or go into effect, as a record date for the determination of the stockholders entitled to receive payment of any such dividend or distribution, or to receive any such allotment of rights, or to exercise the rights in respect to any such change, conversion, or exchange of shares. In such case, only such stockholders as shall be stockholders of record on the date so fixed shall be entitled to receive payment of such dividend, or to receive such allotment of rights, or to -88- exercise such rights, as the case may be, notwithstanding any transfer of any shares on the books of the Corporation after any record date fixed aforesaid. ARTICLE VII LOANS, NOTES, CHECKS, CONTRACTS AND OTHER INSTRUMENTS Section 7.1. Loans. No loans shall be contracted on behalf of the Corporation unless authorized by the Board of Directors. Such authority may be general or confined to specific instances. Section 7.2. Notes, Checks, Etc. All notes, drafts, acceptances, checks, endorsements (other than for deposit) and all evidences of indebtedness of the Corporation whatsoever shall be signed by an Executive Officer, and shall be signed by such other officers or agents and shall be subject to such requirements as to countersignatures or other conditions as the Board of Directors from time to time may designate. Facsimile signatures on checks may be used unless prohibited by the Board of Directors. Section 7.3. Execution of Instruments Generally. Except as provided in Section 7.2, all contracts and other instruments requiring execution by the Corporation may be executed and delivered by the Chairman, the President or any Vice President and authority to sign any such contracts or instruments, which may be general or confined to specific instances, may be conferred by the Board of Directors upon any other person or persons. Any person having authority to sign on behalf of the Corporation may delegate, from time to time, by instrument in writing, all or any part of such authority to any person or persons if authorized to do so by the Board of Directors. ARTICLE VIII GENERAL PROVISIONS Section 8.1. Corporate Seal. The Corporation may adopt a seal in such form as the Board of Directors shall from time to time determine. Section 8.2. Fiscal Year. The fiscal year of the Corporation shall be the calendar year or as otherwise designated by the Board of Directors from time to time. Section 8.3. Authorization. All checks, notes, vouchers, warrants, drafts, acceptances, and other orders for the payment of moneys of the Corporation shall be signed by such officer or officers or such other person or persons as the Board of Directors may from time to time designate. Section 8.4. Reports to Stockholders. The Board of Directors shall cause to be sent to the stockholders of the Corporation prior to the time of the annual meeting of stockholders a financial report as of the end of the preceding fiscal year. Such report shall be examined and reported upon by an independent certified public accountant. The Board of Directors shall have discretion to determine whether other reports shall be sent to stockholders, what such reports shall contain, and whether they shall be audited or accompanied by the report of an independent or certified public accountant. Section 8.5. Effect of Bylaws. No provision in these Bylaws shall vest any property right in any stockholder. Section 8.6. Notices to Stockholders and Waivers of Notices. (a) Whenever, under the provisions of applicable law or of the Certificate of Incorporation or of these Bylaws, written notice is required to be given to any stockholder, it may be given to such person either personally or by sending a copy thereof through the mail or by telegram, postage or charges -89- prepaid, directed to such stockholder at the address of the stockholder as it appears on the records of the Corporation. If the notice is sent by mail or telegraph, it shall be deemed to have been given to the person entitled thereto when deposited in the United States mail or with a telegraph office for transmission to such person. Such notice shall specify the place, date and hour of the meeting and, in the case of special meeting of stockholders, the purpose or purposes for which the meeting is called. When a meeting is adjourned to another time or place, notice need not be given of the adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment is for more than thirty (30) days, or if after the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. (b) Whenever notice to stockholders is required to be given, under the provisions of applicable law or of the Certificate of Incorporation or of these Bylaws, a written waiver of such notice, signed by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to such notice. Neither the business to be transacted at nor the purpose of any regular or special meeting of the stockholders need be specified in any written wavier of notice of such meeting. Attendance of a stockholder at any meeting shall constitute a waiver of notice of such meeting, except when the stockholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Section 8.7. Interested Directors; Quorum. (a) No contract or transaction between the Corporation and one or more of its Directors or officers, or between the Corporation and any other corporation, partnership, association, or other organization in which one or more of its Directors or officers are Directors or officers, or have a financial interest, shall be void or voidable solely for this reason, or solely because the Director or officer is present at or participates in the meeting of the Board of Directors or committee thereof which authorizes the contract or transaction, or solely because his or their votes are counted for such purpose, if: (1) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the Board of Directors or the committee, and the Board or committee in good faith authorizes the contract or transaction by the affirmative votes of a majority of the disinterested Directors, even though the disinterested Directors be less than a quorum; or (2) The material facts as to his relationship or interest and as to the contract or transaction are disclosed or are known to the stockholders entitled to vote thereof, and the contract or transaction is specifically approved in good faith by vote of the stockholders; or (3) The contract or transaction is fair as to the Corporation as of the time it is authorized, approved or ratified, by the Board of Directors, a committee thereof, or the stockholders. (b) Common or interested Directors may be counted in determining the presence of a quorum at a meeting of the Board of Directors or of a committee which authorizes the contract or transaction. -90- ARTICLE IX AMENDMENTS The authority to adopt, amend or repeal Bylaws of the Corporation is expressly conferred upon the Board of Directors, which may take such action by the affirmative vote of a majority of the whole Board of Directors at any regular or special meeting duly convened after notice of that purpose, subject always to the power of the stockholders to adopt, amend or repeal Bylaws. -91- EX-4 3 EXHIBIT 4.13 EXHIBIT 4.13 REGISTRATION RIGHTS AGREEMENT This Agreement is entered into as of this 23rd day of November, 1993 among Robertson-Ceco Corporation, a Delaware corporation (the "Company"), and Foothill Capital Corporation, a California corporation ("Foothill"). WHEREAS, the Company and Foothill are parties to the Loan and Security Agreement dated as of April 12, 1993 (the "Loan Agreement"); WHEREAS,pursuant to the Loan Agreement and the Facility Note (as defined in the Loan Agreement), the Company may discharge all or part of its obligations under the Facility Note by issuing to Foothill shares of the Company's common stock, $.01 par value per share (the "Common Stock"); and WHEREAS, the Common Stock, if any, to be received by Foothill would be issued without registration under the Securities Act (as defined below), and therefore the resale by Foothill of such shares of Common Stock would be subject to restrictions under the Securities Act; WHEREAS, the Loan Agreement requires that the Company and Foothill enter into this Agreement concurrently with any such issuance of Common Stock to Foothill; NOW THEREFORE, in consideration of the foregoing recitals, the mutual agreements set forth herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the undersigned hereby agree as follows: 1. Demand Registration Rights. 1.1 Request for Demand Registration. Upon notice from one or more Initiating Holders (as defined below) requesting that the Company effect the registration under the Securities Act of all or part of the Registrable Securities (as defined below) held by such Initiating Holders and specifying the intended method or methods of disposition of such Registrable Securities, the Company will promptly give written notice of such requested registration to all holders of Registrable Securities and thereupon will use its best efforts to effect the registration, under the Securities Act, of: (i) the Registrable Securities which the Company has been so requested to register by such Initiating Holders, for disposition in accordance with the intended method of disposition stated in such request, and (ii) all other Registrable Securities which the Company has been requested to register by the holders of Registrable Securities by written request delivered to the Company within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities), all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered. During the period beginning upon receipt by the Company of the notice from Initiating Holders referred to above and ending upon the effective date of a registration statement covering the Registrable Securities referred to in such notice (or the prior termination of the proposed registration thereof, if and to the extent permitted by this Agreement), the Company shall not register under the Securities Act any other shares of its Common Stock, except for registration on Form S-8 of shares to be issued under employee benefit plans of the Company; provided, that (i) this provision shall not be construed to limit the Company's right to register other shares of its Common Stock simultaneously with -92- registration of Registrable Securities, to the extent permitted by this Agreement and (ii) this provision shall not prohibit any registration as to which the holders of Registrable Securities had been given the opportunity to exercise piggyback registration rights pursuant to Section 2 below, and failed to exercise such rights. 1.2 Form of Demand Registration Statement. Registrations under this Section 1 shall be on such form as shall be selected by the Company and shall permit the disposition of the Registrable Securities included therein in accordance with the intended method or methods of disposition specified in the request for such registration. 1.3. Exceptions to Demand Registration Rights. Notwithstanding the foregoing provisions of this Section 1, the Company will not be required to effect, or to take any action to effect, any such registration pursuant to this Section 1: (i) after the Company has effected two (2) such registrations pursuant to this Section 1; (ii) if the Company has effected a registration pursuant to this Section 1 within the preceding twelve months, or has effected any registration within the preceding six months in which the Initiating Holders could have participated under Section 2; (iii) if the request for registration does not request the registration of at least 500,000 shares of Common Stock (subject to adjustment in respect of stock dividends, stock splits and similar corporate events), and contain a representation of a good faith intention to sell such shares pursuant to the registration statement; or (iv) for any period of 90 days during any twelve month period if the Board of Directors of the Company determines in good faith that the public sale of securities or the furnishing of a registration statement at such time would be materially detrimental to the Company. 1.4. Effectiveness of Demand Registration. For purposes of this Section 1, a registration shall not be deemed to have been effected pursuant to this Section 1 (i) unless a registration statement with respect thereto has become effective, (ii) if after a registration statement has become effective, such registration is interfered with by any stop order, injunction, or other order of the Commission (as defined below) for any reason not attributable to any holder of Registrable Securities, or (iii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived other than by reason of the failure or refusal of any holder of Registrable Securities. 2. Piggyback Registration Rights. If the Company at any time proposes to register any shares of Common Stock under the Securities Act, whether or not for sale for its own account, on a form which would permit registration of Registrable Securities for sale to the public under the Securities Act, it will each such time give written notice to all holders of Registrable Securities of its intention to do so, specifying the form and manner and the other relevant facts involved in such proposed registration, and upon the written request of any such holder delivered to the Company within 30 days after the giving of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such holder and the intended method of disposition thereof), the Company will use its best efforts as a part of its filing to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders of Registrable Securities, to the extent requisite to permit the disposition (in accordance with -93- the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, provided that: (i) if (x) the registration so proposed by the Company involves an underwritten offering, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, (y) the Registrable Securities so requested to be registered for sale for the account of holders of Registrable Securities are not also to be included in such underwritten offering (either because the Company has not been requested so to include such Registrable Securities pursuant to Section 2 hereof or, if requested to do so, has been unable so to include such Registrable Securities after using reasonable efforts to do so as provided in Section 3.3 hereof), and (z) the managing underwriter of such underwritten offering shall advise the Company in writing that, in its opinion, the distribution of all or a specified portion of such Registrable Securities concurrently with the securities being distributed by such underwriters will substantially interfere with the successful offering of such securities by such underwriters (such opinion to state the approximate number of shares which can be distributed without such effect), then the Company will promptly furnish each such holder of Registrable Securities with a copy of such opinion and may require, by written notice to each such holder accompanying such opinion, that the number of shares of Registrable Securities to be included in such registration statement be limited to the number indicated in such opinion (such portion to be allocated among such holders of Registrable Securities and all other Persons (as defined below) (other than the Company) proposing to include Common Stock in the registration in proportion to the respective numbers of shares requested to be registered by such holders);provided, that shares held by any Persons (other than the Company) participating in such offering pursuant to the exercise of piggyback registration rights granted after the date hereof shall be excluded in their entirety prior to the exclusion of any Registrable Securities; (ii) the Company shall not be obligated to effect any registration of Registrable Securities under this Section 2 incidental to any registration involving any of its securities other than Common Stock, or incidental to the registration of Common Stock in connection with any merger, acquisition, exchange offer, dividend reinvestment plan or stock option or other employee benefit plan; and (iii) if, at any time after giving written notice of its intention to register Common Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason either not to register or to delay registering such Common Stock, the Company may, at its election, give written notice of such determination to each holder of Registrable Securities and, thereupon, (x) in the case of a determination not to register, shall be relieved of its obligation to register any Registrable Securities in connection with such registration, without prejudice, however, to the rights of one or more Initiating Holders to request that such registration be affected as a registration under Section 1 and (y) in the case of a determination to delay registering, shall be permitted to delay registering any Registerable Securities for the same period as the delay in registering such other Common Stock. -94- 3. Registration Procedures. 3.1. Preparation of Registration Statement, etc. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 1 and 2 hereof, the Company will as expeditiously as possible: (i) prepare and (in the case of a registration pursuant to Section 1 hereof, within 45 days after the end of the period within which requests for registration may be delivered to the Company) file with the Commission a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective; provided that before filing such registration statement and any amendments thereto, the Company will furnish to counsel selected by the holders of Registrable Securities to be included in such registration statement copies of all such documents proposed to be filed, which documents will be subject to the review of such counsel. In the case of a registration under Section 1 hereof, such registration statement shall be for an offering to be made on a continuous or delayed basis (a so-called "shelf registration statement") if the Company is eligible for the use thereof and the holders of a majority of the Registrable Securities to be included in such registration statement have requested a shelf registration statement; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and other securities covered by such registration statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement, but in no event for a period of more than one year after such registration statement becomes effective; (iii) furnish to each seller of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits, except that the Company shall not be obligated to furnish any such seller with more than two copies of such exhibits other than incorporated documents), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as such seller may reasonably request in order to facilitate the disposition of its Registrable Securities covered by such registration statement; (iv) use its best efforts to register or qualify such Registrable Securities under such securities or blue sky laws of such jurisdictions as each seller shall reasonably request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of its Registrable Securities covered by such registration statement; (v) furnish to each seller of such Registrable Securities a signed counterpart, addressed to such seller, of an appropriate opinion of counsel for the Company covering substantially the same matters with respect to such registration statement (and the prospectus included therein) as are customarily covered in opinions of issuer's counsel delivered to underwriters in underwritten public offerings of securities; -95- (vi) immediately upon becoming aware of the same, notify each seller of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such seller prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (vii) otherwise use its best efforts to comply with the Securities Act, and make available to its securities holders, as soon as reasonably practicable, but not more than eighteen months after the effective date of such registration statement, an earnings statement covering the period of at least twelve months beginning with the first day of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (viii) unless such Registrable Securities are already listed on each securities exchange, if any, on which the Company's common equity is then listed, use its best efforts to list such Registrable Securities on each such securities exchange. Each holder of Registrable Securities shall be deemed to have agreed by acquisition of such Registrable Securities that upon receipt of any notice from the Company of the happening of any event of the kind described in clause (vi) of this Section 3.1, such holder will forthwith discontinue such holder's offering or disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by said clause (vi) and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice. 3.2. Information Concerning Sellers. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing and which shall be required by law or by the Commission in connection therewith. 3.3. Demand Underwritten Offering. Whenever a registration requested by one or more Initiating Holders pursuant to Section 1 hereof is for an underwritten offering, only shares which are to be distributed by the underwriters designated by the requesting holder may be included in such registration. If Persons holding a majority of the Registrable Securities to be included in such registration shall determine that the number of shares of Registrable Securities should be limited due to market conditions or otherwise, all holders of Common Stock other than Registrable Securities shall first share pro rata in the number of shares to be deferred, with any excess in the number of shares to be deferred to be shared pro rata among all holders of Registrable Securities, such sharing in each case to be based on the respective numbers of shares as to which registration has been requested by such holders. -96- 3.4. Underwriting Agreement. If requested by the underwriters for any underwritten offering of Registrable Securities on behalf of a holder or holders of Registrable Securities pursuant to a registration requested under Section 1 hereof, the Company will enter into an underwriting agreement with such underwriters for such offering, such agreement to contain such representations and warranties by the Company and such other terms and provisions as are customarily contained in underwriting agreements with respect to secondary distributions, including, without limitation, indemnity and contribution to the effect and to the extent provided in Section 4 hereof. If the Company at any time proposes to register any of its securities under the Securities Act (other than pursuant to a request made under Section 1 hereof), whether or not for sale for its own account, and such securities are to be distributed by or through one or more underwriters, the Company will make reasonable efforts, if requested by any holder of Registrable Securities who requests incidental registration of Registrable Securities in connection therewith pursuant to Section 2 hereof, to arrange for such underwriters to include such Registrable Securities among those securities to be distributed by or through such underwriters, provided that reasonable efforts shall not require the Company to reduce the amount or sale price of such securities proposed to be distributed by or through such underwriters. The holders of Registrable Securities on whose behalf Registrable Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement and the representations and warranties by, and the other agreements on the part of, the Company to and for the benefit of such underwriters, shall also be made to and for the benefit of such holders of Registrable Securities. 3.5. Participation. In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, the Company will give the holders of Registrable Securities on whose behalf such Registrable Securities are to be so registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 3.6. Registration Expenses. The Company will pay all Registration Expenses (as defined below) in connection with all registrations effected pursuant to Section 1 or Section 2. 4. Indemnification and Contribution. 4.1. Indemnification by the Company. In the event of any registration of any Registrable Securities under the Securities Act pursuant to Section 1 or 2 hereof, the Company will, and hereby does, indemnify and hold harmless the seller of such securities, its partners, directors and officers, each other Person who participates, on behalf of such seller, as an underwriter, broker or dealer in the offering or sale of such securities and each other Person, if any, who controls such seller or any such participating Person within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which such seller or any such partner, director or officer or participating or controlling Person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained or incorporated by reference in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus -97- or final prospectus included therein, or any related summary prospectus, or any amendment or supplement thereto, or any document incorporated by reference therein, or (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse such seller and each such partner, director, officer, participating Person and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided that the Company shall not be liable to any such indemnified party in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such partner, director, officer, participating Person or controlling Person and shall survive the transfer of such securities by such seller. 4.2. Indemnification by Sellers. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 1 or 2 hereof, that the Company shall have received an undertaking satisfactory to it from the prospective seller of such securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 4.1 hereof) the Company, each officer and director of the Company, and each other Person, if any, who controls the Company within the meaning of the Securities Act, with respect to any statement in or omission from such registration statement, any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto, if such statement or omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, that the liability of any seller shall not exceed the proceeds received by such seller from the sale of Registrable Securities giving rise to the claims hereunder. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller. 4.3. Notice and Defense of Claims. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim of the type referred to in the preceding subsections of this Section 4 such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subsections of this Section 4 except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnifying party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to such indemnifying party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, provided, however, that if any indemnified party reasonably believes that it is advisable for such indemnified party to be represented by separate counsel because of a potential conflict of interest or if the indemnifying party shall fail to assume responsibility for such defense, such indemnified party may -98- retain counsel satisfactory to such indemnified party who will represent such indemnified party, and the indemnifying party shall pay all fees and expenses of such counsel promptly as statements therefor are received. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. 4.4. Contribution. If the indemnification provided for in Section 4.1 or 4.2 hereof is unavailable to a party that would have been an indemnified party under any such section in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each party that would have been an indemnifying party thereunder shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and such indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or such indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account of the equitable considerations referred to in the preceding sentence. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 4.4 shall include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim (which shall be limited as provided in Section 4.3 hereof if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof). No Person that is a seller of Registrable Securities shall be required to contribute any amount in excess of the amount by which the net proceeds from the offering received by it exceed the amount of any damages which such Person has otherwise been required to pay by reason of its indemnification obligations under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 5. Rule 144 Requirements. The Company shall: (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (ii) use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (iii) furnish to any holder of Registrable Securities upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as such holder of Registrable Securities may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any such Registrable Securities without registration. -99- 6. Definitions. For purposes of this Agreement, the following terms shall have the meanings specified below: 6.1. Commission. The term "Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 6.2. Initiating Holder. The term "Initiating Holder" shall mean a Person or Persons who shall request registration under Section 1. 6.3. Person. The term "Person" shall mean an individual, partnership, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof. 6.4. Registrable Securities. The term "Registrable Securities" shall mean (i) any Common Stock issued in full or partial satisfaction of the Facility Note or issued or issuable in exchange for or upon transfer of any Registrable Securities or (ii) any Common Stock or other common equity securities issued or issuable with respect to any Registrable Securities by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or (iii) they shall have ceased to be outstanding. 6.5. Registration Expenses. The term "Registration Expenses" shall mean all expenses incident to performance of or compliance with Sections 1, 2 and 3 hereof by the Company, including without limitation all registration and filing fees, all fees and expenses of complying with securities or blue sky laws and any other expenses of underwriters customarily reimbursed by an issuer in a secondary offering, all printing expenses, all messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits required by or incident to such performance and compliance, fees and disbursements of one counsel for the holders of Registrable Securities on whose behalf Registrable Securities are being registered, but excluding the fees and disbursements of counsel for the holders on whose behalf Registrable Securities are being registered other than the one referred to above and excluding any underwriting discounts and commissions and applicable transfer taxes, if any, each of which shall be borne by the holders of the Registrable Securities in all cases. 7. Securities Act. The term "Securities Act" shall mean the Securities Act of 1933, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 8. Notices. Any notice or other communication in connection with this Agreement shall be deemed to be delivered if in writing (or in the form of a telex or telecopy) addressed as provided below and if either (a) actually delivered at said address or (b) in the case of a letter, three business days shall have elapsed after the same shall have been deposited in the United States mails, postage prepaid and registered or certified: If to the Company, to it at 222 Berkeley Street, Boston, Massachusetts 02116, to the attention of the General Counsel, or at such other address as the Company shall have specified by notice actually received by the addressor prior to the giving of the applicable notice or communication. -100- If to Foothill, to it at 11111 Santa Monica Boulevard, Suite 1500, Los Angeles, California 90025-3333, to the attention of the Business Finance Division Manager, or at such other address as it shall have specified by notice actually received by the addressor prior to the giving of the applicable notice or communication. If to any other holder of record of any Registrable Security, to it at its address set forth in the stock register maintained by the Company or its transfer agent. 9. Amendments. Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived, only with the written consent of the Company and the holders of a two-thirds of the Registrable Securities; provided, that the consent of all holders of Registrable Securities shall be required to amend Section 1 or Section 2. Any amendment or waiver effected in accordance with this Section 8 shall be binding upon the Company and each holder of any Registrable Security. 10. Miscellaneous. This Agreement sets forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby. The invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of any other term or provision hereof. The headings in this Agreement are for convenience of reference only and shall not alter or otherwise affect the meaning hereof. This Agreement may be executed in any number of counterparts which together shall constitute one instrument and shall be governed by and construed in accordance with the domestic substantive laws of The Commonwealth of Massachusetts, and shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. In addition, whether or not any express assignment has been made, provisions of this Agreement that are for your benefit as the holder of any Registrable Security shall also inure to the benefit of, and be enforceable by, all subsequent holders of Registrable Securities. IN WITNESS WHEREOF, the undersigned have cause this Agreement to be executed under seal by their respective duly authorized officers as of the day and year first above written. ROBERTSON-CECO CORPORATION /s/ George S. Pultz By:------------------------- Title: Vice President FOOTHILL CAPITAL CORPORATION /s/ Jeff Nikora By:--------------------------- Title: Vice President -101- EX-4 4 EXHIBIT 4.14 EXHIBIT 4.14 REGISTRATION RIGHTS AGREEMENT This Agreement is entered into as of this 14th day of December, 1993 between Robertson-Ceco Corporation, a Delaware corporation (the "Company"), and RBC Holdings, L.P., a Delaware limited partnership ("RBC"). WHEREAS, pursuant to an Asset Purchase and Stock Subscription Agreement dated December 2, 1993, between the Company and Heico Acquisitions, Inc. ("Heico"), the Company will on the date hereof issue to RBC, as assignee of the rights of Heico under such Asset Purchase and Stock Subscription Agreement, 3,333,333 shares (the "Shares") of the Company's common stock, $.01 par value (the "Common Stock"); WHEREAS, under the terms of such Asset Purchase and Stock Subscription Agreement, it is a condition to the purchase by RBC of the Shares that the Company and RBC enter into this Agreement; NOW THEREFORE, in consideration of the premises and the mutual agreements set forth herein, the undersigned hereby agree as follows: 1. Demand Registration Rights. 1.1 Request for Demand Registration. Upon notice from one or more Initiating Holders (as defined below) requesting that the Company effect the registration under the Securities Act (as defined below) of all or part of the Registrable Securities (as defined below) held by such Initiating Holders and specifying the intended method or methods of disposition of such Registrable Securities, the Company shall promptly give written notice of such requested registration to all holders of Registrable Securities and thereupon shall, as expeditiously as possible, use its best efforts to effect the registration, under the Securities Act, of: (i) the Registrable Securities which the Company has been so requested to register by such Initiating Holders, for disposition in accordance with the intended method of disposition stated in such request, and (ii) all other Registrable Securities which the Company has been requested to register by the holders of Registrable Securities by written request delivered to the Company within 30 days after the giving of such written notice by the Company (which request shall specify the intended method of disposition of such Registrable Securities), all to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered. 1.2 Form of Demand Registration Statement. Registrations under this Section 1 shall be on such form as shall be selected by the Company and shall permit the disposition of the Registrable Securities included therein in accordance with the intended method or methods of disposition specified in the request for such registration. 1.3 Exceptions to Demand Registration Rights. Notwithstanding the foregoing provisions of this Section 1, the Company will not be required to effect, or to take any action to effect, any such registration pursuant to this Section 1: (i) after the Company has effected one (1) such registration pursuant to this Section 1; -102- (ii) if the Company has effected any registration within the preceding six months in which the Initiating Holders could have participated under Section 2; (iii) if the request for registration does not request the registration of at least 500,000 shares of Common Stock (subject to adjustment in the event of any and all stock dividends, stock splits and similar corporate events), and contain a representation of a good faith intention to sell such shares pursuant to the registration statement; (iv) for any period of 90 days during any twelve month period if the Board of Directors of the Company determines in good faith that the public sale of securities or the furnishing of a registration statement at such time would be materially detrimental to the Company; or (v) if in the opinion of counsel to the Company (which may be an officer of the Company), and, if the manner of disposition proposed is an underwritten offering, in the opinion of counsel to the proposed underwriter, delivered to the Company's transfer agent, registration under the Securities Act is unnecessary to allow the sale or transfer of the Registrable Securities proposed to be sold in the registration in the manner described in the request. 1.4 Effectiveness of Demand Registration. For purposes of this Section 1, a registration shall not be deemed to have been effected pursuant this Section 1 (i) unless a registration statement with respect thereto has become effective, (ii) if after a registration statement has become effective, such registration is interfered with by any stop order, injunction, or other order of the Commission (as defined below) for any reason not attributable to any holder of Registrable Securities, or (iii) the conditions to closing specified in the underwriting agreement, if any, entered into in connection with such registration are not satisfied or waived other than by reason of the failure or refusal of any holder of Registrable Securities. 2. Piggyback Registration Rights. If the Company at any time proposes to register any shares of Common Stock under the Securities Act, whether or not for sale for its own account, on a form which would permit registration of Registrable Securities for sale to the public under the Securities Act, it will each such time give written notice to all holders of Registrable Securities of its intention to do so, specifying the form and manner and the other relevant facts involved in such proposed registration, and upon the written request of any such holder delivered to the Company within 30 days after the giving of any such notice (which request shall specify the Registrable Securities intended to be disposed of by such holder and the intended method of disposition thereof), the Company will use its best efforts as a part of its filing to effect the registration under the Securities Act of all Registrable Securities which the Company has been so requested to register by the holders of Registrable Securities, to the extent requisite to permit the disposition (in accordance with the intended methods thereof as aforesaid) of the Registrable Securities so to be registered, provided that: (i) if (x) the registration so proposed by the Company involves an underwritten offering, whether or not for sale for the account of the Company, to be distributed (on a firm commitment basis) by or through one or more underwriters of recognized standing under underwriting terms appropriate for such a transaction, (y) the Registrable Securities so requested to be registered for sale for the account of holders of Registrable Securities are not also to be included in such underwritten offering (either because the Company has not been requested so to include such Registrable Securities pursuant to Section 2 hereof or, if requested to do so, has been unable so to include such Registrable Securities after using reasonable efforts to do so as provided in Section 3.4 hereof), and (z) the managing underwriter of such underwritten offering shall advise the Company in writing that, in its opinion the distribution of all or a -103- specified portion of such Registrable Securities concurrently with the securities being distributed by such underwriters will substantially interfere with the successful offering of such securities by such underwriters (such opinion to state the approximate number of shares which can be distributed without such effect), then the Company will promptly furnish each such holder of Registrable Securities with a copy of such opinion and may require, by written notice to each such holder accompanying such opinion, that the number of shares of Registrable Securities to be included in such registration statement be limited to the number indicated in such opinion (such portion to be allocated among such holders of Registrable Securities and all other Persons (as defined below) (other than the Company) proposing to include Common Stock in the registration in proportion to the respective numbers of shares requested to be registered by such holders); (ii) the Company shall not be obligated to effect any registration of Registrable Securities under this Section 2 incidental to any registration involving any of its securities other than Common Stock, or incidental to the registration of Common Stock in connection with any merger, acquisition, exchange offer, dividend reinvestment plan or stock option or other employee benefit plan; and (iii) if, at any time after giving written notice of its intention to register Common Stock and prior to the effective date of the registration statement filed in connection with such registration, the Company shall determine for any reason either not to register or to delay registering such Common Stock, the Company, may, at its election, give written notice of such determination to each holder of Registrable Securities and, thereupon, (x) in the case of a determination not to register, shall be relieved of its obligation to resister any Registrable Securities in connection with such registration, without prejudice, however, to the rights of one or more Initiating Holders to request that such registration be effected as a registration under Section 1 and (y) in the case of a determination to delay registering, shall be permitted to delay registering any Registerable Securities for the same period as the delay in registering such other Common Stock. If any registration statement filed pursuant to this Section 2 includes Registrable Securities constituting at least 25% of the total securities to be offered, any holder or holders whose Registrable Securities represent at least a majority of the Registrable Securities to be included shall have the right to designate an underwriter in the offering covered by such registration, but not the lead or managing underwriter, provided such designee is reasonably satisfactory to the Company. 3. Registration Procedures. 3.1 Preparation of Registration Statement, etc. If and whenever the Company is required to use its best efforts to effect the registration of any Registrable Securities under the Securities Act as provided in Sections 1 and 2 hereof, the Company shall as expeditiously as possible: (i) prepare and (in the case of a registration pursuant to Section 1 hereof, within 45 days after the end of the period within which requests for registration may be delivered to the Company) file with the Commission a registration statement with respect to such Registrable Securities and use its best efforts to cause such registration statement to become effective; provided, that before filing such registration statement and any amendments thereto, the Company shall furnish to counsel selected by the holders of Registrable Securities to be included in such registration statement copies of all such documents proposed to be filed, which documents shall be subject to the review of such counsel. In the case of a registration under Section 1 hereof, such registration statement shall be for an offering to be made on a continuous or delayed basis (a so -104- -called "shelf registration statement") if the Company is eligible for the use thereof and the holders of a majority of the Registrable Securities to be included in such registration statement have requested a shelf registration statement; (ii) prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective and to comply with the provisions of the Securities Act with respect to the disposition of all Registrable Securities and other securities covered by such registration statement until such time as all of such Registrable Securities have been disposed of in accordance with the intended methods of disposition by the seller or sellers thereof set forth in such registration statement, but in no event for a period of more than one year after such registration statement becomes effective; (iii) furnish to each seller of such Registrable Securities such number of conformed copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits, except that the Company shall not be obligated to furnish any such seller with more than two copies of such exhibits other than incorporated documents), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any summary prospectus) in conformity with the requirements of the Securities Act, such documents incorporated by reference in such registration statement or prospectus, and such other documents, as such seller may reasonably request in order to facilitate the disposition of its Registrable Securities covered by such registration statement, and the Company hereby consents to the use of the prospectus or any amendment or supplement thereto by each such seller and the underwriters in connection with the offering and sale of the Registrable Securities covered by the prospectus or any supplement or amendment thereto; (iv) use its best efforts to register or qualify such Registrable Securities under such securities or blue sky laws of such jurisdictions as each seller shall reasonably request, and do any and all other acts and things which may be necessary or advisable to enable such seller to consummate the disposition in such jurisdictions of its Registrable Securities covered by such registration statement; (v) promptly notify (in writing, if so requested) the sellers of Registrable Securities covered by such registration statement and the managing underwriters, if any, (i) when the registration statement, the prospectus or any prospectus supplement or post-effective amendment has been filed, and with respect to the registration statement or any post- effective amendment, when the same has become effective, (ii) of any material comments by the Commission with respect thereto or any request by the Commission for amendments or supplements to the registration statement or the prospectus or for additional information, (iii) of the issuance by the Commission of any stop order suspending the effectiveness of the registration statement or the initiation of any proceedings for that purpose, (iv) of the occurrence of any event, at any time, that causes the representations and warranties of the Company contemplated by Section 3.4 hereof to cease to be true and correct in all material respects, and (v) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities covered by such registration statement for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (vi) immediately upon becoming aware of the same, notify each seller of Registrable Securities covered by such registration statement, at any time when a prospectus relating thereto is required to be delivered under the Securities Act, of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, -105- includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the request of any such seller prepare and furnish to such seller a reasonable number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing; (vii) otherwise use its best efforts to comply with the Securities Act, and make available to its securities holders, as soon as reasonably practicable, but not more than eighteen months after the effective date of such registration statement, an earnings statement covering the period of at least twelve months beginning with the first day of the first fiscal quarter after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act; and (viii) unless such Registrable Securities are already listed on each securities exchange, if any, on which the Company's common equity is then listed, use its best efforts to list such Registrable Securities on each such securities exchange. (ix) make reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of a registration statement hereunder or any post-effective amendment thereto at the earliest practicable date; (x) if requested by the managing underwriter or underwriters or by the sellers of Registrable Securities covered by such registration statement, promptly incorporate in a prospectus supplement or post- effective amendment such information as such managing underwriter or underwriters or such sellers specify should be included therein relating to the sale of the Registrable Securities, including, without limitation, information with respect to the number or amount of Registrable Securities being sold to such underwriters, the purchase price being paid therefor by such underwriters and with respect to any other terms of the underwritten (or best efforts underwritten) offering of the Registrable Securities to be sold in such offering; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment; Each holder of Registrable Securities shall be deemed to have agreed by acquisition of such Registrable Securities, that upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3.1(vi), such holder will forthwith discontinue such holder's offering or disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such holder's receipt of the copies of the supplemented or amended prospectus contemplated by said Section 3.1(vi) and, if so directed by the Company, will deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such holder's possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice. 3.2 Information Concerning Sellers. The Company may require each seller of Registrable Securities as to which any registration is being effected to furnish the Company such information regarding such seller and the distribution of such securities as the Company may from time to time reasonably request in writing and which shall be required by law or by the Commission in connection therewith. -106- 3.3 Demand Underwritten Offering. Whenever a registration requested by one or more Initiating Holders pursuant to Section 1 hereof is for an underwritten offering, the Initiating Holders may designate the managing underwriter (who shall be the lead underwriter), provided such designee is reasonably satisfactory to the Company, and the Company may designate a co- managing underwriter in such offering, provided such designee is reasonably satisfactory to the Initiating Holders. Only shares which are to be distributed by such underwriters may be included in such registration. If the managing underwriter with respect to such underwritten offering shall determine that the number of shares of Registrable Securities should be limited due to market conditions or otherwise, all holders of Common Stock other than Registrable Securities shall first share pro rata in the number of shares to be deferred, with any excess in the number of shares to be deferred to be shared pro rata among all holders of Registrable Securities, such sharing in each case to be based on the respective numbers of shares as to which registration has been requested by such holders. 3.4 Underwriting Agreement. If requested by the underwriters for any underwritten offering of Registrable Securities on behalf of a holder or holders of Registrable Securities pursuant to a registration requested under Section 1 hereof, the Company shall enter into such customary agreements (including an underwriting agreement) and take such other actions in connection therewith as the sellers of Registrable Securities shall reasonably request in order to expedite or facilitate the disposition of such Registrable Securities and in such connection, whether or not an underwriting agreement is entered into and whether or not the registration is an underwritten registration (i) make such representations and warranties and enter into such covenants and agreements, including, without limitation, indemnity and contribution to the effect and to the extent provided in Section 4 hereof, to and with the sellers of Registrable Securities and the underwriters, if any, in form, substance and scope as are customarily made in such a registration; (ii) obtain an opinion of counsel to the Company in customary form and covering such matters of the type customarily covered by such opinion as the sellers of Registrable Securities and the underwriters, if any, may reasonably request, addressed to each seller of Registrable Securities and the underwriters, if any, and dated the effective date of such registration statement (or, if such registration includes an underwritten offering, dated the date of the closing under the underwriting agreement); (iii) obtain a "cold comfort" letter from the independent certified public accountants of the Company addressed to the sellers of Registrable Securities and the underwriters, if any, dated the effective date of such registration statement (and, if such registration includes an underwritten offering, dated the date of the closing under the underwriting agreement), such letter to be in customary form and covering such matters of the type customarily covered by such letter; and (iv) deliver such documents and certificates as may be reasonably requested by the sellers of Registrable Securities and the managing underwriters, if any, to evidence compliance with clause (i) above and with any customary conditions contained in the underwriting agreement or other agreement entered into by the Company. If the Company at any time proposes to register any of its securities under the Securities Act (other than pursuant to a request made under Section 1 hereof), whether or not for sale for its own account, and such securities are to be distributed by or through one or more underwriters, the Company will make reasonable efforts, if requested by any holder of Registrable Securities who requests incidental registration of Registrable Securities in connection therewith pursuant to Section 2 hereof, to arrange for such underwriters to include such Registrable Securities among those securities to be distributed by or through such underwriters, provided that reasonable efforts shall not require the Company to reduce the amount (subject to Section 2(i)) or sale price of such securities proposed to be distributed by or through such underwriters. The holders of Registrable Securities on whose behalf Registrable Securities are to be distributed by such underwriters shall be parties to any such underwriting agreement. -107- 3.5 Participation. In connection with the preparation and filing of each registration statement registering Registrable Securities under the Securities Act, the Company will give the holders of Registrable Securities on whose behalf such Registrable Securities are to be so registered and their underwriters, if any, and their respective counsel and accountants, the opportunity to participate in the preparation of such registration statement, each prospectus included therein or filed with the Commission, and each amendment thereof or supplement thereto, and will give each of them such access to its books and records and such opportunities to discuss the business of the Company with its officers and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such holders and such underwriters or their respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act. 3.6. Registration Expenses. The Company will pay all Registration Expenses (as defined below) in connection with all registrations effected pursuant to Section 1 or Section 2. 4. Indemnification and Contribution. 4.1 Indemnification by the Company. In the event of any registration of any Registrable Securities under the Securities Act pursuant to Section 1 or 2 hereof, the Company shall, and hereby does, indemnify and hold harmless the seller of such securities, its partners, directors and officers, each other Person who participates, on behalf of such seller, as an underwriter, broker or dealer in the offering or sale of such securities and each other Person, if any, who controls such seller or any such participating Person within the meaning of the Securities Act, against any losses, claims, damages or liabilities, joint or several, including without limitation, subject to Section 4.3, amounts paid in settlement, to which such seller or any such partner, director or officer or participating or controlling Person may become subject under the Securities Act, the Exchange Act, state securities laws or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) arise out of or are based upon (i) any untrue statement or alleged untrue statement of any material fact contained or incorporated by reference in any registration statement under which such securities were registered under the Securities Act, any preliminary prospectus or final prospectus included therein, or any related summary prospectus, or any amendment or supplement thereto, or any document incorporated by reference therein, (ii) any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; and will reimburse such seller and each such partner, director, officer, participating Person and controlling Person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, liability, action or proceeding, provided that the Company shall not be liable to any such indemnified party in any such case to the extent that any such lose, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation thereof. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such seller or any such partner, director, officer, participating Person or controlling Person and shall survive the transfer of such securities by such seller. 4.2 Indemnification by Sellers. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 1 or 2 hereof, that the Company shall have received an undertaking satisfactory to it from the prospective seller of such securities, to indemnify and hold harmless (in the same manner and to the same extent as set forth in Section 4.1 hereof) the Company, each officer and director of the Company, and each other Person, if any, who controls the Company within the -108- meaning of the Securities Act, with respect to any statement in or omission from such registration statement, any preliminary prospectus or final prospectus included therein, or any amendment or supplement thereto, if such statement or omission was made in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by such seller specifically stating that it is for use in the preparation of such registration statement, preliminary prospectus, final prospectus, summary prospectus, amendment or supplement; provided, that the liability of any seller shall not exceed the proceeds received by such seller from the sale of Registrable Securities giving rise to the claims hereunder. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling Person and shall survive the transfer of such securities by such seller. 4.3 Notice and Defense of Claims. Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim of the type referred to in the preceding subsections of this Section 4 such indemnified party will, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the latter of the commencement of such action, provided that the failure of any indemnified party to give notice as provided herein shall not relieve the indemnifying party of its obligations under the preceding subsections of this Section 4 except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, the indemnifying party will be entitled to participate in and to assume the defense thereof, jointly with any other indemnifying party similarly notified, to the extent that it may wish, with counsel reasonably satisfactory to such indemnified party, and after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party will not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, provided, however, that if any indemnified party reasonably believes that it is advisable for such indemnified party to be represented by separate counsel because of a potential conflict of interest or if the indemnifying party shall fail to assume responsibility for such defense, such indemnified party may retain counsel satisfactory to such indemnified party who will represent such indemnified party, and the indemnifying party shall pay all fees and expenses of such counsel promptly as statements therefor are received. No indemnifying party will consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation. 4.4 Contribution. If the indemnification provided for in Section 4.1 or 4.2 hereof is unavailable to a party that would have been an indemnified party under any such section in respect of any losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to therein, then each party that would have been an indemnifying party thereunder shall, in lieu of indemnifying such indemnified party, contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions or proceedings in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party on the one hand and such indemnified party on the other in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions or proceedings in respect thereof). The relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the indemnifying party or such indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company agrees that it would not be just and equitable if contribution pursuant to this Section 4.4 were determined by pro rata allocation or by any other method of allocation which does not take account -109- of the equitable considerations referred to in the preceding sentence. The amount paid or payable by an indemnified party as a result of the losses, claims, damages or liabilities (or actions or proceedings in respect thereof) referred to above in this Section 4.4 shall include any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim (which shall be limited as provided in Section 4.3 hereof if the indemnifying party has assumed the defense of any such action in accordance with the provisions thereof). No Person that is a seller of Registrable Securities shall be required to contribute any amount in excess of the amount by which the net proceeds from the offering received by it exceed the amount of any damages which such Person has otherwise been required to pay by reason of its indemnification obligations under this Section 4. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. 4.5 Timing of Payments. The indemnification and contribution required by this Section 4 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred, subject to refund in the event any such payments are determined not to have been due and owing hereunder. 5. Rule 144 Requirements. The Company shall: (i) make and keep public information available, as those terms are understood and defined in Rule 144 under the Securities Act; (ii) use its best efforts to file with the Commission in a timely manner all reports and other documents required of the Company under the Securities Act and the Exchange Act; and (iii) furnish to any holder of Registrable Securities upon request a written statement by the Company as to its compliance with the reporting requirements of said Rule 144 and of the Securities Act and the Exchange Act, a copy of the most recent annual or quarterly report of the Company, and such other reports and documents of the Company as such holder of Registrable Securities may reasonably request to avail itself of any similar rule or regulation of the Commission allowing it to sell any such Registrable Securities without registration. 6. Definitions. For purposes of this Agreement, the following terms shall have the meanings specified below: 6.1 Commission. The term "Commission" shall mean the United States Securities and Exchange Commission or any other federal agency at the time administering the Securities Act. 6.2 Exchange Act. The term "Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 6.3 Initiating Holder. The term "Initiating Holder" shall mean a Person or Persons who shall request registration pursuant to Section 1 and shall then hold Registrable Securities representing at least 25% of the outstanding shares of Registrable Securities. 6.4 Person. The term "Person" shall mean an individual, partnership, corporation, association, trust, joint venture, unincorporated organization, and any government, governmental department or agency or political subdivision thereof. -110- 6.5 Registrable Securities. The term "Registrable Securities" shall mean (i) the 3,333,333 Shares to be issued pursuant to the Asset Purchase and Stock Subscription Agreement dated December 2, 1993 between Heico and the Company and (ii) any securities issued or issuable in exchange for or upon transfer of any Registrable Securities or (ii) any Common Stock or other common equity securities issued or issuable with respect to any Registrable Securities by way of stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when (i) a registration statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been disposed of in accordance with such registration statement, (ii) they shall have been distributed to the public pursuant to Rule 144 (or any successor provision) under the Securities Act, or (iii) they shall have ceased to be outstanding. 6.6 Registration Expenses. The term "Registration Expenses" shall mean all expenses incident to performance of or compliance with Sections 1, 2 and 3 hereof by the Company, including without limitation all registration and filing fees, all fees and expenses of complying with securities or blue sky laws, all printing expenses, all messenger and delivery expenses, the fees and disbursements of counsel for the Company and of its independent public accountants, including the expenses of any special audits or "cold comfort letters" required by or incident to such performance and compliance, fees and disbursements of one counsel for the holders of Registrable Securities on whose behalf Registrable Securities are being registered, and the salaries and expenses of the Company's officers and employees performing legal and accounting duties in connection with the Company's obligations under this Agreement, but excluding the fees and disbursements of any counsel for the holders on whose behalf Registrable Securities are being registered other than the one counsel referred to above and any underwriting discounts and commissions and applicable transfer taxes in respect of Registrable Securities, if any, each of which shall be borne by the holders of the Registrable Securities in all cases. 6.7 Securities Act. The term "Securities Act" shall mean the Securities Act of 1933, or any successor federal statute, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time. 7. Termination. This Agreement shall terminate and be of no further force or effect (other than the provisions of Section 4 hereof, which shall not terminate) when no Person holding Registrable Securities, even if acting together with all other holders of Registrable Securities, could be an Initiating Holder. 8. Notices. Any notice or other communication in connection with this Agreement shall be deemed to be delivered if in writing (or in the form of a telex or telecopy) addressed as provided below and if either (a) actually delivered at said address or (b) in the case of a letter, three business days shall have elapsed after the same shall have been deposited in the United States mails, postage prepaid and registered or certified: If to the Company, to it at 222 Berkeley Street, Boston, Massachusetts 02116, Facsimile No. (617) 424-5558, to the attention of the General Counsel, or at such other address as the Company shall have specified by notice actually received by the addressor prior to the giving of the applicable notice or communication. If to RBC, to it c/o Heico Acquisitions, Inc., 5600 Three First National Plaza, Chicago, Illinois 60602, Facsimile No. (312) 419-9417, to the attention of the President, or at such other address as it shall have specified by notice actually received by the addresser prior to the giving of the applicable notice or communication. -111- If to any other holder of record of any Registrable Security, to it at its address set forth in the stock register maintained by the Company or its transfer agent. 9. Amendments. Any term of this Agreement may be amended, and the observance of any term of this Agreement may be waived, only with the written consent of the Company and the holders of a majority of the Registrable Securities. Any amendment or waiver effected in accordance with this Section 9 shall be binding upon the Company and each holder of any Registrable Security. No waiver of or exception to any term, condition or provision of this Agreement, in any one or more instance, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision. 10. Miscellaneous. This Agreement sets forth the entire understanding of the parties hereto with respect to the transactions contemplated hereby. The invalidity or unenforceability of any term or provision hereof shall not affect the validity or enforceability of any other term or provision hereof. The headings in this Agreement are for convenience of reference only and shall not alter or otherwise affect the meaning hereof. This Agreement may be executed in any number of counterparts which together shall constitute one instrument and shall be governed by and construed in accordance with the domestic substantive laws of the Commonwealth of Massachusetts and shall bind and inure to the benefit of the parties hereto and their respective successors and assigns. In addition, whether or not any express assignment has been made, provisions of this Agreement that are for your benefit as the holder of any Registrable Security shall also inure to the benefit of, and be enforceable by, all subsequent holders of Registrable Securities. IN WITNESS WHEREOF, the undersigned have cause this Agreement to be executed under seal by there respective duly authorized officers as of the day and year first above written. ROBERTSON-CECO CORPORATION /s/ G. S. Pultz By: ------------------------- Name: George S. Pultz Title: Vice President RBC HOLDINGS, L.P. By: Heico Acquisitions, Inc. General Partner /s/ M. E. H. By:-------------------------- Name: Michael E. Heisley Title: President and CEO -112- EX-10 5 EXHIBIT 10.13 EXHIBIT 10.13 AMENDED AND RESTATED CONSULTING AND SERVICES AGREEMENT AGREEMENT dated as of July 15, 1993, between ROBERTSON-CECO CORPORATION, a Delaware corporation (the "Company"), and SAGE CAPITAL CORPORATION, a Wyoming corporation ("Sage"). WHEREAS, Sage and the Company entered into a certain Consulting and Services Agreement dated September 15, 1992; WHEREAS, Sage is engaged in the business, among other things, of providing consulting and financial services from time to time to various companies experiencing financial difficulties; WHEREAS, the Company believes it is in the best interests of the Company to continue to utilize the consulting and financial services provided by Sage as provided in this Amended and Restated Consulting and Services Agreement; and WHEREAS, Sage is willing to provide consulting and financial services to the Company on the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises and the mutual agreements hereinafter set forth, the parties hereto agree as follows: 1. Services to be Performed. Sage will, during the term of this Agreement, provide such consulting and financial services to the Company as are requested from time to time by the Company, including but not limited to the following: assistance in the Company's development and execution of its business strategies; assistance in the Company's analysis of certain of its business operations; assistance in the Company's analysis of its liquidity position and needs and methods of meeting those needs, including assistance in connection with the preparation of financial budgets, forecasts and cash flow projections; assistance in maintaining the Company's banking and other financial relationships and assistance in evaluating financing proposals and negotiating and consummating a restructuring of the Company's capital structure. In providing such services, Sage will make available substantially the entire working time of Gregg C. Sage. 2. Term of Agreement. This agreement shall continue in full force and effect until July 14, 1996, unless extended by written agreement of the parties. 3. Compensation. For its services hereunder, Sage shall be paid a fee of $200,000 per annum, which shall be paid in twelve equal installments the last day of each month commencing with the first such installment to be paid on July 31, 1993. In addition, Sage shall be reimbursed for all reasonable out-of-pocket costs and expenses incurred by Sage in connection with providing services pursuant to this Agreement. Reimbursements shall be made against statements presented by Sage. As additional compensation, the Company shall pay an amount to Sage based on the achievement of the financial and organizational objectives for the Company's fiscal year 1993 as set forth on Schedule A attached hereto. Scoring of the objectives shall be made under the direction of the Compensation Committee of the Board of Directors of the Company on a basis consistent with the criteria established by the Company under its "Management Incentive Plan and Performance Evaluation Program", provided, however, that no additional compensation will be paid under this Paragraph unless the minimum threshold financial objectives set forth on Schedule A shall have been met. In addition, during the term of this Agreement, Gregg C. Sage shall be eligible to participate in the Company's proposed Long-Term Incentive Plan, as -113- amended. Any awards under such Plan shall be made in accordance with the Company's policies for senior executive management and subject to the terms of the Plan. 4. Confidentiality. Sage agrees to keep confidential any non-public information provided to it in connection with its provision of services hereunder and to use any such non-public information only for the provision of such services, provided that Sage may disclose any such non-public information to the extent required by law or by any governmental or regulatory agency or body (as to which Sage shall give the Company advance notice so that the Company may, if its elects, seek an appropriate protective order) and may disclose any such non-public information which has become public other than through breach of the provisions hereof. Sage acknowledges that remedies at law would be inadequate to protect the Company against breach of this Section 4, and agrees that the Company may enforce the provisions of this Section 4 through the entry of an injunction against Sage and its employees and agents without the posting of a bond or proof of actual damages. 5. Indemnification. The Company hereby agrees to indemnify Sage, and its directors, officers and employees (collectively, the "Indemnified Parties"), against and hold them harmless from all losses, claims, damages and liabilities incurred in connection with any claim, suit or proceeding brought or threatened by any third party against any Indemnified Party by reason of Sage's performance of services pursuant to this Agreement, including without limitation prompt reimbursement of reasonable fees and expenses of counsel incurred in investigating or defending any such claim, suit or proceeding against delivery of an undertaking to repay any such amounts if it is subsequently determined that the recipient is not entitled to indemnification hereunder; provided, however, that the Company shall not be required to indemnify or hold harmless any Indemnified Party in respect of any claim, suit or proceeding arising out of the gross negligence of any Indemnified Party. 6. Assignability. This Agreement may not be assigned by either party hereto without the written consent of the other party. 7. Miscellaneous. This Agreement shall be governed by the internal laws of The Commonwealth of Massachusetts. This Agreement represents the entire understanding between the parties hereto with respect to the subject matter contained herein, and supersedes all prior oral and written understandings relating to the subject matter hereof. This Agreement may be amended only in writing by a document executed by the parties thereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. ROBERTSON-CECO CORPORATION /s/ Denis N. Maiorani By:--------------------------------------- Name: Denis N. Maiorani Title: Executive Vice-President and Chief Financial Officer SAGE CAPITAL CORPORATION /s/ Gregg. C. Sage By:--------------------------------------- Name: Gregg C. Sage Title: Executive Consultant and Director -114- EX-10 6 EXHIBIT 10.22 EXHIBIT 10.22 ROBERTSON-CECO CORPORATION EMPLOYMENT AGREEMENT AGREEMENT entered into as of the 15th day of July, 1993, by and between Robertson-Ceco Corporation, a Delaware corporation (hereinafter referred to as the "Corporation"), and Denis N. Maiorani of Groton, Massachusetts (hereinafter referred to as "Executive"). The parties hereto, each in consideration of the premises and of the joinder of the other herein, hereby agree as follows: 1. Term. The Corporation hereby retains Executive and, subject to the provisions of Section 6 below, Executive hereby agrees to serve the Corporation for the period commencing upon the date of this Agreement and continuing until July 14, 1996, (the "Term"), all on the basis and upon the terms and conditions hereinafter set forth. 2. Powers and Duties. Subject to the provisions of Sections 6 and 7 below, during the Term Executive agrees to serve the Corporation in Boston, Massachusetts (or such other location as the Board of Directors of the Corporation (the "Board") may determine), in such senior executive capacity as may be designated by the Board. Contemporaneously with this Agreement, the Board has elected Executive as President of the Corporation. Executive shall have all the powers and duties consistent with such positions subject to the direction of the Board. 3. Services Covered by this Agreement. All services which Executive shall perform for the Corporation and its subsidiaries during the Term shall be deemed to be services covered by this Agreement and by the compensation herein provided for, and in the absence of agreement to the contrary Executive shall not be entitled to any additional compensation therefor. 4. Base Salary. The Executive's base salary shall accrue at a minimum rate of Three Hundred and Sixty-three Thousand Dollars ($363,000) per annum which shall be subject to periodic upward adjustments in accordance with the policies of the Corporation from time to time in effect (such salary as adjusted being hereinafter referred to as "Base Salary"). 5. Additional Compensation. In addition to the Base Salary, Executive shall be entitled to the following: (a) Executive shall be entitled to participate in the Corporation's Management Incentive Plan and Performance Evaluation Program, proposed Long Term Incentive Plan, and any other compensation and pension and welfare benefit plans of the Corporation for the benefit of its officers and key employees from time to time in effect (subject to the terms of such plans as amended from time to time), and to receive all such other fringe benefits and perquisites as the Corporation shall from time to time make generally available to other officers of the Corporation, provided, however, the Corporation shall provide, with respect to all awards to Executive under any long term incentive plan of the Corporation, that, except in the event of a discharge for Cause or resignation without Good Reason, all such awards shall be fully vested and deemed to be accrued upon the Date of Termination (as defined in Paragraph 6(d)(iii)). (b) Executive shall be entitled to four (4) weeks of vacation during each year of this Agreement, or such greater period as the Board shall approve, and to paid holidays given by the Corporation to its domestic employees generally, without reduction in salary or other benefits. (c) The Corporation shall provide Executive with a free parking space in the 222 Berkeley Street parking garage (or other garage in the building where the Corporation then has its principal executive offices) during the Term of this Agreement. -115- (d) The Corporation shall reimburse Executive, upon proper accounting, for the cost of an annual physical examination during the Term of this Agreement. 6. Termination. Unless earlier terminated in accordance with the following provisions of this Paragraph 6, the Corporation shall continue to employ Executive and Executive shall remain employed by the Corporation during the entire Term of this Agreement as set forth in Paragraph 1. Paragraph 7 hereof sets forth certain obligations of the Corporation in the event that Executive's employment hereunder is terminated. Certain capitalized terms used in this Paragraph 6 and in Paragraph 7 hereof are defined in Paragraph 6(d) below. Upon termination, Executive shall promptly resign all offices, directorships and other positions held in or on behalf of the Corporation. (a) Death or Disability. Except to the extent otherwise provided in Paragraph 7(b) with respect to certain post-Date of Termination payment obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event of Executive's death or in the event that Executive becomes disabled. Executive will be deemed to be disabled upon the earlier of (i) the end of a twelve (12) consecutive month period during which, by reason or physical or mental injury or disease, Executive has been unable to perform substantially Executive's usual and customary duties under this Agreement and (ii) the date that a reputable physician selected by the Board to whom Executive has no reasonable objection determines in writing that Executive will, by reason of physical or mental injury or disease, be unable to perform substantially all of Executive's usual and customary duties under this Agreement for a period of at least twelve (12) consecutive months. If any question arises as to whether Executive is disabled, upon reasonable request therefor by the Board, Executive shall submit to reasonable medical examination by a reputable physician selected by the Board for the purpose of determining the existence, nature and extent of any such disability. In the event of disability, the Board shall promptly give Executive written notice in accordance with Paragraph 13, that Executive has been deemed to be disabled pursuant to this Paragraph and that this Agreement shall terminate by reason thereof. In the event of disability, until the Date of Termination, the Base Salary payable to Executive under Paragraph 4 hereof shall be reduced dollar-for-dollar by the amount of disability benefits, if any, paid to Executive in accordance with any disability policy or program of the Corporation. (b) Discharge for Cause or Resignation for Good Reason. In accordance with the procedures hereinafter set forth, the Board may discharge Executive from his employment hereunder for Cause and Executive may resign from his employment hereunder for Good Reason. Except to the extent otherwise provided in Paragraph 7(a) (in the case of a discharge for Cause) or Paragraph 7(c) (in the case of a resignation for Good Reason), with respect to certain post-Date of Termination obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event Executive is discharged for Cause or resigns for Good Reason. Any discharge of Executive by the Board for Cause or resignation by Executive for Good Reason shall be communicated by a Notice of Termination to Executive (in the case of discharge) or to the Board (in the case of resignation) given in accordance with Paragraph 13 of this Agreement. In the case of a discharge of Executive for Cause, the Notice of Termination shall include a copy of a resolution duly adopted by the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and reasonable opportunity for Executive, together with Executive's counsel, to be heard before the Board prior to such vote), finding that in the reasonable and good faith opinion of the Board Executive was culpable of conduct constituting Cause. No purported termination of Executive's employment for Cause shall be effective without a Notice of Termination. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstances in enforcing Executive's rights hereunder. -116- (c) Termination for Other Reasons. The Corporation may discharge Executive without Cause by giving written notice to Executive in accordance with Paragraph 13. The Executive may resign from his employment without Good Reason by giving at least sixty (60) days prior written notice to the Corporation in accordance with Paragraph 13. Except to the extent otherwise provided in Paragraph 7(a) (in the case of a resignation without Good Reason) or Paragraph 7(c) (in the case of a discharge without Cause), with respect to certain post- Date of Termination obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event Executive is discharged without Cause or resigns without Good Reason. (d) Definitions. For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below: (i) "Accrued Obligations" shall mean, as of the Date of Termination, the sum of (A) Executive's Base Salary under Paragraph 4 through the Date of Termination to the extent not theretofore paid, (B) the amount of any bonus, incentive compensation, deferred compensation and other cash compensation accrued by Executive as of the Date of Termination to the extent not theretofore paid, and (C) the amount of any vacation pay, expense reimbursements and other cash entitlement accrued by Executive as of the Date of Termination to the extent not theretofore paid. For the purpose of this Paragraph 6 (d)(i), amounts shall be deemed to accrue ratably over the period during which they are earned. (ii) "Cause" shall mean any of the following that is materially and demonstrably detrimental to the goodwill of the Corporation or materially and demonstrably damaging to the relationships of the Corporation with its customers, suppliers or employees: (A) except in the event of Executive's disability, an act of willful misconduct or gross negligence by Executive in the performance of his material duties or obligations to the Corporation which continues after written notice is received by Executive specifying the alleged failure in reasonable detail, or (B) conviction of Executive of a felony involving moral turpitude, or (C) a material act of dishonesty or breach of trust on the part of Executive resulting or intended to result directly or indirectly in personal gain or enrichment at the expense of the Corporation. (iii) "Date of Termination" shall mean (A) in the event of a discharge of Executive by the Board for Cause or a resignation by Executive for Good Reason, the date Executive (in the case of discharge) or the Board (in the case of resignation) receives a Notice of Termination, or any later date specified in such Notice of Termination, as the case may be, (B) in the event of a discharge of Executive without Cause the date specified in the written notice to Executive, (C) in the event of a resignation by Executive without Good Reason, the later of any date specified in the written notice to the Board and the date sixty (60) days from the date of such written notice, (D) in the event of Executive's death, the date of Executive's death, and (E) in the event of termination of Executive's employment by reason of disability, the date Executive receives written notice of such termination (or, if later, twelve (12) months from the date that Executive shall have been deemed to be disabled pursuant to Paragraph 6(a)). (iv) "Good Reason" shall mean any of the following: (A) the assignment to Executive of any duties inconsistent in any material respect with Executive's positions with the Corporation as set forth in this Agreement (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Paragraph 2 or any action by the Corporation which results in diminution in such positions, authority, duties or responsibilities, including not electing Executive as Chief Executive Officer within one (1) year from the date of this Agreement (provided, that not electing Executive a Chief Executive Officer shall only be deemed Good Reason if the Executive gives Notice of Termination within the fifteen (15) day period following the date which is one (1) year from the date of this Agreement), but excluding for this purpose any isolated, insubstantial and inadvertent action not -117- taken in bad faith and which is remedied by the Corporation promptly after receipt of written notice thereof given by Executive in accordance with Paragraph 13; or (B) any failure by the Corporation to comply with any of the provisions of this Agreement, other than any isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Corporation promptly after receipt of written notice thereof specifying the alleged failure in reasonable detail given by Executive in accordance with Paragraph 13; or (C) the Corporation shall fail to maintain directors' and officers' insurance, having coverages and dollar limitations which are consistent with those of companies of the Corporation's industry and size, unless after reasonable efforts such insurance is unobtainable by the Corporation. (v) "Notice of Termination" shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated, and (iii) if the Date of Termination is to be other than the date of receipt of such notice, specifies the termination date. 7. Obligations of the Corporation Upon Termination. (a) Discharge for Cause or Resignation without Good Reason. In the event of a discharge of Executive for Cause pursuant to Paragraph 6(b) or resignation by Executive without Good Reason pursuant to Paragraph 6(c): (i) the Corporation shall pay to Executive all Accrued Obligations in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) Executive shall be entitled to receive all benefits accrued by him as of the Date of Termination under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans and arrangements; and (iii) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. (b) Death or Disability. In the event this Agreement terminates pursuant to Paragraph 6(a) by reason of the death or disability of Executive: (i) the Corporation shall pay all Accrued Obligations to Executive, or to his heirs or estate in the event of Executive's death, in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) the Corporation shall continue to pay to Executive, or to his heirs or estate in the event of Executive's death, for a period of six (6) months from the Date of Termination, reduced, in the case of disability, dollar-for- dollar by the amount of any disability benefits paid to the Executive in accordance with any disability policy or program of the Corporation, without duplication of any such reduction pursuant to Paragraph 6(a), (A) Executive's Base Salary in effect on the Date of Termination as determined under Paragraph 4; and (B) in the case of disability, all amounts and provide all other benefits to which Executive would have been entitled as if he had continued to be employed by the Corporation for such period; and (iii) the Executive, or his beneficiary, heirs or estate in the event of the Executive's death, shall be entitled to receive all benefits accrued by him as of the Date of Termination under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans and arrangements; and -118- (iv) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. (c) Discharge without Cause or Resignation for Good Reason. In the event that Executive is discharged other than for Cause or Executive resigns with Good Reason pursuant to Paragraph 6(b): (i) the Corporation shall pay all Accrued Obligations to Executive in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) the Corporation shall continue to pay Executive (A) in the case of resignation for Good Reason pursuant to Paragraph 6(d)(iv)(D), for a period of eighteen (18) months after the Date of Termination, and (B) in all other cases, for a period equal to the greater of eighteen (18) months after the Date of Termination and the then-remaining term of this Agreement, (x) Executive's Base Salary in effect on the Date of Termination as determined under Paragraph 4; and (y) all amounts and provide all other benefits to which Executive would have been entitled as if he had continued to be employed by the Corporation for such period; and (iii) Executive shall be entitled to receive all benefits accrued by him as of the termination of the period specified in clause (ii) above under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans; and (iv) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits applicable to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. 8. Confidentiality. Except for and on behalf of the Corporation with the consent of or as directed by the Board, Executive shall keep confidential and shall not divulge to any other person or entity, during the term of employment or thereafter, any of the business secrets or other confidential information regarding the Corporation and its subsidiaries which has not otherwise become public knowledge; provided, however, that nothing in this Agreement shall preclude Executive from disclosing information (i) to parties retained to perform services for the Corporation or its subsidiaries, or (ii) under any other circumstances to the extent such disclosure is, in the reasonable judgment of Executive, appropriate or necessary to further the best interests of the Corporation or its subsidiaries, or (iii) as may be required by law. 9. Property of the Corporation. All papers, books and records of every kind and description relating to the business and affairs of the Corporation and its subsidiaries, whether or not prepared by Executive, other than personal notes prepared by or at direction of Executive, shall be the sole and exclusive property of the Corporation, and Executive shall surrender them to the Corporation at any time upon request by the Board. 10. Time and Effort. Executive agrees to devote his full business time and best efforts to the performance of his designated duties in furtherance of the Corporation's business. However, Executive may act as a director or trustee of business corporations, foundations or charities and may participate in reasonable amounts of public interest and related work. Executive acknowledges that the Corporation has rights to protect trade secrets and other confidential and proprietary information relating to its products, services, customers, processes and other aspects of its business, whether produced by it or otherwise owned by it, and acknowledges that the Corporation has not waived any of those rights in favor of Executive. -119- 11. Competition. Executive further agrees that, during the Protected Period (as defined below), he will not compete, directly or indirectly, with the business of the Corporation. The phrase "complete, directly or indirectly, with the business of the Corporation" as used herein, shall mean engaging or having an interest, directly or indirectly, as owner, employee, partner, through stock ownership (other than less than 5% of the outstanding stock of a publicly-traded corporation), investment of capital, lending of money or property, rendering of services, or otherwise, either alone or in association with others, in the formation, funding or operation of any type of group, business or enterprise ten percent (10%) or more of the revenue of which (in the four most recent fiscal quarters) is derived from the manufacture and/or sale of products, or provision of services, similar to those manufactured and sold, or provided, by the Corporation or its subsidiaries or partnerships in which the Corporation has an interest at the time of the alleged competition or which performs similar functions to those performed by such products, or which are improvements or replacements therefor. The Protected Period shall be the period during which Executive is employed by the Corporation plus, if Executive's employment with the Corporation ends under circumstances described in Section 6 hereof otherwise than pursuant to Section 7(c), one year after Executive's employment so ends. 12. Nature of Services. The parties hereto agree that the services of Executive are of a personal, special, unique and extraordinary character and cannot be replaced by the Corporation, that the violation by Executive of his agreements in Sections 8, 10 and 11 hereof may cause the Corporation irreparable harm which could not reasonably or adequately be compensated in damages in an action at law, and that his agreements in Sections 8, 10 and 11 hereof shall therefore be enforceable both at law and in equity, by injunction and otherwise. The remedies of the Corporation hereunder, and at law and in equity, shall be cumulative and not alternative, and shall not be exhausted by any one or more uses thereof. 13. Notices. Any notice hereunder shall be effective when mailed by REGISTERED or CERTIFIED MAIL, postage and other charges pre-paid, in the case of Executive, addressed to him at Box 685, Groton, Massachusetts 01450, and in the case of the Corporation, addressed to it at 222 Berkeley Street, Boston, Massachusetts 02116, Attention: General Counsel, or at such other address as either of the parties shall have last designated by notice given in like manner to the other of them. 14. Amendment; Waiver; Assignment. No provisions of this Agreement shall be modified or amended except by an instrument in writing duly executed by the parties hereto, and no custom, act, payment, favor or indulgence shall grant any additional right to Executive or be deemed a waiver by the Corporation of any of Executive's obligations hereunder or release Executive therefrom or impose any additional obligation upon the Corporation, nor shall any assent, express or implied, by the Corporation to, or waiver by the Corporation of, any breach by Executive of any term or provision hereof be deemed to be an assent or waiver by the corporation to or of any succeeding breach of the same or any other term or provision. This Agreement is personal to and shall not be assignable by Executive, but shall inure to the benefit of the respective parties hereto and their respective heirs, successors and assigns. 15. Enforceability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 16. Governing Law. This Agreement shall be construed and enforced in all respects in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles thereof. -120- 17. Entire Understanding; Miscellaneous. This Agreement embodies the entire understanding of the parties hereof, and supersedes all other oral and written agreements or understandings between them regarding the subject matter hereof. No change, alteration or modification hereof may be made except in a writing, signed by each of the parties hereto. The headings in this Agreement are for convenience and reference only and shall not be construed as part of this Agreement or to limit or otherwise affect the meaning hereof. WITNESS the execution hereof under seal the day and year first above written. ROBERTSON-CECO CORPORATION [CORPORATE SEAL] /s/ George S. Pultz By:----------------------------- George S. Pultz, Vice President, General Counsel and Secretary EXECUTIVE /s/ Denis N. Maiorani ------------------------------------------ Denis N. Maiorani -121- EX-10 7 EXHIBIT 10.23 EXHIBIT 10.23 ROBERTSON-CECO CORPORATION EMPLOYMENT AGREEMENT AGREEMENT entered into as of the 15th day of July, 1993, by and between Robertson-Ceco Corporation, a Delaware corporation (hereinafter referred to as the "Corporation"), and Andrew G.C. Sage II of North Palm Beach, Florida (hereinafter referred to as "Executive"). The parties hereto, each in consideration of the premises and of the joinder of the other herein, hereby agree as follows: 1. Term. The Corporation hereby retains Executive and, subject to the provisions of Section 6 below, Executive hereby agrees to serve the Corporation for the period commencing upon the date of this Agreement and continuing until July 14, 1996, (the "Term"), all on the basis and upon the terms and conditions hereinafter set forth. 2. Powers and Duties. Subject to the provisions of Sections 6 and 7 below, during the Term Executive agrees to serve the Corporation in Boston, Massachusetts (or such other location as the Board of Directors of the Corporation (the "Board") may determine), in such senior executive capacity as may be designated by the Board. Contemporaneously with this Agreement, the Board has elected Executive as Chairman of the Board and Chief Executive Officer of the Corporation. Executive shall have all the powers and duties consistent with such positions subject to the direction of the Board. 3. Services Covered by this Agreement. All services which Executive shall perform for the Corporation and its subsidiaries during the Term shall be deemed to be services covered by this Agreement and by the compensation herein provided for, and in the absence of agreement to the contrary Executive shall not be entitled to any additional compensation therefor. 4. Base Salary. The Executive's base salary shall accrue, for so long as Executive shall serve in the position as President and Chief Executive Officer, at a minimum rate of Four Hundred and Sixty Thousand Dollars ($460,000) per annum which shall be subject to periodic upward adjustments in accordance with the policies of the Corporation from time to time in effect (such salary as adjusted being hereinafter referred to as "Base Salary"), it being understood that if the Executive is elected to a senior executive capacity other than Chairman of the Board and Chief Executive Officer, Executive and the Corporation will negotiate in good faith and mutually agree to a new Base Salary taking into consideration, among other things, any reduction in duties. 5. Additional Compensation. In addition to the Base Salary, Executive shall be entitled to the following: (a) Executive shall be entitled to participate in the Corporation's Management Incentive Plan and Performance Evaluation Program, proposed Long Term Incentive Plan, and any other compensation and pension and welfare benefit plans of the Corporation for the benefit of its officers and key employees from time to time in effect (subject to the terms of such plans as amended from time to time), and to receive all such other fringe benefits and perquisites as the Corporation shall from time to time make generally available to other officers of the Corporation, provided, however, the Corporation shall provide, with respect to all awards to Executive under any long term incentive plan of the Corporation, that, except in the event of a discharge for Cause or resignation without Good Reason, all such awards shall be fully vested and deemed to be accrued upon the Date of Termination (as defined in Paragraph 6(d)(iii)). (b) Executive shall be entitled to four (4) weeks of vacation during each year of this Agreement, or such greater period as the Board shall approve, and -122- to paid holidays given by the Corporation to its domestic employees generally, without reduction in salary or other benefits. (c) The Corporation shall provide Executive with a free parking space in the 222 Berkeley Street parking garage (or other garage in the building where the Corporation then has its principal executive offices) during the Term of this Agreement. (d) The Corporation shall reimburse Executive, upon proper accounting, for the cost of an annual physical examination during the Term of this Agreement. 6. Termination. Unless earlier terminated in accordance with the following provisions of this Paragraph 6, the Corporation shall continue to employ Executive and Executive shall remain employed by the Corporation during the entire Term of this Agreement as set forth in Paragraph 1. Paragraph 7 hereof sets forth certain obligations of the Corporation in the event that Executive's employment hereunder is terminated. Certain capitalized terms used in this Paragraph 6 and in Paragraph 7 hereof are defined in Paragraph 6(d) below. Upon termination, Executive shall promptly resign all offices, directorships and other positions held in or on behalf of the Corporation. (a) Death or Disability. Except to the extent otherwise provided in Paragraph 7(b) with respect to certain post-Date of Termination payment obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event of Executive's death or in the event that Executive becomes disabled. Executive will be deemed to be disabled upon the earlier of (i) the end of a twelve (12) consecutive month period during which, by reason or physical or mental injury or disease, Executive has been unable to perform substantially Executive's usual and customary duties under this Agreement and (ii) the date that a reputable physician selected by the Board to whom Executive has no reasonable objection determines in writing that Executive will, by reason of physical or mental injury or disease, be unable to perform substantially all of Executive's usual and customary duties under this Agreement for a period of at least twelve (12) consecutive months. If any question arises as to whether Executive is disabled, upon reasonable request therefor by the Board, Executive shall submit to reasonable medical examination by a reputable physician selected by the Board for the purpose of determining the existence, nature and extent of any such disability. In the event of disability, the Board shall promptly give Executive written notice in accordance with Paragraph 13, that Executive has been deemed to be disabled pursuant to this Paragraph and that this Agreement shall terminate by reason thereof. In the event of disability, until the Date of Termination, the Base Salary payable to Executive under Paragraph 4 hereof shall be reduced dollar-for-dollar by the amount of disability benefits, if any, paid to Executive in accordance with any disability policy or program of the Corporation. (b) Discharge for Cause or Resignation for Good Reason. In accordance with the procedures hereinafter set forth, the Board may discharge Executive from his employment hereunder for Cause and Executive may resign from his employment hereunder for Good Reason. Except to the extent otherwise provided in Paragraph 7(a) (in the case of a discharge for Cause) or Paragraph 7(c) (in the case of a resignation for Good Reason), with respect to certain post-Date of Termination obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event Executive is discharged for Cause or resigns for Good Reason. Any discharge of Executive by the Board for Cause or resignation by Executive for Good Reason shall be communicated by a Notice of Termination to Executive (in the case of discharge) or to the Board (in the case of resignation) given in accordance with Paragraph 13 of this Agreement. In the case of a discharge of Executive for Cause, the Notice of Termination shall include a copy of a resolution duly adopted by the Board at a meeting of the Board called and held for such purpose (after reasonable notice to Executive and reasonable opportunity for Executive, together with Executive's counsel, to be -123- heard before the Board prior to such vote), finding that in the reasonable and good faith opinion of the Board Executive was culpable of conduct constituting Cause. No purported termination of Executive's employment for Cause shall be effective without a Notice of Termination. The failure by Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of Executive hereunder or preclude Executive from asserting such fact or circumstances in enforcing Executive's rights hereunder. (c) Termination for Other Reasons. The Corporation may discharge Executive without Cause by giving written notice to Executive in accordance with Paragraph 13. The Executive may resign from his employment without Good Reason by giving at least sixty (60) days prior written notice to the Corporation in accordance with Paragraph 13. Except to the extent otherwise provided in Paragraph 7(a) (in the case of a resignation without Good Reason) or Paragraph 7(c) (in the case of a discharge without Cause), with respect to certain post- Date of Termination obligations of the Corporation, this Agreement shall terminate immediately as of the Date of Termination in the event Executive is discharged without Cause or resigns without Good Reason. (d) Definitions. For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below: (i) "Accrued Obligations" shall mean, as of the Date of Termination, the sum of (A) Executive's Base Salary under Paragraph 4 through the Date of Termination to the extent not theretofore paid, (B) the amount of any bonus, incentive compensation, deferred compensation and other cash compensation accrued by Executive as of the Date of Termination to the extent not theretofore paid, and (C) the amount of any vacation pay, expense reimbursements and other cash entitlement accrued by Executive as of the Date of Termination to the extent not theretofore paid. For the purpose of this Paragraph 6 (d)(i), amounts shall be deemed to accrue ratably over the period during which they are earned. (ii) "Cause" shall mean any of the following that is materially and demonstrably detrimental to the goodwill of the Corporation or materially and demonstrably damaging to the relationships of the Corporation with its customers, suppliers or employees: (A) except in the event of Executive's disability, an act of willful misconduct or gross negligence by Executive in the performance of his material duties or obligations to the Corporation which continues after written notice is received by Executive specifying the alleged failure in reasonable detail, or (B) conviction of Executive of a felony involving moral turpitude, or (C) a material act of dishonesty or breach of trust on the part of Executive resulting or intended to result directly or indirectly in personal gain or enrichment at the expense of the Corporation. (iii) "Date of Termination" shall mean (A) in the event of a discharge of Executive by the Board for Cause or a resignation by Executive for Good Reason, the date Executive (in the case of discharge) or the Board (in the case of resignation) receives a Notice of Termination, or any later date specified in such Notice of Termination, as the case may be, (B) in the event of a discharge of Executive without Cause the date specified in the written notice to Executive, (C) in the event of a resignation by Executive without Good Reason, the later of any date specified in the written notice to the Board and the date sixty (60) days from the date of such written notice, (D) in the event of Executive's death, the date of Executive's death, and (E) in the event of termination of Executive's employment by reason of disability, the date Executive receives written notice of such termination (or, if later, twelve (12) months from the date that Executive shall have been deemed to be disabled pursuant to Paragraph 6(a)). (iv) "Good Reason" shall mean any of the following: (A) the assignment to Executive of any duties inconsistent in any material respect with -124- Executive's positions with the Corporation as set forth in this Agreement (including status, offices, titles and reporting requirements), authority, duties or responsibilities as contemplated by Paragraph 2, or any action by the Corporation which results in diminution in such positions, authority, duties or responsibilities, excluding for this purpose any isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Corporation promptly after receipt of written notice thereof given by Executive in accordance with Paragraph 13 it being understood that a change in Executive's positions from Chairman of the Board and Chief Executive Officer to some other mutually agreed senior executive capacity shall not be deemed to be Good Reason unless the Corporation and Executive fail to agree to a new Base Salary as contemplated by Paragraph 4; or (B) any failure by the Corporation to comply with any of the provisions of this Agreement, other than any isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Corporation promptly after receipt of written notice thereof specifying the alleged failure in reasonable detail given by Executive in accordance with Paragraph 13; or (C) the Corporation shall fail to maintain directors' and officers' insurance, having coverages and dollar limitations which are consistent with those of companies of the Corporation's industry and size, unless after reasonable efforts such insurance is unobtainable by the Corporation. (v) "Notice of Termination" shall mean a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive's employment under the provision so indicated, and (iii) if the Date of Termination is to be other than the date of receipt of such notice, specifies the termination date. 7. Obligations of the Corporation Upon Termination. (a) Discharge for Cause or Resignation without Good Reason. In the event of a discharge of Executive for Cause pursuant to Paragraph 6(b) or resignation by Executive without Good Reason pursuant to Paragraph 6(c): (i) the Corporation shall pay to Executive all Accrued Obligations in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) Executive shall be entitled to receive all benefits accrued by him as of the Date of Termination under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans and arrangements; and (iii) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. (b) Death or Disability. In the event this Agreement terminates pursuant to Paragraph 6(a) by reason of the death or disability of Executive: (i) the Corporation shall pay all Accrued Obligations to Executive, or to his heirs or estate in the event of Executive's death, in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) the Corporation shall continue to pay to Executive, or to his heirs or estate in the event of Executive's death, for a period of six (6) months from the Date of Termination, reduced, in the case of disability, dollar-for- dollar by the amount of any disability benefits paid to the Executive in accordance with any disability policy or program of the Corporation, without duplication of any such reduction pursuant to Paragraph 6(a), (A) Executive's Base Salary in effect on the Date of Termination as determined under Paragraph 4; and (B) in the case of disability, all amounts and provide all other benefits -125- to which Executive would have been entitled as if he had continued to be employed by the Corporation for such period; and (iii) the Executive, or his beneficiary, heirs or estate in the event of the Executive's death, shall be entitled to receive all benefits accrued by him as of the Date of Termination under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans and arrangements; and (iv) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. (c) Discharge without Cause or Resignation for Good Reason. In the event that Executive is discharged other than for Cause or Executive resigns with Good Reason pursuant to Paragraph 6(b): (i) the Corporation shall pay all Accrued Obligations to Executive in a lump sum in cash within thirty (30) days after the Date of Termination; and (ii) for the greater of eighteen (18) months after the Date of Termination or the then-remaining term of this Agreement, the Corporation shall continue to pay Executive (A) Executive's Base Salary in effect on the Date of Termination as determined under Paragraph 4; and (B) all amounts and provide all other benefits to which Executive would have been entitled as if he had continued to be employed by the Corporation for such period of 18 months or the remaining term of this Agreement; and (iii) Executive shall be entitled to receive all benefits accrued by him as of the termination of the period specified in clause (ii) above under all qualified and non-qualified retirement, pension, profit sharing and similar plans of the Corporation in such manner and at such time as are provided under the terms of such plans; and (iv) all other obligations of the Corporation hereunder shall cease forthwith; provided, however, that this clause shall not affect any benefits applicable to which employees generally upon termination would be entitled under the terms of welfare and fringe benefit plans and programs. 8. Confidentiality. Except for and on behalf of the Corporation with the consent of or as directed by the Board, Executive shall keep confidential and shall not divulge to any other person or entity, during the term of employment or thereafter, any of the business secrets or other confidential information regarding the Corporation and its subsidiaries which has not otherwise become public knowledge; provided, however, that nothing in this Agreement shall preclude Executive from disclosing information (i) to parties retained to perform services for the Corporation or its subsidiaries, or (ii) under any other circumstances to the extent such disclosure is, in the reasonable judgment of Executive, appropriate or necessary to further the best interests of the Corporation or its subsidiaries, or (iii) as may be required by law. 9. Property of the Corporation. All papers, books and records of every kind and description relating to the business and affairs of the Corporation and its subsidiaries, whether or not prepared by Executive, other than personal notes prepared by or at direction of Executive, shall be the sole and exclusive property of the Corporation, and Executive shall surrender them to the Corporation at any time upon request by the Board. 10. Time and Effort. Executive agrees to devote substantially all of his business time and best efforts to the performance of his designated duties in furtherance of the Corporation's business. However, Executive may act as a -126- director or trustee of business corporations, foundations or charities and may participate in reasonable amounts of public interest and related work. Executive acknowledges that the Corporation has rights to protect trade secrets and other confidential and proprietary information relating to its products, services, customers, processes and other aspects of its business, whether produced by it or otherwise owned by it, and acknowledges that the Corporation has not waived any of those rights in favor of Executive. 11. Competition. Executive further agrees that, during the Protected Period (as defined below), he will not compete, directly or indirectly, with the business of the Corporation. The phrase "complete, directly or indirectly, with the business of the Corporation" as used herein, shall mean engaging or having an interest, directly or indirectly, as owner, employee, partner, through stock ownership (other than less than 5% of the outstanding stock of a publicly-traded corporation), investment of capital, lending of money or property, rendering of services, or otherwise, either alone or in association with others, in the formation, funding or operation of any type of group, business or enterprise ten percent (10%) or more of the revenue of which (in the four most recent fiscal quarters) is derived from the manufacture and/or sale of products, or provision of services, similar to those manufactured and sold, or provided, by the Corporation or its subsidiaries or partnerships in which the Corporation has an interest at the time of the alleged competition or which performs similar functions to those performed by such products, or which are improvements or replacements therefor. The Protected Period shall be the period during which Executive is employed by the Corporation plus, if Executive's employment with the Corporation ends under circumstances described in Section 6 hereof otherwise than pursuant to Section 7(c), one year after Executive's employment so ends. 12. Nature of Services. The parties hereto agree that the services of Executive are of a personal, special, unique and extraordinary character and cannot be replaced by the Corporation, that the violation by Executive of his agreements in Sections 8, 10 and 11 hereof may cause the Corporation irreparable harm which could not reasonably or adequately be compensated in damages in an action at law, and that his agreements in Sections 8, 10 and 11 hereof shall therefore be enforceable both at law and in equity, by injunction and otherwise. The remedies of the Corporation hereunder, and at law and in equity, shall be cumulative and not alternative, and shall not be exhausted by any one or more uses thereof. 13. Notices. Any notice hereunder shall be effective when mailed by REGISTERED or CERTIFIED MAIL, postage and other charges pre-paid, in the case of Executive, addressed to him at 11730 Lakehouse Drive, North Palm Beach, Florida 33408, and in the case of the Corporation, addressed to it at 222 Berkeley Street, Boston, Massachusetts 02116, Attention: General Counsel, or at such other address as either of the parties shall have last designated by notice given in like manner to the other of them. 14. Amendment; Waiver; Assignment. No provisions of this Agreement shall be modified or amended except by an instrument in writing duly executed by the parties hereto, and no custom, act, payment, favor or indulgence shall grant any additional right to Executive or be deemed a waiver by the Corporation of any of Executive's obligations hereunder or release Executive therefrom or impose any additional obligation upon the Corporation, nor shall any assent, express or implied, by the Corporation to, or waiver by the Corporation of, any breach by Executive of any term or provision hereof be deemed to be an assent or waiver by the corporation to or of any succeeding breach of the same or any other term or provision. This Agreement is personal to and shall not be assignable by Executive, but shall inure to the benefit of the respective parties hereto and their respective heirs, successors and assigns. 15. Enforceability. If any term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be invalid -127- or unenforceable, the remainder of this Agreement or the application of such term or provision to persons or circumstances other than those to which it is invalid or unenforceable shall not be affected thereby, and each term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 16. Governing Law. This Agreement shall be construed and enforced in all respects in accordance with the laws of the Commonwealth of Massachusetts, without giving effect to the conflict of laws principles thereof. 17. Entire Understanding; Miscellaneous. This Agreement embodies the entire understanding of the parties hereof, and supersedes all other oral and written agreements or understandings between them regarding the subject matter hereof. No change, alteration or modification hereof may be made except in a writing, signed by each of the parties hereto. The headings in this Agreement are for convenience and reference only and shall not be construed as part of this Agreement or to limit or otherwise affect the meaning hereof. WITNESS the execution hereof under seal the day and year first above written. ROBERTSON-CECO CORPORATION [CORPORATE SEAL] By: /s/ George S. Pultz -------------------------------- George S. Pultz, Vice President, General Counsel and Secretary EXECUTIVE /s/ Andrew G. C. Sage II ---------------------------------- Andrew G.C. Sage II -128- EX-11 8 EXHIBIT 11 EXHIBIT 11 ROBERTSON-CECO CORPORATION COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE ------------------------------------------------ (Thousands, except per share amounts) (Unaudited)
YEAR ENDED DECEMBER 31 ---------------------------------- 1991 1992 1993 --------- --------- --------- PRIMARY: Income (loss) from continuing operations . . . . . $(109,033) $(67,348)$(22,603) Less dividends on preferred stock. . . . . . . . . . . . . 281 169 112 --------- -------- -------- Primary income (loss) from continuing operations. . . . . . (109,314) (67,517) (22,715) (Loss) from discontinued operations . . . . . . . . . . (15,769) (3,797) (2,500) Income (loss) from extraordinary items. . . . . . . . . . . . . - - 5,367 Income (loss) from Cumulative effect of accounting change. . - - (1,200) --------- -------- -------- Total primary earnings (loss). . . $(125,083) $(71,314) $(21,048) ========= ======== ======== Average number common shares outstanding. . . . . . . . . . 878 880 6,217 Assumed exercise of stock options and warrants . . . . . - - - --------- -------- --------- Total Shares . . . . . . . . . 878 880 6,217 ========= ======== ========= Primary earnings (loss) per common share from continuing operations. . . . . $ (124.49) $ (76.69)$ (3.65) Primary earnings (loss) per common share from discontinued operations. . . . (17.95) (4.31) (.40) Primary earnings (loss) per common share from extraordinary item. . . . . . - - .86 Primary earnings (loss) from cumulative effect of accounting change. . . . . . . - - (.20) --------- -------- --------- Primary earnings (loss) per common share . . . . . . . . . $ (142.44) $ (81.00) $ (3.39) ========= ======== =========
-129- EX-11 9 EXHIBIT 11 EXHIBIT 11 (Continued) ROBERTSON-CECO CORPORATION COMPUTATION OF EARNINGS (LOSS) PER COMMON SHARE (CONTINUED) ------------------------------------------------------------ (Thousands, except per share amounts) (Unaudited)
YEAR ENDED DECEMBER 31 ---------------------------------- 1991 1992 1993 --------- --------- --------- FULLY DILUTED: Income (loss) from continuing operations. . . . .$(109,033) $(67,348) $(22,603) Less dividends on preferred stock. . . . . . . . . . . . . 281 169 112 --------- -------- -------- Fully diluted income (loss) from continuing operations. . . . . (109,314) (67,517) (22,715) (Loss) from discontinued operations . . . . . . . . . . (15,769) (3,797) (2,500) Income (loss) from extraordinary item . . . . . . . . . . . . . - - 5,367 Income (loss) from cumulative efect of accounting change. . - - (1,200) --------- -------- -------- Total fully diluted earnings (loss). . . . . . . . $(125,083) $(71,314) $(21,048) ========= ======== ======== Average number common shares outstanding. . . . . . . . . . 878 880 6,217 Assumed conversion of convertible debentures . . . . - - - Assumed exercise of stock options and warrants . . . . . - - - --------- -------- -------- Total number common share assuming full dilution . . . . 878 880 6,217 ========= ======== ======== Fully diluted earnings (loss) per common share from continuing operations. . . . . $ (124.49) $ (76.69) $ (3.65) Fully diluted earnings (loss) per common share from discontinued operations. . . . (17.95) (4.31) (.40) Fully diluted earnings (loss) per common share from extraordinary item . . . . . . - - .86 Fully diluted earnings (loss) from cumulative effect of accounting change. . . . . . . - - (.20) --------- -------- --------- Fully diluted earnings (loss) per common share . . . . . . . . $ (142.44) $ (81.00)$ (3.39) ========= ======== =========
-130- EX-21 10 EXHIBIT 21 EXHIBIT 21 ROBERTSON-CECO CORPORATION SUBSIDIARIES OF THE REGISTRANT DECEMBER 31, 1993 - - -------------------------------------------------------------------------------- JURISDICTION COMPANY OF INCORPORATION - - -------------------------------------------------------------------------------- Subsidiaries of the registrant included in the respective consolidated financial statements: DOMESTIC Ceco Dallas Co. Texas Ceco Houston Co. Texas Ceco San Antonio Co. Texas Craw Manufacturing Co. Delaware RHH Industries, Inc. Delaware Quantum Constructors, Inc. Delaware M C Durham Co. North Carolina M C Windsor Co. Arkansas Meyerland Co. Colorado RC Industries Delaware RPM Erectors, Inc. California FOREIGN H. H. Robertson, Inc. Ontario H. H. Robertson (Australia) Pty Ltd Australia H. H. Robertson Hong Kong Ltd. Hong Kong H. H. Robertson Singapore Pte Ltd Singapore Robertson Nederland B.V. Holland Robertson Espanola S.A. Spain Robertson Nordisk A/S Norway H. H. Robertson Nordisk A/S Denmark Unlisted subsidiaries, considered in the aggregate, do not constitute a significant subsidiary. -131- EX-23 11 EXHIBIT 23 EXHIBIT 23.1 CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the incorporation by reference in Registration Statement Nos. 33-41371 and 33-51665 of Robertson-Ceco Corporation on Form S-8 of our report dated February 25, 1993 (May 3, 1993 as to Note 2) (which includes an explanatory paragraph with respect to a substantial doubt about the ability of the Company to continue as a going concern), appearing in this Annual Report on Form 10-K of Robertson-Ceco Corporation for the year ended December 31, 1993. /s/ Deloitte & Touche Deloitte & Touche Boston, Massachusetts March 30, 1994 -132- EX-23 12 EXHIBIT 23 EXHIBIT 23.2 CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-41371 and 33-51665) of Robertson-Ceco Corporation of our report dated March 30, 1994 appearing on page 58 of the Annual Report on Form 10-K for the year ended December 31, 1993. We also consent to the incorporation by reference of our report on the Financial Statement Schedules, which appears on page 69 of this Form 10-K. /s/ Price Waterhouse Price Waterhouse Boston, Massachusetts March 30, 1994 -133- -----END PRIVACY-ENHANCED MESSAGE-----