-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OAeyZikMhef6ozr4dlb5y/RZ4/daJq8DDJH11TtDmU7bTvnRw7tilB7NEtVxnLy2 eCUOoiWbVzmI6YUzgBxG9g== 0000950130-97-003672.txt : 19970815 0000950130-97-003672.hdr.sgml : 19970815 ACCESSION NUMBER: 0000950130-97-003672 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970814 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CONTINENTAL CAN CO INC /DE/ CENTRAL INDEX KEY: 0000103392 STANDARD INDUSTRIAL CLASSIFICATION: METAL CANS [3411] IRS NUMBER: 112228114 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06690 FILM NUMBER: 97660497 BUSINESS ADDRESS: STREET 1: ONE AERIAL WAY CITY: SYOSSET STATE: NY ZIP: 11791 BUSINESS PHONE: 5168224940 MAIL ADDRESS: STREET 1: ONE AERIAL WAY CITY: SYOSSET STATE: NY ZIP: 11791 FORMER COMPANY: FORMER CONFORMED NAME: LOCKWOOD KESSLER & BARTLETT INC DATE OF NAME CHANGE: 19710815 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q --------- (MARK ONE) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended JUNE 30, 1997 ---------------------- OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to . ----- ----- Commission File Number: 1-6690 ------ CONTINENTAL CAN COMPANY, INC. ------------------------------------------------ (Exact name of registrant as specified in its charter) DELAWARE 11-2228114 -------------------------- ------------------------------------ (State of Incorporation) (I.R.S. Employer Identification No.) 301 Merritt 7 Corporate Park, Norwalk, CT 06856 - -------------------------------------------------------------------- (Address of principal executive offices) Zip Code (203) 750-5900 - ---------------------------------------------- (Registrant's telephone number, including area code) 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. X YES NO ----- ----- The number of shares outstanding of the registrant's Common Stock ($.25 par value) as of August 11, 1997 is 3,214,755. FORM 10-Q PART I FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS - ----------------------------- Consolidated Balance Sheets as of June 30, 1997 and December 31, 1996 and June 30, 1996. Consolidated Statements of Earnings for the Three Months Ended June 30, 1997 and 1996 Consolidated Statements of Earnings for the Six Months Ended June 30, 1997 and 1996 Consolidated Statements of Cash Flows for the Six Months Ended June 30, 1997 and 1996 Notes to Consolidated Financial Statements 2 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS JUNE 30, 1997 AND 1996 AND DECEMBER 31, 1996 (UNAUDITED) (In thousands) JUNE 30, DEC. 31, JUNE 30, 1997 1996 1996 ---------- --------- ---------- ASSETS: - ------- Current Assets: Cash and cash equivalents $ 11,950 $ 15,020 $ 6,800 Investment securities 17,434 1,210 - Accounts Receivable: Trade accounts 78,411 74,677 96,476 Other 7,881 7,217 13,160 Less allowance for doubtful accounts (4,368) (4,378) (5,720) --------- --------- --------- Accounts receivable, net 81,924 77,516 103,916 Inventories 92,329 82,911 108,487 Prepaid expenses and other current assets 6,340 5,938 6,530 --------- --------- --------- TOTAL CURRENT ASSETS 209,977 182,595 225,733 --------- --------- --------- Property, plant and equipment, at cost: Land, building and improvements 46,678 49,788 50,775 Manufacturing machinery and equipment 202,415 216,760 273,114 Furniture, fixtures and equipment 8,649 9,434 9,757 Construction in progress 13,570 8,644 25,257 --------- --------- --------- 271,312 284,626 358,903 Less accumulated depreciation and amortization 129,581 132,850 160,041 --------- --------- --------- Net property, plant and equipment 141,731 151,776 198,862 Goodwill, net of accumulated 29,537 31,130 13,758 amortization Other assets, net of accumulated amortization 24,266 25,531 22,969 --------- --------- --------- TOTAL ASSETS $405,511 $391,032 $461,322 ========= ========= ========= See accompanying notes to consolidated financial statements. 3 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (CONTINUED) JUNE 30, 1997 AND 1996 AND DECEMBER 31, 1996 (UNAUDITED) (In thousands except share data) JUNE 30, DEC. 31, JUNE 30, 1997 1996 1996 ----------- ---------- ---------- LIABILITIES AND STOCKHOLDERS' EQUITY: - ------------------------------------ Current Liabilities: Short term borrowings $ 24,682 $ 8,633 $ 60,715 Accounts payable - trade 50,054 44,619 62,294 Accrued liabilities: Employee compensation and benefits 16,901 18,421 19,585 Other accrued expenses 17,943 13,536 19,121 Current installments of long term debt and obligations under capital leases 10,260 5,080 26,367 Income taxes payable 750 1,710 1,778 Other current liabilities 13,336 12,299 9,843 ----------- ---------- ---------- TOTAL CURRENT LIABILITIES 133,926 103,848 199,703 Long term debt, excluding current 147,687 156,373 112,475 installments Obligations under capital leases, excluding current installments 13,227 14,377 15,657 Deferred income taxes 3,832 3,641 3,705 Other liabilities 28,496 32,179 29,236 ----------- ---------- ---------- TOTAL LIABILITIES 327,168 310,418 360,776 Minority interest 12,698 11,990 27,315 STOCKHOLDERS' EQUITY: - -------------------- Capital stock: First preferred stock, cumulative $25 par value. Authorized 250,000 shares; no - - - shares issued. Second preferred stock, 4% non-cumulative, $100 par value. Authorized 1,535 shares; no shares issued. - - - Common stock, $.25 par value. Authorized 20,000,000 shares; Outstanding 3,207,638 shares in 1997, 3,201,035 shares in December 1996 and 3,196,368 shares in June 1996. 802 800 800 ----------- ---------- ---------- 802 800 800 Additional paid-in capital 44,095 43,997 43,945 Retained earnings 24,793 21.182 26,482 ----------- ---------- ---------- 69,690 65,979 71,227 Cumulative foreign currency translation adjustment (4,045) 2,645 2,004 ----------- ---------- ---------- TOTAL STOCKHOLDERS' EQUITY 65,645 68,624 73,231 ----------- ---------- ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $405,511 $391,032 $461,322 =========== ========== ========== See accompanying notes to consolidated financial statements. 4 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS THREE MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED) (In thousands, except per share data) 1997 1996 ------------- ---------- Sales $ 138,462 $ 141,263 Cost of sales 114,837 119,738 ------------- ---------- Gross profit 23,625 21,525 Selling, general and administrative expenses 14,523 16,463 ------------- ---------- OPERATING INCOME 9,102 5,062 Other income (expense): Interest expense, net (4,100) (5,144) Foreign currency exchange gain 42 155 Other - net (35) 19 NET OTHER EXPENSE (4,093) (4,970) Income before provision for income taxes and minority interest 5,009 92 Provision for income taxes 1,413 232 ------------- ---------- Income (loss) before minority interest 3,596 (140) Minority interest 1,066 (321) ------------- ---------- NET INCOME $ 2,530 $ 181 ============= ========== NET EARNINGS PER COMMON SHARE $ 0.75 $ 0.06 ============= ========== See accompanying notes to consolidated financial statements. 5 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EARNINGS SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED) (In thousands, except per share data) 1997 1996 ------------ ---------- Sales $ 261,072 $ 272,645 Cost of sales 217,599 232,259 ------------ ---------- Gross profit 43,473 40,386 Selling, general and administrative expenses 28,599 32,085 ------------ ---------- OPERATING INCOME 14,874 8,301 Other income (expense): Interest expense, net (8,115) (9,821) Foreign currency exchange gain 70 222 Other - net (1) 33 ------------ ---------- NET OTHER EXPENSE (8,046) (9,566) ------------ ---------- Income (loss) before provision for income taxes and minority interest 6,828 (1,265) Provision for income taxes 1,886 95 ------------ ---------- Income (loss) before minority interest 4,942 (1,360) Minority interest 1,322 (1,100) ------------ ---------- NET INCOME (LOSS) $ 3,610 $ (260) ============ ========== NET EARNINGS (LOSS) PER COMMON SHARE $ 1.08 $ (0.08) ============ ========== See accompanying notes to consolidated financial statements. 6 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED) (In thousands) 1997 1996 ----------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 3,609 $ (260) Depreciation and amortization 10,560 17,226 Minority interest 1,332 (1,100) Other adjustments (14,924) (14,827) ----------- ---------- NET CASH PROVIDED BY OPERATING ACTIVITIES 577 1,039 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (5,886) (20,510) Other (16,114) (273) ----------- ---------- NET CASH USED IN INVESTING ACTIVITIES (22,000) (20,783) CASH FLOWS FROM FINANCING ACTIVITIES: Net proceeds from long term debt 769 3,165 Net proceeds from short term borrowings 16,641 14,492 Other 1,860 78 ----------- ---------- NET CASH PROVIDED BY FINANCING ACTIVITIES 19,270 17,735 Effect of exchange rate changes on cash (917) (116) ----------- ---------- Decrease in cash and cash equivalents (3,070) (2,125) Cash and cash equivalents at beginning of period 15,020 8,925 ----------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 11,950 $ 6,800 =========== ========== See accompanying notes to consolidated financial statements. 7 CONTINENTAL CAN COMPANY, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1997 (1) Accounting Policies and Other Matters (a) Basis of Presentation Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. It is suggested that these consolidated financial statements be read in conjunction with the financial statements and notes thereto included in the Company's 1996 Annual Report to Stockholders. (b) Adjustments The results for the interim period reported herein have not been audited; however, in the opinion of management, all adjustments necessary for a fair presentation of the interim period statements have been made. (c) Earnings Per Common Share Earnings per common share is based on the weighted average number of common and common equivalent shares outstanding. Common equivalent shares include dilutive stock options (using the treasury stock method) exercisable under the Company's option plans. Weighted average shares outstanding in the second quarter of 1997 and 1996 were 3,359,120 and 3,283,646, respectively and for the first six months of 1997 and 1996 were 3,356,773 and 3,284,837, respectively. (2) Inventories Inventories consist principally of packaging materials. The components of inventory were as follows: (000's omitted)
June 30, December 31, June 30, 1997 1996 1996 ---------- ---------- --------- In thousands Raw materials & supplies $35,912 $40,785 $ 44,246 Work in process 9,476 6,627 11,646 Finished goods 51,188 39,746 54,620 ---------- ---------- --------- $96,576 $87,158 $110,512 LIFO reserve (4,247) (4,247) (2,025) ---------- ---------- --------- $92,329 $82,911 $108,487 ========== ========== =========
8 (3) Property, Plant and Equipment Effective January 1, 1997, the Company revised its estimates of the useful lives of certain machinery and equipment. These changes were made to better reflect the estimated periods during which these assets will remain in service. For the quarter and six months ended June 30, 1997, the change had the effect of decreasing depreciation expense by $1,246,000 and $2,520,000, respectively. After adjusting for an assumed tax rate of 35% and minority interest, this change increased net income by $457,000 ($0.14 per share) for the second quarter and $1,158,560 ($0.35 per share) for the first six months of 1997. (4) Restructuring charges During the second quarter of 1996, the Company's subsidiary, PCI, recorded a charge of $1,100,000 in connection with a plan to consolidate certain manufacturing operations. The charge is included in selling, general and administrative expense and reflects primarily severance costs from workforce reductions, write-down of excess equipment and non-cancellable lease obligations. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL - ---------------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- Net sales during the second quarter of 1997 decreased 2% to $138,462,000, as compared to $141,263,000 in the second quarter of 1996. Net sales in the first six months of 1997 decreased approximately 4% to $261,072 ,000 from $272,645,000 in the same prior year period. Sales were negatively impacted by the effect of foreign currency translation rate differences which reduced reported sales by the Company's European operations by approximately $13.8 million in the first six months of 1997 and $7.4 million in the second quarter of 1997 versus the same periods in 1996. Sales were positively impacted by resin price increase pass-throughs which increased sales by $11.6 million in the first six months of 1997 and $6.3 million in the second quarter of 1997, as compared to the same prior year periods. The deconsolidation of Onena resulted in a sales reduction of approximately $5.7 million and $11.2 million in the second quarter and first six months of 1997 compared to the same periods in 1996. Gross profit was higher in each period of 1997 than the same prior year period and gross profit as a percentage of sales increased to 16.7% from 14.8% in the first six months of 1997, compared to 1996. Gross profit as a percentage of sales increased to 17.1% in the second quarter of 1997, from 15.2% in the second quarter of 1996. These changes primarily reflect the benefits of the restructuring implemented in prior years and current and past cost reductions. In addition, in January 1997 the Company revised its estimates of the useful lives of certain machinery and equipment to better reflect the estimated periods during which these assets will be in service. The change had the effect of reducing depreciation expense by $1,246,000 and $2,520,000 in the second quarter and first six months of 1997 as compared to the same prior year periods. Selling, general and administrative expense as a percentage of sales decreased to 11.0% in the first six months of 1997 from 11.8% in the same prior year period. Selling, general and administrative expense as a percentage of sales decreased to 10.5% in the second quarter of 1997 from 11.8% in the second quarter of 1996. In addition, in the second quarter of 1996, a $1.1 million restructuring charge for a plant closing at PCI is included in selling, general and administrative expense. Because of these various factors, operating income amounted to $9,102,000 and $14,874,000 in the second quarter and first six months of 1997, respectively, as compared to and $5,062,000 and $8,301,000 in the second quarter and first six months of 1996, respectively. 9 Net interest expense decreased to $4,100,000 in the second quarter of 1997 from $5,144,000 in 1996. Net interest expense decreased to $8,115,000 in the first six months of 1997 as compared to $9,821,000 in the same period of 1996. The reductions reflect an increase in interest-bearing assets, lower debt levels and lower interest rates in 1997 compared to 1996. Provision for income taxes amounted to $1,413,000 and $1,886,000 in the second quarter and first six months of 1997, respectively, as compared to $232,000 and $95,000 in the second quarter and first six months of 1996. Minority interest during each period reflects the interests of other shareholders in some of the Company's subsidiaries. During the second quarter of 1997 an outstanding convertible bond at Ferembal, S.A. (Ferembal) was converted into equity reducing the Company's ownership of Ferembal to 64% from 85%. Net income amounted to $2,530,000 ($0.75 per share) in the second quarter of 1997 and $3,610,000 ($1.08 per share) in the first six months of 1997. Net income amounted to $181,000 ($.06 per share) in the second quarter of 1996 and net loss amounted to $260,000 ($.08 per share) in the first six months of 1996. FINANCIAL CONDITION - ------------------- CAPITAL REQUIREMENTS The Company acquired $2.6 million and $5.9 million of capital assets during the second quarter and first six months of 1997, respectively, consisting primarily of packaging equipment. These assets were acquired for cash. Similar types of assets are expected to be acquired for the remainder of 1997 and total annual capital expenditures are expected to amount to approximately $22 million. In April 1997 the holder of $1.8 million principal amount of convertible bonds in Ferembal converted such bonds into stock representing 25% of the equity of Ferembal. As a result of the conversion the Company's ownership interest in Ferembal was reduced to 64%. The Company intends to actively pursue acquisition possibilities in 1997. It is presently the Company's intention to finance any acquisitions by leveraging the assets of the business to be acquired, with existing cash, through bank borrowings or, possibly, through the issuance of stock. LIQUIDITY The Company's liquidity position declined slightly during the first six months of 1997. Working capital decreased to approximately $76.1 million, and the current ratio amounted to 1.59 at June 30, 1997 compared to 1.76 at December 31, 1996. For the six months ended June 30, 1997, net cash provided by operating activities amounted to $577,000. Operating activities also funded a large increase in inventories. The Company's inventories and accounts receivable increase in the second and third quarters of each year primarily as a result of the seasonality of Ferembal's business which peaks at these periods because of the harvest of vegetable crops for canning. Net cash used in investing activities amounted to $22 million during the first six months of 1997 including $5.9 million for capital expenditures. Most of the cash used for investments, which consist primarily of short-term interest-bearing assets, was generated by PCI. Most of the cash generated by short-term borrowings was used by Ferembal for inventory and receivables. The Company expects that, as Ferembal collects receivables and reduces its seasonally high inventories relating to vegetable canning, these short term borrowings will be repaid. 10 At June 30, 1997, the Company had an available credit line under a Revolving Credit Agreement of $1 million. In addition, the Company's consolidated subsidiaries had available approximately $75 million in credit lines and bank overdraft facilities at June 30, 1997. However, the Company's ability to draw upon these lines for other than its subsidiaries' needs is restricted. The Company expects that cash from operations and its existing banking facilities will be sufficient to meet its operating needs for the remainder of 1997. PART II OTHER INFORMATION ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - ------------------------------------------------------------ At the annual meeting of stockholders on May 21, 1997, of the 3,109,827 shares (97%) represented at the meeting, 2,469,536 votes were cast in favor of the election as directors of each of Messrs. D. Bainton, K. Bainton, R. Bainton, Benson, DiGiovanna, Greeven, O'Neill, Serrell, Utting, Yazgi and J.L. Zapata. Votes withheld were 640,291for each person. In addition, a proposal to amend the Certificate of Incorporation to classify the Board of Directors into three classes, each class consisting of approximately one-third of the total number of authorized directors and being elected every third year for a third year term was approved. Votes in favor of the proposal numbered 1,694,438; votes against were 771,318; and, votes abstaining were 3,733. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K - ----------------------------------------- (a) Exhibits Required (3) Articles of Incorporation as amended............................................... Page 13 (10) Employment Agreement with Donald J. Bainton as Amended May 21, 1997................ Page 17 (11) Statement re computation of per share earnings....................... See Note 1(c) on Page 8 (27) Financial Data Schedule............................................................ Page 19
All other items for which provision is made in the applicable regulations of the Securities and Exchange omission have been omitted as they are not required under the related instructions or they are inapplicable. (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter ended June 30, 1997. 11 SIGNATURE --------- Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CONTINENTAL CAN COMPANY, INC. (REGISTRANT) By: /s/ Abdo Yazgi -------------- Principal Financial Officer and on behalf of registrant DATED: AUGUST 11, 1997 12 EX-3 2 ARTICLES OF INCORPORATION AS AMENDED EXHIBIT 3 CERTIFICATE OF INCORPORATION OF CONTINENTAL CAN COMPANY, INC. (FORMERLY VIATECH, INC.) FIRST: The name of the corporation is Continental Can Company, Inc. (as amended 10/20/92) SECOND: The address of the corporation's registered office in the State of Delaware is 100 West 10th Street, City of Wilmington, County of New Castle. The name of its registered agent at such address is The Corporation Trust Company. THIRD: The purpose of the corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of Delaware. FOURTH: The total number of shares of capital stock which the corporation shall have authority to issue is 20,251,535, divided into (a) 250,000 shares, of the par value of $25 each, of a class designated First Cumulative Preferred Stock, (b) 1,535 shares, of the par value of $100 each, of a class designated 4% Non- cumulative Second Preferred Stock, and (c) 20,000,000 shares of the par value of $.25 each, of a class designated Common Stock. A statement of the voting power, designations, preferences and relative, participating, optional or other special rights, and the qualifications, limitations or restrictions thereof, in respect of the different classes of stock of the corporation, the fixing of which by the certificate of incorporation is desired, and the express grant of such authority as it is desired to grant to the board of directors to fix by resolution or resolutions any thereof in connection with the creation of one or more series of the First Cumulative Preferred Stock are as follows: Division A. First Cumulative Preferred Stock (1) The First Cumulative Preferred Stock may be issued from time to time in one or more series and with such designation for each such series as shall be stated in the resolution or resolutions providing for the issue of each such series adopted by the board of directors. The board of directors in any such resolution or resolutions is authorized to fix, within the aggregate number of 250,000 shares of such First Cumulative Preferred Stock, the number of shares included within each series and to establish the voting powers, designations, preferences and relative, participating, optional or other special rights and qualifications, limitations or restrictions, of each such series, subject to the limitations set forth in the immediately succeeding paragraphs (2), (3) and (4). The shares of First Cumulative Preferred Stock of any one or more series may, by the resolution or resolutions of the board of directors establishing such series, be made convertible, at the option of the holder of record, upon such terms and conditions as the board shall determine, into shares of such class of stock of the corporation, or series within a class, as may be selected by the board of directors, except a class having rights or preferences as to dividends or distribution of assets upon liquidation, dissolution or winding up which are prior or superior in rank to those of the shares of stock being converted. (2) No dividend shall be declared or paid on the 4% Non-cumulative Second Preferred Stock or the Common Stock, nor shall any other distribution on such 4% Non-cumulative Second Preferred Stock or Common Stock be made by way of purchase, redemption or otherwise, unless there shall have been paid, or declared and set aside for payment, all dividends on any series of First Cumulative Preferred Stock for any 13 past quarterly, semi-annual or other payment period established by the resolution or resolutions of the board of directors creating such series, together with all past sinking fund installments on the First Cumulative Preferred Stock, if any. (3) In the event of any liquidation, dissolution or winding up of the corporation, the assets shall first be distributed to the holders of record of the First Cumulative Preferred Stock until such holders have received a sum equal to the par value thereof, plus dividends accrued to the date of distribution. No series of any First Cumulative Preferred Stock shall be entitled to receive any premium in case of any liquidation, dissolution or winding up of the corporation. (4) If the stated dividends and amounts payable on liquidation, dissolution or winding up on all series of First Cumulative Preferred Stock are not paid in full, the shares of all series of the First Cumulative Preferred Stock shall share ratably in the payment of dividends including accumulations, if any, in accordance with the sums which would be payable on such shares if all dividends were declared and paid in full, and in any distribution of assets other than by way of dividends in accordance with the sums which would be payable on such distribution if all sums payable were discharged in full. Division B. 4% Non-cumulative Second Preferred Stock (1) Subject to the preferential rights of the First Cumulative Preferred Stock, the holders of record of shares of the 4% Non-cumulative Second Preferred Stock shall be entitled to receive, when and as declared by the board of directors out of funds legally available therefor, cash dividends at the rate of 4% of the par value thereof, and no more, in each calendar year (including the calendar year of issuance), and if not so paid in the full amount of 4% in any calendar year, no dividends may be paid on the Common Stock in such calendar year. Such dividend right of the 4% Non-cumulative Second Preferred Stock shall be Non- cumulative; that is to say, if the dividend or any part thereof, whether or not declared, is not paid on the 4% Non-cumulative Second Preferred Stock in the calendar year to which it pertains, such dividend or unpaid portion thereof may not be paid thereafter, regardless of whether the corporation shall have or shall have had earnings and profits available for the purpose. (2) In the event of any liquidation, dissolution or winding up of the corporation, the assets shall, after satisfaction of the preferential rights of the First Cumulative Preferred Stock, be distributed to the holders of record of the 4% Non-cumulative Second Preferred Stock until such holders have received a sum equal to the par value thereof, plus an amount equal to the full dividend on the 4% Non-cumulative Second Preferred Stock for the year in which the first distribution is made (unless previously paid), whether or not declared, together with the amount of any dividend theretofore declared and not paid. (3) Subject to the preferential rights of the First Cumulative Preferred Stock, the 4% Non-cumulative Second Preferred Stock may be redeemed as a whole at any time or in part from time to time at the option of the corporation upon 15 days' notice in writing to the holders of record of the shares to be redeemed. The redemption price shall be $102.50 per share, plus an amount equal to the full dividend on the 4% Non-cumulative Second Preferred Stock for the year in which redemption occurs (unless previously paid), whether or not declared. No 4% Non- cumulative Second Preferred Stock may be redeemed unless at the redemption date the full dividend on all shares of 4% Non-cumulative Second Preferred Stock for the current calendar year shall have been declared and paid. From and after the date fixed for redemption unless the corporation shall default of the redemption price, the shares of 4% Non-cumulative Second Preferred Stock shall cease to be outstanding for any purpose, and the holders shall have no right with respect thereto except to receive payment of the redemption price. If less than all shares of the 4% Non-cumulative Second Preferred Stock are being redeemed, the shares to be redeemed shall be selected pro rata or by lot as the board of directors may determine. 14 (4) The holders of the 4% Non-cumulative Second Preferred Stock shall be entitled to one vote for each share of 4% Non-cumulative Second Preferred Stock standing in the name of such holders on the record of stockholders and, except as to matters which under applicable law require the vote of the 4% Non- cumulative Second Preferred Stock as a class, shall vote with the holders of Common Stock as a single class. Division C. Common Stock (1) Subject to the preferential rights of the First Cumulative Preferred Stock and the 4% Non-cumulative Second Preferred Stock to receive dividends, the holders of record of the Common Stock shall be entitled to receive dividends when and as declared by the board of directors out of funds legally available therefor. (2) After satisfaction of the preferential rights of the First Cumulative Preferred Stock and the 4% Non-cumulative Second Preferred Stock, the remaining assets of the corporation shall be distributed equally per share to the holders of the Common Stock. (3) The holders of the Common Stock shall be entitled to one vote for each share of Common Stock standing in the name of such holders on the record of stockholders. (as amended 5/23/88) FIFTH: The name and mailing address of the incorporator is as follows: Name Address - ---- ------- Edward F. Clark, Jr. 2 Wall Street New York, New York 10005 SIXTH: The board of directors may make, alter or repeal the by-laws of the corporation, subject only to such limitations, if any, as may from time to time be imposed by the by-laws. The election of directors need not be by written ballot, except as may otherwise be provided in the by-laws. SEVENTH: The corporation reserves the right to amend, alter, change or repeal any provision contained in this Certificate of Incorporation in the manner now or hereafter provided by law, and all rights conferred herein on stockholders, directors and officers are subject to this reserved power. EIGHTH: A member of the Board of Directors of the Corporation shall have no personal liability to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, other than liability (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under Section 174 of the General Corporation Law of the State of Delaware Code, (iv) for any transaction from which the director derived an improper personal benefit, or (v) for any act or omission occurring prior to the date when this provision becomes effective. (added 6/10/86) NINTH: The Company's Board of Directors shall be divided into three classes designated as Class A, Class B, and Class C, respectively. Directors shall be initially designated as Class A, Class B and Class C directors at the 1997 Annual Meeting of Stockholders. At the first annual meeting of the stockholders following the 1997 Annual Meeting, the term of office of the Class A directors shall expire and Class A directors shall be elected for a full term of three years. At the second annual meeting of the stockholders following the 1997 Annual Meeting, the term of office of the Class B directors shall expire and Class B directors shall be elected for a full term of three years. At the third annual meeting of the stockholders 15 following the 1997 Annual Meeting, the term of office of the Class C directors shall expire and Class C directors shall be elected for a full term of three years. At each succeeding annual meeting of stockholders, directors shall be elected for a full term of three years to succeed the directors of the class whose terms expire at such annual meeting. Notwithstanding the foregoing provisions of this Article 9, each director shall serve until his or her successor is duly elected and qualified or until his earlier death, resignation, or removal. No decrease in the number of directors constituting the board of directors shall shorten the term of any incumbent director. Vacancies on the board may be filled by the remaining directors for the remainder of the full class term. (added 5/27/97) 16 EX-10 3 EMPLOYMENT AGREEMENT WITH DONALD J. BAINTON EXHIBIT 10 AMENDED EMPLOYMENT AGREEMENT made as of the 21st day of May, 1997 by and between Donald J. Bainton (hereafter referred to as "EMPLOYEE") and Continental Can Company, Inc. (hereafter referred to as "EMPLOYER") amending the agreement dated July 23, 1989. The parties hereto mutually agree as follows: FIRST: EMPLOYEE shall be employed as Chairman and Chief Executive Officer of EMPLOYER. SECOND: EMPLOYEE shall be paid a salary to be determined by the Personnel Committee of EMPLOYER'S Board of Directors, but not less than $420,000 per annum. THIRD: The expiration date of the non-qualified stock option to purchase 40,000 shares of the EMPLOYER'S Common Stock awarded in 1983 shall be November 15, 1998. FOURTH: All shares of stock previously issued to EMPLOYEE in lieu of cash compensation (except those shares which had previously been released from forfeiture) shall remain subject to forfeiture until May 17, 2006, or such earlier date as the Personnel Committee of EMPLOYER'S Board of Directors shall, in the future, determine. FIFTH: In the event that any person or associated group of persons acquires or obtains the right to acquire beneficial ownership of shares of stock of EMPLOYER that have 25% or more of the voting power of the outstanding shares of stock of EMPLOYER (hereafter referred to as a CHANGE IN CONTROL), EMPLOYEE shall have the option to deem his employment terminated. SIXTH: EMPLOYEE may exercise the option set forth in Paragraph FIFTH by giving written notice to EMPLOYER within five years after the public announcement of a CHANGE IN CONTROL. SEVENTH: Within one month after a termination of EMPLOYEE'S employment following a CHANGE IN CONTROL, whether or not the result of the exercise of an option pursuant to Paragraph SIXTH, EMPLOYEE shall receive from EMPLOYER a lump sum equal to three times EMPLOYEE'S average annual total compensation during the five years preceding the termination. EIGHTH: EMPLOYEE shall continue to receive the same medical and life insurance coverage EMPLOYEE received from EMPLOYER under the plans maintained by EMPLOYER for all employees as in effect at the time of a termination of EMPLOYEE'S employment following a CHANGE IN CONTROL, whether or not the result of EMPLOYEE'S exercise of an option pursuant to Paragraph SIXTH until his death. During the period she receives a payment pursuant to Paragraph TENTH EMPLOYEE'S surviving spouse, if any, shall receive medical insurance coverage under the plan maintained by EMPLOYER. NINTH: In the event of EMPLOYEE'S death prior to the termination of this Agreement, provided EMPLOYEE is then employed by EMPLOYER, EMPLOYEE'S surviving spouse, if any, shall be paid during her life, an annual amount equal to one- half of EMPLOYEE'S annual salary at the time of his death. TENTH: This Agreement will terminate on May 17, 2006. ELEVENTH: Any disputes arising under this Agreement shall be resolved by arbitration in the City of Stamford, State of Connecticut, under the laws of the State of Connecticut, pursuant to the rules of the American Arbitration Association. 17 IN WITNESS WHEREOF, the parties hereto have signed this Agreement. /s/ Donald J. Bainton CONTINENTAL CAN COMPANY, INC. ---------------------------------- Donald J. Bainton By: /s/ Abdo Yazgi ----------------------------------- Abdo Yazgi, Executive Vice President 18 EX-27 4 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS DEC-31-1997 JAN-01-1997 JUN-30-1997 11,950 17,434 86,292 4,368 92,329 209,977 271,312 129,581 405,511 133,926 125,000 802 0 0 64,843 405,511 261,072 261,072 217,599 246,198 8,046 0 8,115 6,828 1,886 3,610 0 0 0 3,610 1.08 1.08
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