-----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, RqiTxANuPLcuTgnjQh+yLB1sRlNEuxCxz8TVxLrvkspQl/tqfrrWJiKPoii14sKe iwHh2J5+XmbPyjRyzfovZw== 0000950134-98-001138.txt : 19980218 0000950134-98-001138.hdr.sgml : 19980218 ACCESSION NUMBER: 0000950134-98-001138 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980213 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: ELCOR CORP CENTRAL INDEX KEY: 0000032017 STANDARD INDUSTRIAL CLASSIFICATION: ASPHALT PAVING & ROOFING MATERIALS [2950] IRS NUMBER: 751217920 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-05341 FILM NUMBER: 98537131 BUSINESS ADDRESS: STREET 1: 14643 DALLAS PKWY STE 1000 STREET 2: WELLINGTON CTR CITY: DALLAS STATE: TX ZIP: 75240 BUSINESS PHONE: 2148510500 MAIL ADDRESS: STREET 1: WELLINGTON CENTRE STE 1000 STREET 2: 14643 DALLAS PKWY CITY: DALLAS STATE: TX ZIP: 75240-8871 FORMER COMPANY: FORMER CONFORMED NAME: ELCOR CHEMICAL CORP DATE OF NAME CHANGE: 19761119 10-Q 1 FORM 10-Q FOR QUARTER ENDED DECEMBER 31, 1997 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ----------- FORM 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 ----------- For Quarter Ended December 31, 1997 Commission File number 1-5341 ----------------- ------ ELCOR CORPORATION ------------------------------------------------------ (Exact name of Registrant as specified in its charter) DELAWARE 75-1217920 - ------------------------------- ------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 14643 DALLAS PARKWAY SUITE 1000, WELLINGTON CENTRE, DALLAS, TEXAS 75240-8871 - -------------------------------------------- ---------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (972) 851-0500 -------------- 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 . --- --- As of close of business on February 2, 1998, Registrant had outstanding 13,232,590 shares of Common Stock, Par Value $1 per Share. 2 PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements ELCOR CORPORATION CONSOLIDATED BALANCE SHEET (Unaudited, $ in thousands)
ASSETS 12-31-97 6-30-97 --------- --------- CURRENT ASSETS Cash and cash equivalents $ 4,450 $ 3,601 Trade receivables, less allowance of $730 and $545 34,757 43,178 Inventories - Finished goods 21,338 26,400 Work-in-process 416 441 Raw materials 7,665 6,586 --------- --------- Total inventories 29,419 33,427 --------- --------- Prepaid expenses and other 3,173 3,572 Deferred income taxes 2,342 2,508 --------- --------- Total current assets 74,141 86,286 --------- --------- PROPERTY, PLANT AND EQUIPMENT, AT COST 185,841 180,115 Less - accumulated depreciation (67,981) (62,648) --------- --------- Property, plant and equipment, net 117,860 117,467 --------- --------- OTHER ASSETS 3,221 3,490 --------- --------- $ 195,222 $ 207,243 ========= ========= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 10,469 $ 15,899 Accrued liabilities 12,992 12,386 --------- --------- Total current liabilities 23,461 28,285 --------- --------- LONG-TERM DEBT 37,700 52,600 DEFERRED INCOME TAXES 14,508 13,578 SHAREHOLDERS' EQUITY - Common stock 13,238 8,814 Paid-in-capital 66,644 71,350 Retained earnings 39,794 33,039 --------- --------- 119,676 113,203 Less - Treasury stock, at cost, 5,000 and 17,500 shares at December 31, 1997 and June 30, 1997, respectively (123) (423) --------- --------- Total shareholders' equity 119,553 112,780 --------- --------- $ 195,222 $ 207,243 ========= =========
See accompanying notes to consolidated financial statements. 2 3 ELCOR CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited, $ in thousands except per share data)
Three Months Ended Six Months Ended --------------------- --------------------- 12-31-97 12-31-96 12-31-97 12-31-96 -------- -------- -------- -------- SALES $ 60,965 $ 50,636 $134,481 $115,172 -------- -------- -------- -------- COST AND EXPENSES Cost of sales 47,301 39,242 102,702 89,766 Selling, general and administrative 8,384 7,680 17,189 15,577 -------- -------- -------- -------- INCOME FROM OPERATIONS 5,280 3,714 14,590 9,829 -------- -------- -------- -------- OTHER EXPENSE Interest expense, net 614 52 1,373 213 -------- -------- -------- -------- INCOME BEFORE INCOME TAXES 4,666 3,662 13,217 9,616 Provision for income taxes 1,718 1,353 4,875 3,539 -------- -------- -------- -------- NET INCOME $ 2,948 $ 2,309 $ 8,342 $ 6,077 ======== ======== ======== ======== INCOME PER COMMON SHARE - BASIC $ .22 $ .18 $ .63 $ .46 ======== ======== ======== ======== - DILUTED $ .22 $ .17 $ .62 $ .46 ======== ======== ======== ======== DIVIDENDS PER COMMON SHARE $ .06 $ .05 $ .12 $ .09 ======== ======== ======== ======== AVERAGE COMMON SHARES OUTSTANDING - BASIC 13,231 13,170 13,217 13,154 ======== ======== ======== ======== - DILUTED 13,523 13,265 13,484 13,227 ======== ======== ======== ========
See accompanying notes to consolidated financial statements. 3 4 ELCOR CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited, $ in thousands)
Six Months Ended ---------------- 12-31-97 12-31-96 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,342 $ 6,077 Adjustments to reconcile net income to net cash from operating activities: Depreciation and amortization 5,370 3,872 Deferred income taxes 1,096 1,760 Changes in assets and liabilities: Trade receivables 8,421 13,275 Inventories 4,008 5,303 Prepaid expenses and other 399 (527) Accounts payable and accrued liabilities (4,825) (3,913) -------- -------- Net cash provided by operating activities 22,811 25,847 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (5,748) (11,794) Other 254 ( 57) -------- -------- Net cash used for investing activities (5,494) (11,851) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Long-term borrowings, net (14,900) (14,000) Dividends on common stock (1,587) (1,230) Treasury stock transactions and other, net 19 407 -------- -------- Net cash used for financing activities (16,468) (14,823) -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 849 ( 827) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3,601 3,744 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,450 $ 2,917 ======== ========
See accompanying notes to consolidated financial statements. 4 5 ELCOR CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. The attached condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. The company believes that the disclosures included herein are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes included in the company's 1997 Annual Report on Form 10-K. The unaudited financial information contained herein has been prepared in conformity with generally accepted accounting principles on a consistent basis and does reflect all adjustments which are, in the opinion of management, necessary for a fair presentation of the results of operations for the three-month and six-month periods ended December 31, 1997 and 1996, but are, however, subject to year-end audit by the company's independent auditors. Because of seasonal, weather-related conditions in some of the company's market areas, sales can vary at times, and results of any one quarter or other interim reporting period should not necessarily be considered as indicative of results for a full fiscal year. 2. Effective December 15, 1997, the company increased its unsecured revolving credit facility from $80 million to $100 million and the term was extended to December 15, 2002. There were no changes to the financial covenants or to the interest rate the company currently pays for either LIBOR based borrowings or prime rate based borrowings. However, the commitment fee for the average unused portion of the line was reduced from .25% to .175%. 3. In September 1997, the Board of Directors declared a three-for-two stock split payable in the form of a stock dividend which was distributed on November 12, 1997. An amount equal to the par value of the common shares issued in connection with the split was transferred from paid-in capital to the common stock account. Appropriate references to number of shares and to per share information in the Consolidated Financial Statements have been adjusted to reflect the stock split on a retroactive basis. 5 6 4. Basic earnings per share is computed based on the average number of common shares outstanding. Diluted earnings per share includes outstanding stock options. The following table sets forth the computation of basic and diluted earnings per share:
(In thousands) Three Months Ended Six Months Ended 12-31-97 12-31-96 12-31-97 12-31-96 ------- ------- ------- ------- Net Income $ 2,948 $ 2,309 $ 8,342 $ 6,077 ======= ======= ======= ======= Denominator for basic earnings per share - weighted average 13,231 13,170 13,217 13,154 shares outstanding Effect of dilutive securities: Employee stock options 292 95 267 73 ------- ------- ------- ------- Denominator for dilutive earnings per share - adjusted weighted average shares and assumed issuance of shares purchased under ------- ------- ------- ------- incentive stock option plan using the treasury stock method 13,523 13,265 13,484 13,227 ======= ======= ======= ======= Basic earnings per share $ .22 $ .18 $ .63 $ .46 ======= ======= ======= ======= Diluted earnings per share $ .22 $ .17 $ .62 $ .46 ======= ======= ======= =======
6 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations RESULTS OF OPERATIONS CHANGES IN THE THREE MONTH PERIOD ENDED DECEMBER 31, 1997 COMPARED TO THE THREE MONTH PERIOD ENDED DECEMBER 31, 1996. During the three month period ended December 31, 1997, net income increased 28% to $2,948,000 from $2,309,000 in the same quarter last year. Sales increased 20% compared to the prior year quarter. The increase in sales was primarily the result of increased shipments of the company's patented Enhanced High Definition(R) and Raised Profile(TM) Prestique(R) premium laminated fiberglass asphalt shingles, increased shipments of nonwoven fiberglass roofing mats, and much higher sales by the Industrial Products Group. The increase in net income is primarily the result of significantly higher income contribution by the Industrial Products Group. The Roofing Products Group achieved higher sales but slightly lower operating profit for the three months ended December 31, 1997 compared to the same prior year period. Elk Corporation's shipments were aided by El Nino's effect on increased demand in the western United States, which is supplied by Elk's Shafter, California plant. However, contributions from higher shipments of premium laminated shingles were offset by slightly lower average selling prices and higher depreciation and amortization costs during the quarter. Elk's Ennis, Texas nonwoven fiberglass roofing mat operations also achieved higher sales and improved operating profit during the quarter ended December 31, 1997 and are positioned to supply high quality roofing mats to satisfy the growing demand for its products. The Industrial Products Group achieved significantly higher sales and operating profit during the three months ended December 31, 1997 as compared to the same period in the prior year. Chromium Corporation continued to benefit from strong demand for its Compushield(R) conductive coatings used in the telecommunications and electronic equipment industries. Chromium also experienced higher demand for remanufactured large diesel engine components used in the transportation industry. In addition, increased use of Ortloff's technology licensing and consulting services for the natural gas processing industry also contributed to improved results in the current year period. On an overall basis, gross margin on sales was 22.4% for the quarter ended December 31, 1997 compared to 22.5% in the prior year quarter. Lower margins received by the Roofing Products Group for its products as a result of slightly lower average selling prices and higher depreciation and amortization costs were offset by higher margins in the Industrial Products Group. Selling, general and administrative costs were 13.8% of sales in the current year quarter, down from 15.2% of sales in the prior year quarter. Interest expense was significantly higher in the second quarter of fiscal 1998 compared to the same quarter in the prior fiscal year. During the previous year, most interest cost was capitalized in connection with the company's major facilities expansion program, which was completed in March 1997. 7 8 CHANGES IN THE SIX MONTH PERIOD ENDED DECEMBER 31, 1997, AS COMPARED TO THE SIX MONTH PERIOD ENDED DECEMBER 31, 1996. During the six month period ended December 31, 1997, net income increased 37% to $8,342,000 from $6,077,000 in the same period last year. Sales increased 17% compared to the comparable prior year period. The increases in sales and net income were primarily attributable to increased shipments of premium laminated fiberglass shingles, together with much higher sales and income contribution by the Industrial Products Group during the six month period ended December 31, 1997. In the Roofing Products Group, both sales and operating income were higher for the six months ended December 31, 1997 as compared to the same period in the prior fiscal year. The western United States, which is served by the Shafter, California roofing plant, produced very strong demand for Elk Prestique premium laminated shingles. This increased demand was aided by concerns that severe El Nino conditions could cause rain damage from leaking roofs. Although Elk's other roofing plants were also very profitable, sales and operating income were lower at these plants in the first six months of fiscal 1998, as compared to the same period in the prior fiscal year, due primarily to lower shipments from these plants resulting from a realignment of markets served following performance improvements at the Shafter, California plant. Sales and operating income from Elk's mat operations were also higher in the first six months of fiscal 1998 compared to the same period in fiscal 1997. The Industrial Products Group achieved sharply higher sales and operating income in the six month period ending December 31, 1997 compared to the same prior year period. Increased demand and improved results were achieved in each of the Group's principal operations of (1) conductive coatings used in the telecommunications and electronic equipment industries; (2) remanufactured diesel engine components used in the transportation industry; and (3) technology licensing and consulting services for the natural gas processing industry. On an overall basis, for the first six months of fiscal 1998, gross margin on sales was 23.6%, compared to 22.1% for the same period in the prior fiscal year. This increase is primarily attributable to higher sales with better margins in the Industrial Products Group. Higher selling, general and administrative costs are primarily the result of increased business activity in the current year. As a percentage of sales, such expenses were 12.8% of sales for the first six months of fiscal 1998, down from 13.5% of sales for the same period in the prior fiscal year. Higher interest expense in the current year is attributable to the capitalization of most interest cost in the prior year in connection with the company's major facilities expansion program. FINANCIAL CONDITION Total invested capital at December 31, 1997 was $157,253,000. Long-term debt of $37,700,000 represented 24% of total capitalization. At December 31, 1997, $60,710,000 was available under the company's unsecured revolving line of credit, which was increased to $100 million on December 15, 1997 so as to provide additional financial resources to support the company's growth strategies. Cash provided by operations for the six months ended December 31, 1997 was $22,811,000. The current ratio was 3.2 to 1 at December 31, 1997. Working capital decreased $7,321,000 from June 30, 1997, primarily related to a seasonal reduction in trade receivables and inventories, partially offset by lower accounts payable. Historically, working capital requirements fluctuate during the year 8 9 because of seasonality in some market areas. Generally, working capital requirements and related borrowings are higher in the spring and summer months, and lower in the fall and winter months. In addition, receivables may increase during the late winter and early spring months due to extended payment terms to certain customers during these months with payment generally due during the summer months. The company utilized $16,468,000 of cash for financing activities in the first six months of fiscal 1998, primarily for repayment of long-term debt and payment of dividends on common stock. The company used $5,494,000 for investing activities in the first six months of fiscal 1998. Capital expenditures for fiscal 1998 are expected to be in the range of $12,000,000 to $15,000,000. The majority of planned capital expenditures are for productivity, capacity, and cost improvement projects at the current roofing plants and for the development of new computer systems. In addition, the company is expanding its capacity in the Chromium Corporation Conductive Coatings Division to meet rapidly growing demand for its Compushield process for conductive coatings applied to plastic enclosures for telecommunications and electronic equipment. In September 1997, the Board of Directors increased the regular quarterly cash dividend to six cents per common share (after giving effect to a stock split) and declared a three-for-two stock split payable in the form of a stock dividend which was distributed on November 12, 1997 to shareholders of record at the close of business on October 16, 1997. In September 1994, the company's Board of Directors authorized the purchase of up to $10 million of the company's common shares from time to time on the open market to be used for general corporate purposes. As of December 31, 1997, 225,750 shares (after giving effect to the stock split) with a cumulative cost of $2,804,000 had been repurchased under this program. The company's operations are subject to extensive federal, state and local laws and regulations relating to environmental matters. Although the company does not believe it will be required to expend amounts which will have a material adverse effect on the company's consolidated financial position or results of operations by reason of environmental laws and regulations, such laws and regulations are frequently changed and could result in significantly increased cost of compliance. Further, certain of the company's industrial products operations utilize hazardous materials in their production process. As a result, the company incurs costs for remediation activities off-site and at its facilities from time to time. The company establishes and maintains reserves for such remediation activities, when appropriate, in accordance with Statement of Financial Accounting Standard No. 5, "Accounting for Contingencies." Current reserves established for known or probable remediation activities are not material to the company's financial position or results of operations. Management believes that cash and cash equivalents, cash flows from operations and its revolving credit facility should be sufficient during fiscal 1998 and beyond to fund its currently projected capital expenditure requirements, working capital needs, dividends, stock repurchases and other cash requirements. 9 10 PENDING ACCOUNTING PRONOUNCEMENT The Accounting Standards Executive Committee (AcSEC) of the American Institute of Certified Public Accountants has issued an exposure draft on "Reporting on the Costs of Start-Up Activities." If the exposure draft were to be finalized in its proposed form, it would require companies to expense on a current basis previously capitalized start-up costs. At December 31, 1997, the company had $7,827,000,000 of unamortized capitalized start-up costs. While the company does not agree with the accounting treatment proposed in the AcSEC exposure draft and believes that capitalizing costs incurred in constructing major new facilities provides a better matching of revenues and expenses, the company will adopt this statement of position if and when it is finalized. YEAR 2000 ISSUE The company is currently developing a new information system for its critical financial, distribution and manufacturing applications. This system is scheduled for completion and full implementation in the summer of 1999 at an estimated total cost of $6 - $8 million. While the primary purpose of this new information system is to modernize and improve the Company's operations, it is also expected to resolve Year 2000 issues in these critical computer systems. The company also has teams of employees and consultants who are reviewing other computer applications and systems not included in the scope of the new information system, and its electronic interaction with its suppliers, customers and other business partners for Year 2000 readiness. The company is in process of taking relevant inventory, assessing risk, assigning priorities to various tasks and performing limited internal tests. It expects to have fully developed action and contingency plans by the end of calender 1998 and for integrated testing and any remediation to be complete before January 1, 2000. At this time, other than the cost of developing and implementing its new information system, the company does not believe that the costs of addressing the Year 2000 issue will be material, nor will this issue result in uncertainty that is reasonably likely to affect future financial results or operating performance. Furthermore, the company believes its Year 2000 readiness project is on schedule for timely completion. FORWARD-LOOKING STATEMENTS This Form 10-Q contains "forward-looking statements" about the company's prospects for the future. Such statements are subject to certain risks and uncertainties which could cause actual results to differ materially from those projected. Such risks and uncertainties include, but are not limited to, the following: 1. The company's roofing products business is somewhat cyclical and is affected by weather and some of the same economic factors that affect the housing and home improvement industries generally, including interest rates, the availability of financing and general economic conditions. In addition, the asphalt roofing products manufacturing business is highly competitive. 10 11 Actions of competitors, including changes in pricing, or slowing demand for asphalt roofing products due to general or industry economic conditions or the amount of inclement weather could result in decreased demand for the Company's products, lower prices received or reduced utilization of plant facilities. 2. In the asphalt roofing products business, the significant raw materials are ceramic coated granules, asphalt, glass fibers, resins and mineral filler. Increased costs of raw materials can result in reduced margins, as can higher trucking and rail costs. Historically, the company has been able to pass some of the higher raw material and transportation costs through to the customer. Should the company be unable to recover higher raw material and transportation costs from price increases of its products, operating results could be lower than projected. 3. During fiscal 1997, the company completed construction of a new plant at the company's Ennis, Texas facility to manufacture nonwoven fiberglass roofing mats and other mats for a variety of industrial uses. As a new facility, its progress in achieving anticipated operating efficiencies and financial results is difficult to predict. If such progress is slower than anticipated, or if demand for products produced at this new plant does not meet expectations, operating results could be adversely affected. 4. Certain facilities of the company's industrial products subsidiaries must utilize hazardous materials in their production process. As a result, the company could incur costs for remediation activities at its facilities or off-site, and other related exposures from time to time in excess of established reserves for such activities. 5. The company's litigation, including its patent infringement suits against GAF Building Materials Corporation and certain affiliates, is subject to inherent and case-specific uncertainty. The outcome of such litigation depends on numerous interrelated factors, many of which cannot be predicted. Parties are cautioned not to rely on any such forward-looking beliefs or judgments in making investment decisions. 11 12 PART II. OTHER INFORMATION ITEM 4: Submission of Matters to a Vote of Security Holders (a) The company's Annual Meeting of Shareholders was held on October 28, 1997 for the purpose of electing three directors and ratifying the appointment of the company's independent auditors.
(b) Directors Elected: NUMBER OF VOTES --------------- AUTHORITY FOR WITHHELD --- --------- Robert M. Leibrock 7,699,179 91,958 W.F. Ortloff 7,695,110 96,027 Harold K. Work 7,709,634 81,503
Other Directors Whose Term Continued After the Meeting: F.H. Callaway James E. Hall David W. Quinn Richard J. Rosebery (c) Other matters voted upon at the meeting and the number of affirmative votes, negative votes and abstentions.
NUMBER OF VOTES -------------------------------------------------------- AFFIRMATIVE AGAINST ABSTENTIONS ----------- ------- ----------- Ratification of Arthur 7,756,492 14,801 19,844 Andersen LLP as independent auditors of the company for the fiscal year ending June 30, 1998
12 13 ITEM 6: Exhibits and Reports of Form 8-K (a) Exhibits: Exhibit (4.10): Fourth Amendment dated December 15, 1997 to Loan Agreement dated September 29, 1993 among Elcor Corporation, NationsBank of Texas, N.A., as Issuer, Administrative Lender, and Lender; and Bank of America - Texas, N.A., Comerica Bank - Texas, and The Bank of Tokyo - Mitsubishi, Ltd. As Lenders. Exhibit (27): Financial Data Schedule (EDGAR submission only) (b) The Registrant filed two reports on Form 8-K during the quarter ended December 31, 1997. The Registrant filed a Form 8-K on October 15, 1997 relating to a press release containing "forward-looking statements" about its prospects for the future. The Registrant also filed a Form 8-K on October 28, 1997 regarding two significant rulings by the district court relating to the company's ongoing patent litigation with GAF. 13 14 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ELCOR CORPORATION DATE: February 13, 1998 /s/ Richard J. Rosebery ------------------------- ------------------------------- Richard J. Rosebery Vice Chairman, Chief Financial & Administrative Officer and Treasurer /s/ Leonard R. Harral ------------------------------- Leonard R. Harral Vice President and Chief Accounting Officer 14 15 INDEX TO EXHIBIT
Exhibit Number Description - -------------- ----------- Exhibit (4.10): Fourth Amendment dated December 15, 1997 to Loan Agreement dated September 29, 1993 among Elcor Corporation, NationsBank of Texas, N.A., as Issuer, Administrative Lender, and Lender; and Bank of America - Texas, N.A., Comerica Bank - Texas, and The Bank of Tokyo - Mitsubishi, Ltd. As Lenders. Exhibit (27): Financial Data Schedule (EDGAR submission only)
EX-4.10 2 AMENDMENT NO. 4 DATED 12/15/97 TO LOAN AGMT 1 EXHIBIT (4.10) FOURTH AMENDMENT TO LOAN AGREEMENT FOURTH AMENDMENT TO LOAN AGREEMENT (this "Fourth Amendment"), dated as of December 15, 1997, is entered into among ELCOR CORPORATION, a Delaware corporation ("Company"), the lenders listed on the signature pages hereof ("Lenders"), NATIONSBANK OF TEXAS, N.A., as Issuer (in said capacity, "Issuer"), and NATIONSBANK OF TEXAS, N.A., as Administrative Lender (in said capacity, "Administrative Lender"). BACKGROUND A. Company, the Lenders, Issuer and Administrative Lender are parties to that certain Loan Agreement, dated as of September 29, 1993, as amended by that certain First Amendment to Loan Agreement, dated as of October 31, 1994, that certain Second Amendment to Loan Agreement, dated as of December 15, 1995, and that certain Third Amendment to Loan Agreement, dated as of October 31, 1996 (said Loan Agreement, as amended, the "Loan Agreement"; the terms defined in the Loan Agreement and not otherwise defined herein shall be used herein as defined in the Loan Agreement). B. Company, Lenders, Issuer and Administrative Lender desire to amend the Loan Agreement to (i) increase the Commitment to $100,000,000, (ii) extend the Termination Date, (iii) add The Bank of Tokyo-Mitsubishi, Ltd. as a Lender thereto ("Bank of Tokyo"), and (iv) make certain other amendments thereto. NOW, THEREFORE, in consideration of the covenants, conditions and agreements hereafter set forth, and for other good and valuable consideration, the receipt and adequacy of which are all hereby acknowledged, Company, Lenders, Issuer and Administrative Lender covenant and agree as follows: 1. AMENDMENTS TO LOAN AGREEMENT. (a) The dollar amount of "$80,000,000" set forth in the Background paragraph of the Loan Agreement is hereby amended to be "$100,000,000". (b) The definition of "Commitment" set forth in Section 1.1 of the Loan Agreement is hereby amended to read as follows: "'Commitment' means as to any Lender, the amount set forth opposite such Lender's name under the column titled "Commitment" on Schedule 7 hereto, as the same may be reduced or terminated pursuant to Article 2, which at no time shall exceed such Lender's Specified Percentage of $100,000,000." 2 (c) The definition of "Subsidiary" set forth in Section 1.1 of the Loan Agreement is hereby amended to read as follows: "'Subsidiary' of Company means any corporation, partnership, joint venture, trust or estate or other Person of which (or in which) more than 50% of: (a) the outstanding capital stock having voting power to elect a majority of the Board of Directors of such corporation (irrespective of whether at the time capital stock of any other class or classes of such corporation shall or might have such voting power upon the occurrence of any contingency), (b) the interest in the capital or profits of such partnership or joint venture, (c) the beneficial interest of such trust or estate, or (d) the equity interest of such other Person, is at the time directly or indirectly owned by Company, by Company and one or more of its Subsidiaries or by one or more of Company's Subsidiaries." (d) The definition of "Termination Date" set forth in Section 1.1 of the Loan Agreement is hereby amended to read as follows: "'Termination Date' means December 15, 2002, or such earlier date that the Commitment is terminated or such later date that the Commitment is extended pursuant to Section 2.19 hereof." (e) Section 2.6 of the Loan Agreement is hereby amended to read as follows: "2.6. Commitment Fee. Subject to Section 9.13 hereof, Company shall pay to the Administrative Lender, for the ratable account of the Lender, a commitment fee (which shall be payable quarterly in arrears on each Quarterly Date and on the Termination Date) on the daily average Unused Portion (as later defined in this Section 2.6) at the following per annum percentages, applicable in the following situations:
Applicability Fee ------------- --- (i) If the Fixed Charge Coverage Ratio is less than 1.25 0.300 to 1 (ii) If the Fixed Charge Coverage Ratio is greater than or 0.200 equal to 1.25 to 1 but less than 1.50 to 1 (iii) If the Fixed Charge Coverage Ratio is greater than or 0.175 equal to 1.50 to 1
- 2 - 3 The commitment fee payable hereunder shall be subject to reduction or increase, as applicable and as set forth in the table above, on a quarterly basis according to the performance of Company as tested by the Fixed Charge Coverage Ratio. Any such increase or reduction in such commitment fee shall be effective on the first calendar day of the month next succeeding the date of receipt by Administrative Lender of the applicable financial statements. If financial statements of Company setting forth the Fixed Charge Coverage Ratio are not received by Administrative Lender by the date required pursuant to Section 5.5 hereof, the commitment fee shall be determined as if the Fixed Charge Coverage Ratio is less than 1.25 to 1 until such time as such financial statements are received. For the final quarter of any fiscal year of Company, Company may provide its unaudited financial statements, subject only to year-end adjustments, for the purpose of adjusting the commitment fee. The commitment fee is fully earned when due, non-refundable when paid, and shall be computed on the basis of 365 or 366 days, as applicable, for the actual number of days elapsed. Administrative Lender is authorized to, and shall to the extent of funds available, debit Company's account at NationsBank Texas for the payment of such commitment fee after oral notice thereof is given to Company by Administrative Lender. As used herein, the "Unused Portion" shall mean an amount equal to the result of the Commitment, minus the sum of (A) outstanding Advances plus (B) outstanding Reimbursement Obligations." (f) Section 5.23 of the Loan Agreement is hereby amended to read as follows: "5.23. Guaranties by New Subsidiaries. Company shall cause each Subsidiary which Company or any of its Subsidiaries forms during the term of this Agreement to execute and deliver to Administrative Lender a Guaranty Agreement, together with a certified copy of a resolution of the board of directors (or other authorizing document of the appropriate governing body or Person) of such new Subsidiary authorizing the execution and delivery of the Guaranty Agreement and the performance of its terms." (g) Section 6.1 of the Loan Agreement is hereby amended to read as follows: "6.1. Organization and Qualification. Company and each Subsidiary (i) is a corporation or organization duly organized, validly existing, and in good, standing under the Laws of its jurisdiction of incorporation or organization, (ii) is duly licensed and in good standing as a foreign corporation or organization in each jurisdiction in which the nature of the business transacted or the property owned is such as to require licensing as such and where the failure to so qualify - 3 - 4 could reasonably be expected to result in a Material Adverse Effect; and (iii) possesses all requisite authority, power, licenses, permits and franchises to conduct its business and execute, deliver and comply with the terms of the Loan Papers to be executed by it, all of which have been duly authorized and approved by all necessary corporate or other legal action and for none of which is any approval or consent of any Tribunal required." (h) Section 6.5 of the Loan Agreement is hereby amended to read as follows: "6.5. Authority; Validity. The Board of Directors of Company has duly authorized the execution and delivery of this Agreement, the Notes and the other Loan Papers and the performance of their respective terms. The Board of Directors or other governing body or Person of each Subsidiary has authorized the execution and delivery of the Loan Papers to be executed and delivered by such Subsidiary and the performance of their respective terms. No consent of the stockholders or other equity interest owners of Company or any Subsidiary is required as a prerequisite to the validity and enforceability of this Agreement or any document contemplated herein other than those that have already been obtained. Company and each Subsidiary has full power, authority and legal right to execute and deliver and to perform and observe the provisions of all Loan Papers to be executed and delivered by it. This Agreement is, and the Notes and each of the other Loan Papers will on due execution and delivery thereof be, the legal, valid and binding obligation of the Company or the Subsidiary executing and delivering it, enforceable in accordance with their respective terms, subject as to enforcement of remedies to any Debtor Relief Laws. All Subsidiaries are signatories on the Guaranty or an amendment or supplement thereto, and their respective jurisdictions of incorporation or organization are correctly identified thereon." (i) Schedule 1 to the Loan Agreement is hereby amended and supplemented as set forth on Schedule 1 to this Fourth Amendment. (j) Schedule 4 to the Loan Agreement is hereby amended and supplemented as set forth on Schedule 4 to this Fourth Amendment. (k) Schedule 6 to the Loan Agreement is hereby amended and supplemented as set forth on Schedule 6 to this Fourth Amendment. (l) Schedule 7 to the Loan Agreement is hereby amended to be in the form of Schedule 7 to this Fourth Amendment, and the Specified Percentage of Bank of Tokyo is established and the applicable Specified Percentages of the other Lenders are amended as provided therein. - 4 - 5 2. REPRESENTATIONS AND WARRANTIES TRUE; NO EVENT OF DEFAULT. By its execution and delivery hereof, Company represents and warrants that, as of the date hereof and after giving effect to the amendments contemplated by the foregoing Section 1: (a) the representations and warranties contained in the Loan Agreement are true and correct on and as of the date hereof as if made on and as of such date; (b) no event has occurred and is continuing which constitutes a Default or an Event of Default; (c) Company has full power and authority to execute and deliver this Fourth Amendment, the $40,000,000 Note payable to the order of NationsBank of Texas, N.A. in the form of Exhibit A hereto (the "NationsBank Note"), the $30,000,000 Note payable to the order of Bank of America-Texas, N.A. in the form of Exhibit B hereto (the "Bank of America Note"), the $15,000,000 Note payable to the order of Comerica Bank-Texas in the form of Exhibit C hereto (the, "Comerica Note"), and the $15,000,000 Note payable to the order of The Bank of Tokyo-Mitsubishi, Ltd. in the form of Exhibit D hereto (the "Bank of Tokyo Note") (the NationsBank Note, the Bank of America Note, the Comerica Note and the Bank of Tokyo Note are collectively referred to herein as the "Notes"), and this Fourth Amendment, the Loan Agreement, as amended hereby, and the Notes constitute the legal, valid and binding obligations of Company, enforceable in accordance with their respective terms, except as enforceability may be limited by applicable debtor relief laws and by general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law) and except as rights to indemnity may be limited by federal or state securities law; (d) neither the execution, delivery and performance of this Fourth Amendment, the Notes or the Loan Agreement, as amended hereby, nor the consummation of any transactions contemplated herein or therein, will conflict with any Law to which Company or any Subsidiary is subject, or any indenture, agreement or other instrument to which Company or any Subsidiary or any of their respective property is subject; and (e) no authorization, approval, consent, or other action by, notice to, or filing with, any governmental authority or other Person (other than the Board of Directors of Company), is required for the execution, delivery or performance by Company of this Fourth Amendment or the Notes or the acknowledgement of this Fourth Amendment by each Subsidiary which executed the Guaranty Agreement (a "Guarantor"). 3. CONDITIONS OF EFFECTIVENESS. This Fourth Amendment shall be effective as of December 15, 1997, subject to the following: - 5 - 6 (a) Administrative Lender shall have received counterparts of this Fourth Amendment executed by each Lender and Issuer; (b) Administrative Lender shall have received counterparts of this Fourth Amendment executed by Company and acknowledged by each Guarantor; (c) Each Lender shall have received its respective Note executed by Company; (d) the representations and warranties set forth in Section 2 of this Fourth Amendment shall be true and correct; (e) Administrative Lender shall have received certified copies of resolutions of Company authorizing execution, delivery and performance of this Fourth Amendment and the Notes; and (f) Administrative Lender shall have received, in form and substance satisfactory to Administrative Lender and its counsel, such other documents, certificates and instruments as Administrative Lender shall require. 4. GUARANTORS ACKNOWLEDGEMENT. By signing below, each of the Guarantors (i) acknowledges and consents to the execution, delivery and performance by Company of this Fourth Amendment, (ii) agrees that its obligations in respect of the Guaranty Agreement (A) are not released, modified, impaired or affected in any manner by this Fourth Amendment or any of the provisions contemplated herein, and (B) cover, among other things, the Commitment as increased by this Fourth Amendment, and (ii) acknowledges that it has no claims or offsets against, or defenses or counterclaims to, the Guaranty Agreement. 5. REFERENCE TO THE LOAN AGREEMENT. (a) Upon the effectiveness of this Fourth Amendment, each reference in the Loan Agreement to "this Agreement", "hereunder", or words of like import shall mean and be a reference to the Loan Agreement, as affected and amended by this Fourth Amendment. (b) The Loan Agreement, as amended by this Fourth Amendment, and all other Loan Papers shall remain in full force and effect and are hereby ratified and confirmed. 6. COSTS, EXPENSES AND TAXES. Company agrees to pay on demand all costs and expenses of Administrative Lender in connection with the preparation, reproduction, execution and delivery of this Fourth Amendment, the Notes, and the other instruments and documents to be delivered hereunder (including the reasonable fees and out-of-pocket expenses of counsel for Administrative Lender with respect thereto and with respect to advising - 6 - 7 Administrative Lender as to its rights and responsibilities under the Loan Agreement, as amended by this Fourth Amendment). 7. ADVANCES. Upon effectiveness of this Agreement, each of the appropriate Lenders, through the Administrative Lender, by assignments, purchases and adjustments (which shall occur and shall be deemed to occur automatically upon such effectiveness), shall have purchased or sold such Advances so that after giving effect to such assignments, purchases and adjustments, each Lender shall hold Advances and Reimbursement Obligations in accordance with its Specified Percentage, as established or amended hereby. The parties hereto agree that the requirements of Section 9.1 of the Loan Agreement with respect to assignments are hereby waived for purposes of this Fourth Amendment only. Each Lender selling and assigning all or any portion of an Advance and Reimbursement Obligations hereby represents and warrants that such interest being sold is free and clear of any Lien or adverse claim. Bank of Tokyo (a) confirms that it has received a copy of the Loan Agreement and the other Loan Papers, together with copies of the financial statements referred to in Sections 5.5 and 6.2 of the Loan Agreement and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into this Fourth Amendment, (b) agrees that it will, independently and without reliance upon the Administrative Lender, or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Agreement and the other Loan Papers, (c) appoints and authorizes the Administrative Lender to take such action as agent on its behalf and to exercise such powers under the Loan Agreement and the other Loan Papers as are delegated to the Administrative Lender by the terms thereof, together with such powers as are reasonably incidental thereto and hereto, and (d) agrees that it will perform in accordance with its terms all of the obligations which by the terms of the Loan Agreement, the other Loan Papers, and this Assignment and are required to be performed by it as a Lender. 8. EXECUTION IN COUNTERPARTS. This Fourth Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original and all of which taken together shall constitute but one and the same instrument. 9. GOVERNING LAW; BINDING EFFECT. This Fourth Amendment shall be governed by and construed in accordance with the laws of the State of Texas and shall be binding upon Company, each Lender, Issuer and Administrative Lender and their respective successors and assigns. 10. HEADINGS. Section headings in this Fourth Amendment are included herein for convenience of reference only and shall not constitute a part of this Fourth Amendment for any other purpose. 11. ENTIRE AGREEMENT. THE LOAN AGREEMENT, AS AMENDED BY THIS FOURTH AMENDMENT, AND THE OTHER LOAN PAPERS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AS TO THE SUBJECT MATTER - 7 - 8 THEREIN AND HEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. REMAINDER OF PAGE LEFT INTENTIONALLY BLANK - 8 - 9 IN WITNESS WHEREOF, the parties hereto have executed this Fourth Amendment as of the date first above written. ELCOR CORPORATION By: /s/ RICHARD J. ROSEBERY ------------------------------------ Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer - 9 - 10 NATIONSBANK OF TEXAS, N.A., as Administrative Lender, Lender and Issuer By: /s/ JASON BRUHL ----------------------------------- Name: Jason Bruhl --------------------------------- Title: Vice President -------------------------------- - 10 - 11 BANK OF AMERICA - TEXAS, N.A. By: /s/ DONALD P. HELLMAN ----------------------------------- Name: Donald P. Hellman ------------------------------ Title: Vice President ----------------------------- - 11 - 12 COMERICA BANK - TEXAS By: /s/ LARRY W. CALTON ----------------------------------- Name: Larry W. Calton ------------------------------ Title: Assistant Vice President ----------------------------- - 12 - 13 THE BANK OF TOKYO-MITSUBISHI, LTD. By: /s/ CHRIS W. HOLDER ----------------------------------- Name: Chris W. Holder ------------------------------ Title: Vice President ----------------------------- - 13 - 14 ACKNOWLEDGED AND AGREED: ELK CORPORATION OF DALLAS ELK CORPORATION OF TEXAS ELK CORPORATION OF AMERICA ELK CORPORATION OF ARKANSAS ELK CORPORATION OF ALABAMA CHROMIUM CORPORATION OEL, LTD. By: /s/ RICHARD J. ROSEBERY -------------------------------- Richard J. Rosebery Vice President for all GA INDUSTRIES CORPORATION M MACHINERY COMPANY, INCORPORATED (formerly known as Mosley Machinery Company, Incorporated) M SERVICE CORPORATION (formerly known as Mosley Service Corporation) By: /s/ RICHARD J. ROSEBERY -------------------------------- Richard J. Rosebery President for all ELCOR SERVICE CORPORATION By: /s/ RICHARD J. ROSEBERY -------------------------------- Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer - 14 - 15 EXHIBIT A PROMISSORY NOTE $40,000,000.00 Dated: December 15, 1997 FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION, a Delaware corporation ("Company"), hereby promises to pay to the order of NATIONSBANK OF TEXAS, N.A. ("Lender") the principal amount of each Advance made by Lender to Company pursuant to the Loan Agreement (as hereinafter defined). All Advances remaining unpaid shall be repaid in full on the Termination Date. Company promises to pay interest on the unpaid principal balance of each Advance from the date of such Advance until said principal amount is paid in full, at the times and at the rate or rates as specified in the Loan Agreement. Both principal and interest are payable in lawful money of the United States of America to NationsBank of Texas, N.A., as Administrative Lender, at 901 Main Street, Dallas, Texas 75202, in immediately available funds. Each Advance made by Lender to Company pursuant to the Loan Agreement and all payments made on account of principal hereof shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note; provided, however, failure to make any such recordation or endorsement shall not affect the obligations of Company hereunder or under the Loan Agreement. This Note is one of the Notes referred to in, and is entitled to the benefits of and obligations pertaining to, the Loan Agreement dated as of September 29, 1993 (said Loan Agreement, as amended, modified or supplemented from time to time, the "Loan Agreement") among Company, Lender, certain other Lenders, and NationsBank of Texas, N.A., as Administrative Lender, and this Note is a substitution for (but is not an extinguishment or novation of any indebtedness in respect of) that certain Note of Company payable to the order of Lender dated October 31, 1996, in the principal amount of $40,000,000.00. The Loan Agreement, among other things, (i) provides for the making of Advances by Lender to Company from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of Company resulting from each such Advance being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. All terms not expressly defined herein shall have the same definitions as set forth in the Loan Agreement. ELCOR CORPORATION By: ------------------------------------- Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer 16 EXHIBIT B PROMISSORY NOTE $30,000,000.00 Dated: December 15, 1997 FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION, a Delaware corporation ("Company"), hereby promises to pay to the order of BANK OF AMERICA- TEXAS, N.A. ("Lender") the principal amount of each Advance made by Lender to Company pursuant to the Loan Agreement (as hereinafter defined). All Advances remaining unpaid shall be repaid in full on the Termination Date. Company promises to pay interest on the unpaid principal balance of each Advance from the date of such Advance until said principal amount is paid in full, at the times and at the rate or rates as specified in the Loan Agreement. Both principal and interest are payable in lawful money of the United States of America to NationsBank of Texas, N.A., as Administrative Lender, at 901 Main Street, Dallas, Texas 75202, in immediately available funds. Each Advance made by Lender to Company pursuant to the Loan Agreement and all payments made on account of principal hereof shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note; provided, however, failure to make any such recordation or endorsement shall not affect the obligations of Company hereunder or under the Loan Agreement. This Note is one of the Notes referred to in, and is entitled to the benefits of and obligations pertaining to, the Loan Agreement dated as of September 29, 1993 (said Loan Agreement, as amended, modified or supplemented from time to time, the "Loan Agreement") among Company, Lender, certain other Lenders, and NationsBank of Texas, N.A., as Administrative Lender, and this Note is a substitution for (but is not an extinguishment or novation of any indebtedness in respect of) that certain Note of Company payable to the order of Lender dated October 31, 1996 in the principal amount of $25,000,000.00. The Loan Agreement, among other things, (i) provides for the making of Advances by Lender to Company from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of Company resulting from each such Advance being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. All terms not expressly defined herein shall have the same definitions as set forth in the Loan Agreement. ELCOR CORPORATION By: ------------------------------------ Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer 17 EXHIBIT C PROMISSORY NOTE $15,000,000.00 Dated: December 15, 1997 FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION, a Delaware corporation ("Company"), hereby promises to pay to the order of COMERICA BANK - TEXAS ("Lender") the principal amount of each Advance made by Lender to Company pursuant to the Loan Agreement (as hereinafter defined). All Advances remaining unpaid shall be repaid in full on the Termination Date. Company promises to pay interest on the unpaid principal balance of each Advance from the date of such Advance until said principal amount is paid in full, at the times and at the rate or rates as specified in the Loan Agreement. Both principal and interest are payable in lawful money of the United States of America to NationsBank of Texas, N.A., as Administrative Lender, at 901 Main Street, Dallas, Texas 75202, in immediately available funds. Each Advance made by Lender to Company pursuant to the Loan Agreement and all payments made on account of principal hereof shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note; provided, however, failure to make any such recordation or endorsement shall not affect the obligations of Company hereunder or under the Loan Agreement. This Note is one of the Notes referred to in, and is entitled to the benefits of and obligations pertaining to, the Loan Agreement dated as of September 29, 1993 (said Loan Agreement, as amended, modified or supplemented from time to time, the "Loan Agreement") among Company, Lender, certain other Lenders, and NationsBank of Texas, N.A., as Administrative Lender, and this Note is a substitution for (but is not an extinguishment or novation of any indebtedness in respect of) that certain Note of Company payable to the order of Lender dated October 31, 1996 in the principal amount of $15,000,000.00. The Loan Agreement, among other things, (i) provides for the making of Advances by Lender to Company from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of Company resulting from each such Advance being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. All terms not expressly defined herein shall have the same definitions as set forth in the Loan Agreement. ELCOR CORPORATION By: ------------------------------------ Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer 18 EXHIBIT D PROMISSORY NOTE $15,000,000.00 Dated: December 15, 1997 FOR VALUE RECEIVED, the undersigned, ELCOR CORPORATION, a Delaware corporation ("Company"), hereby promises to pay to the order of THE BANK OF TOKYO-MITSUBISHI, LTD. ("Lender") the principal amount of each Advance made by Lender to Company pursuant to the Loan Agreement (as hereinafter defined). All Advances remaining unpaid shall be repaid in full on the Termination Date. Company promises to pay interest on the unpaid principal balance of each Advance from the date of such Advance until said principal amount is paid in full, at the times and at the rate or rates as specified in the Loan Agreement. Both principal and interest are payable in lawful money of the United States of America to NationsBank of Texas, N.A., as Administrative Lender, at 901 Main Street, Dallas, Texas 75202, in immediately available funds. Each Advance made by Lender to Company pursuant to the Loan Agreement and all payments made on account of principal hereof shall be recorded by Lender and, prior to any transfer hereof, endorsed on the grid attached hereto which is part of this Note; provided, however, failure to make any such recordation or endorsement shall not affect the obligations of Company hereunder or under the Loan Agreement. This Note is one of the Notes referred to in, and is entitled to the benefits of and obligations pertaining to, the Loan Agreement dated as of September 29, 1993 (said Loan Agreement, as amended, modified or supplemented from time to time, the "Loan Agreement") among Company, Lender, certain other Lenders, and NationsBank of Texas, N.A., as Administrative Lender. The Loan Agreement, among other things, (i) provides for the making of Advances by Lender to Company from time to time in an aggregate amount not to exceed at any time outstanding the U.S. dollar amount first above mentioned, the indebtedness of Company resulting from each such Advance being evidenced by this Note, and (ii) contains provisions for acceleration of the maturity hereof upon the happening of certain stated events and also for prepayments on account of principal hereof prior to the maturity hereof upon the terms and conditions therein specified. All terms not expressly defined herein shall have the same definitions as set forth in the Loan Agreement. ELCOR CORPORATION By: ------------------------------------ Richard J. Rosebery Vice Chairman, Chief Financial and Administrative Officer and Treasurer 19 SCHEDULE 1 EXISTING LITIGATION This schedule is confidential and has been omitted. 20 SCHEDULE 4 FIXED ASSETS HELD FOR SALE This schedule is confidential and has been omitted. 21 SCHEDULE 6 NATIONSBANK OF TEXAS, N.A. 901 Main Street Dallas, Texas 75202 COMERICA BANK - TEXAS 1300 Northpark Center Dallas, Texas 75225 BANK OF AMERICA TEXAS, N.A. 1925 West John Carpenter Freeway Irving, Texas 75063 THE BANK OF TOKYO-MITSUBISHI, LTD. 3150 Trammell Crow Center 2001 Ross Avenue Dallas, Texas 75201 22 SCHEDULE 7
LENDER COMMITMENT SPECIFIED ------ ---------- --------- PERCENTAGE ---------- NationsBank of Texas, N.A. $40,000,000 40.00% Bank of America - Texas, N.A. $30,000,000 30.00% Comerica Bank - Texas $15,000,000 15.00% The Bank of Tokyo-Mitsubishi, Ltd. $15,000,000 15.00%
EX-27 3 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS JUN-30-1998 JUL-01-1997 DEC-31-1997 4,450 0 35,487 730 29,419 74,141 185,841 67,981 195,222 23,461 37,700 0 0 13,238 106,315 195,222 134,481 134,481 102,702 119,891 0 0 1,373 13,217 4,875 0 0 0 0 8,342 .63 .62
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