Preferred Stock. On February 19, 1993, the Company completed a public offering of 1,495,000 shares of Preferred Stock at $50 per share. The preferred stock is convertible at the option of the holder into Common Stock at the rate of 2.5397 shares of Common Stock for each share of Preferred Stock. Annual dividends are $2.875 and are cumulative. The Preferred Stock is exchangeable, in whole or in part, at the option of the Company on any dividend payment date beginning February 15, 1995, for the Company’s 5 3/4% Convertible Subordinated Debentures due February 15, 2018, at a rate of $50 principal amount of debentures for each share of Preferred Stock. The Preferred Stock is redeemable at any time on or after February 15, 1996, in whole or in part, at the Company’s option, initially at a redemption price of $52.0125 per share and thereafter at redemption prices declining to $50 per share on or after February 15, 2003, plus unpaid dividends to the redemption date. Holders of Preferred Stock have no voting rights unless dividends are in arrears six quarters or more, at which time they have the right to elect two directors of the Company until all dividends have been paid. Total dividends paid during 1994 and 1993 were $4,298,000 and $3,904,000, respectively.

Stock Split. On March 13, 1992, the Company’s Board of Directors voted to amend its Certificate of Incorporation to increase the Company’s authorized Common Stock, $.01 par value, from 9,000,000 to 70,000,000 shares. In addition, the Company declared a 2.797 for 1 stock split of the Common Stock, $.01 par value (effected in the form of a stock dividend of 1.797 shares on each outstanding share). All references to share and per share data in the accompanying consolidated financial statements have been retroactively restated to give effect to the stock split.

Repurchase of Common Stock. On November 13, 1992, 4,439,000 shares of Common Stock were repurchased from Kelso Best Partners, L.P. (“Kelso”), which was the Company’s largest shareholder at that time. These were purchased at a cost of $12.50 per share (a discount of $1.50 per share from the then quoted NASDAQ NMS sale price). These shares were subsequently retired by the Company.

Stock Options. On March 13, 1992, the Company adopted a stock option plan which provides 1,000,000 shares of Common Stock for the granting of options to directors and key employees of the Company.

In May 1993, the Company adopted a disinterested directors stockholder plan, which provides 225,000 shares of common stock for the granting of options to directors who administer the Company’s stock option plan and are not permitted to receive stock option grants under such plan. These options are exercisable at the date they are granted. This plan was terminated in May 1994. The options previously granted under this plan will continue in effect according to their terms.

Option transactions are summarized as follows: 

                                                        1994       1993  
Options outstanding at the  beginning of the year     589,100    551,600
Options granted                                        54,700     37,500
Options cancelled                                     (11,460)         -
Options exercised                                      (3,440)         - 

Options outstanding as of December 31                 628,900    589,100 

Option price range as of December 31               $9.50 to $13.88       

Options exercisable at December 31, 1994              222,180

Shareholders’ Rights Plan. Each issued and outstanding share of Common Stock has associated with it one Common Stock purchase right to purchase a share of Common Stock from the Company at a price of $60.00. Such rights are not exerciseable until certain events occur as detailed in the rights agreement.