STOCK DATA Class A common stock has preference over common as to cumulative dividends of $0.75 per annum from April 1, 1949, payable quarterly January 1, etc.; and in any liquidation as to assets equal to $12 and dividends. Purchase and reserve funds.-Annually by April 30 beginning 1951, an amount equal to 10 percent of preceding fiscal year's consolidated net earnings, but not in excess of $25,000, until 4-percent bank loan or any renewal thereof is retired; and thereafter 15 percent of such earnings, but not in excess of $37,500. Company may take credit at the lower of cost or $12 for shares otherwise acquired, and at par for shares converted into common stock. Cash shall be used to purchase or redeem stock. In the underwriting agreement, company covenanted that during each 4-week accounting period beginning March 26 in 1949, and for the first 11 such periods each year thereafter ending in October 1952 it would provide a reserve equal to 10 percent of consolidated net earnings, but not to exceed $25,000 annually. Any losses shall be applied against succeeding periods. Reserve shall be used to purchase stock during each 4-week period at not exceeding $12 a share. The amounts so expended may be credited as prescribed against subsequent retirement obligations. One-half of any reserve remaining in October 1952 shall be used to redeem the stock and the other half shall revert to company. Redeemable for purchase and reserve funds at any time and otherwise on any dividend date on 30 days' notice, in whole or in part, at $12 and dividends. Convertible at any time (if called, through redemption) into one common share. Conversion privilege is protected against dilution. Voting power. One vote per share, same as common. Protective provisions.-Consent of holders of majority of class A is necessary to increase the authorized amount or change the provisions thereof. Revolving credit.-Under terms of a loan agreement dated Dec. 22, 1949, and effective Jan. 3, 1950, three New York City banks agreed to extend credit up to $10,000,000 to the company for a 5-year period, loans to be evidenced by demand notes. On Jan. 3, 1950, company retired out of loans obtained under the agreement the $3,750,000 of serial notes payable to banks. STOCK [Giving effect to payment of 20 percent stock dividend on Mar. 16, 1950] 1 Company held an additional 106 shares which were not issued but in lieu of which cash was paid in connection with stock dividend. CORPORATE BACKGROUND Company is a leading manufacturer of medium and low-priced cigars, its principal brands including El Producto, Harvester, Dutch Masters, and La Palina. Company raises a large part of its requirements of shade-grown tobacco, used for cigar wrappers, on its own farms and leased land, situated mostly in the Connecticut Valley. Binder and filler tobaccos are purchased, the latter partly in Cuba and Puerto Rico. S. Elkeles Cigar Box Co., a wholly owned subsidiary, manufactures boxes exclusively for the company, supplying about one third of its requirements. Employees. Approximately 5,000. Subsidiaries Principal wholly owned subsidiaries are: G. H. P. Cigar Co., Inc. Property Plants owned are at Philadelphia (2), Allentown, Wilkes-Barre, and West Pittston, Pa., Camden, N. J., and Poughkeepsie, N. Y. Those leased are at Lancaster, Coplay, and Allentown, Pa., and Perth Amboy, N. J. Numerous stemmeries and warehouses are owned or leased. Company raises yearly about 1,300 acres of shade-grown wrapper tobacco on 15 plantations in the Connecticut River valley. It owns eight of these plantations, which produce about one-half of this type of tobacco grown by the company. Expansion of facilities. During 1949, company invested approximately $1,500,000 in additional plants and facilities. An addition to the West Pittston plant, started in 1948, was completed, and a building in Pittston, Pa., formerly operated in conjunction with this production, was converted to a stripping plant. In August 1949, company acquired an industrial unit in Wilkes-Barre, Pa., which was converted to a cigar factory and began operations in February 1950. Construction of a storage warehouse and fumigating plant at Glastonbury, Conn., also was completed early in 1950. HISTORY Company was incorporated with perpetual charter under laws of Delaware on May 14, 1919, and thereupon acquired five other companies, subsequently dissolved. In the same year, took over G. J. Johnson Cigar Co., manufacturer of Dutch Masters brand cigars, and in 1920 acquired entire common stock of 44 Cigar Co. In 1926, purchased outstanding stock of G. H. P. Cigar Co., manufacturer of El Producto and other cigar brands. In July 1940, company acquired for approximately $4,000,000, paid partly in 10-year notes and partly in cash, the entire assets (except a claim for $204,033 against Porto Rican American Tobacco Co.) of Congress Cigar Co., Inc., including two factories and other facilities. Certain undescribed assets of Porto Rican American Tobacco Co. were subsequently acquired. January 1, 1948, company acquired all remaining outstanding stock of S. Elkeles Cigar Box Co., in which it had held a substantial interest for more than 25 years. Officers: Frank P. Will, chairman. MANAGEMENT Samuel J. Silberman, president. Stanley S. Keyser, vice president, tobacco. Charles F. Meyer, vice president, production. Morris Hillison, vice president, sales. Leo Ornstein, secretary and treasurer. Herman Ferber, assistant vice president. Abraham H. Berman, assistant vice president. Dwight L. Moody, assistant secretary. Directors: Frank P. Will,' chairman, Merion Station, Pa. Marvin J. Silberman, vice president and director, Royal Lace Paper Works Inc., Scarsdale, N. Y. Samuel J. Silberman, president, Scarsdale, N. Y. Leo Ornstein, secretary and treasurer, New York. E. Chester Gersten,' president, Public National Bank & Trust Co., Montclair, N. J. William B. Joyce,' president, Wm. B. Joyce & Co., New York. Herbert H. Maass, member, Maass, Davidson, Levy & Friedman, New York. Douglass Debevoise, president, the Debevoise Co., New York. Fairleigh S. Dickinson, Jr., president, Becton, Dickinson & Co., Rutherford, John O'Neil, director, General Tire & Rubber Co., Akron, Ohio. 1 Also a director in other companies. Offices.-Executive Office: 444 Madison Avenue, New York, N. Y. Corporate office: Wilmington, Del. Annual meeting: First Monday in April at New York office. Dated October 1, 1945. Interest payable April and October 1. Principal and interest payable at office of trustee. Period of grace for interest-30 days. Federal income tax.-Not paid by company. Trustee.-Public National Bank & Trust Co., New York. Denominations.-Coupon, $1,000, registerable as to principal only. Purpose of issue.-Net proceeds from sale of these debentures were used to redeem, on November 30, 1945, the 39,393 outstanding shares of $4.75 preferred stock at $102.50 a share and accrued dividend. Sinking fund.—Semiannually February 15 and August 15, beginning 1956, cash sufficient to redeem $200,000 of debentures on next succeeding interest date. Credit may be taken, at sinking fund redemption price then to be in effect, for debentures delivered in lieu of cash or those redeemed otherwise than through sinking fund. Cash in fund on any payment date sufficient to redeem at least $10,000 of debentures on next succeeding interest date shall be so applied. Redeemable for sinking fund on any interest date on 30 days' notice, beginning April 1, 1956, in amounts not less than $10,000, at 101 through April 1, 1957; 100% through April 1, 1958; 100% through April 1, 1959; 100% through April 1, 1961; 100% through April 1, 1962; 100% through April 1, 1963; 100% through April 1, 1964; and 100 through April 1, 1965. Redeemable otherwise in whole or in part at any time on 30 days' notice at the following prices, plus interest in each of the years ended September 30: Security. A direct obligation of the company, but not secured by any lien. Protective provisions.-Company covenants not to mortgage or pledge any property or permit any subsidiary to do so (except in favor of company) without securing the debentures equally and ratably therewith. Excepted from the foregoing are purchase money obligations or liens on after acquired property not exceeding 66% percent of lesser of cost or fair value of property acquired. Company further covenants not to incur unsecured funded debt exceeding $6,500,000 in 1945, or an amount lesser by $500,000 in each succeeding year through 1955. Dividend restrictions.-Company may not pay cash dividends on or acquire any of its capital stock except out of consolidated net income accrued since December 31, 1944; and then only if, giving effect thereto, consolidated net assets are equal to the greater of 125 percent of consolidated funded debt or $7,500,000. Offered.-$4,000,000 on October 25, 1945, by syndicate headed by Eastman, Dillon & Co., at 10134 and accrued interest. Listed.-New York Stock Exchange. Authorized capitalization created upon organization in May 1919, consisted of 50,000 shares of 7 percent preferred stock ($100 par) and 90,000 no par common shares. Authorized common was subsequently increased at various times to 500,000 shares in November 1927. At that time an authorized issue of 110,000 shares of 61⁄2 percent prior preferred stock ($100 par) was created. Authorized amounts of both preferred issues were subsequently reduced from time to time until eliminated from the capitalization through retirement of 20,939 shares of 7 percent preferred in August 1943, and remaining 38,162 shares of 61⁄2 percent prior preferred on May 19, 1944. On April 3, 1944, stockholders approved creation of 40,000 shares of $4.75 no par preferred stock. Entire issue (39,393 shares outstanding) was redeemed on November 30, 1945. Stockholders December 1949. February 1949. Transfer agent.-Manufacturers Trust Co., New York City. 2, 083 2, 135 Markets for stock.-Listed on New York Stock Exchange; traded on Philadelphia-Baltimore Stock Exchange. New York Stock Exchange symbol.-CA. Annual price range-Stock (New York Stock Exchange)-Common (no par) 1 Paid Mar. 30. In addition, a 20 percent stock dividend was paid Mar. 16; fractional shares were paid in ash at rate of $7.40 for each of a share. 2 Initial dividend of $1.50 per share paid Apr. 15; also stock dividend of 15 percent paid Nov. 1. Dividends on old 7 percent preferred, 61⁄2 percent prior preferred and $4.75 preferred were paid regularly until redemption of the issues on August 20, 1943, May 19, 1944, and November 30, 1945, respectively. Dividend restrictions.-Under terms of revolving credit agreement, company may not pay cash dividends on or acquire any of its stock except out of consolidated earnings accrued since December 31, 1949, plus $1,000,000. It must at all times maintain a ratio of current assets to current liabilities of not less than 11⁄2 to 1 and net current assets of not less than $10,000,000, with $1,000,000 of the reserve for crop hazards and other contingencies included in current liabilities for purpose of this computation. For additional restrictions, see description of debenture 34s, due 1965. 71936-50-ser. vv- -5 |