Fill and Sign the 105 to Authorize a Corporation to Purchase Up to a Specified Amount of Its Convertible Form

§4.105 To authorize a corporation to purchase up to a specified amount of its Convertible Debentures (using internally generated funds - not borrowings) Authorization to Purchase 6% Convertible Debentures of April 1, 1982 The Board of Directors will submit for approval a proposal that they be authorized, subject to such limitations of law as may be applicable, to purchase or cause to be purchased within one year next following March 24, 1981, up to $1,000,000 of the 6% convertible debentures due April 1, 1982, of the Company at such prevailing price or prices as the Board of Directors in its discretion shall deem advisable and for the best interests of the Company. As of December 31, 1980, there were $1,610,400 of the debentures outstanding. The Board of Directors recommends that such authorization be granted. If the proposal is adopted, purchase will depend upon the availability of funds of the Company and other monetary considerations. Such purchases, if made, would be with funds from profits that may be generated from internal operations. It is not contemplated that funds will be borrowed for such purchases. Anticipating the maturity would reduce the amount of debentures due at their final maturity in 1982 and would reduce the cash required to redeem the remaining debentures at that time. The market value of the debentures is in the range of $90 per $100 par value as of a recent date. The debentures are convertible into common stock of the Corporation at a current price of $25.52 per share with a current market bid price of $21 1/4. The Board of Directors will not have the authority to purchase any such debentures unless approval is granted. The granting of such authorization will require the affirmative vote of at least a majority of the outstanding shares. Under the authorization granted last year by the shareholders, $138,500 face value of debentures have been purchased through February 1, 1981. Such purchases will save the Company, on an annual basis, $2,237 in interest cost with the additional benefit of having retired debt at less than face value, and has created a greater net return than repayment of debt with a slightly higher interest rate. 1980 diluted earnings would have been 2¢ less per share had not the debentures been purchased. Short-term debt on December 31, 1980 was $5,493,586 of which $736,032 are notes given by the bank to the United States Treasury for Treasury Tax and Loan Accounts due on demand, bearing interest at 6 1/4% below the average weekly Federal Funds rate and $4,757,554 are participation certificates representing securities sold under agreements to repurchase, bearing interest at the Federal Discount rate and are due on demand.