united
states
securities and exchange
commission
Washington,
D.C. 20549
FORM
10-K
(Mark
One)
| [X] | Annual report pursuant to section 13 or 15(d) of the |
| Securities Exchange Act of 1934 | |
| For the fiscal year ended December 31, 2009 | |
| 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
0-2757
| THE MONARCH CEMENT
COMPANY
(Exact name of
registrant as specified in its charter)
|
||
| Kansas | 48-0340590 | |
|
(State or
other jurisdiction of
|
(IRS employer identification no.) | |
| incorporation or organization) | ||
| P.O. Box 1000, Humboldt, Kansas 66748-0900 | ||
| (Address of principal executive offices) (zip code) |
Registrant's telephone
number, including area code: (620)
473-2222
Securities registered
pursuant to Section 12(b) of the Act: None
Securities
registered pursuant to Section 12(g) of the Act:
| Title of Class: | Capital Stock, par value $2.50 per share | |
| Class B Capital Stock, par value $2.50 per share |
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act.
Yes
____ No X
Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act.
Yes
____ No X
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____
Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).
Yes____No____
Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of
Regulation S-K (§229.405 of this chapter) is not contained herein, and will not
be contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [X]
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer or a smaller reporting company. See
the definitions of "large accelerated filer", "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act:
| Large accelerated filer ____ | Accelerated filer X | |
| Non-accelerated filer ____ | (Do not check if a smaller reporting company) | Smaller reporting company ____ |
Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes __ No X
The
aggregate market value of the voting and non-voting common equity held by
non-affiliates computed by reference to the average bid and asked price of such
common equity as of the last business day of the registrant's most recently
completed second fiscal quarter was $91,763,831.
As of
February 10, 2010, the registrant had outstanding 2,532,463 shares of Capital
Stock, par value $2.50 per share, and 1,491,735 shares of Class B Capital Stock,
par value $2.50 per share.
DOCUMENTS
INCORPORATED BY REFERENCE
Portions of the following
documents are incorporated by reference into the indicated parts of this report:
(1) the registrant's annual report to stockholders for the year ended December
31, 2009 - Parts I, II and IV of Form 10-K and (2) the registrant's definitive
proxy statement prepared in connection with the annual meeting of stockholders
to be held on April 14, 2010 - Parts II and
III of Form 10-K.
PART I
Item 1. Business
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
(other than that presented below) is incorporated herein by reference to the
description of the Company's business, including information regarding lines of
business, in The Monarch Cement Company's 2009 Annual Report to Stockholders
(filed herewith as Exhibit 13) under the headings:
|
·
|
Description
of the Business;
|
|
·
|
Lines
of Business; and
|
|
·
|
Note
10, Lines of Business, of Notes to Consolidated Financial
Statements.
|
The
Company did not introduce any new products nor begin to do business in a new
industry segment during 2009.
The
Company owns and operates quarries located near its Humboldt, Kansas plant. Such
quarries contain all essential raw materials presently used by the Company. The
Company's total reserves, including these quarries and other property located
near the plant, are estimated to be sufficient to maintain operations at the
Humboldt plant's present
capacity for more than 50 years, although not all reserves
are currently permitted. While these raw materials are accessible to the Company,
we have determined that additional capital expenditures will be needed to
improve the movement of raw materials to our plant. We refer you to the
disclosure under the "Capital Resources" heading of the
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" in our 2009 Annual Report to Stockholders, which is
incorporated herein by reference.
The
Company's products are marketed under registered trademarks using the name
"MONARCH". The Company's operations are not materially dependent on any
trademarks, franchises, patents or on any licenses relating to the use
thereof.
Portland
cement is the basic material used in the production of ready-mixed concrete that
is used in highway, bridge and building construction. These construction
activities are seasonal in nature. During winter months when the ground is
frozen, groundwork preparation cannot be completed. Cold temperatures affect
concrete set-time, strength and durability, limiting its use in winter months.
Dry ground conditions are also required for construction activities to proceed.
During the summer, winds and warmer temperatures tend to dry the ground quicker
creating fewer delays in construction projects.
Variations
in weather conditions from year-to-year significantly affect the demand for our
products during any particular quarter; however, our Company's highest revenue
and earnings historically occur in its second and third fiscal quarters, April
through September.
It is
necessary for the Company to invest a significant portion of its working capital
in inventories. At December 31, 2009 the Company had inventories as
follows:
1.
|
Cement
|
$ | 5,345,468 | ||
|
Work
in process
|
2,050,200 | |||
|
Building
products
|
5,225,431 | |||
|
Fuel,
gypsum and other materials
|
7,625,573 | |||
|
Operating
and maintenance supplies
|
11,538,788 | |||
|
Total
|
$ | 31,785,460 |
The
Company is heavily dependent upon the construction industry and is directly
affected by the level of activity in that industry. However, no customer
accounted for 10% or more of the Company's consolidated net revenue during 2009,
2008 or 2007.
Backlog
of customers' orders is not a material factor in the Company's
business.
The
Company has no contracts that are subject to renegotiation of profits or
termination thereof at the election of the government.
The
manufacture and sale of cement and ready-mixed concrete are extremely
competitive enterprises. A number of producers, including several nationwide
manufacturers, compete for business with the Company in its market area. The
Company is not a significant factor in the nationwide portland cement or
ready-mixed concrete business but does constitute a significant market factor
for cement in its market area. Cement generally is produced to meet standard
specifications and there is little differentiation between the products sold by
the Company and its competitors. Accordingly, competition exists primarily in
the areas of price and customer service.
The
Company did not spend a material amount in the last three fiscal years on
Company sponsored research and development. However, the Company is a member of
the Portland Cement Association which conducts research for the cement
industry.
The
Company has, during the past several years, made substantial
capital expenditures for pollution control equipment. The Company also incurs
normal operating and maintenance expenditures in connection with its pollution
control equipment.
At
December 31, 2009, the Company and its subsidiaries employed approximately 610
employees including 465 hourly employees and 145 salaried employees, which
included plant supervisory personnel, sales and executive staff. Of the 610
total employees, approximately 34% are union employees. Approximately 22% of
those union employees (8% of our total employees) are covered by contracts that
expire in 2010. The Company believes it has a good working relationship with its
employees and has been successful in negotiating multi-year union contracts
without work stoppages.
All of
the Company's operations and sales are in one geographic area consisting
primarily of the State of Kansas, the State of Iowa, southeast Nebraska, western
Missouri, northwest Arkansas and northern Oklahoma.
The
Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current
Reports on Form 8-K, and any amendments to those reports filed with or furnished
to the Securities and Exchange Commission, are available free of charge through
the "SEC Filings" link of the Company's website, http://www.monarchcement.com,
as soon as reasonably practicable after filing
2.
with or
furnished to the SEC. These reports are also available to read and copy
at the SEC's Public Reference Room at 100 F Street, NE, Washington, DC 20549.
Information on the operation of the Public Reference Room can be obtained by
calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains an Internet
site that contains reports, proxy and information statements, and other
information regarding issuers that file electronically with the SEC at http://www.sec.gov.
Item 1a. Risk
Factors
We are
identifying important risks and uncertainties that could affect the Company's
results of operations, financial condition or business and that could cause them
to differ materially from the Company's historical results of operations,
financial condition or business, or those contemplated by forward-looking
statements made herein or elsewhere, by, or on behalf of, the
Company. Factors that could cause or contribute to such differences
include, but are not limited to, those factors referred to below. The
risk factors highlighted are not the only ones that the Company
faces.
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
(other than that presented below) is incorporated herein by reference to the
material responsive to this Item in The Monarch Cement Company's 2009 Annual
Report to Stockholders in the "Capital Resources" section of
the "Management's Discussion and Analysis of Financial Condition and
Results of Operations" under the headings:
|
·
|
Market
Risks;
|
|
·
|
Inflation;
and
|
|
·
|
Environmental
Regulations.
|
We depend on
construction activity levels, which tend to be cyclical. Our
operating results depend on residential, commercial and governmental
construction activity and spending levels which tend to be
cyclical. Construction activity and spending levels are influenced by
interest rates, inflation, environmental laws and regulations, employment levels
and the availability of funds for public construction
projects. Economic downturns may lead to recessions in the
construction industry, either in individual markets or
nationally. These cyclical downturns in construction activity in our
market area, which we cannot control, significantly affect our
business.
Construction is
dependent upon the overall U.S. economy which remains weak and could weaken
further. Commercial and residential construction levels
generally move with economic cycles; when the economy is strong, construction
levels rise and when the economy is weak, construction levels
fall. The overall U.S. economy has been hurt by changes in the
financial services sector and the resulting constraints on credit
availability. The overall weakness in the economy and the uncertainty
in the credit markets could cause commercial and residential construction to
remain at low levels or weaken further, and thereby continue to adversely affect
our sales volumes and earnings. A recessionary economy can also
increase the likelihood we will not be able to collect on our accounts
receivable from our customers.
A decline in public
sector construction and reductions in governmental funding could adversely
affect our operations and results. If spending on publicly
funded construction is
3.
reduced
significantly as a result of a loss of federal funding or a significant
reduction in state or federal budgets, our earnings could be negatively
affected.
Competition in our
industry could adversely affect our results of
operations. Substantially all markets we operate in are highly
competitive. We compete with several other domestic suppliers of
cement, concrete and concrete products, as well as with importers of foreign
cement. Many factors affect the competitive environments we face in
our markets. Among others, they include the number of competitors in
the market, the pricing policies of those competitors, the financial strength of
those competitors, the total production capacity serving the market, the
barriers that potential competitors face to enter the market, the proximity of
natural resources to the market, as well as economic conditions and product
demand within the market. Such factors come together in our market in
varying ways, sometimes in ways that adversely impact demand for and pricing of
our products.
Increased energy and
fuel costs may have a material adverse effect on our
results. Our operations consume significant amounts of
energy. The price and availability of energy are subject to
political, economic and market factors that are generally outside our
control. Energy and fuel costs have affected, and may continue to
affect, our financial condition, results of operations and
liquidity.
Adverse weather
lessens demand for our products, which is seasonal in our
market. Construction activity, and thus demand for our
products, decreases substantially during periods of cold weather, when it snows
or when heavy or sustained rains fall. Consequently, demand for our
products is significantly lower during the winter, when winter weather
significantly curtails construction activity. Our operations are
seasonal, with sales generally peaking during the second and third quarters
because of normally better weather conditions. However, high levels
of rainfall can adversely impact our operations during these periods as
well. Such adverse weather conditions can materially and adversely
affect our results of operations and profitability if they occur with unusual
intensity, during abnormal periods, or last longer than usual, especially during
peak construction periods.
Changes in legal
requirements and governmental policies concerning zoning, land use,
environmental and other areas of the law impact our
business. Our operations are affected by numerous federal,
state and local laws and regulations related to zoning, land use and
environmental matters. Despite our compliance efforts, there is the
inherent risk of liability in the operation of our business, especially from an
environmental standpoint. These potential liabilities could have an
adverse impact on our operations and profitability. Our operations
require numerous governmental approvals and permits, which often require us to
make significant capital and maintenance expenditures to comply with zoning and
environmental laws and regulations. Stricter laws and regulations, or
more stringent interpretations of existing laws or regulations, may impose new
liabilities on us, reduce operating hours, require additional investment by us
in pollution control equipment, or impede the expansion of our
facilities.
Climate change and
climate change legislation or regulations may adversely impact our
business. A number of governmental bodies have introduced or
are contemplating legislative and regulatory change in response to the potential
impacts of climate change including pending U.S. legislation that, if enacted,
would limit and reduce greenhouse gas emissions through a
"cap
4.
and
trade" system
of allowances and credits, among other provisions. In addition, the
Environmental Protection Agency (EPA) has for the first time required large
emitters of greenhouse gases to collect and report data with respect to their
greenhouse gas emissions and has proposed a permitting process for large
emitters. Our cement plant could be subject to this permitting under
the regulations as currently proposed. Any such "cap-and-trade"
system or other limitations imposed on the emission of "greenhouse gases" could
have a material adverse affect on our financial position, results of operation
or cash flows.
Litigation could
affect our profitability. The nature of our business exposes
us to various litigation matters including product liability claims, employment,
health and safety matters, environmental matters, regulatory and administrative
proceedings, governmental investigations, tort claims and contract
disputes. We contest these matters vigorously and make insurance
claims where appropriate. However, litigation is inherently costly
and unpredictable, making it difficult to accurately estimate the outcome of
existing or future litigation.
Item 1b. Unresolved
Staff Comments
None.
Item 2. Properties
The
Company's corporate office and cement plant, including equipment and raw
materials are located at Humboldt, Kansas, approximately 110 miles southwest of
Kansas City, Missouri. The Company owns approximately 5,000 acres of land on
which the Humboldt plant, offices and all essential raw materials are located.
Construction completed in 2006 increased our plant's capacity allowing us to
produce in excess of one million tons of cement per year. Producing at that
level, raw material reserves are estimated to be sufficient to maintain
operations at this plant for more than 50 years, although not all reserves are
currently permitted. The Company believes that this
plant and equipment are suitable and adequate for its current level of
operations and provides for increases in market demand. The Company installed a
fuel handling system which was completed in the third quarter of 2009 at a cost
of approximately $4.4 million. Projects in the planning and design phases
include an overland conveyor system to improve efficiencies in moving raw
materials. We refer
to
the “Capital Resources” section of the “Management's Discussion and Analysis of
Financial Condition and Results of Operations” in our 2009 Annual Report to
Stockholders for a more detailed description of the Company's
capital resources and improvements under consideration. Such information is
hereby incorporated herein by reference.
The
Company also owns approximately 250 acres of land in Des Moines, Iowa on which
it operates a cement terminal. The Company transfers cement produced in
Humboldt, Kansas to this terminal for distribution to Iowa customers. The
Company also owns a rock quarry located near Earlham, Iowa, approximately 30
miles west of Des Moines, Iowa. Approximately 300 acres of this 400 acre
tract have been quarried and the Company has contracted with a third party to
quarry and sell the remaining rock. This quarry operation will not have a
material effect on the Company's overall operations.
The
Company owns various companies which sell ready-mixed concrete, concrete
products and sundry building materials within the Humboldt cement plant's
primary market.
5.
Various
equipment and facility improvements in this line of business ensure these plants
are suitable and adequate for their current level of operations and
provide for increases in market demand. Individual locations do not have a
material effect on the Company's overall operations.
Item 3. Legal
Proceedings
By letter dated April 27, 2009, the Company was
notified by the Kansas Department of Health and Environment (KDHE) of
allegations by KDHE that the Company has performed multiple modifications and
alterations at the Company's facility for which the Company did not apply for or
obtain the KDHE construction permits required by the Kansas Air Quality Act and
related regulations. KDHE also alleged that the Company did not apply for
or obtain from KDHE the necessary permits for modifications or alterations to a
facility that are significant for Prevention of Significant Deterioration (PSD).
Based on these allegations, KDHE proposes to assess a civil penalty of $351,000,
and to require the Company to submit a new, complete PSD permit application,
including therein a proposal by the Company for installation of air emission
controls to achieve Best Available Control Technology (BACT) as provided in
applicable regulations. The Company does not agree with certain of
KDHE's factual and legal allegations, and is attempting to resolve these issues
through negotiation and mutual agreement between the Company and KDHE. The
Company reserves all legal rights in the event such a resolution cannot be
reached.
Item
4. [Removed
and Reserved]
PART II
Item 5. Market
for Registrant's Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity
Securities
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
(other than that presented below) is incorporated herein by reference to the
material responsive to this Item in The Monarch Cement Company's 2009 Annual
Report to Stockholders under the heading "Stock Market and Dividend Data". In
addition we submit the following information:
The
Company's Board of Directors is responsible for determining the amount and
timing of dividend payments. All
dividends are discretionary and are based on past financial performance and
availability of funds. For several years the Company has paid a dividend
in January, March, June and September. At the April 2008 Board of Directors
meeting, the Board increased the dividend from $0.22 per share to $0.23 per
share. At the April 2009 Board of Directors meeting, the Board maintained a
$0.23 per share dividend. The
Company is not restricted regarding payment of dividends, but its ability to do
so is subject to its satisfaction of a financial covenant provided in the
terms and conditions of our loan agreement. This covenant requires
the Company to maintain a tangible net worth of $90 million and an adjusted
tangible net worth, which is tangible net worth before other comprehensive
income, of $95 million. The Company was in compliance with these requirements at
year end. The minimum net worth requirements could impact the Company's ability
to pay dividends in the future.
6.
The Company does not have
any compensation plans or individual compensation arrangements under which
equity securities of the registrant are authorized for issuance to employees or
non-employees.
The
Company did not sell any of its equity securities during 2009. In 1996, our
Board of Directors authorized the purchase, through open market transactions, of
up to 400,000 shares of our Company's common stock. Management was given
discretion to determine the number and pricing of the shares to be purchased, as
well as, the timing of any such purchases. During 2009, the Company did not
purchase any of its equity securities. Our Company continues to have authority
to purchase 124,332 shares of our common stock at management's
discretion.
Item 6. Selected
Financial Data
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
is incorporated herein by reference to the material responsive to this Item on
page 1 of the Company's 2009 Annual Report to Stockholders.
Item 7. Management's
Discussion and Analysis of Financial Condition and
Results of Operations
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item (other than that
presented below) is incorporated herein by reference to the material responsive
to this Item in The Monarch Cement Company's 2009 Annual Report to Stockholders
under the heading "Management's Discussion and Analysis of Financial Condition
and Results of Operations". In addition we submit the following
information:
The
Company does not have any off-balance sheet arrangements.
Item 7a. Quantitative
and
Qualitative
Disclosures About Market Risk
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
(other than that presented below) is incorporated herein by reference to the
material responsive to this Item in The Monarch Cement Company's 2009 Annual
Report to Stockholders in the "Capital Resources" section of the "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
under the heading "Market Risks". In addition we submit the following
information:
In December 2009, Monarch entered into an amendment to the loan agreement with
its current lender, Bank of Oklahoma, N.A., to, among other things, renew and
modify the terms of Monarch's term loan and revolving line of credit. Monarch's
current unsecured credit commitment consists of a $17.8 million term loan
maturing December 31, 2014 and a $15.0 million line of credit maturing
December 31, 2010. The Company had $15.1 million of bank loans as of December
31, 2009. Under the amended loan agreement, interest on the line of credit
varies with the lender's national prime rate less 0.50% with a 3.50% interest
rate minimum or floor. Interest rates on the Company's term loan remain variable
and are based on the lender's national prime rate less 0.75% with a 3.00%
interest rate minimum or floor. Prior to the renewal, interest on the line of
credit varied with the lender's national prime rate less 1.25% with a 2.5%
interest rate minimum or floor
7.
for 2009 and 1.25% with no
interest rate minimum or floor for 2008. Interest on the Company's term loan was
variable and was based on the lender's national prime rate less 0.75% with a
3.00% interest
rate minimum or floor for 2009. It was based on the JP Morgan Chase prime rate
less 0.75% with no interest rate minimum or floor for
2008.
Item 8. Financial
Statements and Supplementary Data
Pursuant
to General Instruction G(2) to Form 10-K, the information required by this Item
is incorporated herein by reference to the material responsive to this Item in
the Company's 2009 Annual Report to Stockholders under the
headings:
|
·
|
Report
of Independent Registered Public Accounting Firm (BKD, llp--related
to financial statements);
|
|
·
|
Consolidated
Balance Sheets--December 31, 2009 and
2008;
|
|
·
|
Consolidated
Statements of Income--For the Years Ended December 31, 2009, 2008 and
2007;
|
|
·
|
Consolidated
Statements of Comprehensive Income--For the Years Ended December 31, 2009,
2008 and 2007;
|
|
·
|
Consolidated
Statements of Stockholders' Equity and Noncontrolling Interests--For the
Years Ended December 31, 2009, 2008 and
2007;
|
|
·
|
Consolidated
Statements of Cash Flows--For the Years Ended December 31, 2009, 2008 and
2007; and
|
|
·
|
Notes
to Consolidated Financial Statements--December 31, 2009, 2008 and
2007.
|
Item 9. Changes
in and Disagreements With Accountants on Accounting
and
Financial Disclosure
None
Item 9a. Controls
and Procedures
The Company maintains disclosure controls and
procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act)
that are designed to ensure that information required to be disclosed in the
Company's reports under the Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the
Securities and Exchange Commission, and that such information is accumulated and
communicated to the Company's management, including its President and Chairman
of the Board of Directors and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosures. Any controls and procedures, no
matter how well designed and operated, can provide only reasonable assurance of
achieving the desired control objectives.
As of the end of the period covered by this
report, an evaluation was carried out by the Company's management, including its
President and Chairman of the Board of Directors and Chief Financial Officer, of
the effectiveness of its disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934). Based upon that
evaluation, the Company's President and Chairman of the Board of Directors and
Chief Financial Officer concluded that these disclosure controls and procedures
were effective as of the end of the period covered by this
report.
8.
Pursuant to General
Instruction G(2) to Form 10-K, the information required by this Item with
respect to internal control over financial reporting is incorporated herein by
reference to the material responsive to this Item with respect to such
information in the Company's 2009 Annual Report to Stockholders under the
following headings:
|
·
|
Management's
Report on Internal Control Over Financial Reporting;
and
|
|
·
|
Report
of Independent Registered Public Accounting Firm (BKD, llp--related
to internal control over financial
reporting).
|
In addition, we submit the following
information:
There has been no change in our Company's internal
control over financial reporting that occurred during the fiscal quarter ended
December 31, 2009 that has materially affected, or is reasonably likely to
materially affect, our internal control over financial
reporting.
Item 9b. Other
Information
There was
no information required to be disclosed, but not reported, in a report on
Form 8-K during the fourth quarter of 2009.
PART III
Item 10. Directors,
Executive Officers and Corporate Governance
Pursuant to General
Instruction G(3) to Form 10-K, the information required by this Item (other than
that presented below) is incorporated herein by reference to the material
responsive to this Item in the Company's definitive proxy statement prepared in
connection with its
2010 annual meeting of stockholders pursuant to Regulation 14A and previously
filed with the Commission, which material is provided under the following
headings of said proxy statement:
|
·
|
Election
of Directors and Related
Information;
|
|
·
|
Information
Concerning Nominees for Election to Board of Directors and Directors
Continuing in Office;
|
|
·
|
Specific
Experience, Qualifications, Attributes and Skills of Our Directors and
Nominees;
|
|
·
|
Information
Concerning Executive Officers;
|
|
·
|
Section
16(a) Beneficial Ownership Reporting
Compliance;
|
|
·
|
Nomination
of Directors;
|
|
·
|
Executive
Compensation; and
|
|
·
|
Audit
Committee Report.
|
In addition we submit the following information:
The
Company has adopted an Ethics Policy for directors, corporate officers and
corporate staff employees including, our principal executive officer, principal
financial officer, principal
9.
accounting
officer and persons performing similar functions. This Ethics Code is posted on
our internet website (http://www.monarchcement.com)
under "About Us, Ethics Policy" and is available for your examination. Any
substantive amendment to, or waiver from, a provision of this Code that applies
to our principal executive officer, principal financial officer, principal
accounting officer or persons performing similar functions will be disclosed in
a report on Form 8-K.
Item 11. Executive
Compensation
Pursuant
to General Instruction G(3) to Form 10-K, the information required by this Item
is incorporated herein by reference to the material responsive to this Item in
the Company's definitive proxy statement prepared in connection with its 2010
annual meeting of stockholders pursuant to Regulation 14A and previously filed
with the Commission, which material is provided under the following captions of
said proxy statement:
|
·
|
Executive
Compensation;
|
|
·
|
Defined
Benefit Retirement Plan;
|
|
·
|
Severance
Pay Plan;
|
|
·
|
Compensation
Discussion and Analysis;
|
|
·
|
Compensation
Committee Report;
|
|
·
|
Compensation
Committee Interlocks And Insider Participation;
and
|
|
·
|
Board
Leadership Structure and Role in Risk
Oversight.
|
Item 12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder
Matters
Pursuant to General Instruction G(3) to Form 10-K, the
information required by this Item (other than that
presented below) is incorporated herein by reference to the material responsive
to this Item in the Company's definitive proxy statement prepared in connection
with its 2010 annual meeting of stockholders pursuant to Regulation 14A and
previously filed with the Commission, which material is provided under the
following heading of said proxy statement:
|
·
|
Security
Ownership of Certain Beneficial Owners and
Management.
|
In
addition we submit the following information:
The Company does not have
any compensation plans or individual compensation arrangements under
which equity securities of the registrant are authorized for issuance to
employees or non-employees.
Item 13. Certain
Relationships and Related Transactions, and Director
Independence
Pursuant to General Instruction G(3) to Form
10-K, the
information required by this Item is incorporated herein by reference to the
material responsive to this Item in the Company's definitive proxy statement
prepared in connection with its 2010 annual meeting of stockholders pursuant
to Regulation 14A and previously filed with the Commission, which
material is provided under the following headings of said proxy
statement:
10.
|
·
|
Related
Party Transactions;
|
|
·
|
Nomination
of Directors; and
|
|
·
|
Audit
Committee Report.
|
Item 14. Principal
Accounting Fees and Services
Pursuant to General
Instruction G(3) to Form 10-K, the information
required by this Item is incorporated herein by reference to the material
responsive to this Item in the Company's definitive proxy statement prepared in
connection with its 2010 annual meeting of stockholders pursuant to
Regulation 14A and previously filed
with the Commission, which material is provided under the following heading of
said proxy statement:
|
·
|
Independent
Auditors.
|
PART IV
Item 15. Exhibits,
Financial Statement Schedules
Financial
Statements
Pursuant to General
Instruction G(2) to Form 10-K, the following is a list of the information
required by this Item which is incorporated herein by reference to the material
responsive to this Item in The Monarch Cement Company's 2009 Annual Report to
Stockholders under the headings:
|
·
|
Report
of Independent Registered Public Accounting Firm (BKD, llp--related
to financial statements);
|
|
·
|
Consolidated
Balance Sheets--December 31, 2009 and
2008;
|
|
·
|
Consolidated
Statements of Income--For the Years Ended December 31, 2009, 2008 and
2007;
|
|
·
|
Consolidated
Statements of Comprehensive Income--For the Years Ended December 31,
2009, 2008 and 2007;
|
|
·
|
Consolidated
Statements of Stockholders' Equity and Noncontrolling Interests--For the
Years Ended December 31, 2009, 2008 and
2007;
|
|
·
|
Consolidated
Statements of Cash Flows--For the Years Ended December 31, 2009, 2008 and
2007; and
|
|
·
|
Notes
to Consolidated Financial Statements--December 31, 2009, 2008 and
2007.
|
11.
Financial
Statement Schedules
Schedule
II -- Valuation and Qualifying Accounts
Exhibits
|
|
3(i)
|
Articles
of Incorporation. (Filed with the Company's Annual Report on
Form 10-K for the year ended December 31, 1994 (File No. 0-2757) as
Exhibit 3(i) and incorporated herein by
reference.)
|
|
|
3(ii)
|
By-laws. (Filed
with the Company's Current Report on Form 8-K dated April 12, 2006 (File
No. 0-2757) as Exhibit 3(ii) and incorporated herein by
reference.)
|
|
|
10.1
|
Loan
agreement dated January 1, 2001, between the Bank of Oklahoma N.A.
and The Monarch Cement Company. (Filed with the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001
(File No. 0-2757) as Exhibit 10.1 and incorporated herein by
reference.)
|
|
|
10.1(a)
|
First
amendment
to agreement dated January 1, 2001, between the Bank of
Oklahoma N.A. and The Monarch Cement Company. (Filed with
the Company's Annual Report on Form 10-K for the year ended
December 31, 2002 (File No. 0-2757)
as Exhibit 10.1(a) and incorporated herein by
reference.)
|
|
|
10.1(b)
|
Second
amendment to agreement dated January 1, 2001, between the Bank of Oklahoma
N.A. and The Monarch Cement Company as amended by first amendment dated
December 31, 2002. (Filed with the Company's Annual Report on
Form 10-K for the year ended December 31, 2003 (File No. 0-2757) as
Exhibit 10.1(b) and incorporated herein by
reference.)
|
|
|
10.1(c)
|
Third
amendment to agreement dated January 1, 2001, between the Bank of Oklahoma
N.A. and The Monarch Cement Company as amended by first amendment dated
December 31, 2002 and second amendment dated December 31,
2003. (Filed with the Company's Annual Report on Form 10-K for
the year ended December 31, 2004 (File No. 0-2757) as Exhibit 10.1(c) and
incorporated herein by reference.)
|
|
|
10.1(d)
|
Fourth
amendment to agreement dated January 1, 2001, between the Bank of Oklahoma
N.A. and The Monarch Cement Company as amended by first amendment dated
December 31, 2002, second amendment dated December 31, 2003 and third
amendment dated December 31, 2004. (Filed with the Company's
Annual Report on Form 10-K for the year ended December 31, 2005 (File No.
0-2757) as Exhibit 10.1(d) and incorporated herein by
reference.)
|
|
|
10.1(e)
|
Fifth
amendment to agreement dated January 1, 2001, between the Bank of Oklahoma
N.A. and The Monarch Cement Company
as
|
12.
|
|
|
amended
by first amendment dated December 31, 2002, second amendment dated
December 31, 2003, third amendment dated December 31, 2004 and fourth
amendment dated January 1, 2006. (Filed with the Company's Annual Report
on Form 10-K for the year ended December 31, 2006 (File No. 0-2757) as
Exhibit 10.1(e) and incorporated herein by
reference.)
|
|
|
10.1(f)
|
Sixth
amendment to agreement dated January 1, 2001, between the Bank of Oklahoma
N.A. and The Monarch Cement Company as amended by first amendment dated
December 31, 2002, second amendment dated December 31, 2003, third
amendment dated December 31, 2004, fourth amendment dated January 1, 2006
and fifth amendment dated December 31, 2006. (Filed with the Company's
Annual Report on Form 10-K for the year ended December 31, 2007 (File No.
0-2757) as Exhibit 10.1(f) and incorporated herein by
reference.)
|
|
|
10.1(g)
|
Seventh amendment to agreement dated January 1,
2001, between the Bank of Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002, second amendment
dated December 31, 2003, third December
31, 2004, fourth amendment dated January 1, 2006, fifth
amendment dated December 31, 2006, and sixth amendment dated
December 31, 2007. (Filed with the Company's Annual Report on Form 10-K
for the year ended December 31, 2008 (File No. 0-2757) as Exhibit 10.1(g)
and incorporated herein by
reference.)
|
|
|
10.1(h)
|
Eighth amendment to agreement dated January 1,
2001, between the Bank of Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002, second amendment
dated December 31, 2003, third amendment dated December
31, 2004, fourth amendment dated January 1, 2006, fifth
amendment dated December 31, 2006, sixth amendment dated
December 31, 2007, and seventh amendment dated December 31, 2008. (Filed
with the Company's Current Report on Form 8-K dated December 31, 2009
(File No. 0-2757) as Exhibit 10.1(h) and incorporated herein by
reference.)
|
|
|
13
|
2009
Annual Report to Stockholders.
|
|
|
21
|
Subsidiaries
of the Registrant.
|
|
|
31.1
|
Certificate
of the President and Chairman of the Board pursuant to Section
13a-14(a)/15d-14(a) of the Securities Exchange Act of
1934.
|
|
|
31.2
|
Certificate
of the Chief Financial Officer pursuant to Section 13a-14(a)/15d-14(a) of
the Securities Exchange Act of
1934.
|
13.
|
|
32.1
|
18
U.S.C. Section 1350 Certificate of the President and Chairman of the Board
dated March 16, 2010.
|
|
|
32.2
|
18
U.S.C. Section 1350 Certificate of the Chief Financial Officer dated March
16, 2010.
|
14.
SIGNATURES
Pursuant
to the requirements of Section 13 or 15(d) 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.
The Monarch Cement Company
(Registrant)
| By: /s/ Walter H. Wulf, Jr. | ||
|
Walter H. Wulf,
Jr.
President
|
||
| Date: March 16, 2010 | ||
Pursuant
to the requirements of the Securities Exchange Act of 1934, this report has been
signed below by the following persons on behalf of the registrant and in the
capacities and on the dates indicated.
| By: /s/ Jack R. Callahan | By: /s/ Gayle C. McMillen | |
| Jack R. Callahan | Gayle C. McMillen | |
| Director | Director | |
| Date: March 16, 2010 | Date: March 16, 2010 | |
| By: /s/ Ronald E. Callaway | By: /s/ Byron K. Radcliff | |
| Ronald E. Callaway | Byron K. Radcliff | |
| Director | Director | |
| Date: March 16, 2010 | Date: March 16, 2010 | |
| By: /s/ David L. Deffner | By: /s/ Walter H. Wulf, Jr. | |
| David L. Deffner | Walter H. Wulf, Jr. | |
| Director | President, Principal Executive | |
| Officer and Director | ||
| Date: March 16, 2010 | Date: March 16, 2010 | |
| By: /s/ Robert M. Kissick | By: /s/ Debra P. Roe | |
| Robert M. Kissick | Debra P. Roe, CPA | |
| Director | Chief Financial Officer | |
| Date: March 16, 2010 | Date: March 16, 2010 |
15.
Report
of Independent Registered Public Accounting Firm on
Financial
Statement Schedules
Audit
Committee, Board of Directors and Stockholders
The
Monarch Cement Company
Humboldt,
Kansas
In
connection with our audit of the consolidated financial statements of The
Monarch Cement Company for each of the three years in the period ended December
31, 2009, we have also audited the following financial statement
schedules. These financial statement schedules are the responsibility
of the Company’s management. Our responsibility is to express an
opinion on these financial statement schedules based on our audits of the basic
consolidated financial statements. The schedules are presented for
purposes of complying with the Securities and Exchange Commission’s rules and
regulations and are not a required part of the consolidated financial
statements.
In our
opinion, the financial statement schedules referred to above, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information required to be
included therein.
BKD,
llp
Kansas
City, Missouri
March 16,
2010
THE MONARCH CEMENT COMPANY
AND SUBSIDIARIES
SCHEDULE II -- VALUATION AND
QUALIFYING ACCOUNTS
FOR THE THREE YEARS ENDED
DECEMBER 31, 2009
|
Additions
|
||||||||||||||||
|
Balance
at
|
Charged
to
|
Deduction
|
Balance
|
|||||||||||||
|
Beginning
|
Costs
and
|
from
|
at
End
|
|||||||||||||
|
Description
|
of
Period
|
Expenses
|
Reserves
|
of
Period
|
||||||||||||
| (1) | ||||||||||||||||
|
For
the Year Ended December 31, 2009:
|
||||||||||||||||
|
Reserve
for doubtful accounts
|
$ | 788,000 | $ | 214,000 | $ | 91,000 | $ | 911,000 | ||||||||
|
For
the Year Ended December 31, 2008:
|
||||||||||||||||
|
Reserve
for doubtful accounts
|
$ | 640,000 | $ | 428,000 | $ | 280,000 | $ | 788,000 | ||||||||
|
For
the Year Ended December 31, 2007:
|
||||||||||||||||
|
Reserve
for doubtful accounts
|
$ | 641,000 | $ | 290,000 | $ | 291,000 | $ | 640,000 | ||||||||
| (1) Writeoff of uncollectible accounts, net of collections on accounts previously written off. | ||||||||||||||||
17.
EXHIBIT INDEX
Exhibit
Number Description
3(i) Articles
of Incorporation. (Filed with the Company's Annual
Report
on Form
10-K for the year ended December 31, 1994 (File
No.
0-2757) as Exhibit 3(i) and incorporated herein by reference.)
3(ii) By-laws. (Filed
with the Company's Current Report on Form 8-K
dated
April 12, 2006 (File No. 0-2757) as Exhibit 3(ii) and
incorporated
herein by reference.)
10.1 Loan
agreement dated January 1, 2001, between the Bank of
Oklahoma N.A and
The Monarch Cement Company. (Filed
with the
Company's Quarterly Report on Form 10-Q for the
quarter
ended September 30, 2001 (File No. 0-2757) as
Exhibit
10.1 and incorporated herein by reference.)
10.1(a) First
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company.
(Filed
with the Company's Annual Report on Form 10-K for
the year
ended December 31, 2002 (File No. 0-2757) as
Exhibit
10.1(a) and incorporated herein by reference.)
10.1(b) Second
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company, as
amended
by first amendment dated December 31, 2002. (Filed
with the
Company's Annual Report on Form 10-K for the year
ended
December 31, 2003 (File No. 0-2757) as Exhibit 10.1(b)
and
incorporated herein by reference.)
10.1(c) Third
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002 and
second
amendment dated December 31, 2003. (Filed
with the
Company's Annual Report on Form 10-K for the year
ended
December 31, 2004 (File No. 0-2757) as Exhibit 10.1(c)
and
incorporated herein by reference.)
10.1(d) Fourth
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002,
second
amendment dated December 31, 2003 and third amendment
dated
December 31, 2004. (Filed with the Company's Annual
Report
on Form
10-K for the year ended December 31, 2005 (File No. 0-2757)
as
Exhibit 10.1(d) and incorporated herein by reference.)
10.1(e) Fifth
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002,
second
amendment dated December 31, 2003, third amendment
dated December 31, 2004 and fourth amendment dated
January
1, 2006. (Filed with the Company's Annual Report on
Form 10-K
for the year ended December 31, 2006 (File No. 0-2757)
as
Exhibit 10.1(e) and incorporated herein by reference.)
10.1(f) Sixth
amendment to agreement dated January 1, 2001, between the
Bank of
Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002,
second
amendment dated December 31, 2003, third amendment
dated
December 31, 2004, fourth amendment dated
January
1, 2006 and fifth amendment dated December 31, 2006.
(Filed
with the Company's Annual Report on Form 10-K for the
year
ended December 31, 2007 (File No. 0-2757) as Exhibit 10.1(f)
and
incorporated herein by reference.)
10.1(g) Seventh
amendment to agreement dated January 1, 2001, between
the Bank
of Oklahoma N.A. and The Monarch Cement Company
as
amended by first amendment dated December 31, 2002, second
amendment
dated December 31, 2003, third amendment dated
December
31, 2004, fourth amendment dated January 1, 2006,
fifth
amendment dated December 31, 2006, and sixth amendment
dated
December 31, 2007. (Filed with the Company's Annual
Report on
Form 10-K for the year ended December 31, 2008 (File
No.
0-2757) as Exhibit 10.1(g) and incorporated herein by reference.)
10.1(h) Eighth
amendment to agreement dated January 1, 2001, between the
Bank
of
Oklahoma N.A. and The Monarch Cement Company
as amended by first amendment dated December 31, 2002, second
amendment dated December 31, 2003, third amendment dated
December 31, 2004, fourth amendment dated
January 1, 2006,
fifth amendment dated December 31, 2006, sixth amendment
dated December 31, 2007, and seventh amendment dated
December 31,
2008. (Filed with the Company's Current Report on Form 8-K dated
December 31, 2009 (File No. 0-2757) as Exhibit 10.1(h) and
incorporated
herein by reference.)
13 2009
Annual Report to Stockholders.
21 Subsidiaries
of the Registrant.
31.1
Certificate
of the President and Chairman of the Board pursuant
to
Section
13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934.
31.2 Certificate
of the Chief Financial Officer pursuant to Section
13a-14(a)/15d-14(a)
of the Securities Exchange Act of 1934.
32.1 18 U.S.C.
Section 1350 Certificate of the President and
Chairman
of the
Board dated March 16, 2010.
32.2 18 U.S.C.
Section 1350 Certificate of the Chief Financial
Officer
dated
March 16, 2010.