<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
-------------------------------------------------
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 1-4001
UNION CAMP CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
VIRGINIA 13-5652423
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1600 VALLEY ROAD, WAYNE, NEW JERSEY 07470
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(Address of Principal Executive Offices) (Zip Code)
(201) 628-2000
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(Registrant's Telephone Number, Including Area Code)
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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
----------- -------------
69,141,424 shares of Registrant's Common Stock, Par Value $1 Per Share, were
outstanding as of the close of business on April 30, 1996.
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UNION CAMP CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Part I. FINANCIAL INFORMATION*
Item 1. Financial Statements. 2
Item 2. Management's Discussion and
Analysis of Financial Condition
and Results of Operations. 6
Part II. OTHER INFORMATION
Item 2. Changes in Securities. 8
Item 4. Submission of Matters to a
Vote of Security-Holders. 8
Item 6. Exhibits and Reports on Form 8-K. 9
</TABLE>
--------------------------
*A summary of the Registrant's significant accounting policies is contained in
the Registrant's Form 10-K for the year ended December 31, 1995 which has
previously been filed with the Commission.
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<PAGE>
PART I. FINANCIAL INFORMATION
Item I. Financial Statements.
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
($ in thousands, except per share)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------
1996 1995
---- ----
<S> <C> <C>
Net Sales $ 978,255 $ 1,021,146
Costs and other charges:
Cost of products sold 678,707 662,829
Selling and administrative expenses 103,499 90,634
Depreciation and cost of timber harvested 68,450 66,364
---------- ------------
Income from operations 127,599 201,319
---------- ------------
Gross interest expense 28,232 32,935
Less capitalized interest (860) (5,078)
Other (income) expense -net 3,478 1,015
---------- ------------
Income before income taxes and minority interest 96,749 172,447
---------- ------------
Income taxes:
Current 22,449 44,401
Deferred 13,349 20,340
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Total income taxes 35,798 64,741
---------- ------------
Minority interest (net of tax) (2,448) (2,699)
Net Income $ 58,503 $ 105,007
========== ============
Earnings per share: $ 0.85 $ 1.50
Dividends per share $ 0.45 $ 0.39
Earnings per share are computed on the basis of the average number of common
shares outstanding:
1996: 69,108,949 1995: 70,036,504
</TABLE>
See also the accompanying notes to consolidated financial statements.
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<PAGE>
UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
($ in thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
------------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 28,844 $ 30,332
Receivables-net 497,771 489,967
Inventories at lower of cost or market:
Finished goods 236,057 242,732
Raw materials 109,106 109,181
Supplies 115,813 116,804
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Total inventories 460,976 468,717
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Assets held for resale 1,323 1,289
Other 36,167 43,512
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Total current assets 1,025,081 1,033,817
---------- ----------
Plant and equipment, at cost 6,359,985 6,304,113
Less: accumulated depreciation 2,981,986 2,918,963
---------- ----------
3,377,999 3,385,150
Timberlands, less cost of timber harvested 345,360 274,935
---------- ----------
Total property 3,723,359 3,660,085
---------- ----------
Other assets 178,785 144,441
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Total Assets $4,927,225 $4,838,343
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities $ 616,482 $ 574,113
Long-term debt 1,195,623 1,197,536
Deferred income taxes 724,169 709,850
Other liabilities and minority interest 242,099 235,152
Stockholders' equity (Shares outstanding
(1996: 69,128,053; 1995: 69,078,078) 2,148,852 2,121,692
---------- ----------
Total Liabilities and Stockholders' Equity $4,927,225 $4,838,343
========== ==========
</TABLE>
See also the accompanying notes to consolidated financial statements.
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UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-------------------------
1996 1995
---- ----
<S> <C> <C>
Cash Provided By (Used For) Operations:
Net income $ 58,503 $105,007
Adjustments to reconcile net income
to cash provided by operations:
Depreciation, amortization, and
cost of company timber harvested 72,875 70,443
Deferred income taxes 13,349 20,340
Other 7,887 2,725
Changes in operational assets
and liabilities:
Receivables (6,769) (65,964)
Inventories 8,146 (12,709)
Other assets 4,389 (1,380)
Accounts payable, taxes and other
liabilities (17,766) 11,594
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Cash Provided By Operations 140,614 130,056
---------- ----------
Cash (Used For) Provided By Investment
Activities:
Capital expenditures:
Plant and equipment (53,155) (56,924)
Timberlands (74,043) (4,766)
Payments for acquired businesses (31,850) --
Proceeds from sale of businesses -- 11,083
Other (13,410) (9,786)
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(172,458) (60,393)
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Cash (Used For) Provided By Financing
Activities:
Change in short-term notes payable 82,230 (3,771)
Repayments of long-term debt (20,845) (15,460)
Dividends paid (31,103) (27,320)
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30,282 (46,551)
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Effect of exchange rate changes on cash 74 179
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Increase (decrease) in cash and cash
equivalents (1,488) 23,291
Balance at beginning of year 30,332 13,256
---------- ----------
Balance at end of period $ 28,844 $ 36,547
========== ==========
Supplemental cash flow information:
Cash paid during the period for:
Interest (net of amount capitalized) $ 33,847 $ 34,666
Income taxes $ 7,147 $ 14,550
</TABLE>
See also the accompanying notes to consolidated financial statements.
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UNION CAMP CORPORATION
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. The information furnished in this report is unaudited but includes
all adjustments which, in the opinion of management, are necessary for
a fair presentation of results for the interim periods reported. The
adjustments made were of a normal recurring nature.
Note 2. "Other Assets" increased by more than $34 million from year-end
1995, primarily due to a $22.5 million investment to acquire a 50%
interest in a corrugated container plant in Turkey.
Note 3. Included in "Current Liabilities" are $124 million and $44 million
of commercial paper borrowings at March 31, 1996 and year-end 1995,
respectively.
Note 4. Included in "Other Liabilities and Minority Interest" for March 31,
1996 and year-end 1995 are $71.5 million and $69.3 million,
respectively, representing the minority interest in Union Camp's 68%
owned subsidiary, Bush Boake Allen.
Note 5. Certain amounts have been reclassified for 1995 to conform with the
1996 presentation.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Net income for the first quarter of 1996 was $58.5 million or $.85 per share,
compared to $105.0 million or $1.50 per share for the first quarter of last
year. The significant earnings decrease reflects the continued unfavorable
pricing climate in both the domestic and export paper products markets. During
the first quarter, these markets continued to be negatively effected by a
sluggish economy and a slowing of demand due to customers adjusting their
inventory levels downward, which reduced average selling prices from the record
levels achieved in mid 1995. Operating income for the quarter was $127.6
million, a 37% decrease from the $201.3 million reported for last year's first
quarter.
Net sales for the first quarter were $978 million, 4% below the previous year's
comparable quarter. Total paper product shipments for the quarter were
approximately 854,000 tons, a 6% decline from last year's first quarter. Lower
selling prices for the company's paper and packaging products and a decline in
shipments of linerboard and corrugated containers were the primary contributors
to the decrease.
Operating income for the paper and paperboard segment was $104.7 million, a 37%
decrease from the $165.8 million reported for the first quarter of last year.
Lower average selling prices and marginally higher manufacturing costs per ton
at the company's paper mills were the primary reasons for this earnings decline.
Both the domestic and foreign paper products markets experienced a decline
towards the end of last year, due to a sluggish economy and customers working
down inventories built earlier in 1995. This trend continued into the first
quarter of this year, which negatively effected average selling prices for both
domestic and export linerboard and uncoated business papers. For the quarter,
average prices for the company's linerboard and uncoated business papers were
down 11% and 6%, respectively, compared to last year's first quarter. As a
result of the slowness in the market, the company took approximately 55,000 tons
of market-related linerboard downtime during the first quarter.
Packaging segment operating income was $12.6 million for the first quarter of
1996, compared to $21 million for last year's comparable quarter. The domestic
corrugated container operations were the primary contributors to the lower level
of earnings for the segment. Higher raw material costs and an 8% decline in
shipments from the first quarter of last year more than offset a 5% increase in
average selling prices. First quarter earnings from the company's overseas
container operations decreased substantially over last year's comparable
quarter. Earnings for the flexible packaging operations improved 21% over the
first quarter of last year, primarily attributable to overall cost reductions
and higher average selling prices.
6
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The company's non-paper businesses reported a 31% decrease in operating income,
compared to last year's first quarter. The wood products operations were the
primary contributors to this decline, reporting operating income of $5.4
million, 65% below the first quarter oflast year, reflecting a downward trend in
selling prices, in addition to higher wood costs for the quarter. Operating
income for the chemical segment was $17.2 million for the quarter, compared to
$17.6 million for last year's first quarter. Despite continued strong results
for the Bush Boake Allen flavor and fragrance operations, higher manufacturing
costs at the company's tall- oil-based chemical business slightly offset these
gains.
Depreciation expense increased 2% in the first quarter of 1996 from last year's
comparable period, primarily attributable to the start up of the recovery boiler
at the Savannah mill at the end of the first quarter of last year.
Cash flow from operations for the first quarter of 1996 was $140.6 million,
compared to $130.1 million for last year's comparable period. The increase was
primarily due to a decrease in working capital, partially offset by lower
earnings for the first quarter of this year. Capital expenditures for the first
quarter totaled $127.2 million, compared to $61.7 million last year. This
increase is attributable to a large timberland acquisition in early 1996. Total
debt increased $61 million during the first quarter of 1996, primarily
attributable to increased commercial paper borrowings. The ratio of long-term
debt to total capital was 29.4% at March 31, 1996, compared to 29.7% at year-end
1995.
Net working capital was $408.6 million at March 31, 1996, compared to $459.7
million at year-end 1995. The decrease in working capital was primarily
attributable to an increase in short-term commercial paper borrowings at the end
of the first quarter.
In April 1996, the company entered into a definitive agreement to acquire the
outstanding shares of The Alling & Cory Company (Alling & Cory) a paper
distribution business, for a combination of company common stock and cash
totaling approximately $89 million. Alling & Cory had net sales of $764 million
in 1995. The acquisition is subject to approval by Alling & Cory stockholders
and is expected to close mid-year 1996.
7
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Part II. OTHER INFORMATION
Item 2. Changes in Securities.
A Shareholder Rights Plan became effective on February 26, 1996 which
replaced, with certain modifications, the Company's prior shareholder
rights plan which was adopted in 1986 and expired on February 26, 1996.
Each share of Company Common Stock has one Right annexed to it. The
Rights are described in and the Shareholder Rights Plan is an exhibit to
a Registration Statement on Form 8-A which was filed with the Securities
and Exchange Commission on February 22, 1996.
Item 4. Submission of Matters to a Vote of Security-Holders.
The Company's annual meeting of its stockholders was held on April 30,
1996.
At the annual meeting the Company's stockholders voted on four
proposals: (1) the election of three nominees to serve as directors for
three year terms; (2) the ratification of the appointment of Price
Waterhouse as independent accountants for the year 1996; (3) a
stockholder proposal to endorse the CERES Principles; and (4) a
stockholder proposal to establish a timetable to eliminate
organochlorines. The voting of the Company's stockholders as to these
matters was as follows:
1. Election of Directors.
<TABLE>
<CAPTION>
Votes
Nominees Votes For Withheld
-------- --------- --------
<S> <C> <C>
George D. Busbee 60,252,830 1,192,233
Raymond E. Cartledge 60,089,341 1,355,722
Gary E. MacDougal 60,333,942 1,111,121
</TABLE>
2. Ratification of Appointment of Accountants.
<TABLE>
<CAPTION>
Votes
Votes For Against Abstentions
--------- ------- -----------
<S> <C> <C>
61,293,746 55,668 95,649
</TABLE>
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3. Stockholder Proposal to Endorse the CERES Principles.
<TABLE>
<CAPTION>
Votes Broker
Votes For Against Abstentions Non-Votes
<S> <C> <C> <C>
3,331,534 51,015,987 3,669,845 3,427,697
</TABLE>
4. Stockholder Proposal to Establish a Timetable to
Eliminate Organochlorines.
<TABLE>
<CAPTION>
Votes Broker
Votes For Against Abstentions Non-Votes
--------- ------- ----------- ---------
<S> <C> <C> <C>
1,844,558 51,747,882 4,424,926 3,427,697
</TABLE>
Item 6. Exhibits and Reports on Form 8-K.
a) Exhibits.
<TABLE>
<CAPTION>
No. Description
--- -----------
<S> <C>
3.2 Bylaws of Union Camp Corporation,
as amended April 30, 1996.
11 Statement re computation of per
share earnings.
27 Financial data schedule.
</TABLE>
b) Reports on Form 8-K.
No Current Report on Form 8-K was filed by the Registrant during
the first quarter of 1996.
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SIGNATURES
Pursuant to the requirements 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.
UNION CAMP CORPORATION
----------------------------------
(Registrant)
Date: May 14, 1996 /S/ Dirk R. Soutendijk
------------ ----------------------
DIRK R. SOUTENDIJK
VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY
Date: May 14, 1996 /S/ Robert E. Moore
------------ -------------------
ROBERT E. MOORE
VICE PRESIDENT AND COMPTROLLER
(Chief Accounting Officer)
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
NUMBERED
NO. DESCRIPTION PAGE
<S> <C> <C>
3.2 Bylaws of Union Camp Corporation, 13
as amended April 30, 1996
11 Statement re computation of per 34
share earnings
27 Financial data schedule 35
</TABLE>
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BY-LAWS
UNION CAMP CORPORATION
(AS AMENDED APRIL 30, 1996)
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<PAGE>
<PAGE>
BY-LAWS
OF
UNION CAMP CORPORATION
(AS AMENDED APRIL 30, 1996)
---------------------------
ARTICLE I
Stock
SECTION 1. Form and Execution of Certificates. The certificates of
shares of stock of the Corporation shall be in such form not inconsistent with
the Articles of Incorporation as shall be approved by the Board of Directors.
Certificates of stock shall be signed by the Chairman of the Board, the
President or by a Vice President and the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, except that where any such certificates
shall be countersigned by a transfer agent or by a registrar, other than the
Corporation, the signatures of any of the officers above specified may be
facsimiles, engraved or printed. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be such officer before such certificate is issued, it may be issued by the
Corporation with the same effect as if he were such officer at the date of its
issue.
SECTION 2. Regulations. The Board of Directors may make such rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of certificates of stock and concerning certificates of stock
issued, transferred or registered in lieu or replacement of any lost, stolen,
destroyed or mutilated certificates of stock.
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SECTION 3. Transfer Agent and Registrar. The Board of Directors may
appoint a transfer agent or transfer agents and a registrar or registrars of
transfer for any or all classes of the capital stock of the Corporation, and may
require stock certificates of any or all classes to bear the signature of either
or both.
SECTION 4. Closing of Transfer Books, Fixing of Record Date. The Board
of Directors may fix in advance a date, not exceeding 70 days preceding the date
of any meeting of stockholders, or the date for the payment of any dividend, or
the date for the determination of stockholders for any other proper purpose, as
a record date for the determination of the stockholders exclusively entitled to
notice of and to vote at any such meeting, or any adjournment thereof, or
entitled to receive payment of any such dividend, or for any other proper
purpose.
SECTION 5. Restrictions on Transfer. The Board of Directors may impose
restrictions on transfer of securities of the Corporation pursuant to the Rights
Agreement, dated as of January 25, 1996, by and between the Corporation and The
Bank of New York, as and to the extent required by such Rights Agreement, as
amended from time to time.
SECTION 6. Control Share Acquisitions. Article 14.1 of the Virginia
Stock Corporation Act shall not apply to acquisitions of the Corporation.
2
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ARTICLE II
Stockholders
SECTION 1. Annual Meeting. The annual meeting of the stockholders for
the election of directors and for the transaction of such other business as may
properly come before the meeting shall be held at such time, and at such place,
either within or without the State of Virginia, as may be designated in the
notice thereof, on the last Tuesday in April of each year if not a legal
holiday, but if a legal holiday, then on the next succeeding business day.
At the annual meeting of stockholders, only such business shall be
conducted as shall have been properly brought before the meeting (a) by or at
the direction of the Board of Directors or (b) by any stockholder of the
Corporation who shall be entitled to vote at such meeting and who complies with
the procedures set forth in this Section 1.
In addition to any other applicable requirements, for business,
including the nomination of one or more persons for election as Directors, to be
properly brought before the annual meeting by a stockholder, such stockholder
must have given timely advance written notice thereof to the Secretary of the
Corporation. The Secretary shall deliver timely received notices to the Board of
Directors or a committee designated by the Board for review. To be timely, a
stockholder's notice must be received by the Secretary at the principal
executive offices of the Corporation not less than sixty days in advance of the
day established in accordance with this Section as the day of the annual meeting
of stockholders. In calculating days in advance of the
3
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annual meeting, the day of such annual meeting shall not be included so that
stockholders shall begin counting with the day immediately preceding the day of
the annual meeting which, for purposes of such calculation, shall be one day in
advance of the annual meeting.
A stockholder's notice to the Secretary shall set forth as to each
matter of business the stockholder proposes to bring before the annual meeting:
(a) a description of the business intended to be brought before the annual
meeting, including the text of any resolution to be presented, and the reasons
for conducting such business at the annual meeting; (b) the name and address of
the stockholder proposing such business; (c) a representation that the
stockholder is a holder of record of stock of the Corporation entitled to vote
at the annual meeting and intends to appear in person or by proxy at the meeting
to bring the business specified in the notice before the meeting; (d) the class
and number of shares of stock of the Corporation owned (i) of record and (ii)
beneficially by the stockholder; and (e) any material interest of the
stockholder in the business to be brought before the meeting.
A stockholder's notice of intent to make a nomination of one or more
persons for election as Directors at the annual meeting of stockholders shall,
in addition to the information required above, set forth as to each such person:
(a) the name, age and business and residence addresses of the person; (b) the
principal occupation or employment of the person; (c) the class and number of
shares of stock of the Corporation owned (i) of record and (ii) beneficially by
the person; (d) a description of all arrangements or understandings between the
stockholder and the person and any other person or persons (naming such other
person or persons) pursuant to which the nomination or nominations are to be
made by the stockholder; (e) such other information regarding the person as
would be required to be included in a proxy statement filed pursuant to
4
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the proxy rules of the Securities and Exchange Commission, had the person been
nominated by the Board of Directors; and (f) the written consent of the person
to serve as a Director of the Corporation if so elected. The Corporation may
require any stockholder proposing to nominate one or more persons for election
as Directors to furnish such other information as may reasonably be required by
the Corporation to determine the eligibility of each such person to serve as a
Director of the Corporation.
In the event a stockholder attempts to bring business before the annual
meeting without complying with the provisions of this Section 1, the presiding
officer of the meeting shall determine and declare to the meeting that the
business was not properly brought before the meeting, and such business shall
not be transacted.
SECTION 2. Special Meeting. Special meetings of the stockholders for any
purpose or purposes may be held at any time and at any place, within or without
the State of Virginia, designated in the call thereof, whenever called by the
Board of Directors, the Chairman of the Board, the President, or as otherwise
provided by law.
SECTION 3. Notice. Written notice of every annual or special meeting of
the stockholders, stating the place, day and hour and purpose or purposes
thereof, shall be given to each stockholder of record entitled to vote thereat,
either personally or by mailing the notice to him at his address as it appears
on the stock transfer books of the Corporation. Where such notice of a
stockholders' meeting includes as a purpose thereof action with respect to an
amendment of the Articles of Incorporation or a reduction of stated capital or a
plan of merger or consolidation, such notice shall be given in the manner
hereinabove provided, but at least 25 and not more than 50 days before the date
of any such meeting and any such notice shall be
5
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<PAGE>
accompanied by a copy of the proposed amendment or plan of reduction or merger
or consolidation.
SECTION 4. Quorum. A quorum at any meeting of the stockholders shall
consist of a majority of the stock of the Corporation entitled to vote, present
in person or by proxy, unless otherwise required by law or the Articles of
Incorporation. If at the time and place of the meeting there is present less
than a quorum, a majority of the stock present in person or by proxy and
entitled to vote, shall have power to adjourn the meeting from time to time
without notice until a quorum is secured, and thereupon any business may be
transacted which might have been transacted at the meeting as originally called.
SECTION 5. Organization. All meetings of the stockholders shall be
presided over by the Chairman of the Board, or in his absence, by the President,
or in his absence, by the Chairman of the Executive Committee. In case none of
such officers of the Corporation shall be present, a chairman shall be elected
by the vote of a majority of the stock present in person or by proxy entitled to
vote. The Secretary of the Corporation or an Assistant Secretary shall act as
secretary of every such meeting when present, and in the absence of either, the
presiding officer may appoint any other officer of the Corporation to act as
Secretary.
SECTION 6. Inspectors. At any annual or special meeting of stockholders,
inspectors of election may be appointed by the presiding officer of the meeting
for the purpose of opening and closing the polls, receiving and taking charge of
proxies, and receiving and counting the ballots or the votes of stockholders
otherwise given and shall in writing certify to the returns. No candidate for
election as director shall be appointed or act as inspector.
6
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<PAGE>
ARTICLE III
Directors
SECTION 1. Number, Vacancy. The property, business and affairs of the
Corporation shall be managed by a Board of 11 directors. Except as otherwise
provided by law or in these By-laws or in the Articles of Incorporation, the
directors shall be elected by the stockholders at each annual meeting of
stockholders and shall serve until the next succeeding annual meeting and until
their successors shall have been elected. In the event of any vacancy in the
directors resulting from death, resignation, disqualification, an increase by
thirty percent (30%) or less in the number of directors last elected by the
stockholders, or other cause, the remaining directors, although less than a
quorum, by an affirmative vote of a majority thereof, may fill such vacancy.
SECTION 2. Regular Meeting. Regular meetings of the Board of Directors
shall be held, either within or without the State of Virginia, as shall from
time to time be determined by the Board of Directors. After there has been such
determination and notice thereof has been given to each member of the Board of
Directors, no further notice shall be required for any such regular meeting. The
annual meeting of the Board of Directors may be held, without notice, on the
same day as and after the annual meeting of the stockholders.
SECTION 3. Special Meeting. Special meetings of the Board of Directors
shall be held, either within or without the State of Virginia, upon the order of
the Board, or the call of the Chairman of the Board, the President, or three
directors. The Secretary, or other officer performing his duties, shall give
notice to each director of the time and place of each meeting, by
7
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<PAGE>
mailing the same at least two days before the meeting or by telegraphing or
telephoning the same prior to the meeting.
SECTION 4. Quorum. A majority of the number of directors fixed by these
By-laws shall constitute a quorum for the transaction of business except as
otherwise provided by law or the Articles of Incorporation or these By-laws, but
a majority of those present at the time and place of any meeting, although less
than a quorum, may adjourn from time to time without notice, until a quorum is
secured.
SECTION 5. Compensation. The Board of Directors shall have the authority
to fix the compensation of the directors and of members of the Executive
Committee and of other committees of the Board.
SECTION 6. Indemnification of Officers, Directors and Employees.
(a) Each director and officer of the Corporation shall be indemnified by
the Corporation against all costs and expenses reasonably incurred by or imposed
upon him in connection with or resulting from any action, suit or proceeding to
which he may be made a party by reason of his being or having been a director or
officer of the Corporation (whether or not he continues to be a director or
officer at the time of incurring such cost or expense), except in relation to
matters as to which a recovery shall be had against him by reason of his having
been finally adjudged in such action, suit or proceeding to have been derelict
in the performance of his duty as such director or officer. The foregoing
qualification shall not, however, prevent a settlement by the Corporation prior
to final adjudication when such settlement appears to be in the interest of the
Corporation. The right of indemnification herein provided shall not be
8
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exclusive of other rights to which any director or officer may be entitled as a
matter of law. (Adopted by the stockholders of the Corporation March 3, 1942.)
(b) As used in the following subsections of this Section 6:
"Applicant" means the person seeking indemnification
pursuant to this Section.
"Expenses" includes counsel fees.
"Liability" means the obligation to pay a judgment,
settlement, penalty, fine, including any excise tax assessed with respect to an
employee benefit plan, or reasonable expenses incurred with respect to a
proceeding.
"Official capacity" means, (i) when used with respect to a
director, the office of director in the Corporation; or (ii) when used with
respect to an individual other than a director, the office in the Corporation
held by the officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the Corporation.
"Official capacity" does not include service for any other
foreign or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
"Party" includes an individual who was, is, or is
threatened to be made a named defendant or respondent in a proceeding.
"Proceeding" means any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative or
investigative and whether formal or informal.
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(c) The Corporation shall indemnify any person who was or is a
party to any proceeding by reason of the fact that he is or was a director,
officer or employee of the Corporation, or is or was serving at the request of
the Corporation as a director, trustee, partner, officer or employee of another
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprise, against any liability incurred by him in connection with such
proceeding if (i) he believed, in the case of conduct in his official capacity,
that his conduct was in the best interests of the Corporation, and in all other
cases that his conduct was at least not opposed to its best interests, and, in
the case of any criminal proceeding, had no reasonable cause to believe his
conduct was unlawful, (ii) in connection with a proceeding by or in the right of
the Corporation, he was not adjudged liable to the Corporation, and (iii) in
connection with any proceeding charging improper benefit to him, whether or not
involving action in his official capacity, he was not adjudged liable on the
basis that personal benefit was improperly received by him. A person is
considered to be serving an employee benefit plan at the corporation's request
if his duties to the corporation also impose duties on, or otherwise involve
services by, him to the plan or to participants in or beneficiaries of the plan.
A person's conduct with respect to an employee benefit plan for a purpose he
believed to be in the interests of the participants and beneficiaries of the
plan is conduct that satisfies the requirements of this subsection.
(d) The termination of any proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not of itself create a presumption that the applicant did not meet the
standard of conduct described in subsection (c) of this Section.
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<PAGE>
(e) To the extent that the applicant has been successful on the
merits or otherwise in defense of any proceeding referred to in subsection (c)
of this Section, or in defense of any claim, issue or matter therein, he shall
be indemnified against expenses actually and reasonably incurred by him in
connection therewith.
(f) Any indemnification under subsection (c) of this Section
(unless ordered by a court) shall be made by the Corporation only as authorized
in the specific case upon a determination that indemnification of the applicant
is proper in the circumstances because he has met the applicable standard of
conduct set forth in subsection (c).
The determination shall be made:
(i) By the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained under paragraph (i) of this
subsection, by majority vote of a committee duly designated by the Board of
Directors (in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to the
proceeding;
(iii) By special legal counsel:
(A) Selected by the Board of Directors or its committee in
the manner prescribed in paragraph (i) or (ii) of this subsection; or
(B) If a quorum of the Board of Directors cannot be
obtained under paragraph (i) of this subsection and a committee cannot be
designated under paragraph (ii) of this subsection, selected by majority vote of
the full Board of Directors, in which selection directors who are parties may
participate; or
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(iv) By the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may not be
voted on the determination.
Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the determination
that indemnification is permissible, except that if the determination is made by
special legal counsel, authorization of indemnification and evaluation as to
reasonableness of expenses shall be made by those entitled under paragraph (iii)
of this subsection to select counsel.
(g) (i) The Corporation may pay for or reimburse the reasonable
expenses incurred by any applicant who is a party to a proceeding in advance of
final disposition of the proceeding if:
(A) The applicant furnishes the Corporation a written statement
of his good faith belief that he has met the standard of conduct described in
subsection (c);
(B) The applicant furnishes the Corporation a written
undertaking, executed personally or on his behalf, to repay the advance if it is
ultimately determined that he did not meet the standard of conduct; and
(C) A determination is made that the facts then known to those
making the determination would not preclude indemnification under this Section.
(ii) The undertaking required by subparagraph (B) of paragraph (i) of
this subsection shall be an unlimited general obligation of the applicant but
need not be secured and may be accepted without reference to financial ability
to make repayment.
(iii) Determinations and authorizations of payments under this
subsection shall be made in the manner specified in subsection (f).
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(h) The Board of Directors is hereby empowered, by majority vote
of a quorum of disinterested directors, to cause the Corporation to indemnify or
contract in advance to indemnify any person not specified in subsection (c) of
this Section who was or is a party to any proceeding, by reason of the fact that
he is or was an agent of the Corporation, or is or was serving at the request of
the Corporation as an agent of another corporation, partnership, joint venture,
trust, employee benefit plan or other enterprise, to the same extent as if such
person were specified as one to whom indemnification is granted in subsection
(c). The provisions of subsections (d) through (g) of this Section shall be
applicable to any indemnification provided hereafter pursuant to this subsection
(h).
(i) The Corporation may purchase and maintain insurance to
indemnify it against the whole or any portion of the liability assumed by it in
accordance with this Section and may also procure insurance, in such amounts as
the Board of Directors may determine, on behalf of any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, against any liability asserted against or incurred by him in
any such capacity or arising from his status as such, whether or not the
Corporation would have power to indemnify him against such liability under the
provisions of this Section.
(j) The Board of Directors is hereby empowered to cause the
Corporation to contract in advance to indemnify any person specified in
subsection (c) of this Section provided that such contract does not permit
indemnification if the proposed indemnitee failed to meet the standard of
conduct set forth in subsection (c).
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(k) Every reference herein to directors, officers, employees or
agents shall include former directors, officers, employees and agents and their
respective heirs, executors and administrators. The indemnification hereby
provided and provided hereafter pursuant to the power hereby conferred on the
Board of Directors shall not be exclusive of any other rights to which any
person may be entitled, including any right under policies of insurance that may
be purchased and maintained by the Corporation or others, with respect to
claims, issues or matters in relation to which the Corporation would not have
the power to indemnify such person under the provisions of this Section.
(l) For the purposes of this Section, references to the
"Corporation" include all constituent corporations absorbed in a consolidation
or merger as well as the resulting or surviving corporation so that any person
who is or was a director, officer or employee of such a constituent corporation
or is or was serving at the request of such constituent corporation as a
director, officer or employee of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Section with respect to the resulting or surviving
corporation as he would if he had served the resulting or surviving corporation
in the same capacity.
(m) If any part of this Section 6 shall be found, in any claim,
action, suit or proceeding, to be invalid or ineffective, the validity and the
effect of the remaining parts shall not be affected.
SECTION 7. Executive Committee. The Board of Directors may, by a
resolution adopted by a majority of the number of directors fixed by these
By-laws, appoint an Executive Committee to consist of two or more directors as
determined by the Board. A majority of the
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members appointed shall constitute a quorum. Such Committee shall have the power
of the Board of Directors in the management of the property, business and
affairs of the Corporation, except the power to declare dividends, or to approve
an amendment of the Articles of Incorporation or of these By-laws or to approve
a plan of merger or consolidation. Such Committee shall keep regular minutes of
its proceedings and shall report to the Board and be subject to its directions.
The Board may fill vacancies therein in the same manner as original appointments
to such Committee. Meetings of the Executive Committee shall be held, either
within or without the State of Virginia, upon the order of the Committee or the
call of the Chairman of the Executive Committee, or two or more members of the
Committee. The Secretary, or other officer performing his duties, shall give
notice to each Executive Committee member of the time and place of each
Executive Committee meeting, by mailing the same at least two days before the
meeting or by telegraphing or telephoning the same prior to the meeting.
SECTION 8. Other Committees. From time to time the Board of Directors by
a resolution adopted by a majority of the directors present at a meeting at
which a quorum is present may appoint any other committee or committees of
directors for any purpose or purposes, to the extent lawful, which shall have
such powers as shall be determined and specified by the Board of Directors in
the resolution of appointment. Meetings of any such committees shall be held
either within or without the State of Virginia, upon the order of such
committee, or the call of the Chairman, such committee, or two or more members
of such committee. The Secretary, or other officer performing his duties, shall
give notice to each member of such
15
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committee of the time and place of each meeting of such committee, by mailing
the same at least two days before the meeting or by telegraphing or telephoning
the same prior to the meeting.
SECTION 9. Action Without a Meeting. Unless otherwise restricted by law
or the Articles of Incorporation, any action required or permitted to be taken
at any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if a written consent, setting forth the action so to be
taken, shall be signed by all of the directors or all of the members of the
committee, as the case may be. Action taken under this Section is effective when
the last director signs the consent unless the consent specifies a different
effective date, in which event the action taken is effective as of the date
specified therein provided the consent states the date of execution by each
director.
SECTION l0. Termination of Committee Membership. In the event any person
shall cease to be a director of the Corporation, such person shall
simultaneously therewith cease to be a member of any committee.
ARTICLE IV
Officers
SECTION 1. Officers. The officers of the Corporation shall be the
Chairman of the Board, the Vice Chairman of the Board, President, Chairman of
the Executive Committee, one or more Senior Executive Vice Presidents, Executive
Vice Presidents, Senior Vice Presidents, Vice Presidents, Secretary, Treasurer,
General Counsel, Comptroller, Assistant Secretaries, Assistant Treasurers, and
Assistant Comptrollers, and such other officers and agents as may be required by
law, or as may be deemed useful. The Chairman of the Board, the Vice Chairman of
the Board,
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<PAGE>
the President and the Chairman of the Executive Committee shall each be a member
of the Board of Directors. Any person may hold at the same time any two of the
offices above named, except the offices of President and Secretary.
SECTION 2. Election of Officers; Term of Office. All officers and agents
shall be elected annually by the Board of Directors at each annual meeting of
the Board. If the Board of Directors shall fail to fill any designated office at
an annual meeting or if any vacancy shall occur, or if any office shall be newly
created, such office may be filled at any meeting of the Board of Directors.
Each officer shall hold office until his successor is duly elected, or
until his earlier death, resignation or removal, provided that the terms of
office of all officers shall terminate at any annual meeting of the Board of
Directors at which the President is elected. The Board of Directors shall have
the power to remove any officer, with or without cause, at any time.
ARTICLE V
Powers and Duties of Officers
SECTION l. Chairman of the Board. The Chairman of the Board shall be the
chief executive officer of the Corporation and shall have general supervision
over the business of the Corporation. He shall preside at all meetings of the
stockholders and the Board of Directors.
SECTION 2. Chairman of the Executive Committee. The Chairman of the
Executive Committee shall be the presiding officer of the Executive Committee
and shall have such other powers and duties as may be assigned to him by the
Board of Directors.
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SECTION 3. President. The President shall be the chief operating officer
of the Corporation and shall have such other powers and duties as may from time
to time be assigned to him by the Board of Directors or the Chairman of the
Board.
SECTION 4. Other officers. All officers other than those expressly
referred to in this Article V shall have such powers and duties as usually
pertain to their respective offices, in addition to the powers and duties
conferred by law or by other sections of these By-laws, and such other duties
and powers as may be assigned to them by the Board of Directors, the Chairman of
the Board or the President.
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ARTICLE VI
Fiscal Year
SECTION 1. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year.
ARTICLE VII
Checks, Notes, Drafts, Contracts, Etc.
SECTION 1. Checks, Notes, Drafts, Etc. All checks, notes, drafts or
other orders for the payment of money of the Corporation shall be signed,
endorsed or accepted in the name of the Corporation by such officer or person as
may be designated from time to time either by the Board of Directors or by an
officer authorized by the Board of Directors to make such designation.
SECTION 2. Execution of Contracts, Deeds, Etc. The Board of Directors
may authorize any officer or agent in the name and on behalf of the Corporation
to enter into or execute and deliver any and all deeds, bonds, mortgages,
contracts and other obligations or instruments, and such authority may be
general or confined to specific instances.
ARTICLE VIII
Seal
SECTION 1. Form. The Corporate Seal of the Corporation shall be the Seal
impressed on the margin hereof.
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<PAGE>
ARTICLE IX
Waiver of Notice
SECTION 1. Waiver of Notice. Any stockholder, director or officer may
waive any notice required to be given in accordance with law, these By-laws or
the Articles of Incorporation by attendance in person or by a writing signed by
the person or persons entitled to said notice or by his proxy, whether before or
after the time or event referred to in said notice, which waiver shall be deemed
equivalent to such notice.
ARTICLE X
Amendment to By-laws
SECTION 1. By the Directors. Except as otherwise provided by law, the
Board of Directors shall have the power to make, amend and repeal the By-laws of
the Corporation.
SECTION 2. By the Stockholders. By-laws made by the Board of Directors
may be repealed or changed, and new By-laws made, by the stockholders and the
stockholders may prescribe that any By-laws made by them shall not be altered,
amended or repealed by the directors. Any such action shall be taken at any
annual or special meeting of stockholders, provided that the notice of such
meeting shall have included such action among the purposes of the meeting.
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EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------------------------
1996 1995
---- ----
<S> <C> <C>
Net Income ($000) $58,503 $105,007
Weighted Average Common
Shares Outstanding 69,108,949 70,036,504
Earnings Per Share $0.85 $1.50
Weighted Average Common
Shares Outstanding
Including Common Stock
Equivalents - Primary Basis 69,507,429 70,577,131
Primary Earnings Per Share $0.84 $1.49
Weighted Average Common
Shares Outstanding
Including Common Stock
Equivalents - Fully
Diluted Basis 69,542,427 70,696,067
Fully Diluted Earnings Per Share $0.84 $1.49
</TABLE>
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE CONSOLIDATED STATEMENT OF INCOME FOR THE
THREE MONTHS ENDED MARCH 31, 1996 AND THE CONSOLIDATED
BALANCE SHEET AT MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 28844
<SECURITIES> 0
<RECEIVABLES> 515083
<ALLOWANCES> 17312
<INVENTORY> 460976
<CURRENT-ASSETS> 1025081
<PP&E> 6705345
<DEPRECIATION> 2981986
<TOTAL-ASSETS> 4927225
<CURRENT-LIABILITIES> 616482
<BONDS> 1195623
<COMMON> 69128
0
0
<OTHER-SE> 2079724
<TOTAL-LIABILITY-AND-EQUITY> 4927225
<SALES> 978255
<TOTAL-REVENUES> 978255
<CGS> 678707
<TOTAL-COSTS> 850656
<OTHER-EXPENSES> 3478
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 28232
<INCOME-PRETAX> 96749
<INCOME-TAX> 35798
<INCOME-CONTINUING> 58503<F1>
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 58503
<EPS-PRIMARY> .85
<EPS-DILUTED> .84
<FN>
<F1>Reflects adjustment for minority interest (net of tax) of $2,448.
</FN>
</TABLE>
