UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended November 30, 1995
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-5858
UNIVAR CORPORATION
A Delaware I.R.S. Employer
Corporation No. 91-0816142
6100 Carillon Point
Kirkland, Washington 98033
Telephone No. (206) 889-3400
Indicated by a 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 ___
On January 4, 1996, the Registrant had outstanding 21,675,202 shares
(excluding treasury shares) of common stock of $0.33-1/3 par value,
which is the Registrant's only class of common stock.
UNIVAR CORPORATION and Subsidiaries
INDEX TO FORM 10-Q
PAGE NO.
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
November 30, 1995 and February 28, 1995 3
Consolidated Statements of Operations
Three and Nine Months Ended November 30, 1995
and 1994 4
Condensed Consolidated Statements of Cash
Flows
Three and Nine Months Ended November 30, 1995
and 1994 5
Notes to Condensed Consolidated Financial
Statements 6
Item 2.Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURES 12
UNIVAR CORPORATION and Subsidiaries
Condensed Consolidated Balance Sheets (See Notes)
(000's) November 30, 1995 February 28, 1995
(Unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 18,009 $ 19,516
Receivables - net 271,497 243,899
Inventories 156,039 133,282
Other current assets 12,970 10,551
--------- ---------
Total current assets 458,515 407,248
Real Properties Held for
Sale and Long Term 30,681 28,780
Receivables
Property, Plant and 202,872 208,355
Equipment - net
Other Assets 26,699 28,820
--------- --------
$718,767 $673,203
========= =========
Liabilities and
Shareholders' Equity
Current Liabilities:
Bank overdrafts $ 18,192 $ 19,584
Notes payable 60,692 36,284
Current portion of long- 657 3,978
term debt
Accounts payable 226,345 222,675
Accrued liabilities 53,819 48,119
--------- ---------
Total current liabilities 359,705 330,640
Long-term Debt 129,910 122,086
Other Long-term Liabilities 41,912 44,314
Shareholders' Equity
Common stock 8,006 8,006
Additional paid-in capital 107,929 107,799
Retained earnings 81,676 74,428
Cumulative translation 159 -4,909
adjustment
Treasury stock -10,507 -9,087
Deferred stock -23 -74
compensation expense
-------- --------
Total shareholders' 187,240 176,163
equity
-------- --------
$718,767 $673,203
======== ========
UNIVAR CORPORATION and Subsidiaries
Consolidated Statements of Operations (Unaudited) (See Notes)
Three Months Ended Nine Months Ended
November 30, November 30,
(000's except per share data) 1995 1994 1995 1994
---- ----- ----- -----
Sales $479,756 $468,778 $1,563,743 $1,468,933
Cost of Sales 412,443 399,814 1,345,200 1,258,782
------- ------- ---------- ----------
Gross Margin 67,313 68,964 218,543 210,151
Gross Margin Percentage 14.0% 14.7% 14.0% 14.3%
Operating Expenses 63,008 62,873 187,803 186,645
Reengineering Costs 160 604 160 37,361
------- ------- ------- -------
Income (Loss) from Operations 4,145 5,487 30,580 -13,855
------- ------- ------- -------
Other Income (Expense):
Interest expense -3,872 -3,293 -11,213 -9,207
Other income-net 409 197 1,917 224
Income (Loss) Before Taxes ------ ------ ------- ------
and Minority Interest 682 2,391 21,284 -22,838
Provision for (Benefit of) 654 1,560 9,193 -6,779
Taxes on Income
------ ------ ------ ------
Income (Loss) before Minority 28 831 12,091 -16,059
Interest
------ ------ ------ -------
Minority Interest in Univar 0 -104 0 604
Europe
------ ------ ------ -------
Net Income (Loss) $28 $ 935 $12,091 $-16,663
====== ====== ======= =======
Net Income (Loss) per Share $0.00 $0.04 $0.56 $ -0.79
====== ====== ======= =======
Dividends Paid per Share $0.08 $ 0.08 $0.23 $ 0.23
====== ====== ====== =======
Weighted Average Number of
Shares Outstanding 21,674 21,791 21,708 21,198
====== ====== ====== ======
UNIVAR CORPORATION and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited) (See Notes)
Three Months Ended Nine Months Ended
November 30, November 30,
(000's except per share data) 1995 1994 1995 1994
---- ---- ---- -----
Cash Flows Provided (Used) by
Operating Activities:
Net Income (Loss) $ 28 $ 935 $12,091 $-16,663
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 7,230 7,003 21,358 20,827
Non-cash portion of 0 0 0 16,389
reengineering costs
Other - net -2,332 -4,348 -3,676 -1,794
Changes in assets and
liabilities:
Accounts receivable 14,905 16,044 -22,101 -13,891
Inventories 1,580 1,071 -19,330 -4,872
Accounts payable -21,293 1,455 -2,843 21,180
Other current assets, net -342 -2,201 -2,632 -3,898
Other current liabilities,net -4,776 -4,446 4,605 2,433
------ ------- -------- -------
Net Cash Provided (Used) by -5,000 15,513 -12,528 19,711
Operating Activities
------ ------ ------- -------
Cash Flows Used by Investing
Activities:
Proceeds from (acquisition 924 -33,339 1,073 -32,713
of) investments
Additions to property, plant -6,734 -6,966 -13,605 -15,250
and equipment
Changes in other assets 182 25 154 69
------ ------- ------ -------
Net Cash Used by Investing -5,628 -40,280 -12,378 -47,894
Activities
------ ------- ------ -------
Cash Flows Provided by Financing
Activities:
Short-term borrowings - net 13,958 4,595 20,728 17,321
Common stock activity 53 194 189 37,515
Long-term debt incurred 66,489 20,244 93,706 20,351
Reduction in long-term debt -64,632 -450 -87,443 -38,432
Payment of dividends -1,624 0 -4,851 -4,580
------ ------ ------- -------
Net Cash Provided by 14,244 24,583 22,329 32,175
Financing Activities
------ ------ ------- ------
Effect of Exchange Rate Changes -243 53 1,070 853
on Cash
------ ------ ------- ------
Net Cash Provided (Used) 3,373 -131 -1,507 4,845
Cash and Equivalents at
Beginning of Period 14,636 20,506 19,516 15,530
------ ------- ------- -------
Cash and Equivalents at End of $18,009 $20,375 $18,009 $20,375
Period ====== ======= ======= =======
UNIVAR CORPORATION and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of presentation
The accompanying unaudited condensed consolidated financial
statements were prepared in accordance with generally accepted
accounting principles for interim financial information pursuant
to the rules and regulations of the Securities and Exchange
Commission and instructions to Form 10-Q. While these statements
reflect all adjustments (which consist of normal recurring
accruals) which are, in the opinion of management, necessary to a
fair presentation of the results for the interim periods
presented, they do not include all of the information and
disclosures required by generally accepted accounting principles
for complete financial statements. These statements should be read
in conjunction with the financial statements and notes thereto
included in the Annual Report of the Registrant for the fiscal
year ended February 28, 1995, and filed as Item 8 to Form 10-K,
Commission File No. 1-5858.
Results of operations for interim periods are not necessarily
indicative of the results that may be expected for the year ending
February 29, 1996.
2. LIFO inventory
The LIFO method of pricing is used for approximately 62% of
the Registrant's inventory. Because an actual valuation of
inventory under the LIFO method can be made only at the end of
each fiscal year based on the inventory levels and costs at that
time, interim financial results are based on estimated LIFO
adjustments and are subject to final fiscal year-end LIFO
inventory amounts.
3. Reengineering costs
Beginning in the third quarter of fiscal 1994, the
Corporation began work on a strategic business transformation of
the U.S. operating company. The project began with an analysis of
all aspects of services provided, customer profitability,
logistics network design, and information systems effectiveness.
As a result of this effort, at the end of the third quarter of
fiscal 1995, the Corporation announced its plans to reorganize the
U.S. company, redesign its distribution network, develop a
national procurement and materials management strategy, increase
sales force efficiency, improve gross margins, and reduce the
amount of capital required to conduct ongoing operations.
During the first nine months of fiscal 1995, the Corporation
recorded pretax reengineering charges of $37.4 million. These
charges included the write-down to fair value of certain
facilities, facility closure costs, the estimated effect of work
force reductions, and consultant fees.
During the third quarter this year, the Corporation revised
its estimates of severance related to planned work force
reductions. The cost of additional severance recognized in
connection with organizational changes made during the current
quarter was offset, in part, by reversal of work force reduction
accruals established in fiscal 1995.
At the end of the third quarter of fiscal 1996, the remaining
accruals for facility closure costs, severance, and an unallocated
facility valuation allowance totals $14.1 million.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Organizational Change
During the third quarter Paul H. Hough was elected President and Chief
Executive Officer of the Corporation, as well as President of Van Waters
& Rogers Inc., the Corporation's U.S. subsidiary. Management has
previously announced that its U.S. reengineering program was expected,
absent unforeseen economic or other circumstances, to result in a pre-
tax improvement in income from operations at an annual run rate of $30
million by the end of the Corporation's 1997 fiscal year. In light of
the changes in officers, the timetable for realizing the benefits from
the reengineering program is being re-evaluated.
Results of Operations
Net earnings for the third fiscal quarter were $28,000. Last year,
income for the third quarter totaled $935,000. The essentially break-
even results for the quarter resulted from a lack of adequate sales
volume and increased transportation costs in the Corporation's U.S.
operations, affecting gross margins in that business unit.
For the first nine months of this fiscal year, the Corporation reported
net income of $12.1 million. Excluding after-tax reengineering costs
totaling $23.2 million, earnings for the similar period last year were
$6.5 million.
Sales for the third quarter were $479.8 million, an increase of 2.3%
over the third quarter last year. Sales in the U.S. decreased by less
than one percent, while sales in foreign markets served by the
Corporation continued to demonstrate growth. Reported in local
currencies, foreign sales were up 9.5% in Europe and up 1.4% in Canada.
When measured in U.S. dollars, European sales increased 14.9% and
Canadian sales increased 2.2%, due to favorable currency exchange rates.
Sales for the first nine months this year increased by 6.5%, compared
with the same period last year. In the U.S., sales were flat. Reported
in constant dollars, European sales grew by 17.0%, while Canadian sales
increased 14.8%. When measured in U.S. dollars, European sales increased
by 25.6%, and Canadian sales increased by 15.3%, both benefiting from
favorable currency exchange rates.
On a worldwide basis, gross margin percentage was 14.0% for the third
quarter, down from 14.7% in the third quarter last year. A drop in
margin percentage in the U.S. more than offset margin percentage
increases in both Europe and Canada. Higher volumes of lower margin
products, such as bulk and commodity chemicals, contributed to the
decrease in gross margin percentage. For the first nine months this
year, gross margin percentage was 14.0%, compared with 14.3% for the
first nine months of the prior year.
Operating expenses for the third quarter this year were $63.0 million,
an increase of less than 1% compared with the third quarter last year.
In the U.S., operating expenses decreased, while in Canada and Europe,
operating expenses increased, in part as a result of the increase in
related sales volumes, and in part to changes in currency exchange
rates. As a percentage of sales, operating expenses dropped to 13.1%,
down from 13.4% in the third quarter last year.
As a percentage of sales, operating expense for the first nine months of
this year dropped to 12.0%, down from 12.7% in the first nine months
last year. Operating expenses, as a percentage of sales, decreased in
each of the Corporation's operations, worldwide.
The Corporation is involved in certain elective and required
environmental programs. The following table shows additions to and
expenditures charged against the Corporation's environmental accruals
for the current and prior year comparable quarters and
first nine months:
Quarter ended Nine months ended
Nov. 30, Nov. 30,
(millions) 1995 1994 1995 1994
---- ---- ----- ----
Beginning $17.3 $16.9 $17.0 $15.5
balance
Expense 1.1 1.7 3.8 4.8
provisions
Expenditures -1.6 -1.1 -4.0 -2.8
---- ---- ---- ----
Ending balance $16.8 $17.5 $16.8 $17.5
===== ===== ===== =====
The disproportionate effective tax rate for the quarter resulted from
losses incurred in the U.S. where a tax benefit was provided at rates
which are lower compared with the tax provision rates in Canada and
Europe. Additional factors which had the effect of increasing the tax
expense provision rate while decreasing the tax benefit rate include
operating losses and goodwill amortization in certain foreign countries
for which no immediate tax benefit is available.
Liquidity and Capital Resources
Working capital at the end of the third quarter was $98.8 million,
compared with $74.5 million at the prior year-end. Over the same
period, the current ratio increased to 1.27:1 compared with 1.23:1. The
changes in working capital and current ratios are due in part to
seasonal fluctuations in working capital components related to
agricultural sales and to increased short term borrowings, which support
higher inventory levels.
During the third quarter and first nine months of the current year, cash
totaling $5.0 million and $12.5 million, respectively, was utilized by
operating activities. During the same periods last year, cash was
provided by operating activities totaling $15.5 million and $19.7
million.
The utilization of cash for the third quarter of this year is consistent
with the seasonal fluctuation of working capital related to agricultural
sales. Cash utilization for the first nine months reflects a
combination of the non-recurring cash impact of last year's
reengineering costs, changes in components of working capital
necessitated by the growth of sales in both Canada and Europe, and
increased inventory in the U.S.
The Corporation has domestic and foreign short-term credit lines
totaling $98.2 million, of which $37.5 million was available at quarter-
end. The Corporation also has access to funds up to $285 million under
two medium-term revolving credit agreements, of which $173 million was
available at quarter end. The Corporation believes its internally
generated cash, together with its access to bank lines, will be adequate
to fund planned capital expenditures and investments, and to support its
working capital requirements.
Capital Expenditures
During the third quarter of this fiscal year, additions to property,
plant, and equipment totaled $6.7 million, compared with $7.0 million
for the prior year third quarter. For the first nine months, additions
to property, plant and equipment totaled $13.6 million compared with
$15.3 million in the same period last year. Additions in the current
year consisted primarily of normal replacement and upgrading of fixed
assets and construction expenditures for refurbishing warehouse and
office facilities. The Corporation utilized available cash and credit
capacity to fund the capital expenditures.
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
A. Exhibit
Number Description
10.29 Separation agreement with James P. Alampi
10.30 Separation agreement with James W. Bernard
B. Reports on Form 8-K
Form 8-K, filed on November 1, 1995, announced the appointment of Paul
H. Hough as president and chief executive officer of the registrant,
replacing James W. Bernard.
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 therunto duly authorized.
UNIVAR CORPORATION
Date: January 10, 1996 By: /s/ PAUL H. HOUGH
Paul H. Hough
President and Chief
Executive Officer
Date: January 10, 1996 By: /s/ GARY E. PRUITT
Gary E. Pruitt
Chief Financial Officer
(Principal Financial and Accounting Officer)
Exhibit 10.29
SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is entered into by and
between James P. Alampi, a Washington resident ("Alampi"), Van Waters &
Rogers Inc., a Washington corporation (the "Company"), and Univar
Corporation, a Delaware corporation ("Univar"), to set forth the
parties' understanding regarding Alampi's resignation from and
termination of employment with the Company.
2
RECITALS
Whereas, Alampi has served the Company in various capacities, most
recently as President; and
Whereas, the Company is a wholly-owned subsidiary of Univar, and
Whereas, Alampi tendered his resignation as an officer and director
of the Company and an officer of Univar effective October 26, 1995,
which was accepted by the Board of Directors of Univar Corporation on
said date, and Alampi was relieved of all duties effective said date;
and
Whereas, Alampi and Univar Corporation are parties to an employment
agreement dated November 16, 1990; and
Whereas, Alampi and Univar are parties to an Agreement dated March
2, 1992 ("Change of Control Agreement"), which sets forth various rights
of Alampi that arise upon a "Change of Control" of Univar as said term
is defined in the Agreement; and
Whereas, the parties mutually agree their joint interests will be
furthered by an amicable parting,
Now, therefore, the parties agree as follows:
COVENANTS
1. The Company shall continue Alampi in its employ, on paid leave
of absence, through and including December 30, 1995 ("paid employment"),
during which time he shall continue to be compensated in accordance with
the Company's standard payroll practices at his current gross rate of
pay of $ 24,071.67 per month. During the period of paid employment,
Alampi shall continue to be provided an auto allowance ($1,437 per
month), health care coverage, and life and disability insurance, shall
remain eligible to participate in the UNI$AVER 401(K) plan and the
Univar Stock Purchase Plan, shall continue to accrue vacation, and shall
continue to accrue service credit under the Univar Pension Plan, all on
the identical terms as were in effect on October 25, 1995. Univar
sponsored personal automobile insurance shall remain in effect through
Alampi's paid employment. Sums paid Alampi pursuant to this paragraph
are subject to all applicable lawfully required withholdings, and Alampi
shall have full responsibility for his personal tax obligations.
Eligible earnings received by Alampi through December 30, 1995 shall be
included in calculating his pension benefit, and amounts received by
Alampi after December 30, 1995 do not qualify as eligible earnings.
2. a. Alampi shall be removed from the payroll and his
employment shall terminate effective December 30, 1995 ("Date of
Termination"). On the following regular pay day he shall be paid for
his accrued vacation the sum of $23,457, less lawfully required
withholdings. As severance, Alampi shall receive the gross amount of
$252,124, less lawfully required withholdings (representing his final
annual salary pro rated for the period December 31, 1995 through October
25, 1996, plus a monthly auto allowance of $1,437 for the months January
through October, 1996). Such amount shall be paid in equal monthly
installments of $25,212.40 on the fifth business day of each month for
the period January through and including October, 1996. Said
installments shall be paid by the Company, with payment guarantied by
Univar.
b. Alampi shall be eligible to participate in the Management
Annual Incentive Plan ("MIP") for Fiscal Year 1996, with an annual
target bonus of $151,738. If a MIP bonus is earned based on Company
performance as provided in the Plan, Alampi will receive the amount of
MIP actually earned, with an employee performance multiplier of one,
with any payout subject to lawfully required withholdings; provided, the
Company is not guaranteeing or representing that a MIP bonus will be
payable under the terms of the Plan.
3. During the period December 31, 1995 through October 25, 1996
("severance period"), or until such sooner time as Alampi becomes
eligible for coverage under any other employer's health care plan, the
Company will pay Alampi's COBRA cost for continuation of medical and
dental benefits, if he elects coverage, for him and such of his family
members as were covered by the Company's health care plan on October 25,
1995. Alampi agrees to provide notice to the Company at such time as he
becomes covered by any other employer's health care plan.
4. a. Effective December 30, 1995, Alampi shall be deemed fully
vested in the 3348 shares of Univar Corporation common stock granted by
the June 21, 1991 Restricted Stock Award. Alampi shall have the option
of satisfying his withholding tax obligations on said stock grant by
having the amount of required withholding tax deducted from the
severance allowance referenced in paragraph 2 above, or by surrender of
shares in an amount necessary to satisfy the withholding obligation.
b. Effective December 30, 1995, Alampi shall be deemed fully
vested in the 3348 Non- Qualified Options to purchase shares of Univar
Corporation common stock, which options were granted on June 21, 1991,
at an option price of $13.875. Said stock options must be exercised
within ninety (90) days after the Date of Termination, or they will
lapse and be forfeited.
c. Under the Non-Qualified Options granted under the 1992
Long Term Incentive Plan ("LTIP"), Alampi's separation shall be deemed
an involuntary termination without cause, and the options shall vest on
the terms set forth in the Plan, which are summarized as follows (in the
event of any inconsistency between this summary and the Plan, the Plan
shall govern):
(i) Fixed Vesting Without Deferred Cash Incentive ("DCI"):
Starting on the first anniversary of the Date of Termination, and
continuing on each of the four succeeding anniversaries of the Date of
Termination, twenty percent (20%) of each of Alampi's grants, as set
forth in subparagraph 4 (c.)(iii), shall be vested and eligible for
exercise. Upon that vesting, the LTIP options may be exercised by
Alampi, but the Company will not provide any DCI (as defined in the
LTIP).
(ii) Accelerated Vesting With DCI: At the end of each three
year Performance Cycle, as defined in the LTIP, commencing with the
Performance Cycle for the period ending February 29, 1996 and ending at
the end of the Performance Cycle that immediately precedes the
termination date of each individual LTIP grant, the Company will
determine how many of the options would then be eligible for accelerated
vesting in accordance with the LTIP. If any of the above referenced
LTIP options are eligible for accelerated vesting, then they will vest
and have the DCI attached to them, even if they may have previously
become vested in accordance with paragraph 4(c.)(i) above. Upon such
accelerated vesting, Alampi will then be obliged to exercise the LTIP
options in accordance with the LTIP.
(iii) Alampi's outstanding stock options under the LTIP
are as follows:
GRANT DATE TERMINATION DATE NO. OF SHARES PER SHARE PRICE
3/02/92 6/02/02 7900 $12.75
3/01/93 6/01/03 11,899 $10.625
3/01/94 6/01/04 14,225 $11.25
3/01/95 6/01/05 13,187 $12.50
5. Alampi will be provided executive outplacement services at
Company expense from an outplacement firm of his choice located in the
greater Seattle area, provided that the cost to the Company shall not
exceed $25,000, and payment by the Company shall be made directly to the
service provider after receipt of its invoice.
6. Except as expressly provided herein, Alampi's entitlements to
accrued benefits under the UNI$AVER plan, the Univar Pension Plan, the
Univar Supplemental Benefits Plan, and the Univar Stock Purchase Plan
shall be governed by the terms of the corresponding plan documents as
applicable to terminations of employment. Specifically, Alampi will
receive a total pension benefit equivalent to that which he would
receive computed under the formula established by the Univar Pension
Plan and Univar Supplemental Benefits Plan based on his original service
date of December 1, 1978, with credited service through December 30,
1995 (`adjusted pension benefit"). From the adjusted pension benefit
will be deducted the sum of $1,927.89, representing the monthly benefit
payable to him under the VWR Corporation Pension Plan, which is payable
to Alampi from said Plan and not from the Univar Pension Plan, the
Univar Supplemental Benefits Plan, from Univar, nor from Van Waters &
Rogers Inc. As to the balance of the total benefit payable to Alampi
(adjusted pension benefit less $1927.89), to the extent the amount
payable to Alampi under the Univar Pension Plan and Univar Supplemental
Benefits Plan, based on his actual credited service date of July 30,
1990, is less than the adjusted pension benefit, such difference will be
paid from corporate assets of Van Waters & Rogers Inc. Univar represents
that the Triggered Rabbi Trust applicable to the Univar Supplemental
Benefits Plan in the event of a change of control, as that term is
defined in said document, is applicable to vested benefits of former
employees of Univar entitled to benefits under The Univar Supplemental
Benefits Plan.
7. Neither the Company, Univar, its subsidiary and affiliated
companies, nor their respective directors, officers, employees,
attorneys, or agents are advising Alampi with respect to the income tax
consequences of compensation and benefits conveyed pursuant to this
Separation Agreement, and Alampi agrees that he is responsible for all
applicable taxes based on his receipt of such compensation and benefits.
8. Alampi further agrees that he shall not at any time make or
cause to be made negative, disparaging or defamatory statements, written
or oral, about the Company, Univar, or their respective officers,
directors, or employees. The Company and Univar agree that they shall
not at any time make or cause to be made negative, disparaging or
defamatory statements, written or oral, about Alampi, and will inform
their respective officers and directors of this commitment.
9. By entering into this Agreement, the Company, Univar, its
subsidiary and affiliated companies, and their respective directors,
officers, employees, attorneys, and agents neither acknowledge nor admit
any wrongdoing or liability to Alampi for any claims, and to the
contrary expressly deny any wrongdoing or liability by the Company,
Univar, its subsidiary and affiliated companies, and their respective
directors, officers, employees, attorneys and agents.
10. As consideration for the obligations undertaken by the Company
and Univar pursuant to this Agreement, Alampi, on behalf of himself and
his heirs, administrators, representatives, executors and assigns,
hereby releases the Company, Univar, their subsidiary and affiliated
companies, their successors, predecessors, and all their respective
officers, directors, stockholders, employees, attorneys, agents and
persons acting by, through, under or in concert with any of them, from
any and all claims, causes of action, suits, demands, debts, expenses,
liabilities, obligations, agreements, controversies, damages, costs,
and/or attorney's fees, known or unknown, arising from or relating to
his employment and the termination of the employment relationship. This
release includes, without limitation, any and all rights and age
discrimination claims Alampi may have under the federal Age
Discrimination in Employment Act of 1967 (29 USC 621, et seq.), Title
VII of the Civil Rights Act (42 USC 2000e, et seq.), and any and all
state or local anti-discrimination laws. This waiver and release shall
not apply to claims arising after Alampi's execution of this Agreement.
Alampi represents that there are, as of the date this Agreement is
executed by him, no claims, charges, complaints, or legal proceedings
pending against the Company or Univar Corporation that have been brought
by him or on his behalf.
11. Alampi specifically agrees as follows:
A. Alampi is knowingly and voluntarily entering
into this Agreement;
B. Alampi acknowledges that the Company and Univar
are providing him benefits and compensation, to which the
Company and Univar maintain he would not otherwise be
entitled, as part of the consideration for Alampi's entering
into this Agreement;
C. Alampi is hereby advised by this Agreement to
consult with an attorney prior to executing this Agreement;
D. Alampi understands that he has a period of
twenty-one (21) days from the date he is provided a copy of
this Agreement in which to consider and sign the Agreement
(during which the offer will remain open), and that he has an
additional seven (7) days after signing this Agreement within
which to revoke his acceptance of the Agreement; and
E. If during the twenty-one (21) day waiting period
Alampi should elect not to sign this Agreement, or during the
seven (7) day revocation period Alampi should revoke
acceptance of the Agreement, then this Agreement shall be
void.
12. Alampi agrees that all trade secrets of the Company, Univar,
and their subsidiary and affiliated companies that he has acquired in
his capacity as an officer, director, employee or consultant of the
Company and/or officer or consultant of Univar will be held by him in
confidence and shall not be disclosed to any other person or entity
except to the extent compelled by legal process. Alampi further agrees
the fact of and terms of this Agreement shall be confidential and not
disclosed to any other person or entity other than his legal counsel,
tax advisors, and his spouse and her attorney, except to the extent
compelled by legal process.
13. Alampi shall execute simultaneously with the execution of this
Agreement a Noncompetition Agreement identical to that attached as
Exhibit A, and incorporated herein by reference. Alampi agrees not to
seek or accept re-employment with the Company, nor with any parent,
subsidiary or affiliated company with common ownership, unless requested
by a resolution from the Board of Directors of Univar.
14. Alampi agrees that in the event his assistance is required or
requested in connection with any litigation or legal proceeding
involving the Company or Univar Corporation, he shall make himself
available at reasonable times and upon reasonable notice and cooperate
fully in providing any lawful assistance that may be needed. If such
need arises after October 25, 1996, Alampi shall be compensated for his
time in such event at a daily rate of compensation equal to his final
daily pay rate of $1,110.00, and the Company shall reimburse Alampi for
his reasonable out of pocket business expenses.
15. Alampi shall return to the Company any and all of its, and/or
Univar's property, in his possession or control, including without
limitation all Univar and Company reports, memoranda, spreadsheets,
projections, budgets, customer lists, contracts, quotes, correspondence,
and all other documentation, including electronically stored data,
together with all personal property of the Company and Univar including
but not limited to keys, computers, computer equipment, telephones, and
electronic or office equipment. All such property shall be returned no
later than five business days after execution of this Agreement by
Alampi. The Company acknowledges Alampi has returned previously the
laptop computer, keys, key card, and credit card assigned to him.
Additionally, within fifteen days after the execution of this Agreement
Alampi shall take all steps necessary to sell the membership at
Inglewood Country Club, the initiation fee for which was paid by the
Company. The membership shall be offered at a price agreed to in
advance by the Company; Alampi shall pay to the Company the net proceeds
of the sale within three business days after his receipt of the same.
The Company shall pay only the monthly membership fee until the sale is
consummated.
16. In consideration of the obligations undertaken by Univar and
the Company pursuant to this Agreement, effective October 26, 1995,
Alampi hereby releases Univar from obligations under and waives all
rights arising from the Change of Control Agreement.
17. The parties agree that in the event of a breach by Alampi of
the obligations he has undertaken hereunder and under the incorporated
Noncompetition Agreement, damages would be difficult or impossible to
calculate, and the parties therefore agree that in the event of a proven
breach by Alampi the Company shall be awarded liquidated damages in the
amount of $252,124.
18. This Separation Agreement and the incorporated Noncompetition
Agreement set forth the full understanding and agreement of the parties
and supersede any and all other understandings or agreements, written or
oral, including without limitation the Agreement between Univar
Corporation and Alampi dated November 16, 1990. This Agreement cannot
be amended or modified except in writing signed by the parties hereto
and no oral modification of this provision shall be given effect.
19. This Agreement shall be governed by Washington law. Any
dispute arising from or relating to this Agreement shall be resolved
exclusively through arbitration conducted in King County, Washington
under the auspices and rules of the American Arbitration Association, or
such other private dispute resolution mechanism as the parties may
mutually agree upon in writing. In any such proceeding, the prevailing
party shall be awarded its reasonable attorney's fees and costs, in
addition to any damages that may be awarded. This provision shall not
preclude the Company, Univar, nor their successors from commencing
legal proceedings in a court of competent jurisdiction to seek
injunctive and all other available relief in the event of a claimed
breach of the Noncompetition Agreement incorporated herein.
Van Waters & Rogers Inc. James P. Alampi
/s/ Drew MacAfee 1/9/96 /s/ James P. Alampi 12/28/95
By: Drew MacAfee Date By: James P. Alampi Date
Vice President,
Human Resources
Univar Corporation
/s/ James Wiborg 12/29/95
By: James Wiborg Date
Chairman, Board of Directors
of Univar Corporation
Exhibit 10.30
SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is entered into by and
between James W. Bernard, a Washington resident ("Bernard"), and Univar
Corporation, a Delaware Corporation ("Univar" or the "Company"), to set
forth the parties' understanding regarding Bernard's resignation from
and termination of employment with the Company.
RECITALS
Whereas, Bernard has served the Company in various capacities, most
recently as President and Chief Executive Officer; and
Whereas, Bernard tendered his resignation as an officer of Univar
effective October 26, 1995, which was accepted by the Board of Directors
of Univar on said date, and Bernard was relieved of all duties effective
said date; and
Whereas, Bernard and Univar are parties to an Agreement dated March
2, 1992 ("Change of Control Agreement"), which sets forth various rights
of Bernard that arise upon a "Change of Control" of Univar as said term
is defined in the Agreement; and
Whereas, the parties mutually agree their joint interests will be
furthered by an amicable parting,
Now, therefore, the parties agree as follows:
COVENANTS
1. As severance, Bernard shall receive the gross amount of
$500,844, less lawfully required withholdings (representing his annual
salary and annualized auto allowance). Such amount shall be paid in
twelve equal monthly installments of $41,737, on the fifth business day
of each month, for the period November, 1995 through and including
October, 1996. Any installment that would be due prior to expiration of
the revocation period referenced herein shall be paid within five
business days after expiration of said period. Eligible earnings
received by Bernard through October 26, 1995 ("Date of Termination")
shall be included in calculating his pension benefit, and amounts
received by Bernard after his Date of Termination do not qualify as
eligible earnings. Bernard shall also be paid the sum of $96,490, less
lawfully required withholdings, for accrued vacation; said amount shall
be paid at the time of payment of the first monthly installment
referenced above. Univar sponsored personal automobile insurance shall
remain in effect through November 30, 1995.
2. Bernard shall be eligible to participate in the Management
Annual Incentive Plan ("MIP") for Fiscal Year 1996, with an annual
target bonus of $230,788. If a MIP is earned based on Company
performance as provided in the Plan, Bernard will receive the amount of
MIP actually earned, with an employee performance multiplier of one,
with any payout subject to lawfully required withholdings; provided, the
Company is not guaranteeing or representing that an MIP bonus will be
payable under the terms of the Plan.
3. During the period October 26, 1995 through October 25, 1996
(the "severance period"), or until such sooner time as Bernard becomes
eligible for coverage under any other employer's health care plan or
elects early retirement and becomes eligible for the Company's Retiree
Medical Plan, the Company will pay Bernard's COBRA cost for continuation
of medical and dental benefits, if he elects coverage, for him and such
of his family members as were covered by the Company's health care plan
on October 25, 1995. Bernard agrees to provide the Company notice if he
becomes covered by another employer's health care plan.
4. a. Effective five business days following expiration of the
rescission period provided for herein, Bernard shall be deemed fully
vested in the 802 Non- Qualified Options to purchase shares of Univar
Corporation common stock, which options were granted on April 9, 1990,
at an option price of $11.20. Said stock options and all other vested
options granted under the 1986 LTI Stock Plan must be exercised within
ninety (90) days after the Date of Termination, or they will lapse and
be forfeited.
b. Under the Non-Qualified Options granted under the 1992
Long Term Incentive Plan ("LTIP") Bernard's separation shall be deemed
an involuntary termination without cause, and the options shall vest on
the terms set forth in the Plan, which are summarized as follows (in the
event of any inconsistency between this summary and the Plan, the Plan
shall govern):
(i) Fixed Vesting Without Deferred Cash Incentive ("DCI"):
Starting on the first anniversary of the Date of Termination, and
continuing on each of the four succeeding anniversaries of the Date of
Termination, twenty percent (20%) of each of Bernard's grants, as set
forth in subparagraph 4 (b.)(iii), shall be vested and eligible for
exercise. Upon that vesting, the LTIP options may be exercised by
Bernard, but the Company will not provide any DCI (as defined in the
LTIP).
(ii) Accelerated Vesting With DCI: At the end of each three
year Performance Cycle, as defined in the LTIP, commencing with the
Performance Cycle for the period ending February 29, 1996 and ending at
the end of the Performance Cycle that immediately precedes the
termination date of each individual LTIP grant, the Company will
determine how many of the options would then be eligible for accelerated
vesting in accordance with the LTIP. If any of the above-referenced
LTIP options are eligible for accelerated vesting, then they will vest
and have the DCI attached to them, even if they may have previously
become vested in accordance with paragraph 4(b.)(i) above. Upon such
accelerated vesting, Bernard will then be obliged to exercise the LTIP
options in accordance with the LTIP.
(iii) Bernard's outstanding stock options under the LTIP
are as follows:
GRANT DATE TERMINATION DATE NO. OF SHARES PER SHARE PRICE
3/02/92 6/02/02 15,790 $12.75
3/01/93 6/01/03 19,302 $10.625
3/01/94 6/01/04 21,636 $11.25
3/01/95 6/01/05 20,057 $12.50
5. Should Bernard elect to take early retirement and begin
receiving pension benefits under the Univar Pension Plan and the Univar
Supplemental Benefits Plan prior to the time he reaches age 62, the
Company shall pay Bernard monthly an amount equal to the difference
between his monthly pension benefits under the referenced Plans and the
amount of monthly benefits he would receive under said Plans if he
retired at age 62, with his present number of years of credited service
("age 62 equivalent differential"). The age 62 equivalent differential
shall be paid from general assets of the Company and not from either of
the referenced Plans, shall be paid at the same time as monthly benefits
are paid pursuant to the referenced Plans, and shall be paid for so long
as monthly benefits are paid pursuant to said Plans. If Bernard should
elect to begin receiving pension benefits after age 62, his actual age
at the time he elects to begin receiving pension benefits shall be used
for pension calculation purposes and no age 62 equivalent differential
will be paid.
6. Except as expressly provided herein, Bernard's entitlements to
accrued benefits under the UNI$AVER plan, the Univar Pension Plan, The
Univar Supplemental Benefits Plan, and the Univar Stock Purchase Plan
shall be governed by the terms of the corresponding plan documents as
applicable to terminations of employment. Univar represents that the
Triggered Rabbi Trust applicable to the Univar Supplemental Benefits
Plan in the event of a change of control, as that term is defined in
said document, is applicable to vested benefits of former employees of
Univar entitled to benefits under The Univar Supplemental Benefits Plan.
7. Bernard shall continue to act in his capacity as a member of
the Board of Directors of Univar for the balance of his current elected
term, and for any subsequent term(s) for which he shall be so elected,
and shall be compensated for such service on the same basis as other non-
employee members of the Board.
8. Neither the Company, its subsidiaries or affiliates, nor their
respective officers, employees, agents or directors are advising Bernard
with respect to the income tax consequences of compensation and benefits
conveyed pursuant to this Separation Agreement, and Bernard agrees that
he is responsible for all applicable taxes based on his receipt of such
compensation and benefits.
9. By entering into this Agreement, the Company, its subsidiaries
and affiliates and their respective directors, officers, employees,
attorneys, and agents neither acknowledge nor admit any wrongdoing or
liability to Bernard for any claims, and to the contrary expressly deny
any wrongdoing or liability by the Company, its subsidiaries and
affiliated corporations, and their respective directors, officers,
employees, attorneys and agents.
10. As consideration for the obligations undertaken by the Company
pursuant to this Agreement, Bernard, on behalf of himself and his heirs,
administrators, representatives, executors and assigns, hereby releases
Univar, all subsidiary and affiliated companies, their successors,
predecessors, and all their respective officers, directors,
stockholders, employees, attorneys, agents and persons acting by,
through, under or in concert with any of them, from any and all claims,
causes of action, charges, suits, demands, debts, expenses, liabilities,
obligations, agreements, controversies, damages, costs, and/or
attorney's fees, known or unknown, arising from or relating to his
employment and the termination of the employment relationship. This
release includes, without limitation, any and all rights and age
discrimination claims Bernard may have under the federal Age
Discrimination in Employment Act of 1967 (29 USC 621, et
seq.), Title VII of the Civil Rights Act (42 USC 2000e, et seq.), and
any and all state or local anti-discrimination laws. This waiver and
release shall not apply to claims arising after Bernard's execution of
this Agreement. Bernard represents that there are, as of the date this
Agreement is executed by him, no claims, charges, complaints, or legal
proceedings pending against Univar or any of its subsidiary or
affiliated companies that have been brought by him or on his behalf.
11. Bernard specifically agrees as follows:
A. Bernard is knowingly and voluntarily entering
into this Agreement;
B. Bernard acknowledges that the Company is
providing him benefits and compensation, to which the Company
maintains he would not otherwise be entitled, as part of the
consideration for Bernard's entering into this Agreement;
C. Bernard is hereby advised by this Agreement to
consult with an attorney prior to executing this Agreement;
D. Bernard understands that he has a period of
twenty-one (21) days from the date he is provided a copy of
this Agreement in which to consider and sign the Agreement
(during which the offer will remain open), and that he has an
additional seven (7) days after signing this Agreement within
which to revoke his acceptance of the Agreement; and
E. If during the twenty-one (21) day waiting period
Bernard should elect not to sign this Agreement, or during the
seven (7) day revocation period Bernard should revoke
acceptance of the Agreement, then this Agreement shall be
void.
12. Bernard agrees that all trade secrets of the Company, and its
subsidiary and affiliated companies, he has acquired in his capacity as
an employee of the Company will be held by him in confidence and shall
not be disclosed to any other person or entity except to the extent
compelled by legal process. Bernard further agrees the fact of and terms
of this Agreement shall be confidential and not disclosed to any other
person or entity other than his legal counsel and tax advisors, except
to the extent compelled by legal process.
13. Bernard shall execute simultaneously with the execution of
this Agreement a Noncompetition Agreement identical to that attached as
Exhibit A, and incorporated herein by reference. Bernard agrees not to
seek or accept re-employment with the Company, nor with any successor,
parent, subsidiary or affiliated company with common ownership, unless
requested by a resolution from the Board of Directors of Univar or its
successor. Bernard further agrees that he shall not at any time make or
cause to be made negative, disparaging or defamatory statements, written
or oral, about Univar Corporation, its subsidiary or affiliated
companies, or their respective officers, directors, or employees. The
Company and Univar agree that they shall not at any time make or cause
to be made negative, disparaging or defamatory statements, written or
oral, about Bernard, and will inform their respective officers and
directors of this commitment.
14. Bernard agrees that in the event his assistance is required or
requested in connection with any litigation or legal proceeding
involving Univar or any of its subsidiary or affiliated companies (other
than in his capacity as member of the Board of Directors), he shall make
himself available at reasonable times and upon reasonable notice and
cooperate fully in providing any lawful assistance that may be needed.
If such need arises after October 25, 1996, and other than in Bernard's
capacity as a Director, Bernard shall be compensated for his time in
such event at a daily rate of compensation equal to his final daily pay
rate of $1860, and the Company shall reimburse Bernard for his
reasonable out of pocket business expenses.
15. With the exception of materials required by Bernard to fulfill
his ongoing obligations as a member of Univar's Board of Directors,
Bernard shall return to the Company any and all of its property in his
possession, including without limitation all Company (including
subsidiaries') reports, memoranda, spreadsheets, projections, budgets,
customer lists, contracts, quotes, correspondence, and all other
documentation, including electronically stored data, together with all
personal property of the Company including but not limited to keys,
computers, computer equipment, telephones, and electronic or office
equipment. All such property shall be returned no later than five
business days after execution of this Agreement by Bernard. Bernard
shall be entitled to retain the mobile telephone in his automobile.
16. In consideration of the obligations undertaken by Univar
pursuant to this Agreement, effective October 26, 1995, Bernard hereby
releases Univar from obligations under and waives all rights arising
from the Change of Control Agreement.
17. The parties agree that in the event of a breach by Bernard of
the obligations he has undertaken hereunder and under the Noncompetition
Agreement incorporated herein, damages would be difficult or impossible
to calculate, and the parties therefore agree that in the event of a
proven breach by Bernard the Company shall be awarded liquidated damages
in the amount of $500,844.
18. This Separation Agreement and the incorporated Noncompetition
Agreement set forth the full understanding and agreement of the parties
and supersede any and all other understandings or agreements, written or
oral. This Agreement cannot be amended or modified except in writing
signed by the parties hereto and no oral modification of this provision
shall be given effect.
19. This Agreement shall be governed by Washington law. Any
dispute arising from or relating to this Agreement shall be resolved
exclusively through arbitration conducted in King County, Washington
under the auspices and rules of the American Arbitration Association, or
such other private dispute resolution mechanism as the parties may
mutually agree upon in writing. In any such proceeding, the prevailing
party shall be awarded its reasonable attorney's fees and costs, in
addition to any damages that may be awarded. This provision shall not
preclude the Company from commencing legal proceedings in a court of
competent jurisdiction to seek injunctive and all other available relief
in the event of a claimed breach of the Noncompetition Agreement
incorporated herein.
Univar Corporation James W. Bernard
/s/ James Wiborg 12/29/95 /s/ James W.Bernard 12/22/95
By: James Wiborg Date By: James W. Bernard Date
Chairman, Board of Directors
of Univar Corporation
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FINANCIAL
STATEMENTS FOR THE PERIOD ENDED NOVEMBER 30, 1995 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-END> NOV-30-1995
<CASH> 18,009,000
<SECURITIES> 0
<RECEIVABLES> 273,696,000
<ALLOWANCES> 2,199,000
<INVENTORY> 156,039,000
<CURRENT-ASSETS> 458,515,000
<PP&E> 377,365,000
<DEPRECIATION> 174,493,000
<TOTAL-ASSETS> 718,767,000
<CURRENT-LIABILITIES> 359,705,000
<BONDS> 0
<COMMON> 8,006,000
0
0
<OTHER-SE> 179,234,000
<TOTAL-LIABILITY-AND-EQUITY> 718,767,000
<SALES> 1,563,743,000
<TOTAL-REVENUES> 1,563,743,000
<CGS> 1,345,200,000
<TOTAL-COSTS> 187,963,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 11,213,000
<INCOME-PRETAX> 21,284,000
<INCOME-TAX> 9,193,000
<INCOME-CONTINUING> 12,091,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,091,000
<EPS-PRIMARY> 0.56
<EPS-DILUTED> 0.56
</TABLE>
