<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 2000
COMMISSION FILE NO. 333-46607-12
WERNER HOLDING CO. (PA), INC.
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
PENNSYLVANIA 25-0906875
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION
OF INCORPORATION OR NO.)
ORGANIZATION)
93 WERNER RD. 16125
GREENVILLE, PENNSYLVANIA (ZIP CODE)
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES)
</TABLE>
(724) 588-2550
(CO-REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
COMMISSION FILE NO. 333-46607
WERNER HOLDING CO. (DE), INC.
(EXACT NAME OF CO-REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 25-1581345
(STATE OR OTHER JURISDICTION (IRS EMPLOYER IDENTIFICATION
OF INCORPORATION OR NO.)
ORGANIZATION)
1105 NORTH MARKET ST., 19899
SUITE 1300 (ZIP CODE)
WILMINGTON, DELAWARE
(ADDRESS OF PRINCIPAL
EXECUTIVE OFFICES)
</TABLE>
(302) 478-5723
(CO-REGISTRANT'S TELEPHONE NUMBER INCLUDING AREA CODE)
Indicate by check mark whether each of the Co-registrants (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the Co-registrants'
classes of common stock, as of March 31, 2000:
Werner Holding Co. (PA), Inc. 1,879.5454 shares of Class A Common
Stock
21,774.9346 shares of Class B Common Stock
5,553.7790 shares of Class C Common Stock
1,000 shares of Class D Common Stock
45,000 shares of Class E Common Stock
Werner Holding Co. (DE), Inc. 1,000 shares of Common Stock
<PAGE> 2
INDEX
WERNER HOLDING CO. (PA), INC.
WERNER HOLDING CO. (DE), INC.
FORM 10-Q
PERIOD ENDED MARCH 31, 2000
<TABLE>
<S> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements of Werner Holding Co. (PA), Inc. and
Subsidiaries (Unaudited)
Condensed Consolidated Balance Sheets -- March 31, 2000 and
December 31, 1999......................................... 1
Condensed Consolidated Statements of Operations -- Three
Months Ended March 31, 2000 and 1999...................... 2
Condensed Consolidated Statements of Changes in
Shareholders' Equity (Deficit) -- Three Months Ended March
31, 2000 and 1999......................................... 3
Condensed Consolidated Statements of Cash Flows -- Three
Months Ended March 31, 2000 and 1999...................... 5
Notes to Condensed Consolidated Financial Statements........ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations of Werner Holding Co. (PA), Inc.
and Subsidiaries.......................................... 13
Item 3. Quantitative and Qualitative Disclosures about Market
Risk...................................................... 15
PART II OTHER INFORMATION
Item 1. Legal Proceedings........................................... 15
Item 6. Exhibits and Reports on Form 8-K............................ 16
SIGNATURES............................................................... 17
</TABLE>
The financial statements included herein are that of Werner Holding Co.
(PA), Inc. ("Holding (PA)"). The Co-registrants are Holding (PA) and Werner
Holding Co. (DE), Inc. (the "Issuer"), which is a wholly-owned subsidiary of
Holding (PA). Holding (PA) has no substantial operations or assets other than
its investment in the Issuer. The consolidated financial condition and results
of operations of Holding (PA) are substantially the same as those of the Issuer.
As used herein and except as the context otherwise may require, the "Company" or
"Werner" means, collectively, Holding (PA), the Issuer and all of their
consolidated subsidiaries.
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1.
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................. $ 1 ,065 $ 866
Undivided interest in accounts receivable................. 64,798 68,393
Allowance for doubtful accounts........................... (2,200) (1,900)
Refundable income taxes................................... -- 697
Inventories............................................... 72,991 58,348
Deferred income taxes..................................... 2,190 2,420
Other..................................................... 2,818 1,907
--------- ---------
Total current assets................................. 141,662 130,731
Property, plant and equipment, net.......................... 89,415 83,507
Other assets:
Deferred income taxes..................................... 12,458 10,972
Deferred financing fees, net.............................. 10,902 11,474
Other..................................................... 18,726 18,756
--------- ---------
42,086 41,202
--------- ---------
TOTAL ASSETS......................................... $ 273,163 $ 255,440
========= =========
LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable.......................................... $ 41,212 $ 31,065
Accrued liabilities....................................... 34,774 36,679
Income taxes payable...................................... 3,670 --
Current maturities of long-term debt...................... 1,450 1,450
--------- ---------
Total current liabilities............................ 81,106 69,194
Long-term obligations:
Long-term debt............................................ 277,163 277,434
Reserve for product liability and workers' compensation
claims................................................. 32,407 29,247
Other long-term obligations............................... 24,781 23,441
--------- ---------
Total liabilities.................................... 415,457 399,316
Shareholders' deficit:
Common stock.............................................. 1 1
Additional paid-in-capital................................ 200,958 198,786
Accumulated deficit....................................... (340,684) (341,718)
Accumulated other non-owner changes in equity............. (260) (260)
Notes receivable arising from stock loan plan............. (2,309) (685)
--------- ---------
Total shareholders' deficit.......................... (142,294) (143,876)
--------- ---------
TOTAL LIABILITIES AND SHAREHOLDERS' DEFICIT.......... $ 273,163 $ 255,440
========= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
1
<PAGE> 4
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
-------- --------
<S> <C> <C>
Net sales................................................... $129,022 $105,459
Cost of sales............................................... 96,841 75,148
-------- --------
Gross profit................................................ 32,181 30,311
General and administrative expenses......................... 7,692 7,772
Selling and distribution expenses........................... 15,076 13,779
-------- --------
Operating profit............................................ 9,413 8,760
Other income (expense), net................................. 290 (51)
-------- --------
Income before interest and taxes............................ 9,703 8,709
Interest expense............................................ 6,945 6,732
-------- --------
Income before income taxes.................................. 2,758 1,977
Income tax.................................................. 1,113 826
-------- --------
NET INCOME.................................................. $ 1,645 $ 1,151
======== ========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
2
<PAGE> 5
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL NON-OWNER TOTAL
COMMON PAID-IN ACCUMULATED EQUITY SHAREHOLDERS'
STOCK CAPITAL DEFICIT CHANGES OTHER EQUITY (DEFICIT)
------ ---------- ----------- ----------- ------- ----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 2000........... $1 $198,786 $(341,718) $(260) $ (685) $(143,876)
Non-owner equity changes:
Net income......................... 1,645 1,645
---------
Total non-owner equity changes... 1,645
Notes receivable arising from stock
loan plan, net..................... (1,624) (1,624)
Repurchase of common stock........... (611) (611)
Issuance of common stock............. 2,172 2,172
-- -------- --------- ----- ------- ---------
Balance at March 31, 2000............ $1 $200,958 $(340,684) $(260) $(2,309) $(142,294)
== ======== ========= ===== ======= =========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
3
<PAGE> 6
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS' EQUITY (DEFICIT) (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
ACCUMULATED
OTHER
ADDITIONAL NON-OWNER TOTAL
COMMON PAID-IN ACCUMULATED EQUITY SHAREHOLDERS'
STOCK CAPITAL DEFICIT CHANGES OTHER EQUITY (DEFICIT)
------ ---------- ----------- ----------- ----- ----------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1999............. $ 1 $198,847 $(351,607) $(1,638) $ -- $(154,397)
Non-owner equity changes:
Net income........................... 1,151 1,151
Other non-owner equity changes:
Unrealized gains on investments
(net of deferred taxes of $19)... 35 35
Less: reclassification adjustment
for gains realized included in
net income (net of tax).......... (18) (18)
---------
Total non-owner equity changes... 1,168
Notes receivable arising from stock
loan plan............................ (580) (580)
------ -------- --------- ------- ----- ---------
Balance at March 31, 1999.............. $ 1 $198,847 $(350,456) $(1,621) $(580) $(153,809)
====== ======== ========= ======= ===== =========
Non-owner equity changes:
Net income........................... 4,508 4,508
Other non-owner equity changes:
Unrealized gains on investments
(net of deferred taxes of $27)... 49 49
Less: reclassification adjustment
for gains realized included in
net income (net of tax).......... (26) (26)
---------
Total non-owner equity changes... 4,531
Notes receivable arising from stock
loan plan............................ (80) (80)
Repurchase of common stock............. (1,429) (1,429)
------ -------- --------- ------- ----- ---------
Balance at June 30, 1999............... $ 1 $198,847 $(347,377) $(1,598) $(660) $(150,787)
====== ======== ========= ======= ===== =========
Non-owner equity changes:
Net income........................... 3,874 3,874
---------
Total non-owner equity changes... 3,874
Notes receivable arising from stock
loan plan............................ 30 30
Repurchase of common stock............. (61) (61)
------ -------- --------- ------- ----- ---------
Balance at September 30, 1999.......... $ 1 $198,786 $(343,503) $(1,598) $(630) $(146,944)
====== ======== ========= ======= ===== =========
Non-owner equity changes:
Net income........................... 1,785 1,785
Other non-owner equity changes:
Adjustment to minimum pension
liability........................ 1,338 1,338
---------
Total non-owner equity changes... 3,123
Notes receivable arising from stock
loan plan............................ (55) (55)
------ -------- --------- ------- ----- ---------
Balance at December 31, 1999........... $ 1 $198,786 $(341,718) $ (260) $(685) $(143,876)
====== ======== ========= ======= ===== =========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
4
<PAGE> 7
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS -- (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------
2000 1999
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 1,645 $ 1,151
Reconciliation of net income to net cash provided by (used
in) operating activities:
Depreciation.............................................. 2,066 2,018
Amortization of deferred financing fees and original issue
discount............................................... 664 660
Amortization of recapitalization and other deferred
costs.................................................. 853 1,158
Provision for losses on accounts receivable............... 300 50
Provision for product liability and workers' compensation
claims................................................. 3,826 4,157
Payment of product liability and workers' compensation
claims................................................. (666) (406)
Deferred income taxes..................................... (1,256) (1,560)
Changes in operating assets and liabilities:
Undivided interest in accounts receivable.............. 3,595 (3,425)
Refundable income taxes................................ 697 490
Inventories............................................ (14,643) (15,504)
Accounts payable....................................... 3,429 4,993
Accrued liabilities.................................... (1,382) 3,430
Income taxes payable................................... 3,670 1,475
Other, net............................................. (827) 26
-------- --------
Net cash provided by (used in) operating activities......... 1,971 (1,287)
INVESTING ACTIVITIES
Capital expenditures........................................ (7,944) (4,701)
Other, net.................................................. (121) 103
-------- --------
Net cash used in investing activities....................... (8,065) (4,598)
FINANCING ACTIVITIES
Issuance of notes receivable arising from stock loan plan... -- (580)
Repayment of notes receivable arising from stock loan
plan...................................................... 56 --
Repurchase of common stock.................................. (611) --
Issuance of common stock.................................... 492 --
Increase in cash overdrafts................................. 6,718 --
Repayments of long-term debt................................ (362) (362)
-------- --------
Net cash provided by (used in) financing activities......... 6,293 (942)
-------- --------
Net increase (decrease) in cash and cash equivalents........ 199 (6,827)
Cash and cash equivalents at beginning of period............ 866 9,387
-------- --------
Cash and Cash Equivalents at End of Period.................. $ 1,065 $ 2,560
======== ========
SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:
Issuance of common stock in exchange for notes receivable
arising from stock loan plan.............................. $ 1,680 $ --
======== ========
</TABLE>
See notes to unaudited condensed consolidated financial statements.
5
<PAGE> 8
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(DOLLARS IN THOUSANDS)
A. BASIS OF PRESENTATION AND RECAPITALIZATION
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
Werner Holding Co. (PA), Inc., ("Holding (PA)") include its accounts and the
accounts of its wholly-owned subsidiary, Werner Holding Co. (DE), Inc.
("Issuer") and the Issuer's wholly-owned subsidiaries (collectively the
"Company"). Holding (PA) has no substantial operations or assets, other than its
investment in the Issuer. The consolidated financial condition and results of
operations of Holding (PA) are substantially the same as those of the Issuer.
Intercompany accounts and transactions have been eliminated. The unaudited
condensed consolidated financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the opinion
of management, all adjustments (consisting only of normal recurring accruals)
considered necessary for a fair financial presentation have been included.
Operating results for the three months ended March 31, 2000 are not necessarily
indicative of the results that may be expected for the year ending December 31,
2000. For further information, refer to the consolidated financial statements
and notes thereto included in the Company's most recent Annual Report on Form
10-K.
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions in certain circumstances that affect amounts reported in the
consolidated financial statements and notes. Actual results could differ from
those estimates.
Certain amounts for 1999 have been reclassified to conform to the 2000
interim period presentation.
The Recapitalization
In 1997, the Company entered into a recapitalization agreement (the
"Agreement") with certain affiliates of INVESTCORP S.A. ("Investcorp") and
certain other international investors organized by Investcorp (collectively, the
"Investors"). Pursuant to the Agreement, the Company's common stock was
reclassified and the Company redeemed certain shares of its reclassified stock
for $330,700 and a market participation right, and sold to the Investors newly
created common shares for $122,700 representing 67% of the outstanding voting
equity of the Company (all of which actions together constituted the
"Recapitalization"). The transaction was accounted for as a recapitalization and
as such the historical basis of the Company's assets and liabilities was not
affected. The Recapitalization was funded through borrowings under a senior
credit facility with a syndicate of banks (the "Senior Credit Facility"), the
issuance of Senior Subordinated Notes (the "Notes"), and the proceeds from the
sale of stock to the Investors.
6
<PAGE> 9
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
B. INVENTORIES
Components of inventories are as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
2000 1999
--------- ------------
<S> <C> <C>
Finished products.......................................... $40,163 $30,470
Work-in-process............................................ 15,459 15,267
Raw materials and supplies................................. 27,054 22,296
------- -------
82,676 68,033
Less excess of cost over LIFO stated values................ 9,685 9,685
------- -------
NET INVENTORIES............................................ $72,991 $58,348
======= =======
</TABLE>
C. COMMITMENTS AND CONTINGENCIES
The Company is involved from time to time in various legal proceedings and
claims incident to the normal conduct of its business. Although it is impossible
to predict the outcome of any pending legal proceeding, the Company believes
that such legal proceedings and claims individually and in the aggregate are
either without merit, covered by insurance or adequately reserved for, and will
not have a material adverse effect on its results of operations, financial
position, or cash flows.
In March 1998, an action was filed in the United States District Court for
the Western District of Pennsylvania entitled Elizabeth Werner, et al v. Eric J.
Werner, et al (Civil Action No. 98-503). The action purports, in part, to be
brought derivatively on behalf of Holding (PA) and, in part, to be brought on
behalf of plaintiffs individually against the Company and certain current and
former officers and directors of the Company. The aspect of the case purportedly
brought on behalf of Holding (PA) alleges breaches of fiduciary duty by various
members of the Company's management arising out of, among other things, the
issuance of restricted stock to management of the Company in 1992 and 1993.
Holding (PA)'s Board of Directors referred the matter to a special committee of
disinterested directors to investigate the merits of the claim and to take
appropriate actions on behalf of Holding (PA). After a detailed investigation,
the special committee recommended that the derivative claims not be pursued by
or on behalf of Holding (PA). Accordingly, all the defendants made motions to
dismiss the derivative claims. Pursuant to an amendment to the complaint filed
by plaintiffs on March 29, 1999, the only remaining corporate defendant in this
action is Holding (PA). Pursuant to the same amendment, the only remaining
derivative claim asserted by the plaintiffs is a claim for excessive
compensation, not relating to the restricted stock issuances. The aspect of the
case purportedly brought on behalf of plaintiffs individually against the
Company appears to arise out of the 1992 and 1993 restricted stock issuances as
well as certain alleged misrepresentations by representatives of the Company.
The plaintiffs seek monetary damages in an unspecified amount. In May 1999, the
magistrate judge issued a report and recommendation ruling that all of the
Plaintiffs' claims be dismissed. The District Court issued a Memorandum Order on
August 4, 1999 granting the motion to dismiss all remaining claims against all
defendants without prejudice and adopted the magistrate judge's report as the
opinion of the District Court. The plaintiffs have appealed such decision.
Management believes that the ultimate resolution of this lawsuit will not have a
material adverse effect on the Company's results of operations, financial
position, or cash flows.
7
<PAGE> 10
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
D. SEGMENT INFORMATION
The Company classifies its business in two segments: Climbing Products,
which includes aluminum, fiberglass and wood ladders, scaffolding, stages and
planks; and Extruded Products, which includes aluminum extrusions and fabricated
components. The Company's reportable segments are based on the characteristics
of the product and the markets and distribution channels through which the
products are sold. The composition of segments and measure of segment
profitability are consistent with that used by the Company's management. The
Company evaluates segment performance based on operating profit. There has not
been a material change in total assets, the basis of segmentation or the basis
of measurement of segment profit or loss from that disclosed in the Company's
most recent Annual Report on Form 10-K. Net sales and operating profit (loss) of
the Company's segments for the three months ended March 31, 2000 and 1999 are as
follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
----------------------
2000 1999
-------- --------
<S> <C> <C>
Net Sales
Climbing Products......................................... $103,481 $ 80,828
Extruded Products......................................... 25,541 24,631
-------- --------
$129,022 $105,459
======== ========
Operating Profit (Loss)
Climbing Products......................................... $ 9,249 $ 7,373
Extruded Products......................................... 703 3,303
Corporate & Other......................................... (539) (1,916)
-------- --------
$ 9,413 $ 8,760
======== ========
</TABLE>
Corporate & Other includes various corporate expenses and eliminations.
E. SALES OF ACCOUNTS RECEIVABLE
The undivided interest in accounts receivable is the net residual interest
associated with accounts receivable sold under a receivables purchase agreement.
As of March 31, 2000 and December 31, 1999, the Company had sold $91,798 and
$88,393 of accounts receivable in exchange for $27,000 and $20,000 in cash and
an undivided interest in the accounts receivable of $64,798 and $68,393,
respectively. The ongoing cost associated with the receivables purchase
agreement, which represents a return to investors in the purchased interests, is
reported in the accompanying condensed consolidated statements of operations in
"Other income (expense), net".
8
<PAGE> 11
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
F. SUPPLEMENTAL GUARANTOR INFORMATION
In connection with the Recapitalization in 1997, the Company refinanced
substantially all of its outstanding debt through borrowings under the Senior
Credit Facility and the Notes. The issuer of the refinanced debt is Werner
Holding Co. (DE), Inc. (the "Issuer"). Holding (PA) has provided a full,
unconditional, joint and several guaranty of the Issuer's obligations under the
Senior Credit Facility and the Notes. In addition, the Issuer's wholly-owned
subsidiaries, except for Werner Funding Corporation, (collectively referred to
as the "Guarantor Subsidiaries") have provided full, unconditional, joint and
several guarantees of the Senior Credit Facility and the Notes.
Following is condensed consolidated information for Holding (PA) (the
"Parent Company"), the Issuer, the Guarantor Subsidiaries, and Werner Funding
Corporation (the "Non-Guarantor Subsidiary"). Separate financial statements of
the Guarantor Subsidiaries are not presented because management has determined
that they would not provide additional information that is material to
investors. Therefore, each of the Guarantor Subsidiaries is combined in the
presentation below. Further, separate financial statements of the Issuer have
not been provided as management has determined that they would not provide
information that is material to investors, as the Issuer has no substantial
operations or assets, other than its investment in its subsidiaries.
Investments in subsidiaries are accounted for on the equity method of
accounting. Earnings of subsidiaries are, therefore, reflected in the respective
investment accounts of the Parent Company and the Issuer. The investments in
subsidiaries and intercompany balances and transactions have been eliminated.
Income taxes are allocated generally on a separate return basis with
reimbursement for losses utilized on a consolidated basis in accordance with a
tax sharing agreement between the Company and each of its subsidiaries.
9
<PAGE> 12
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
F. SUPPLEMENTAL GUARANTOR INFORMATION -- CONTINUED
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED CONSOLIDATING BALANCE SHEETS
-------------------------------------------------------------------------------
COMBINED NON-
PARENT GUARANTOR GUARANTOR
COMPANY ISSUER SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
------- --------- ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
MARCH 31, 2000
ASSETS
Current assets:
Undivided interest in accounts
receivable..................... $64,798 $ 64,798
Inventories, net................. $ 72,991 72,991
Other current assets............. $ 22 $ 448 3,395 8 3,873
--------- --------- --------- ------- -------- ---------
Total current assets......... 22 448 76,386 64,806 141,662
Property, plant and equipment,
net.............................. 2 89,413 89,415
Investment in subsidiaries......... (153,062) (132,982) 6,289 $279,755
Other assets....................... 5 11,053 30,928 100 42,086
--------- --------- --------- ------- -------- ---------
TOTAL ASSETS................. $(153,035) $(121,479) $ 203,016 $64,906 $279,755 $ 273,163
========= ========= ========= ======= ======== =========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Other current liabilities........ $ (214) $ 10,394 $ 70,432 $ 494 $ 81,106
Intercompany payable
(receivable)................... (10,527) (250,974) 203,378 58,123
--------- --------- --------- ------- -------- ---------
Total current liabilities.... (10,741) (240,580) 273,810 58,617 81,106
Long-term debt..................... 272,163 5,000 277,163
Other long-term liabilities........ 57,188 57,188
Total equity (deficit)....... (142,294) (153,062) (132,982) 6,289 $279,755 (142,294)
--------- --------- --------- ------- -------- ---------
TOTAL LIABILITIES AND EQUITY
(DEFICIT)................. $(153,035) $(121,479) $ 203,016 $64,906 $279,755 $ 273,163
========= ========= ========= ======= ======== =========
DECEMBER 31, 1999
ASSETS
Current assets:
Undivided interest in accounts
receivable..................... $68,393 $ 68,393
Inventories, net................. $ 58,348 58,348
Other current assets............. $ 37 $ 473 3,468 12 3,990
--------- --------- --------- ------- -------- ---------
Total current assets......... 37 473 61,816 68,405 130,731
Property, plant and equipment,
net.............................. 2 83,505 83,507
Investment in subsidiaries......... (154,535) (135,033) 5,686 $283,882
Other assets....................... 5 10,961 30,136 100 41,202
--------- --------- --------- ------- -------- ---------
TOTAL ASSETS................. $(154,493) $(123,597) $ 181,143 $68,505 $283,882 $ 255,440
========= ========= ========= ======= ======== =========
LIABILITIES AND SHAREHOLDERS'
EQUITY (DEFICIT)
Current liabilities:
Other current liabilities........ $ 421 $ 9,034 $ 59,577 $ 162 $ 69,194
Intercompany payable
(receivable)................... (11,038) (250,530) 198,911 62,657
--------- --------- --------- ------- -------- ---------
Total current liabilities.... (10,617) (241,496) 258,488 62,819 69,194
Long-term debt..................... 272,434 5,000 277,434
Other long-term liabilities........ 52,688 52,688
Total equity (deficit)....... (143,876) (154,535) (135,033) 5,686 $283,882 (143,876)
--------- --------- --------- ------- -------- ---------
TOTAL LIABILITIES AND EQUITY
(DEFICIT)................. $(154,493) $(123,597) $ 181,143 $68,505 $283,882 $ 255,440
========= ========= ========= ======= ======== =========
</TABLE>
10
<PAGE> 13
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
F. SUPPLEMENTAL GUARANTOR INFORMATION -- CONTINUED
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS
--------------------------------------------------------------------------
COMBINED NON-
PARENT GUARANTOR GUARANTOR
COMPANY ISSUER SUBSIDIARIES SUBSIDIARY ELIMINATIONS CONSOLIDATED
------- ------ ------------ ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED
MARCH 31, 2000
Net sales........................ $129,022 $129,022
Cost of sales.................... 96,841 96,841
------ ------ -------- ------ ------- --------
Gross profit..................... 32,181 32,181
Selling, general and
administrative expenses....... $ 11 $ 5 22,752 22,768
------ ------ -------- ------ ------- --------
Operating (loss) profit.......... (11) (5) 9,429 9,413
Other income (expense), net...... 1,502 2,014 (598) $1,496 $(4,124) 290
Interest income (expense)........ 255 (768) (5,893) (539) (6,945)
------ ------ -------- ------ ------- --------
Income (loss) before income taxes
(benefit)..................... 1,746 1,241 2,938 957 (4,124) 2,758
Income taxes (benefit)........... 101 (233) 891 354 1,113
------ ------ -------- ------ ------- --------
NET INCOME (LOSS)........... $1,645 $1,474 $ 2,047 $ 603 $(4,124) $ 1,645
====== ====== ======== ====== ======= ========
FOR THE THREE MONTHS ENDED
MARCH 31, 1999
Net sales........................ $105,459 $105,459
Cost of sales.................... 75,148 75,148
------ ------ -------- ------ ------- --------
Gross profit..................... 30,311 30,311
Selling, general and
administrative expenses....... $ 3 21,548 21,551
------ ------ -------- ------ ------- --------
Operating (loss) profit.......... (3) 8,763 8,760
Other income (expense), net...... $ 986 1,409 (1,289) $ 970 $(2,127) (51)
Interest income (expense)........ 272 (556) (5,087) (1,361) (6,732)
------ ------ -------- ------ ------- --------
Income (loss) before income taxes
(benefit)..................... 1,258 850 2,387 (391) (2,127) 1,977
Income taxes (benefit)........... 107 (129) 989 (141) 826
------ ------ -------- ------ ------- --------
NET INCOME (LOSS)........... $1,151 $ 979 $ 1,398 $ (250) $(2,127) $ 1,151
====== ====== ======== ====== ======= ========
</TABLE>
11
<PAGE> 14
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- CONTINUED
(DOLLARS IN THOUSANDS)
F. SUPPLEMENTAL GUARANTOR INFORMATION -- CONTINUED
<TABLE>
<CAPTION>
SUPPLEMENTAL CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS
----------------------------------------------------------------
COMBINED NON-
PARENT GUARANTOR GUARANTOR
COMPANY ISSUER SUBSIDIARIES SUBSIDIARY CONSOLIDATED
-------- -------- ------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
FOR THE THREE MONTHS ENDED
MARCH 31, 2000
Net cash from operating activities........... $(448) $ 806 $ 1,615 $ (2) $ 1,971
Net cash from investing activities........... 511 (444) (8,132) (8,065)
Net cash from financing activities........... (63) (362) 6,718 6,293
----- ------- ------- ---- -------
Net increase (decrease) in cash and cash
equivalents................................ 201 (2) 199
Cash and cash equivalents at beginning
of period.................................. 417 442 7 866
----- ------- ------- ---- -------
Cash and cash equivalents at end of period... $ 417 $ 643 $ 5 $ 1,065
===== ======= ======= ==== =======
FOR THE THREE MONTHS ENDED
MARCH 31, 1999
Net cash from operating activities........... $ 273 $ 2,513 $(4,085) $ 12 $(1,287)
Net cash from investing activities........... 306 (4,455) (449) (4,598)
Net cash from financing activities........... (580) (362) (942)
----- ------- ------- ---- -------
Net (decrease) increase in cash and cash
equivalents................................ (1) (2,304) (4,534) 12 (6,827)
Cash and cash equivalents at beginning
of period.................................. 1 2,618 6,768 9,387
----- ------- ------- ---- -------
Cash and cash equivalents at end of period... $ 314 $ 2,234 $ 12 $ 2,560
===== ======= ======= ==== =======
</TABLE>
12
<PAGE> 15
WERNER HOLDING CO. (PA), INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The following discussion should be read in conjunction with the Unaudited
Condensed Consolidated Financial Statements of the Company and the notes thereto
included elsewhere in this document and the Company's most recent Annual Report
on Form 10-K as filed with the Securities and Exchange Commission. This document
contains, in addition to historical information, forward-looking statements that
are subject to risks and other uncertainties. The Company's actual results may
differ materially from those anticipated in these forward-looking statements. In
the text below, financial statement amounts have been rounded and the percentage
changes are based on the financial statements.
RESULTS OF OPERATIONS -- QUARTER ENDED MARCH 31, 2000 AS COMPARED TO QUARTER
ENDED MARCH 31, 1999
Net Sales. Net sales increased $23.5 million or 22.3% to $129.0 million for
the quarter ended March 31, 2000 from $105.5 million for the quarter ended March
31, 1999. Net sales of climbing products increased $22.7 million or 28.0% to
$103.5 million for the quarter ended March 31, 2000 from $80.8 million for the
quarter ended March 31, 1999. The majority of the increase in net sales of
climbing products was attributable to Keller brand ladder sales arising from the
Keller business acquired in the fourth quarter of 1999. Excluding the effects of
the Keller acquisition, net sales of climbing products increased $11.0 million
or 13.6%. Net sales of extruded products of $25.5 million for the quarter ended
March 31, 2000 increased by $0.9 million or 3.7% compared to the quarter ended
March 31, 1999. The increase in net sales of extruded products was due primarily
to the impact of higher aluminum prices for the quarter ended March 31, 2000
partially offset by a change in product mix to a higher volume of lower priced
products.
Gross Profit. Gross profit increased $1.9 million or 6.2% to $32.2 million
for the quarter ended March 31, 2000 from $30.3 million for the quarter ended
March 31, 1999. The increase was primarily due to higher sales of climbing
products. Gross profit as a percentage of net sales in the quarter ended March
31, 2000 decreased to 25.0% from 28.7% for the quarter ended March 31, 1999.
This decrease in the gross profit margin percentage principally resulted from
the lower gross profit margin business acquired from Keller Ladders, Inc. in the
fourth quarter of 1999, higher aluminum and freight costs, and a reduction in
the profitability of the mix of extruded products sales.
General and Administrative Expenses. General and administrative expenses
were $7.7 million for the quarter ended March 31, 2000 compared to $7.8 million
for the quarter ended March 31, 1999. Reductions in consulting expenses in the
quarter ended March 31, 2000 were substantially offset by increases in payroll
and related costs, and an increase in the provision for losses on accounts
receivable.
Selling and Distribution Expenses. Selling and distribution expenses
increased $1.3 million or 9.4% to $15.1 million for the quarter ended March 31,
2000 from $13.8 million for the quarter ended March 31, 1999. The increase was
primarily due to higher sales commissions, and increased distribution expenses
resulting from higher freight rates on inventory transfers and the start-up of a
new warehouse facility.
Operating Profit (Loss). Operating profit increased $0.6 million to $9.4
million for the quarter ended March 31, 2000 from $8.8 million for the quarter
ended March 31, 1999. Operating profit of the Climbing Products segment
increased $1.8 million to $9.2 million in the first quarter of 2000 from $7.4
million in the first quarter of 1999. This increase was primarily due to the
increased sales of climbing products partially offset by higher aluminum costs,
sales commissions and distribution expenses. Operating profit of the Extruded
Products segment decreased $2.6 million to $0.7 million for the quarter ended
March 31, 2000 from $3.3 million for the quarter ended March 31, 1999. The
decrease in Extruded Products operating profit was caused by greater volumes of
lower margin products and the time lag in passing higher aluminum costs into
sales prices in the quarter ended March 31, 2000, compared to the exceptionally
good product profitability during the quarter ended March 31, 1999. Corporate
and Other expenses decreased $1.4 million for the quarter ended March 31, 2000
13
<PAGE> 16
compared to the quarter ended March 31, 1999. The decrease was primarily due to
higher consulting expenses in 1999.
Other Income (Expense), Net. Other income, net was $0.3 million for the
quarter ended March 31, 2000 compared to other (expense), net of $(0.1) million
for the quarter ended March 31, 1999. The difference was primarily attributable
to an increase in royalty and other income in the first quarter of 2000.
Interest Expense. Interest expense increased $0.2 million to $6.9 million
for the quarter ended March 31, 2000 from $6.7 million for the quarter ended
March 31, 1999. The increase was primarily due to higher interest rates.
Income Taxes. In accordance with APB Opinion 28, at the end of each interim
period the Company shall make its best estimate of the annual effective tax rate
expected to be applicable for the full fiscal year. The rate so determined shall
be used in providing for income taxes on a current year-to-date basis. The
effective tax rate shall include the effect of any valuation allowance expected
to be necessary at the end of the year for deferred tax assets related to
originating deductible temporary differences and loss carryforwards during the
year. Accordingly, the Company has estimated its annual effective tax rates for
the three months ended March 31, 2000 and 1999.
The difference between the statutory and effective tax rates at both March
31, 2000 and 1999 was primarily due to state taxes (net of federal benefit) and
estimated income tax accruals.
Net Income. Net income increased $0.4 million to $1.6 million for the
quarter ended March 31, 2000 from net income of $1.2 million for the quarter
ended March 31, 1999 as a result of all of the above factors.
LIQUIDITY AND CAPITAL RESOURCES
The Company satisfies its working capital needs and capital expenditure
requirements primarily through a combination of operating cash flow, borrowings
under the Senior Credit Facility and sales of accounts receivable under a
receivables purchase agreement with a financial institution (the "Receivables
Purchase Agreement"). The Company believes it has sufficient funds available to
support debt service requirements, projected capital expenditures and working
capital needs based on projected results of operations, availability under the
Senior Credit Facility, and the Receivables Purchase Agreement.
Net cash flows provided by operating activities were $2.0 million for the
three months ended March 31, 2000 compared to net cash flows used in operations
of $1.3 million for the three months ended March 31, 1999. The increase is
primarily attributable to an increase in cash provided by the Receivables
Purchase Agreement. The increases in inventories and accounts payable for the
three months ended March 31, 2000 and 1999 were principally due to seasonal
factors. Net cash used in investing activities was $8.1 million for the three
months ended March 31, 2000 compared to net cash used of $4.6 million for the
three months ended March 31, 1999. The increase was primarily due to an increase
in capital expenditures for various capital projects, including information
systems and increased capacity. Net cash flows provided by financing activities
were $6.3 million for the three months ended March 31, 2000 compared to net cash
used of $0.9 million for the three months ended March 31, 1999. The increase is
due to book overdrafts of cash and common stock transactions in the three months
ended March 31, 2000.
SEASONALITY, WORKING CAPITAL AND CYCLICALITY
Sales of certain products of the Company are subject to seasonal variation.
Demand for the Company's ladder products is affected by residential housing
starts and existing home sales, commercial construction activity and overall
home improvement expenditures. The residential and commercial construction
markets are sensitive to cyclical changes in the economy. Due to seasonal
factors associated with the construction industry, sales of products and working
capital requirements are typically higher during the second and third quarters
than at other times of the year. The Company expects to use the Senior Credit
Facility and the Receivables Purchase Agreement to meet any seasonal variations
in its working capital requirements.
14
<PAGE> 17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about the Company's market risk disclosures
involves forward-looking statements. Actual results could differ materially from
those projected in the forward-looking statements. The Company is exposed to
market risk related to changes in interest rates, foreign currency exchange
rates and commodity prices. The Company does not use derivative financial
instruments for speculative or trading purposes.
The Company is exposed to market risk from changes in interest rates on
long-term debt obligations. The Company manages such risk through the use of a
combination of fixed and variable rate debt. Currently, the Company does not use
derivative financial instruments to manage its interest rate risk. There have
been no material changes in market risk from changes in interest rates from that
disclosed in the Company's most recent Annual Report on Form 10-K.
The Company has no operations in foreign countries. International sales
were not material to the Company's operations for the three months ended March
31, 2000. Accordingly, the Company is not subject to material foreign currency
exchange risk. To date, the Company has not entered into any foreign currency
forward exchange contracts or other derivative financial instruments relative to
foreign currency exchange rates.
The Company is also exposed to market risk from changes in the price of
aluminum. The Company manages such risk through the use of aluminum futures and
options contracts. There have been no material changes in market risk from
changes in the price of aluminum from that disclosed in the Company's most
recent Annual Report on Form 10-K.
PART II -- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved from time to time in various legal proceedings and
claims incident to the normal conduct of its business. In the opinion of
management, the amount of any ultimate liability with respect to these
proceedings and claims will not have a material adverse effect on its results of
operations, financial position or cash flows.
In March 1998, an action was filed in the United States District Court for
the Western District of Pennsylvania entitled Elizabeth Werner, et al v. Eric J.
Werner, et al (Civil Action No. 98-503). The action purports, in part, to be
brought derivatively on behalf of Holding (PA) and, in part, to be brought on
behalf of plaintiffs individually against the Company and certain current and
former officers and directors of the Company. The aspect of the case purportedly
brought on behalf of Holding (PA) alleges breaches of fiduciary duty by various
members of the Company's management arising out of, among other things, the
issuance of restricted stock to management of the Company in 1992 and 1993.
Holding (PA)'s Board of Directors referred the matter to a special committee of
disinterested directors to investigate the merits of the claim and to take
appropriate actions on behalf of Holding (PA). After a detailed investigation,
the special committee recommended that the derivative claims not be pursued by
or on behalf of Holding (PA). Accordingly, all the defendants made motions to
dismiss the derivative claims. Pursuant to an amendment to the complaint filed
by plaintiffs on March 29, 1999, the only remaining corporate defendant in this
action is Holding (PA). Pursuant to the same amendment, the only remaining
derivative claim asserted by the plaintiffs is a claim for excessive
compensation, not relating to the restricted stock issuances. The aspect of the
case purportedly brought on behalf of plaintiffs individually against the
Company appears to arise out of the 1992 and 1993 restricted stock issuances as
well as certain alleged misrepresentations by representatives of the Company.
The plaintiffs seek monetary damages in an unspecified amount. In May 1999, the
magistrate judge issued a report and recommendation ruling that all of the
Plaintiffs' claims be dismissed. The District Court issued a Memorandum Order on
August 4, 1999 granting the motion to dismiss all remaining claims against all
defendants without prejudice and adopted the magistrate judge's report as the
opinion of the District Court. The plaintiffs have appealed such decision.
Management believes that the ultimate resolution of this lawsuit will not have a
material adverse effect on the Company's results of operations, financial
position, or cash flows.
15
<PAGE> 18
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
<TABLE>
<S> <C>
3.1 Certificate of Incorporation of Werner Holding Co. (DE),
Inc. (filed as Exhibit 3.1 to Issuer's Form S-4 Registration
Statement No. 333-46607 and incorporated herein by
reference).
3.2 By-laws of Werner Holding Co. (DE), Inc. (filed as Exhibit
3.2 to Issuer's Form S-4 Registration Statement No.
333-46607 and incorporated herein by reference).
3.3 Amended and Restated Articles of Incorporation of Werner
Holding Co. (PA), Inc. (filed as Exhibit 3.2.1 to Issuers
Annual Report on Form 10-K for the year ended December 31,
1998 and incorporated herein by reference).
3.4 Amended and Restated By-laws of Werner Holding Co. (PA),
Inc. (filed as Exhibit 3.1 to Issuer's Quarterly Report on
Form 10-Q for the quarter ended March 31, 1999 and
incorporated herein by reference).
3.5 Certificate of Incorporation of Werner Ladder Inc.
3.6 By-laws of Werner Ladder Inc.
10.1 Amendment No. 3 to Stock Incentive Plan
27.1 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K:
None.
16
<PAGE> 19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Co-registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
WERNER HOLDING CO. (PA), INC.
Date: May 11, 2000
/s/ R. P. Tamburrino
--------------------------------------
R. P. Tamburrino
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
WERNER HOLDING CO. (DE), INC.
/s/ R. P. Tamburrino
--------------------------------------
R. P. Tamburrino
Vice President, Chief Financial
Officer and Treasurer
(Principal Financial Officer and
Principal Accounting Officer)
17
<PAGE> 1
EXHIBIT 3.5
STATE OF DELAWARE
OFFICE OF THE SECRETARY OF STATE
__________________
I, EDWARD J. FREEL, SECRETARY OF STATE OF THE STATE OF DELAWARE, DO HEREBY
CERTIFY THE ATTACHED IS A TRUE AND CORRECT COPY OF THE CERTIFICATE OF
INCORPORATION OF "WERNER LADDER INC.", FILED IN THIS OFFICE ON THE TWENTY-NINTH
DAY OF MARCH, A.D. 2000, AT 9 O'CLOCK A.M.
A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE NEW CASTLE
COUNTY RECORDER OF DEEDS.
[SEAL OF THE SECRETARY'S OFFICE] /s/ Edward J. Freel
----------------------------------
Edward J. Freel, Secretary of State
AUTHENTICATION: 0349105
DATE: 03-30-00
3203082 8100
001159557
<PAGE> 2
STATE OF DELAWARE
SECRETARY OF STATE
DIVISION OF CORPORATIONS
FILED 09:00 AM 03/29/2000
001159557 -- 3203082
CERTIFICATE OF INCORPORATION
OF
WERNER LADDER INC.
__________________
FIRST: The name of the corporation shall be Werner Ladder Inc.
SECOND: Its registered office in the State of Delaware is to be located at
1105 North Market Street, Suite 1300, in the city of Wilmington, County of New
Castle and its registered agent at such address is Delaware Corporate
Management, Inc.
THIRD: The purpose or purposes of the corporation shall be:
To engage in any lawful act or activity for which corporations
may be organized under the General Corporation Law of Delaware.
FOURTH: The total number of shares of stock which this corporation is
authorized to issue is:
Three thousand (3,000) shares of common stock at a par value
of ($.O1) per share
FIFTH: The name and address of the incorporator is as follows:
Wendy A. Meikle
93 Werner Road
Greenville, PA 16125
SIXTH: The Board of Directors shall have the power to adopt, amend or
repeal the by-laws.
SEVENTH: No director shall be personally liable to the corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. Notwithstanding (the foregoing sentence, a director
shall be liable to the extent provided by applicable law, (i) for breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) pursuant to Section 174 of the Delaware General
Corporation Law or (iv) for any transaction from which the director derived an
improper personal benefit. No amendment to or repeal of this Article SEVENTH
shall apply to or have any effect on the liability or alleged liability of any
director of the corporation for or with respect to any acts or omissions of
such director occurring prior to such amendment.
<PAGE> 3
IN WITNESS WHEREOF, the undersigned, being the incorporator herein before
named, has executed this certificate of incorporation this 29th day of March,
2000.
/s/ Wendy A. Meikle
-----------------------------
Wendy A. Meikle
Incorporator
<PAGE> 1
Exhibit 3.6
BY-LAWS
of
WERNER LADDER INC.
(A Delaware corporation)
Dated March 29, 2000
<PAGE> 2
INDEX
BY-LAWS
ARTICLE I
STOCKHOLDERS........................... 1
Section 1.01. Annual Meetings............................................ 1
---------------
Section 1.02. Special Meetings........................................... 1
----------------
Section 1.03. Notice Of Annual and Special Meetings...................... 1
-------------------------------------
Section 1.04. Quorum..................................................... 1
------
Section 1.05. Voting..................................................... 2
------
Section 1.06. Procedure at Stockholders' Meetings........................ 2
-----------------------------------
Section 1.07. Action Without Meeting..................................... 2
----------------------
ARTICLE II
DIRECTORS ............................. 2
Section 2.01. Number, Election and Term of Office........................ 2
-----------------------------------
Section 2.02. Chairman of the Board....................................... 3
---------------------
Section 2.03. Annual Meeting.............................................. 3
--------------
Section 2.04. Regular Meetings........................................... 3
----------------
Section 2.05. Special Meetings........................................... 3
----------------
Section 2.06. Notice of Annual and Special Meetings...................... 3
-------------------------------------
Section 2.07. Quorum and Manner of Acting................................ 3
---------------------------
Section 2.08. Action Without Meeting..................................... 4
----------------------
Section 2.09. Participation by Conference Telephone...................... 4
-------------------------------------
Section 2.10. Resignations............................................... 4
------------
Section 2.11. Removal of Directors....................................... 4
--------------------
Section 2.12. Vacancies.................................................. 4
---------
Section 2.13. Compensation of Directors.................................. 4
-------------------------
Section 2.14. Committees................................................. 4
----------
Section 2.15. Personal Liability of Directors............................ 5
-------------------------------
ARTICLE III
OFFICERS AND EMPLOYEES...................... 5
Section 3.01. Executive Officers......................................... 5
------------------
Section 3.02. Additional Officers; Other Agents and Employees............ 5
-----------------------------------------------
Section 3.03. The President.............................................. 5
-------------
Section 3.04. The Vice Presidents........................................ 5
-------------------
Section 3.05. The Secretary and Assistant Secretaries.................... 6
---------------------------------------
Section 3.06. The Treasurer and Assistant Treasurers..................... 6
--------------------------------------
Section 3.07. Vacancies.................................................. 6
---------
Section 3.08. Delegation of Duties....................................... 6
--------------------
Section 3.09. Personal Liability of Officers, Employees and Agents....... 6
----------------------------------------------------
<PAGE> 3
ARTICLE IV
SHARES OF CAPITAL STOCK........................ 7
Section 4.01. Share Certificates.......................................... 7
------------------
Section 4.02. Transfer of Shares......................................... 7
------------------
Section 4.03. Transfer Agents and Registrars............................. 7
------------------------------
Section 4.04. Lost, Stolen, Destroyed or Mutilated Certificates.......... 7
-------------------------------------------------
Section 4.05. Regulations Relating to Shares............................. 7
------------------------------
Section 4.06. Holders of Record.......................................... 7
-----------------
Section 4.07. Fixing of Record Date....................................... 8
---------------------
ARTICLE V
LOANS, NOTES, CHECKS,
CONTRACTS AND OTHER INSTRUMENTS ................... 8
Section 5.01. Notes, Checks, etc......................................... 8
-------------------
Section 5.02. Execution of Instruments Generally......................... 8
----------------------------------
Section 5.03. Proxies in Respect of Stock or Other Securities or Other
--------------------------------------------------------
Corporations.................... 8
------------
ARTICLE VI
GENERAL PROVISIONS........................... 9
Section 6.01. Offices..................................................... 9
-------
Section 6.02. Corporate Seal.............................................. 9
--------------
Section 6.03. Fiscal Year................................................ 9
-----------
ARTICLE VII
VALIDATION OF CERTAIN CONTRACTS................... 9
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS.............. 9
ARTICLE IX
AMENDMENTS.............................. 10
INDEX
<PAGE> 4
WERNER LADDER INC.
By-Laws
ARTICLE I
STOCKHOLDERS
SECTION 1.01. ANNUAL MEETINGS. Annual meetings of the
stockholders shall be held at such place, either within or without the State of
Delaware, and at such time and date as the Board of Directors shall determine
and as set forth in the notice of the meeting.
SECTION 1.02. SPECIAL MEETINGS. Special meetings of the
stockholders may be called at any time, for the purpose or purposes set forth in
the call, by the Chairman of the Board, the President, the Board of Directors or
the holders of at least one-fifth of all the shares outstanding and entitled to
vote thereat, by delivering a written request to the Secretary. At any time,
upon the written request of any person or persons who have duly called a special
meeting, it shall be the duty of the Secretary to fix the date of the meetings,
to be held not more than 75 days after receipt of the request, and to give due
notice thereof. Special meetings shall be held at such place, either within or
without the State of Delaware, and at such time and date as the Board of
Directors shall determine and as set forth in the notice of the meeting.
SECTION 1.03. NOTICE OF ANNUAL AND SPECIAL MEETINGS. Except as
otherwise expressly required by law, notice of each meeting of stockholders,
whether annual or special, shall be given at least 5 and not more than 60 days
prior to the date on which the meeting is to be held to each stockholder of
record entitled to vote thereat by delivery of a notice thereof to him
personally or by sending a copy thereof through the mail or by telecommunication
equipment, charges prepaid, to his address appearing on the records of the
Corporation. Each such notice shall specify the place, day and hour of the
meeting and, in the case of a special meeting, shall briefly state the purpose
or purposes for which the meeting is called. A written waiver of notice, signed
by the person or persons entitled to such notice, whether before or after the
date and time fixed for the meeting shall be deemed the equivalent of such
notice. Neither the business to be transacted at nor the purpose of the meeting
need be specified in a waiver of notice of such meeting.
SECTION 1.04. QUORUM. A stockholders' meeting duly called
shall not be organized for the transaction of business unless a quorum is
present. At any meeting the presence in person or by proxy of stockholder
entitled to cast at least a majority of the votes which all stockholders are
entitled to cast on the particular matter shall constitute a quorum for the
purpose of considering such matter, except as otherwise expressly provided by
law or by the Certificate of Incorporation or By-Laws of the Corporation. The
stockholders present at a duly organized meeting can continue to do business
until adjournment, notwithstanding the withdrawal of enough stockholders to
leave less than a quorum. If a meeting cannot be organized because a quorum has
not attended, those present may adjourn the meeting from time to time to such
time (not more than 30 days after the next previous adjourned meeting) and place
as they may determine, without notice other than by announcement at the meeting
of the time and place of the adjourned meeting; and in the case of any meeting
called for the election of directors, those who attend the second of such
adjourned meetings, although entitled to cast less than a majority of the votes
entitled to be cast on any matter to be considered at the meeting, shall
nevertheless constitute a quorum for the purpose of electing directors.
1
<PAGE> 5
SECTION 1.05. VOTING. At every meeting of stockholders, each
holder of record of issued and outstanding stock of the Corporation entitled to
vote at such meeting shall be entitled to vote in person or by proxy and, except
where a date has been fixed as the record date for the determination of
stockholders entitled to notice of or to vote at such meeting, no holder of
record of a share of stock which has been transferred on the books of the
Corporation within 10 days next preceding the date of such meeting shall be
entitled to notice of or to vote at such meeting in respect of such share so
transferred. Resolutions of the stockholders shall be adopted, and any action of
the stockholders at a meeting upon any matter shall be taken and be valid, only
if at least a majority of the votes cast with respect to such resolutions or
matter are cast in favor thereof, except as otherwise expressly provided by law
or by the Certificate of Incorporation or By- Laws of the Corporation. The
Chairman of the Board (if one has been elected and is present) shall be
chairman, and the Secretary (if present) shall act as secretary, at all meetings
of the stockholders. In the absence of the Chairman of the Board, the President
shall be chairman; and in the absence of both of them, the chairman shall be
designated by the Board of Directors or if not so designated shall be elected by
the stockholders present; and in the absence of the Secretary, an Assistant
Secretary shall act as secretary of the meeting.
SECTION 1.06. PROCEDURE AT STOCKHOLDERS' MEETINGS. The
organization of each meeting of the stockholders, the order of business thereat
and all matters relating to the manner of conducting the meetings shall be
determined by the chairman of the meeting, whose decisions may be overruled only
by majority vote (which shall not be by ballot) of the stockholders present and
entitled to vote at the meeting in person or by proxy. Meetings shall be
conducted in a manner designed to accomplish the business of the meeting in a
prompt and orderly fashion and to be fair and equitable to all stockholders, but
it shall not be necessary to follow Roberts' Rules of Order or any other manual
of parliamentary procedure.
SECTION 1.07. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any annual or special meeting of stockholders, or any
action which may be taken at any annual or special meeting, may be taken without
a meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted, and such written consent is filed with the
minutes of proceedings of the stockholders. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE II
DIRECTORS
SECTION 2.01. NUMBER, ELECTION AND TERM OF OFFICE. The number
of directors which shall constitute the full Board of Directors shall be
determined by resolution of the board of directors or by the stockholders at the
annual meeting provided, however, that in no event shall the number of directors
be less than three or more than eleven. Each director shall hold office for the
term for which he is elected and thereafter until his successor is duly elected
or until his prior death, resignation or removal. Directors need not be
stockholders.
2
<PAGE> 6
SECTION 2.02. CHAIRMAN OF THE BOARD. The Board of Directors
shall elect a Chairman of the Board. The Chairman when present shall preside at
all meetings of the shareholders and of the Board of Directors.
SECTION 2.03. ANNUAL MEETING. Annual Meetings of the Board of
Directors shall be held each year at the same place as and immediately after the
annual meeting of stockholders, or at such other place and time as shall
theretofore have been determined by the Board. At its regular annual meeting,
the Board of Directors shall organize itself and elect the officers of the
Corporation for the ensuing year, and may transact any other business.
SECTION 2.04. REGULAR MEETINGS. Regular meetings of the Board
of Directors may be held at such intervals and at such time and place as shall
from time to time be determined by the Board. After there has been such
determination and notice thereof has been once given to each person then a
member of the Board of Directors, regular meetings may be held at such intervals
and time and place without further notice being given.
SECTION 2.05. SPECIAL MEETINGS. Special meetings of the Board
of Directors may be called at any time by the Board, by the Chairman of the
Board, by the President or by any two directors to be held on such day and at
such time and place as shall be specified by the person or persons calling the
meeting.
SECTION 2.06. NOTICE OF ANNUAL AND SPECIAL MEETINGS. Except as
otherwise expressly required by law, notice of the annual meeting of the Board
of Directors need not be given. Except as otherwise expressly required by law,
notice of every special meeting of the Board of Directors specifying the place,
date and time thereof shall be given to each director either by being mailed on
at least the third day prior to the date of the meeting or by being sent by
telecommunications equipment or given personally or by telephone at least 24
hours prior to the time of the meeting. A written waiver of notice of a special
meeting, signed by the person or persons entitled to such notice, whether before
or after the date and time stated therein fixed for the meeting, shall be deemed
the equivalent of such notice, and attendance of a director at a meeting shall
constitute a waiver of notice of such meeting except when the director attends
the meeting for the express purpose of objecting, when he enters the meeting, to
the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at nor the purpose of the
meeting need be specified in a waiver of notice of such meeting.
SECTION 2.07. QUORUM AND MANNER OF ACTING. At all meetings of
the Board of Directors, except as otherwise expressly provided by law or by the
Certificate of Incorporation or By-Laws of the Corporation, the presence of a
majority of the full Board shall be necessary and sufficient to constitute a
quorum for the transaction of business. If a quorum is not present at any
meeting, the meeting may be adjourned from time to time by a majority of the
directors present until a quorum as aforesaid shall be present, but notice of
the time and place to which such a meeting is adjourned shall be given to any
directors not present either by being sent by telecommunications equipment or
given personally or by telephone at least 8 hours prior to the date of
reconvening. Resolutions of the Board of Directors shall be adopted, and any
action of the Board at a meeting upon any matter shall be taken and be valid,
only with the affirmative vote of at least a majority of the directors present
at the meeting, except as otherwise provided herein. The Chairman of the Board
(if one has been elected and is present) shall be chairman, and the Secretary
(if present) shall act as secretary, at all meetings of the Board. In the
absence of the Chairman of the Board, the President shall be chairman, and in
the absence of both of them the directors present shall select a
3
<PAGE> 7
member of the Board of Directors to be chairman; and in the absence of the
Secretary and Assistant Secretary, the chairman of the meeting shall designate
any person to act as secretary of the meeting.
SECTION 2.08. ACTION WITHOUT MEETING. 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 consent in writing,
setting forth the actions so taken, shall be signed by all members of the Board
or such committees, as the case may be, and such written consent is filed with
the minutes of the Board or committee.
SECTION 2.09. PARTICIPATION BY CONFERENCE TELEPHONE. Members
of the Board of Directors of the Corporation, or any committee designated by the
Board, may participate in a meeting of the Board or committee by means of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other, and participation in a meeting
by such means shall constitute presence in person at such meeting.
SECTION 2.10. RESIGNATIONS. A director may resign by
submitting his written resignation to the Chairman of the Board (if one has been
elected) or the Secretary. Unless otherwise specified therein, the resignation
of a director need not be accepted to make it effective and shall be effective
immediately upon its receipt by such officer or as otherwise specified therein.
If the resignation of a director specifies that it shall be effective at some
time later than receipt, until that time the resigning director shall be
competent to act on all matters before the Board of Directors, including filling
the vacancy caused by such resignation.
SECTION 2.11. REMOVAL OF DIRECTORS. The entire Board of
Directors or any individual director may be removed at any time for cause or
without cause by the holders of a majority of the shares then entitled to vote
at an election of directors. The vacancy or vacancies caused in the Board of
Directors by such removal may but need not be filled by such stockholders at the
same meeting or at a special meeting of the stockholders called for that
purpose.
SECTION 2.12. VACANCIES. Any vacancy that shall occur in the
Board of Directors by reason of death, resignation, removal, increase in the
number of directors or any other cause whatever shall, unless filled as provided
in Section 2.11 of this Article II, be filled by a majority of the then members
of the Board, whether or not a quorum, and each person so elected shall be a
director until he or his successor is elected by the stockholders at a meeting
called for the purpose of electing directors, or until his prior death,
resignation or removal.
SECTION 2.13. COMPENSATION OF DIRECTORS. The Corporation may
allow compensation to its directors for their services, as determined from time
to time by resolution adopted by the Board of Directors.
SECTION 2.14. COMMITTEES. The Board of Directors may, by
resolution adopted by a majority of the full Board, designate one or more
committees consisting of directors to have and exercise such authority of the
Board in the management of the business and affairs of the Corporation as the
resolution of the Board creating such committee may specify and as is otherwise
permitted by law. The Board of Directors may designate one or more directors as
alternate members of any committee, who may replace any absent or disqualified
member at any meeting of the committee. In the absence or disqualification of
any member of such committee or committees, the member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another director to act at the
meeting in the place of such absent or disqualified member.
4
<PAGE> 8
SECTION 2.15. PERSONAL LIABILITY OF DIRECTORS.
------------ -------------------------------
(a) To the fullest extent that the laws of the State of
Delaware, as the same exist or may hereafter be amended, permit elimination of
the personal liability of directors, no director of this Corporation shall be
personally liable to this Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director.
(b) The provisions of this Section 2.15 shall be deemed to be
a contract with each director of this Corporation who serves as such at any time
while this Section 2.15 is in effect, and each such director shall be deemed to
be serving as such in reliance on the provisions of this Section 2.15. Any
amendment or repeal of this Section 2.15 or adoption of any By-Law of this
Corporation or other provision of the Certificate of Incorporation of this
Corporation which has the effect of increasing director liability shall operate
prospectively only and shall not affect any action taken, or any failure to act,
by a director of this Corporation prior to such amendment, repeal, By-Law or
other provision becoming effective.
ARTICLE III
OFFICERS AND EMPLOYEES
SECTION 3.01. EXECUTIVE OFFICERS. The Executive Officers of
the Corporation shall be the President, a Secretary and a Treasurer, and may
include one or more Vice Presidents as the Board of Directors may from time to
time determine, all of whom shall be elected by the Board of Directors. Any two
or more offices may be held by the same person. Each Executive Officer shall
hold office until the next succeeding annual meeting of the Board of Directors
and thereafter until his successor is duly elected and qualifies, or until his
earlier death, resignation or removal.
SECTION 3.02. ADDITIONAL OFFICERS; OTHER AGENTS AND EMPLOYEES.
The Board of Directors may from time to time appoint or hire such additional
officers, assistant officers, agents, employees and independent contractors as
the Board deems advisable; and the Board or the President shall prescribe their
duties, conditions of employment and compensation. Subject to the power of the
Board of Directors, the President may employ from time to time such other
agents, employees, and independent contractors as he may deem advisable for the
prompt and orderly transaction of the business of the Corporation, and he may
prescribe their duties and the conditions of their employment, fix their
compensation and dismiss them, without prejudice to their contract rights, if
any.
SECTION 3.03. THE PRESIDENT. Subject to the control of the
Board of Directors, the President shall have general policy supervision of and
general management and executive powers over all the property, business,
operations and affairs of the Corporation, and shall see that the policies and
programs adopted or approved by the Board are carried out. The President shall
exercise such further powers and duties as from time to time may be prescribed
in these By-Laws or by the Board of Directors.
SECTION 3.04. THE VICE PRESIDENTS. The Vice Presidents may be
given by resolution of the Board of Directors general executive powers, subject
to the control of the President, concerning one or more or all segments of the
operations of the Corporation. The Vice Presidents shall exercise such further
powers and duties as from time to time may be prescribed in these By-Laws or by
the Board of Directors or by the President. At the request of the President or
in his absence or disability, the senior Vice President shall exercise all the
powers and duties of the President.
5
<PAGE> 9
SECTION 3.05. THE SECRETARY AND ASSISTANT SECRETARIES. It
shall be the duty of the Secretary (a) to keep or cause to be kept an original
or duplicate record of the proceedings of the stockholders and the Board of
Directors, and a copy of the Certificate of Incorporation and of the By-Laws;
(b) to attend to the giving of notices of the Corporation as may be required by
law or these By-Laws; (c) to be custodian of the corporate records and of the
seal of the Corporation and see that the seal is affixed to such documents as
may be necessary or advisable; (d) to have charge of the stock books of the
Corporation, and a share register, giving the names of the stockholders in
alphabetical order, and showing their respective addresses, the number and
classes of shares held by each, the number and date of certificates issued for
the shares, and the date of cancellation of every certificate surrendered for
cancellation; and (e) to exercise all powers and duties as may be prescribed by
the Board of Directors or by the President from time to time. The Secretary by
virtue of his office shall be an Assistant Treasurer. The Assistant Secretaries
shall assist the Secretary in the performance of his duties and shall also
exercise such further powers and duties as from time to time may be assigned to
them by the Board of Directors, the President or the Secretary. At the direction
of the Secretary or in his absence or disability, an Assistant Secretary shall
perform the duties of the Secretary.
SECTION 3.06. THE TREASURER AND ASSISTANT TREASURERS. The
Treasurer shall have custody of all the funds and securities of the Corporation.
He shall collect all moneys due the Corporation and deposit such moneys to the
credit of the Corporation in such banks, trust companies, or other depositories
as may have been duly designated by the Board of Directors. He shall endorse for
collection on behalf of the Corporation checks, notes, drafts and other
documents, and may sign and deliver receipts, vouchers and releases of liens
evidencing payments made to the Corporation. Subject to Section 5.01 of these
By-Laws, he shall cause to be disbursed the funds of the Corporation by payment
in cash or by checks or drafts upon the authorized depositories of the
Corporation. He shall have charge of the books and accounts of the Corporation.
He shall perform all acts incident to the office of Treasurer and such other
duties as may be assigned to him by the Board of Directors. The Treasurer by
virtue of his office shall be an Assistant Secretary. The Assistant Treasurers
shall assist the Treasurer in the performance of his duties and shall also
exercise such further powers and duties as from time to time may be assigned to
them by the Board of Directors, the President or the Treasurer. At the direction
of the Treasurer or in his absence or disability, an Assistant Treasurer shall
perform the duties of the Treasurer.
SECTION 3.07. VACANCIES. Vacancy in any office or position by
reason of death, resignation, removal, disqualification, disability or other
cause, shall be filled in the manner provided in this Article III for regular
election or appointment to such office.
SECTION 3.08. DELEGATION OF DUTIES. The Board of Directors may
in its discretion delegate from the time being the powers and duties, or any of
them, of any officer to any other person whom it may selection.
SECTION 3.09. PERSONAL LIABILITY OF OFFICERS, EMPLOYEES AND
AGENTS. The Corporation shall indemnify its officers, employees and agents to
the full extent permitted by Section 145 of the Delaware General Corporation
Law, as amended from time to time, or any successor provision of Delaware law.
6
<PAGE> 10
ARTICLE IV
SHARES OF CAPITAL STOCK
SECTION 4.01. SHARE CERTIFICATES. Every holder of stock in the
Corporation shall be entitled to a certificate or certificates, to be in such
form as the Board of Directors may from time to time prescribe, signed by the
President or any Vice President and by the Treasurer or any Assistant Treasurer
or the Secretary or any Assistant Secretary. The signatures of such officers may
be facsimiles. Each such certificate shall set forth the name of the registered
holder thereof, the number and class of shares and the designation of the
series, if any, which the certificate represents. The Board of Directors may, if
it so determines, direct that certificates for shares of stock of the
Corporation be signed by a transfer agent or registered by a registrar or both,
in which case such certificates shall not be valid until so signed or
registered.
In the case of any officer of the Corporation who shall have
signed, or whose facsimile signature shall have been used on, any certificate
for shares of stock of the Corporation shall cease to be such officer, whether
because of death, resignation, removal or otherwise, before such certificate
shall have been delivered by the Corporation, such certificate shall
nevertheless be deemed to have been adopted by the Corporation and may be issued
and delivered as though the person who signed such certificate or whose
facsimile signature shall have been used thereon had not ceased to be such
officer.
SECTION 4.02. TRANSFER OF SHARES. Transfer of shares of stock
of the Corporation shall be made only on the books of the Corporation by the
registered holder thereof or by his attorney thereunto authorized by an
instrument duly executed and filed with the Corporation, and on surrender of the
certificate or certificates for such shares properly endorsed or accompanied by
properly executed stock powers and evidence of the payment of all taxes imposed
upon such transfer. Except as provided in Section 4.04 of this Article IV, every
certificate surrendered for transfer shall be canceled and no new certificate or
certificates shall be issued in exchange for any existing certificate until such
existing certificate shall have been so cancelled.
SECTION 4.03. TRANSFER AGENTS AND REGISTRARS. The Board of
Directors may appoint any one or more qualified banks, trust companies or other
corporations organized under any law of any state of the United States or under
the laws of the United States as agent or agents for the Corporation in the
transfer of the stock of the Corporation and likewise may appoint any one or
more such qualified banks, trust companies or other corporations as registrar or
registrars of the stock of the Corporation.
SECTION 4.04. LOST, STOLEN, DESTROYED OR MUTILATED
CERTIFICATES. New certificates for shares of stock may be issued to replace
certificates lost, stolen, destroyed or mutilated upon such terms and
conditions, which may but need not include the giving of a satisfactory bond or
other indemnity, as the Board of Directors may from time to time determine.
SECTION 4.05. REGULATIONS RELATING TO SHARES. The Board of
Directors shall have power and authority to make such rules and regulations not
inconsistent with these By-Laws or with law as it may deem expedient concerning
the issue, transfer and registration of certificates representing shares of
stock of the Corporation.
SECTION 4.06. HOLDERS OF RECORD. The Corporation shall be
entitled to treat the holder of record of any share or shares of stock as the
holder and owner in fact thereof and shall not be bound to
7
<PAGE> 11
recognize any equitable or other claim to or interest in such shares on the part
of any other person, whether or not it shall have express or other notice
thereof, except as otherwise expressly provided by the laws of the State of
Delaware.
SECTION 4.07. FIXING OF RECORD DATE. The Board of Directors
may fix a time, not less than 10 or more than 60 days prior to the date of any
meeting of stockholders, or the date fixed for the payment of any dividend or
distribution, or the date for the allotment of rights, or the date when any
change or conversion or exchange of shares will be made or go into effect, as a
record date for the determination of the stockholders entitled to notice of, or
to vote at, any such meeting, or entitled to receive payment of any such
dividend or distribution, or to receive any such allotment of rights, or to
exercise the rights in respect to any such change, conversion or exchange of
shares. In such case, only such stockholders as shall be stockholders of record
on the date so fixed shall be entitled to notice of, or to vote at, such meeting
or to receive payment of such dividend, or to receive such allotment of rights,
or to exercise such rights, as the case may be, notwithstanding any transfer of
any shares on the books of the Corporation after any record date fixed as
aforesaid.
ARTICLE V
LOANS, NOTES, CHECKS,
CONTRACTS AND OTHER INSTRUMENTS
SECTION 5.01. NOTES, CHECKS, ETC. All notes, drafts,
acceptances, checks, endorsements (other than for deposit) and all evidences of
indebtedness of the Corporation whatsoever shall be signed by such officers or
agents and shall be subject to such requirements as to countersignature or other
conditions as the Board of Directors from time to time may designate. Facsimile
signatures on checks may be used unless prohibited by the Board of Directors.
SECTION 5.02. EXECUTION OF INSTRUMENTS GENERALLY. Except as
provided in Section 5.01 of this Article V, all contracts and other instruments
requiring execution by the Corporation may be executed and delivered by the
President, any Vice President or the Treasurer, and authority to sign any such
contracts or instruments, which may be general or confined to specific
instances, may be conferred by the Board of Directors upon any other person or
persons. Any person having authority to sign on behalf of the Corporation may
delegate, from time to time, by instrument in writing, all or any part of such
authority to any person or person if authorized so to do by Board of Directors.
SECTION 5.03. PROXIES IN RESPECT OF STOCK OR OTHER SECURITIES
OR OTHER CORPORATIONS. Unless otherwise provided by the Board of Directors, the
President may from time to time appoint an attorney or attorneys or an agent or
agents of the Corporation to exercise in the name and on behalf of the
Corporation the powers and rights which the Corporation may have as the holder
of stock or other securities in any other corporation to vote or consent in
respect of such stock or other securities, may instruct the person or persons so
appointed as to the manner of exercising such powers and rights and may execute
or cause to be executed in the name and on behalf of the Corporation and under
its corporate seal or otherwise all such written proxies or other instruments as
he may deem necessary or proper in order that the Corporation may exercise its
said powers and rights.
8
<PAGE> 12
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.01. OFFICES. The registered office of the
Corporation shall be at 1105 North Market Street, Suite 1300, Wilmington,
Delaware. The Corporation may have other offices, within or without the State of
Delaware, at such place or places as the Board of Directors may from time to
time determine or the business of the Corporation may require.
SECTION 6.02. CORPORATE SEAL. The Board of Directors shall
prescribe the form of a suitable corporate seal, which shall contain the full
name of the Corporation and the year and state of incorporation. Such seal may
be used by causing it or a facsimile or reproduction thereof to be affixed to or
placed upon the document to be sealed.
SECTION 6.03. FISCAL YEAR. Unless otherwise determined by the
Board of Directors, the fiscal year of the Corporation shall be the calendar
year.
ARTICLE VII
VALIDATION OF CERTAIN CONTRACTS
SECTION 7.01. No contract or other transaction between the
Corporation and another person shall be invalidated or otherwise adversely
affected by the fact that any one or more stockholders, directors or officers of
the Corporation -
(i) is pecuniarily or otherwise interested in, or is a
stockholder, director, officer, or member of, such other person, or
(ii) is a party to, or is in any other way pecuniarily or
otherwise interested in, the contract or other transaction, or
(iii) is in any way connected with any person pecuniarily or
otherwise interested in such contract or other transaction, provided the fact of
such interest shall be disclosed or known to the Board of Directors or the
stockholders, as the case may be, and in any action of the stockholders or of
the Board authorizing or approving any such contract or other transaction, any
and every stockholder or director may be counted in determining the existence of
a quorum with like force and effect as though he were not so interested, or were
not such a stockholder, director, member or officer, or were not such a party,
or were not so connected. Such director, stockholder or officer shall not be
liable to account to the Corporation for any profit realized by him from or
through any such contract or transaction approved or authorized as aforesaid. As
used herein, the term "person" includes a corporation, partnership, firm,
association or other legal entity.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS AND OFFICERS
SECTION 8.01. To the maximum extent provided by applicable
law, no director shall be personally liable to the Corporation or its
stockholders for monetary damages for any breach of fiduciary duty by such
director as a director. The foregoing sentence shall not eliminate or limit the
liability of a
9
<PAGE> 13
director, (i) for breach of the director's duty of loyalty of the Corporation or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct of a knowing violation of law, (iii) pursuant to Section
174 of the Delaware General Corporation Law or (iv) for any transaction from
which the director derived an improper personal benefit. No amendment to or
repeal of this Article VIII shall apply to or have any effect on the liability
or alleged liability of any director of the Corporation for or with respect to
any acts or omissions of such director occurring prior to such amendment.
Directors and officers of the Corporation shall be indemnified
as of right to the fullest extent now or hereafter permitted by law in
connection with any actual or threatened civil, criminal, administrative or
investigative action, suit or proceeding (whether brought by or in the name of
the Corporation or otherwise) arising out of their service to the Corporation or
to another organization at the request of the Corporation. Persons who are not
directors or officers of the Corporation may be similarly indemnified in respect
of such service to the extent authorized at any time by the Board of Directors
of the Corporation. The Corporation may purchase and maintain insurance to
protect itself and any such director, officer or other person against any
liability asserted against him and incurred by him in respect of such service
whether or not the Corporation would have the power to indemnify him against
such liability by law or under the provisions of this Article. The provisions of
this Article shall be applicable to actions, suits or proceedings commenced
after the adoption hereof, whether arising from acts or omissions occurring
before or after the adoption hereof, and to directors, officers and other
persons who have ceased to render such service, and shall inure to the benefit
of the heirs, executors and administrators of the directors, officers and other
persons referred to in this Article.
ARTICLE IX
AMENDMENTS
SECTION 9.01. These By-Laws may be amended, altered and
repealed, and new By-Laws may be adopted, by the stockholders or the Board of
Directors of the Corporation at any regular or special meeting. No provision of
these By-laws shall vest any property or contract right in any stockholder.
10
<PAGE> 1
EXHIBIT 10.1
AMENDMENT NO. 3
TO
WERNER HOLDING CO. (PA), INC.
STOCK INCENTIVE PLAN
--------------------
The Werner Holding Co. (PA), Inc. Stock Incentive Plan (the "Plan") is hereby
amended as follows:
The first sentence of paragraph 2. STOCK SUBJECT TO PLAN of the Plan is
amended to read:
The number of shares of stock that may be subject to Options or Stock
Appreciation Rights granted hereunder plus the number of shares of
stock that may be granted or sold as Restricted Stock hereunder shall
not in the aggregate exceed 8,353 shares of the Company's Class C
Common Stock (the "Shares"), subject to adjustment under Section 13
hereof; provided further that the number of Shares that a Participant
(as hereinafter defined) may receive pursuant to the Plan shall in no
event exceed 2,500 in any year.
Pursuant to Werner Holding Co. (PA), Inc. Board of Directors action dated March
2, 2000.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001056112
<NAME> WERNER HOLDING CO. (PA), INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<CASH> 1,065
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> (2,200)
<INVENTORY> 72,991
<CURRENT-ASSETS> 141,662
<PP&E> 182,902
<DEPRECIATION> 93,487
<TOTAL-ASSETS> 273,163
<CURRENT-LIABILITIES> 81,106
<BONDS> 277,163
0
0
<COMMON> 1
<OTHER-SE> (142,295)
<TOTAL-LIABILITY-AND-EQUITY> 273,163
<SALES> 129,022
<TOTAL-REVENUES> 129,022
<CGS> 96,841
<TOTAL-COSTS> 119,609
<OTHER-EXPENSES> (290)
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 6,945
<INCOME-PRETAX> 2,758
<INCOME-TAX> 1,113
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,645
<EPS-BASIC> 0
<EPS-DILUTED> 0
</TABLE>
