<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
(Mark One)*
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended March 31, 1996 or [ ] Transition
--------------
report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934
for the transition period from_____ to_____
Commission file number 1-5964
---------------------------------
ALCO STANDARD CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 23-0334400
- ------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Box 834, Valley Forge, Pennsylvania 19482
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(610) 296-8000
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
NONE
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
* Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
----- -----
* Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1996.
Common Stock, no par value 128,386,641 shares
<PAGE>
INDEX
ALCO STANDARD CORPORATION
PART I. FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (Unaudited)
Consolidated Balance Sheets--March 31, 1996
and September 30, 1995
Consolidated Statements of Income--Three months
ended March 31, 1996 and March 31, 1995 and
Six months ended March 31, 1996 and March 31, 1995
Consolidated Statements of Cash Flows--Six
months ended March 31, 1996 and March 31, 1995
Notes to Consolidated Financial Statements--
March 31, 1996
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition and Liquidity
PART II. OTHER INFORMATION
- ---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
- ----------
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements (unaudited)
- ----------------------------------------
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31 September 30
ASSETS 1996 1995
- ------ ----------- ------------
<S> <C> <C>
Current Assets
Cash $ 83,280 $ 90,106
Accounts receivable, less allowance for doubtful accounts:
3/96 - $43,835; 9/95 - $48,628 1,172,295 1,175,699
Inventories 818,904 747,895
Prepaid expenses, deposits and deferred taxes 187,349 146,867
----------- ------------
Total current assets 2,261,828 2,160,567
----------- ------------
Investments and Long-Term Receivables 63,818 56,086
Property and Equipment, at cost 824,705 745,235
Less accumulated depreciation 389,572 375,285
----------- ------------
435,133 369,950
----------- ------------
Other Assets
Goodwill 1,283,919 1,058,214
Miscellaneous 170,334 109,436
----------- ------------
1,454,253 1,167,650
----------- ------------
Finance Subsidiaries Assets 1,277,060 983,322
----------- ------------
$ 5,492,092 $ 4,737,575
=========== ============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
March 31 September 30
LIABILITIES AND SHAREHOLDERS' EQUITY 1996 1995
- ------------------------------------ ------------ -------------
<S> <C> <C>
Current Liabilities
Current portion of long-term debt $ 23,130 $ 26,319
Notes payable 179,291 280,832
Trade accounts payable 470,139 501,316
Accrued salaries, wages and commissions 90,796 115,874
Deferred revenues 189,626 172,900
Restructuring costs 8,341 33,302
Other accrued expenses 327,710 259,534
------------ -------------
Total current liabilities 1,289,033 1,390,077
------------ -------------
Long-Term Debt 772,809 325,314
Other Liabilities
Deferred taxes 101,489 96,082
Restructuring costs 6,000 6,000
Other long term liabilities 176,755 178,782
------------ -------------
284,244 280,864
------------ -------------
Finance Subsidiaries Liabilities;
including debt of: 3/96 - $997,983; 9/95 - $817,585 1,081,334 872,783
Shareholders' Equity
Series AA convertible preferred stock, no par value:
Depositary shares issued and outstanding
9/95 - 4,025 shares 201,924
Series BB conversion preferred stock, no par value:
3,877 depositary shares issued and outstanding 290,170 290,152
Common stock, no par value:
Authorized 300,000 shares
Issued 3/96 -128,168 shares; 9/95 - 112,182 shares 1,115,572 637,414
Retained earnings 682,807 765,309
Foreign currency translation adjustment (23,852) (21,536)
Cost of common shares in treasury: 3/96 - 1 shares;
9/95 - 118 shares (25) (4,726)
------------ -------------
2,064,672 1,868,537
------------ -------------
$ 5,492,092 $ 4,737,575
============ =============
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
--------------------------- ----------------------------
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues
Net sales $ 2,771,353 $ 2,425,354 $ 5,304,968 $ 4,586,145
Dividends, interest and other income 1,100 692 2,114 1,562
Finance subsidiaries 35,636 19,788 67,431 39,728
---------- ---------- ---------- ----------
2,808,089 2,445,834 5,374,513 4,627,435
---------- ---------- ---------- ----------
Costs and Expenses
Cost of goods sold 1,984,646 1,819,279 3,834,080 3,425,488
Selling and administrative 672,086 522,656 1,258,581 1,001,930
Interest 18,365 15,047 32,692 26,997
Finance subsidiaries interest 15,930 6,978 30,739 16,597
---------- ---------- ---------- ----------
2,691,027 2,363,960 5,156,092 4,471,012
---------- ---------- ---------- ----------
Income Before Taxes 117,062 81,874 218,421 156,423
Taxes on Income 45,925 32,749 85,869 61,829
---------- ---------- ---------- ----------
Net Income 71,137 49,125 132,552 94,594
Preferred Dividends 4,885 2,893 12,549 5,786
---------- ---------- ---------- ----------
Net Income Available to Common Shareholders $ 66,252 $ 46,232 $ 120,003 $ 88,808
========== ========== ========== ==========
Earnings Per Share (1) $0.52 $0.42 $0.97 $0.80
========== ========== ========== ==========
Cash dividends per share of common stock $0.14 $0.13 $0.28 $0.26
========== ========== ========== ==========
</TABLE>
(1) See Exhibit 11 for computation of earnings per share.
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
---------------------------
1996 1995
--------- -----------
<S> <C> <C>
Operating activities
Net income $ 132,552 $ 94,594
Additions (deductions) to reconcile net income to net
cash provided (used) by operating activities:
Depreciation 46,985 36,368
Amortization 19,190 15,800
Payment of restructuring costs (23,391) (16,356)
Provision for losses on accounts receivable 14,506 12,217
Changes in operating assets and liabilities, net
of effects from acquisitions and divestitures:
Decrease (increase) in accounts receivable 65,704 (95,084)
Increase in inventories (1,137) (92,009)
Increase in prepaid expenses (44,833) (5,620)
(Decrease) increase in accounts payable, deferred
revenues and accrued expenses (53,219) 21,156
Miscellaneous (2,000) (3,047)
--------- -----------
Net cash provided (used) 154,357 (31,981)
Investing activities
Proceeds from sale of property and equipment 19,232 13,624
Cost of companies acquired, net of cash acquired (178,552) (81,971)
Expenditures for property and equipment (75,975) (47,058)
Purchase of miscellaneous assets (44,932) (29,817)
Finance subsidiaries receivables - additions (431,671) (310,643)
Finance subsidiaries receivables - collections 173,381 108,052
--------- -----------
Net cash used (538,517) (347,813)
Financing activities
Proceeds (repayments) from short-term borrowings, net (89,072) 135,000
Proceeds from issuance of long-term debt 439,595 121,826
Proceeds from option exercises and sale of treasury shares 34,690 40,600
Proceeds from sale of finance subsidiaries lease receivables 26,454 33,586
Proceeds (repayments) from accounts receivable sold (4,279)
Debt issue costs (5,965)
Long-term debt repayments (105,646) (24,177)
Finance subsidiaries debt - additions 254,800 204,246
Finance subsidiaries debt - repayments (74,402) (52,573)
Dividends paid (45,700) (33,160)
Purchase of treasury shares (53,141) (55,074)
--------- -----------
Net cash provided 377,334 370,274
--------- -----------
Net decrease in cash (6,826) (9,520)
Cash at beginning of year 90,106 53,369
--------- -----------
Cash at end of period $ 83,280 $ 43,849
========= ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
ALCO STANDARD CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
Note 1: Basis of Presentation
---------------------
The accompanying 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 Rule 10-
01 of Regulation S-X. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Company's annual report on Form
10-K for the year ended September 30, 1995. Certain prior year amounts have been
reclassified to conform with the current year presentation.
Note 2: Debt
----
On December 11, 1995, the Company issued $300 million of 30 year bonds
at a stated interest rate of 6.75% to the public at a discount price of 98.48%.
The effective yield on the bonds is 6.87%. The bonds will be redeemable as a
whole or in part, at the option of the Company at any time, at a redemption
price equal to the greater of (i) 100% of their principal amount or (ii) the sum
of the present values of the remaining scheduled payments of principal and
interest thereon discounted to maturity on a semiannual basis (assuming a 360-
day year consisting of twelve 30-day months) at the Treasury Yield (as defined)
plus 15 basis points, plus in each case accrued interest to the date of
redemption. Interest on the bonds is paid semi-annually. The bonds are not
subject to sinking fund provisions.
Note 3: Series AA Preferred Stock Redemption
------------------------------------
On February 9, 1996, the Company redeemed all of its Series AA
Preferred Stock for common stock at a conversion rate of 2.2402 shares of common
stock for each depositary share redeemed. Common shares totaling 8,585,000 were
issued in connection with this redemption.
<PAGE>
Item 2: Management's Discussion and Analysis of Results of Operations and
- --------------------------------------------------------------------------
Financial Condition and Liquidity
- ---------------------------------
Results of Operations
---------------------
The discussion of the results of operations reviews the operations of the
Company as contained in the Consolidated Statements of Income.
Three and Six Months Ended March 31, 1996
Compared with the Three and Six Months Ended March 31, 1995
-----------------------------------------------------------
Revenues and income before taxes for the second quarter and year-to-date of
fiscal 1996 compared to the second quarter and year-to-date of fiscal 1995 were
as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------------ -----------------------
March 31 % March 31 %
----------- -----------
REVENUES: 1996 1995 Change 1996 1995 Change
---- ---- ------ ---- ---- ------
<S> <C> <C> <C> <C> <C> <C>
(in millions)
IKON Office Solutions $ 1,063 $ 698 52.3% $ 1,916 $1,334 43.4%
Unisource
United States 1,553 1,551 .1 3,074 2,918 5.3
Canada 194 199 (2.5) 389 379 2.6
--- --- --- ---
Total Unisource 1,747 1,750 (.2) 3,463 3,297 5.0
----- ----- ----- -----
Operating 2,810 2,448 14.8 5,379 4,631 16.2
Corporate and eliminations (2) (2) (4) (4)
----- ----- ----- -----
$2,808 $2,446 14.8% $5,375 $4,627 16.2%
====== ====== ====== ======
Three Months Ended Six Months Ended
----------------------- ----------------------
March 31 % March 31 %
----------- -----------
INCOME BEFORE TAXES: 1996 1995 Change 1996 1995 Change
---- ---- ------ ---- ---- ------
(in millions)
IKON Office Solutions $ 90.9 $ 59.0 54.1% $167.0 $114.2 46.2%
Unisource
United States 52.9 42.4 24.8 100.6 78.5 28.2
Canada 7.2 10.6 (32.1) 15.5 17.1 (9.4)
--- ---- ---- ----
Total Unisource 60.1 53.0 13.4 116.1 95.6 21.4
---- ---- ----- ----
Operating 151.0 112.0 34.8 283.1 209.8 34.9
Interest (18.4) (15.0) (32.7) (27.0)
Non-allocated (15.5) (15.1) (32.0) (26.4)
------ ------ ------ ------
$117.1 $ 81.9 43.0% $218.4 $156.4 39.6%
====== ====== ====== ======
</TABLE>
QUARTER:
The Company's revenues for the second quarter of fiscal year 1996 were $2.8
billion, a 14.8% increase over the comparable period in the prior year.
Operating income increased 34.8% to $151.0 million from $112.0 million reported
in the second quarter of fiscal year 1995. Earnings per share of $.52 for the
second quarter of fiscal 1996 were 23.8% higher than the $.42 reported in the
second quarter of the prior year.
SIX MONTHS:
For the six months ended March 31, 1996, revenues were $5.4 billion, a
16.2% increase over the prior year's $4.6 billion. Operating income increased
34.9% for the first six months of fiscal 1996 compared to the prior year, to
$283.1 million. Earnings per share for the six months ended March 31, 1996
increased 21.3% to $.97 from $.80 in the first six months of fiscal 1995.
<PAGE>
IKON Office Solutions
QUARTER:
IKON Office Solutions (IKON), formerly Alco Office Products, generated $365
million in increased revenues in the second quarter of fiscal 1996, a 52.3%
increase over the prior year, of which $263 million relates to current and prior
year acquisitions and $102 million to IKON's base companies. IKON improved its
internal revenue growth to 14.6% in the second quarter.
IKON's operating income increased by $31.9 million, or 54.1% over the prior
year. Current and prior year acquisitions contributed $19.9 million. The
remaining $12.0 million represents internal growth from its base companies.
IKON Capital, Inc. (formerly Alco Capital Resource, Inc.) contributed 8.9% of
IKON's operating income in the second quarter of fiscal 1996 compared to 9.3% in
the second quarter of fiscal 1995. Operating margins were 8.6% in the second
quarter of fiscal 1996, compared to 8.5% in fiscal 1995.
SIX MONTHS:
For the six months ended March 31, 1996, IKON generated $582 million in
increased revenues, a 43.4% increase over the prior year, of which $417 million
relates to current and prior year acquisitions and $165 million to IKON's base
companies. Internal revenue growth in IKON's base companies continues to be
across all revenue segments, but primarily in equipment sales, supplies, service
and outsourcing businesses.
Operating income at IKON increased 46.2%, or $52.8 million, over the prior
year. Current and prior year acquisitions contributed $33.0 million. The
remaining $19.8 million represents internal growth from its base companies. This
growth primarily represents higher operating contributions from the equipment,
service and outsourcing areas of IKON's businesses. IKON Capital contributed
9.6% of IKON's operating income in the first six months of fiscal 1996 compared
to 9.3% in the first six months of fiscal 1995. Operating margins were 8.7% in
the first half of fiscal 1996, compared to 8.6% in fiscal 1995.
IKON Strategic Vision
The Company has developed a long range strategy to transform IKON. The
strategy includes broadening the business into three market segments - analog,
networking and outsourcing. The transformation will include consolidating
administrative functions, rationalizing the supply chain, establishing new
vendor alliances, developing a new information technology system, adopting a
single name, developing a major/national accounts program and moving to a
market-place focus to strengthen local service. IKON is in the early stages of
this transformation, which is expected to take up to four years.
Unisource
QUARTER:
Revenues from Unisource's U.S. operations were essentially flat for the
quarter compared to the prior year. Current and prior year acquisitions
contributed $120 million to revenue, while paper prices and shipments each
declined approximately 3% which decreased revenues of base companies. Supply
systems volume, excluding acquisitions, grew approximately 2% compared to the
second quarter of fiscal 1995, while pricing was down approximately 3%.
Unisource's Canadian operations' revenues decreased by $5 million, also the
result of paper price and volume decreases.
Operating income from Unisource's U.S. operations increased $10.5 million,
of which $6.8 million was from current and prior year acquisitions and $3.7
million was from its base companies. The increase in operating income from base
companies was primarily due to improvement in gross trading margin percentages,
restructuring benefits and operating efficiencies, net of the effects of price
and volume decreases. The decrease of $3.4 million in the Canadian operation
reflects both price and volume decreases. Operating margins were 3.4% in the
second quarter of fiscal 1996, compared to 3.0% in fiscal 1995.
<PAGE>
SIX MONTHS:
The $156 million increase in revenues from Unisource's U.S. operations
includes current and prior year acquisitions of $196 million, offset by revenue
declines in base companies. Unisource's Canadian operations increased their
revenues by $10 million, including $7 million contributed by a 1995 acquisition.
Operating income from Unisource's U.S. operations increased $22.1 million,
of which $10.7 million is from current and prior year acquisitions and $11.4
million is from its base companies. The increase in operating income from base
companies was primarily due to improvement in gross trading margin percentages,
restructuring benefits and operating efficiencies, net of the effects of price
and volume decreases. The decrease of $1.6 million in the Canadian paper
operation reflects the price and volume decreases. Operating margins were 3.4%
in the first half of fiscal 1996, compared to 2.9% in fiscal 1995.
Unisource Restructuring
During the quarter, Unisource successfully completed beta testing its new
information technology system. Unisource is now upgrading the software to its
latest release before beginning implementation and expects the system to be
substantially implemented by the end of 1997. Unisource still expects to
deliver $50 million of restructuring benefits in fiscal 1996. At
March 31, 1996, the remaining restructuring reserve is $14.3 million.
Foreign Operations
QUARTER:
Revenues from the Company's paper and office products operations outside
the U.S. were $327 million for the second quarter of fiscal 1996 compared to
$271 million for the same period of the prior fiscal year, an increase of 20.7%.
IKON's European operations accounted for $45 million of the increase, primarily
the result of the acquisitions of A:Copy (UK) PLC and Copymore PLC in the third
and fourth quarters of fiscal 1995. IKON's Canadian revenues increased $16
million, while Unisource's Canadian revenues decreased $5 million.
Operating income from foreign operations was $21.5 million for the three
months ended March 31, 1996, up $5.5 million from the prior year, of which $7.2
million is attributable to IKON's European operations. IKON's Canadian
operations added $1.7 million of operating income to the second quarter of
fiscal 1996, while Unisource's Canadian operations were $3.4 million less than
the prior year.
SIX MONTHS:
For the first six months of fiscal 1996, revenues from the Company's paper
and office products operations outside the U.S. increased 24.9% to $647
million, compared to $518 million for the same period of the prior fiscal year.
IKON's European operations accounted for $89 million of the increase, primarily
the result of the acquisitions of A:Copy (UK) PLC and Copymore PLC in the third
and fourth quarters of fiscal 1995. The increase also includes $40 million from
Unisource and IKON Canadian operations.
Foreign operations operating income was $41.4 million for the six months
ended March 31, 1996, up $15.4 million from the prior year, of which $14.2
million is attributable to IKON's European operations. IKON's Canadian
operations added $2.8 million of operating income to the first six months of
fiscal 1996, while Unisource's Canadian operations were $1.6 million less than
the prior year.
There was no material effect of foreign currency exchange rate fluctuations
on the results of operations during the first six months of fiscal 1996 compared
to the first six months of fiscal 1995.
<PAGE>
Acquisitions
In the second quarter of fiscal 1996, IKON completed 30 acquisitions with
annualized revenues of $379 million, including five acquisitions in the U.K.
This brings total year to date acquisitions to 54, with annualized revenues of
$516 million. Several of these acquisitions will expand IKON's capacity and
expertise in networking and outsourcing, two of the group's focus areas in its
strategic vision.
Unisource completed 10 acquisitions in the second quarter of fiscal 1996
with annualized revenues of $239 million. For the six months ended
March 31, 1996, Unisource completed 21 acquisitions with annualized revenues of
$514 million. Almost all of the U.S.-based acquisitions in the second quarter
are supply systems companies, reflecting Unisource's goal of a balanced revenue
contribution between its paper and supply systems segments by the year 2000. Two
of the second quarter acquisitions are located in Mexico, for a total of four
year-to-date, further expanding the group's presence in that market.
Other
Interest expense year-to-date increased by approximately $5.7 million,
primarily the result of increased borrowing levels during the first half of
fiscal 1996 compared to the fiscal 1995.
Income before taxes increased by $35.2 million, or 43.0% for the second
quarter and $62.0 million, or 39.6% year-to-date over the prior year, primarily
reflecting the combined result of improved operations from base companies, along
with earnings contributed by acquisitions, net of increased interest costs and
corporate expenses. The effective income tax rate year-to-date is 39.3%
compared with 39.5% for the comparative period in fiscal 1995.
Weighted average shares of 128.4 million for the quarter ended
March 31, 1996 were 17.1 million shares greater than the 111.3 million at
March 31, 1995, primarily the result of acquisitions for stock and conversion of
Series AA Preferred Stock effective February 9, 1996.
The Company now plans to adopt Statement of Financial Accounting Standards
No. 121, "Accounting for the Impairment of Long-Lived Assets and Long-Lived
Assets to Be Disposed Of" in the first quarter of fiscal 1997. It is not
expected to have a material effect on the Company's financial statements.
On April 17, 1996, the Company announced that its Board of Directors has
approved the structuring of its businesses, IKON and Unisource, under separate
ownership in order to maximize the future growth potential of both businesses.
The Company is actively considering a variety of alternatives for separating the
two businesses. The Company plans to reach a decision as to the method of
separation by the end of June, with an estimated completion date of not later
than December 31, 1996.
<PAGE>
Financial Condition and Liquidity
---------------------------------
The Company's operations for the first six months of fiscal 1996 generated
$154 million in cash. This cash, along with increased debt levels, funded the
Company's major cash usages for the first half of fiscal 1996, primarily
acquisitions, capital expenditures and dividends.
Debt, excluding finance subsidiaries, was $975 million at March 31, 1996,
an increase of $343 million from the Company's debt balance at
September 30, 1995 of $632 million, but only a $50 million increase for the
second quarter. In November 1995, the Company filed a shelf registration with
the SEC under which it could issue up to $750 million of debt or equity
securities. On December 11, 1995, the Company issued $300 million of 30 year
bonds with a stated interest rate of 6.75% to the public at a discount of 98.48%
under this shelf. The proceeds were used to repay short term borrowings. The
Company had a total of $600 million in bank credit commitments as of
March 31, 1996. Short term borrowings supported by these facilities totaled $163
million leaving $437 million unused and available. At March 31, 1996, debt as a
percentage of capitalization was 32.1% and the current ratio was 1.8 to 1.
The Company filed a shelf registration for 10 million shares of common
stock in January 1996. Shares issued under this registration statement are
being used primarily for acquisitions. Approximately 5.8 million shares have
been issued under this shelf registration through March 31, 1996. A shelf
registration statement for 5 million shares of common stock, which will also be
used for acquisitions, was filed in March 1996.
The Company estimated that total cash expenditures in connection with the
Unisource restructuring plan will amount to $143 million. In addition to the
$112 million spent through fiscal 1995, $23 million was expended in the first
six months of fiscal 1996, totaling $135 million spent to date. Unisource
anticipates spending an additional $8 million during the remainder of fiscal
1996. The remaining commitment under Unisource's $300 million 10 year
information technology outsourcing agreement, which was effective
January 1, 1994, is $195 million at March 31, 1996. The foregoing commitments
are anticipated to be funded from Unisource's operating cash flow.
Finance subsidiaries debt grew by $180 million from September 30, 1995, a
result of increased leasing activity. During the six months ended
March 31, 1996, IKON Capital issued an additional $169.5 million under its
medium term notes program which began in July 1994. At March 31, 1996, $741.5
million of medium term notes remain outstanding with a weighted interest rate of
6.7%, leaving $728.5 million available under this program. Under its $125
million asset securitization agreement commenced in September 1994, IKON Capital
sold $26.5 million in direct financing leases during the first half of fiscal
1996, replacing those leases liquidated and leaving the amount of contracts sold
unchanged.
The Company believes that its operating cash flow together with unused
lines of credit and other financing arrangements will be sufficient to finance
current operating requirements including capital expenditures, acquisitions and
restructuring and transformation programs.
<PAGE>
PART II. OTHER INFORMATION
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
On January 25, 1996, the Company held its annual meeting of shareholders,
at which eleven directors were elected to hold office until election of their
successors. The shareholders also voted on the following proposals: 1) a
proposal to amend the Amended Articles of Incorporation of the Company to
increase the number of shares of common stock which the Company shall have
authority to issue from 150 million to 300 million shares; and 2) a proposal to
amend the Code of Regulations of the Company to fix the minimum number of
directors at seven and the maximum number of directors at sixteen and to permit
the Board of Directors to change the number of directors fixed by the
shareholders within the minimum and maximum numbers established by the Code of
Regulations.
The following sets forth the tabulation of votes with respect to the above
proposals:
Proposal to Elect Directors For Withheld
- ---------------------------- --- --------
Paul J. Darling, II 91,449,481 665,128
William F. Drake 90,614,598 1,500,011
James J. Forese 91,462,419 652,191
Frederick S. Hammer 91,744,188 370,421
Barbara B. Hauptfuhrer 91,449,913 664,697
Dana G. Mead 86,148,267 5,966,343
Ray B. Mundt 91,726,217 388,393
Paul C. O'Neill 91,447,351 667,258
Rogelio G. Sada 91,417,963 696,647
James W. Stratton 91,463,861 650,748
John E. Stuart 91,735,500 379,110
For Against Abstain
--- ------- -------
Proposal to Amend Articles
of Incorporation: 82,886,029 8,666,370 562,210
Proposal to Amend Code of
Regulations: 75,188,332 14,348,317 2,577,960
All proposals were routine; therefore, no broker non-votes were recorded.
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) The following Exhibits are furnished pursuant to Item 601 of
Regulation S-K:
Exhibit No. (3.1) Amended and Restated Articles of Incorporation
of Alco Standard Corporation.
Exhibit No. (3.2) Amended and Restated Code of Regulations of
Alco Standard Corporation.
Exhibit No. (4.2) Amendment No. 2 dated as of December 1, 1994,
Amendment No. 3 dated as of March 17, 1995, and Amendment No. 4
dated as of March 26, 1996 to Revolving Credit and Acceptance
Agreement dated as of April 21, 1993, which was filed as Exhibit 4.2
to Alco's 1993 Form 10-K and 1994 Form 10-K.
Exhibit No. (10.20) First Amendment dated as of September 15, 1995
and Second Amendment dated as of March 15, 1996 to Receivables
Transfer Agreement dated as of September 23, 1994 among IKON Capital,
Inc., Twin Towers, Inc. and Deutsche Bank AG, New York Branch, which
was filed as Exhibit 10.20 to Alco's 1994 Form 10-K/A.
Exhibit No. (10.1) Alco Standard Corporation Amended and Restated
Long Term Incentive Plan.
Exhibit No. (10.4) Alco Standard Corporation Amended and Restated
Partners' Stock Purchase Plan.
Exhibit No. (10.5) Alco Standard Corporation Amended and Restated
1995 Stock Option Plan.
Exhibit No. (11) Computation of Earnings per Share
Exhibit No. (27) Financial Data Schedule.
(b) Reports on Form 8-K
On March 8, 1996, the registrant filed a Current Report on
Form 8-K to file, under Item 5 of the form, the announcement
made March 4, 1996 of the name change of the Company's
office products group from Alco Office Products to IKON
Office Solutions, Inc.
On April 22, 1996, the registrant filed a Current Report on
Form 8-K to file, under Item 5 of the form, the announcement
made April 17, 1996 of the decision to structure the Company's
two businesses, IKON Office Solutions, Inc. and Unisource
Worldwide, Inc., under separate ownership.
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized. This report has also been signed by the
undersigned in his capacity as the chief accounting officer of the Registrant.
ALCO STANDARD CORPORATION
Date May 14, 1996 /s/ Michael J. Dillon
--------------- ---------------------
Michael J. Dillon
Vice President and Controller
(Chief Accounting Officer)
<PAGE>
INDEX TO EXHIBITS
-----------------
Exhibit Number
- --------------
(3.1) Amended and Restated Articles of Incorporation
of Alco Standard Corporation.
(3.2) Amended and Restated Code of Regulations of
Alco Standard Corporation.
(4.2) Amendment No. 2 dated as of December 1, 1994,
Amendment No. 3 dated as of March 17, 1995, and Amendment No. 4
dated as of March 26, 1996 to Revolving Credit and Acceptance
Agreement dated as of April 21, 1993.
(10.20) First Amendment dated as of September 15, 1995
and Second Amendment dated as of March 15, 1996 to Receivables
Transfer Agreement dated as of September 23, 1994 among IKON
Capital, Inc., Twin Towers, Inc.
and Deutsche Bank AG, New York Branch.
(10.1) Alco Standard Corporation Amended and Restated
Long Term Incentive Plan.
(10.4) Alco Standard Corporation Amended and Restated
Partners' Stock Purchase Plan.
(10.5) Alco Standard Corporation Amended and Restated
1995 Stock Option Plan.
(11) Computation of Earnings per Share
(27) Financial Data Schedule.
<PAGE>
ALCO STANDARD CORPORATION
AMENDED AND RESTATED ARTICLES OF INCORPORATION
(With Amendments through May 3, 1996) *
_____________________________________________
* Terms of the Serial Preferred Stock are described herein as of the date of
adoption of the amendment authorizing the particular series. As a result of the
two-for-one stock split occuring on November 9, 1996, adjusted conversion rates,
redemption rates and other changes are applicable to the serial preferred stock
in accordance with the adjustment provision of each series.
<PAGE>
AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF
ALCO STANDARD CORPORATION
FIRST: The name of the Corporation shall be ALCO STANDARD CORPORATION.
SECOND: The principal office of the Corporation in the State of Ohio is to be
located at Cleveland in Cuyahoga County.
THIRD: The purposes for which, and for any of which, the Corporation is formed
are as follows:
1. To develop, manufacture, service, repair, treat, finish, buy, sell
and generally deal in, in every manner, articles, materials and products of
every kind and description, to own, hold and deal in, in every manner, all real
and personal property, and to do all things necessary or incidental to the
foregoing purposes.
2. In general to carry on any other lawful business whatsoever which
is calculated, directly or indirectly, to promote the interests of the
Corporation or to enhance the value of its properties; and to have and exercise
all rights, powers and privileges which are now or may hereafter be conferred
upon corporations by the laws of Ohio; provided, however, that nothing contained
in this Article Third shall be construed as authorizing the Corporation to carry
on the business of a public utility or railroad as defined by the public utility
laws of the State of Ohio.
The Corporation reserves the right at any time and from time to time
to substantially change its purposes in any manner now or hereafter permitted by
statute. Any change of the purposes of the Corporation authorized or approved
by the holders of shares entitled to exercise the proportion of the voting power
of the Corporation now or hereafter required by statute for such authorization
or approval shall be binding and conclusive upon every shareholder of the
Corporation as fully as if such shareholder had voted therefor; and no
shareholder, notwithstanding that he may have voted against such change of
purposes or may have objected in writing thereto, shall be entitled to payment
of the fair cash value of his shares.
FOURTH: The number of shares which the Corporation is authorized to have
outstanding is 302,095,628 consisting of 2,095,628 shares of Serial Preferred
Stock of no par value (hereinafter called "Serial Preferred Stock"), and
300,000,000 shares of Common Stock of no par value (hereinafter called "Common
Stock"). The shares of such classes shall have the following express terms:
Division A
Express Terms of the Serial Preferred Stock
1. Series and Rank. The Serial Preferred Stock may be issued from
---------------
time to time in one or more series. All shares of Serial Preferred Stock shall
be of equal
<PAGE>
-2-
rank and shall be identical, except in respect of the matters that may be fixed
by the Board of Directors as hereinafter provided, and each share of each series
shall be identical with all other shares of such series, except as to the date
from which dividends are cumulative. Subject to the provisions of Sections 2 to
7, both inclusive, of this Division, which provisions shall apply to all Serial
Preferred Stock, the Board of Directors hereby is authorized to cause such
shares to be issued in one or more series and with respect to each such series
prior to the issuance thereof to fix:
(a) The designation of the series, which may be by distinguishing
number, letter or title.
(b) The number of shares of the series, which number the Board of
Directors may (except where otherwise provided in the creation of the series)
increase or decrease (but not below the number of shares thereof then
outstanding).
(c) The annual dividend rate of the series.
(d) The dates at which dividends, if declared, shall be payable, and
the dates from which dividends shall be cumulative.
(e) The redemption rights and price or prices, if any, for shares of
the series.
(f) The terms and amount of any sinking fund provided for the
purchase or redemption of shares of the series.
(g) The amounts payable on shares of the series in the event of any
liquidation, dissolution or winding up of the affairs of the Corporation, which
amount may vary depending upon whether such liquidation, dissolution or winding
up is voluntary or involuntary.
(h) Whether the shares of the series shall be convertible into Common
Stock, and, if so, the conversion price or prices, any adjustments thereof, and
all other terms and conditions upon which such conversion may be made.
(i) Restrictions on the issuance of shares of the same series or of
any other class or series.
The Board of Directors is authorized to adopt from time to time
amendments to the Articles of Incorporation fixing, with respect to each such
series, the matters described in clauses (a) to (i), both inclusive, of this
Section 1.
2. Dividends. The holders of the Serial Preferred Stock of each
---------
series shall be entitled to receive, when and as declared by the Board of
Directors, out of funds of the Corporation legally available for dividends,
dividends in cash at the rate for such series fixed in accordance with the
provisions of Section 1 of this Division, and no more, payable quarterly on the
dates fixed for such series. Such dividends on each share of Serial Preferred
Stock shall accrue and be cumulative, whether or
<PAGE>
-3-
not earned or declared, from and after the date or dates fixed with respect to
such series. No dividends may be paid upon or declared or set apart for any of
the Serial Preferred Stock for any quarterly dividend period unless at the same
time a like proportionate dividend for the same quarterly dividend period,
ratably in proportion to the respective annual dividend rates fixed therefor,
shall be paid upon or declared or set apart for all Serial Preferred Stock of
all series then issued and outstanding and entitled to receive such dividend.
3. Dividends on or Distributions to Holders of Junior Stock. So long as
--------------------------------------------------------
any shares of Serial Preferred Stock are outstanding, the Corporation shall not
(a) declare or pay any dividends (other than dividends payable in Common Stock
or other shares of the Corporation ranking junior to the Serial Preferred Stock)
to holders of Common Stock or shares of the Corporation of any other class
ranking on a parity with or junior to the Serial Preferred Stock, or (b) make
any distributions of assets (directly or indirectly, by purchase; redemption or
otherwise) to the holders of Common Stock or shares of the Corporation of any
other class ranking on a parity with or junior to the Serial Preferred Stock
(except in the case of shares purchased in compromise of claims or to prevent
loss on doubtful debts and except in the case of shares purchased out of the
proceeds of the sale of Common Stock or other shares ranking junior to the
Serial Preferred Stock received by the Corporation, subsequent to January 1,
1968):
(a) Unless all accrued and unpaid dividends on shares of Serial Preferred
Stock, including the full dividends for the then quarterly dividend period,
shall have been paid or declared and funds sufficient for payment thereof set
apart; and
(b) Unless there shall be no arrearages with respect to redemption of
shares of Serial Preferred Stock from any sinking fund provided for shares of
such series in accordance with provisions of Section 1 of this Division.
4. Voting Rights. The holders of Serial Preferred Stock shall be
-------------
entitled at all times to one vote for each share, and except as otherwise
required by law, the holders of the Serial Preferred Stock and Common Stock of
the Corporation shall vote together as one class on all matters, subject,
however, to the special voting rights conferred upon the holders of the Serial
Preferred Stock as hereinafter provided.
If and when the Corporation shall be in default in the payment, in whole or
in part, of each of six quarterly dividends (whether or not consecutive) accrued
on any series of Serial Preferred Stock whether or not earned or declared, the
holders of the Serial Preferred Stock of all series, voting separately as a
single class, shall be entitled to elect two Directors of the Corporation, to
serve in addition to the Directors otherwise elected.
Such rights to elect additional Directors may be exercised at any annual
meeting of shareholders or, within the limitation hereinafter provided, at a
special meeting of shareholders held for such purpose. If such default shall
occur more than
<PAGE>
-4-
90 days preceding the date of the next annual meeting of shareholders as fixed
by the Regulations of the Corporation, then a special meeting of the holders of
the Serial Preferred Stock shall be called by the Secretary of the Corporation
upon the written request of the holders of not less than 10% of the Serial
Preferred Stock then outstanding, such meeting to be held within 60 days after
the delivery to the Secretary of such request or such later time as may be
reasonably required to obtain clearance from the Securities and Exchange
Commission. Such additional Directors, whether elected at an annual meeting or
at a special meeting, shall serve until the next annual meeting and until their
successors shall be duly elected and qualified, unless their terms shall sooner
terminate pursuant to the provisions of this Section 4. At any meeting for the
purpose of electing such additional Directors, the holders of 35% of the Serial
Preferred Stock then outstanding shall constitute a quorum, and any such meeting
shall be valid, notwithstanding that a quorum of the outstanding shares of any
other class or classes shall not be present or represented thereat. At the time
of any such meeting at which a quorum shall be present, the number of Directors
constituting the whole Board of Directors shall be deemed to be increased by
two.
If and when all dividends in default on the Serial Preferred Stock shall be
paid or declared and funds sufficient for the payment thereof irrevocably set
aside for payment, the right of the holders of the Serial Preferred Stock as a
class to elect two Directors shall then cease and if any Directors were elected
by the holders of the Serial Preferred Stock, as a class, the term of such
Directors shall terminate, and the number of Directors constituting the whole
Board of Directors shall be accordingly reduced. The above provisions for the
vesting of such voting rights in the holders of the Serial Preferred Stock, as a
class, shall apply, however, in case of any subsequent default or failure under
this Section 4.
The rights of the holders of Serial Preferred Stock to elect two Directors
provided by this Section 4 shall, when in effect, be in lieu of, and not in
addition to, all other rights otherwise held by the holders of Serial Preferred
Stock to vote as a class with the Common Stock for the election of Directors.
5. Action Requiring Serial Preferred Stock Consent.
-----------------------------------------------
(a) So long as any shares of Serial Preferred Stock shall be outstanding,
the Corporation shall not, without (i) the affirmative vote of the holders of at
least two-thirds of the shares of Serial Preferred Stock at the time
outstanding, given in person or by proxy, either at a special meeting called for
the purpose, or at any annual meeting of shareholders if appropriate notice of
such proposed action is given, at which all of the shares of Serial Preferred
Stock shall vote separately as a single class, or (ii) the written consent of
the holders of at least two-thirds of the shares of Serial Preferred Stock at
the time outstanding:
A) Amend or repeal any of the provisions of the Articles or Regulations of
the Corporation so as to affect adversely the preferences, rights, powers or
privileges of the Serial Preferred Stock or the holders thereof.
<PAGE>
-5-
B) Authorize or issue any class or series of any class of the stock of the
Corporation ranking prior to the Serial Preferred Stock, or authorize or issue
any obligations or securities convertible into any such class.
C) Purchase or redeem (for sinking fund purposes or otherwise) less than
all of the Serial Preferred Stock then outstanding except in accordance with a
stock purchase offer made to all holders of record of Serial Preferred Stock,
unless all accrued and unpaid dividends on the Serial Preferred Stock, including
all dividends for the then quarterly dividend period, shall have been paid or
declared and funds sufficient for the payment thereof set apart, and unless all
accrued sinking fund obligations applicable thereto shall have been complied
with.
D) Sell, lease or convey all or substantially all of the property or
business of the Corporation, or voluntarily liquidate or dissolve the
Corporation, or consolidate or merge the Corporation with or into any other
corporation; provided, however, that no such class vote or consent of the
holders of the Serial Preferred Stock shall be required for consolidation or
merger of the Corporation if (i) each holder of shares of Serial Preferred Stock
immediately prior to such consolidation or merger shall, upon the occurrence
thereof, possess the same or an equivalent number of shares of the resulting
corporation (which may be the Corporation or another corporation) having
substantially the same or equivalent terms and provisions as the shares of
Serial Preferred Stock, and (ii) the resulting corporation will have,
immediately after such consolidation or merger, no stock either authorized or
outstanding ranking prior to or on a parity with such shares, other than stock
of the Corporation theretofore authorized ranking prior to or on a parity with
the Serial Preferred Stock (or stock of the resulting corporation into which
such stock of the Corporation is changed pursuant to the merger or
consolidation).
(b) So long as any shares of Serial Preferred Stock shall be outstanding,
the Corporation shall not, without (i) the affirmative vote of the holders of at
least a majority of the shares of Serial Preferred Stock at the time
outstanding, given in person or by proxy, either at a special meeting called for
the purpose, or at any annual meeting of shareholders if appropriate notice of
such proposed action is given, at which all of the shares of Serial Preferred
Stock shall vote separately as a single class, or (ii) the written consent of
the holders of at least a majority of the shares of Serial Preferred Stock at
the time outstanding: A) authorize or issue any class of the stock of the
Corporation ranking on a parity with the Serial Preferred Stock, with respect to
the payment of dividends or upon liquidation, dissolution and winding up of the
Corporation, or authorize or issue any obligations or securities convertible
into any such class, or B) increase the authorized number of shares of the
Serial Preferred Stock or increase the authorized number of shares of any class
ranking on a parity with the Serial Preferred Stock, with respect to the payment
of dividends or upon liquidation, dissolution and winding up of the Corporation,
or authorize or issue any obligations or securities convertible into any such
class.
(c) So long as any shares of a series of Serial Preferred Stock shall be
outstanding, the Corporation shall not, without (i) the affirmative vote of the
holders
<PAGE>
-6-
of at least two-thirds of the shares of such series at the time outstanding,
given in person or by proxy, either at a special meeting or at any annual
meeting of shareholders if appropriate notice of such proposed action is given,
at which all of the shares of such series shall vote separately as a single
class, or (ii) the written consent of the holders of at least two-thirds of the
shares of such series at the time outstanding, amend or repeal any of the
provisions of the Articles or Regulations of the Corporation so as to affect
adversely and particularly the preferences, rights, powers or privileges of such
series of Serial Preferred Stock or the holders thereof.
(d) Notwithstanding the foregoing, (i) no such vote or consent of the
holders of the Serial Preferred Stock shall be required if, prior to or
contemporaneously with the happening of any of the events listed in
subparagraphs (a) or (b) above, provision has been made in accordance with the
provisions fixed by the Directors for the redemption of all of the Serial
Preferred Stock at the time outstanding and (ii) no such vote or consent of the
holders of any series of Serial Preferred Stock shall be required if, prior to
or contemporaneously with the happening of any of the events listed in
subparagraph (c) above, provision has been made in accordance with the
provisions fixed by the Directors for the redemption of all shares of such
series of Serial Preferred Stock at the time outstanding.
6. Liquidation Rights. In the event of the liquidation, dissolution or
------------------
winding up of the Corporation, whether voluntary or involuntary, the holders of
Serial Preferred Stock shall be entitled to receive out of the assets of the
Corporation, before any payment or distribution shall be made to the holders of
Common Stock or any other class of stock junior to the Serial Preferred Stock as
to rights upon liquidation, payment of the amount per share provided for in the
resolution or resolutions adopted by the Board of Directors providing for the
issuance of such shares, plus an amount equal to all dividends accrued to the
date of such payment and unpaid, whether or not earned or declared but without
interest, and no more.
If, upon any liquidation, dissolution or winding up of the Corporation, the
assets available for distribution shall be insufficient to pay the holders of
all outstanding shares of Serial Preferred Stock the amounts to which they shall
respectively be entitled, the holders of Serial Preferred Stock of all series
shall share ratably in any distribution of assets according to the respective
amounts which would be payable in respect of the shares held by them upon such
distribution if all amounts payable in respect of the Serial Preferred Stock of
all series were paid in full. Neither the consolidation or merger of the
Corporation into or with any other corporation or corporations, nor the sale or
transfer by the Corporation of all or any part of its assets, nor the reduction
of the capital stock of the Corporation, shall be deemed to be a liquidation,
dissolution or winding up of the Corporation within the meaning of any of the
provisions of this Section 6.
7. Definitions. For the purpose of this Division:
------------
Whenever reference is made to shares "ranking prior to the Serial Preferred
Stock" or "on a parity with the Serial Preferred Stock" such reference shall
mean and
<PAGE>
-7-
include all shares of the Corporation in respect of which the rights of the
holders thereof as to the payment of dividends or as to distributions in the
event of any involuntary liquidation, dissolution or winding up of the
Corporation are given preference over, or rank on an equality with, (as the case
may be) the rights of the holders of the Serial Preferred Stock; and whenever
reference is made to shares "ranking junior to the Serial Preferred Stock" such
reference shall mean and include all shares of the Corporation in respect of
which the rights of the holders as to the payment of dividends and as to
distributions in the event of an involuntary liquidation, dissolution or winding
up of the Corporation are junior and subordinate to the rights of the holders of
the Serial Preferred Stock.
8. Express Terms of the Series 12 Preferred Stock (Express Terms are
Described as Adopted by Amendment on December 5, 1988)
----------------------------------------------------------------------
There is hereby established a series of the Serial Preferred Stock to be
known as Series 12 Preferred Stock to which all of the Express Terms of the
Serial Preferred Stock set forth in 1 through 7 above as well as the following
provisions shall be applicable:
(a) The designation of the series is Series 12 Preferred Stock;
(b) The number of shares of the series, which number the Board of
Directors may increase or decrease (but not below the number of shares then
outstanding) is 480,000 shares;
(c) The annual dividend rate of the series shall be in an amount per share
(rounded to the nearest cent) equal to, but no more than, the greater of (x)
$6.80 or (y) subject to the provision for adjustment thereinafter set forth,
one hundred times the aggregate per share amount of all cash dividends, and one
hundred times the aggregate per share amount (payable in kind) of all non-cash
dividends or other distributions other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock of the Corporation
since the immediately preceding Quarterly Dividend Payment Date (as defined in
subparagraph (d) below), or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of a share or fraction of a share of
Series 12 Preferred Stock (the "Original Issue Date"). In the event the
Corporation shall at any time on or after the Original Issue Date declare or pay
any dividend on the shares of Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding Common
Stock (by reclassification or otherwise than by payment of a dividend in Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount to which holders of shares of Series 12 Preferred Stock are
entitled (without giving effect to such event) under clause (y) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
<PAGE>
-8-
The Corporation shall declare a dividend or distribution on the Series 12
Preferred Stock as provided in the paragraph above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in
shares of Common Stock); provided that, in the event no dividend or distribution
shall have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend
Payment Date, a dividend of $6.80 per share on the Series 12 Preferred Stock
shall nevertheless be payable on such subsequent Quarterly Dividend Payment
Date. The record date for any such dividend or distribution shall be the tenth
Trading Day prior to the Quarterly Dividend Payment Date.
(d) The dividends provided above shall be payable quarterly on January 1,
April 1, July 1, and October 1 in each year (each such date being referred to
herein as a "Quarterly Dividend Payment Date");
(e) The Corporation, at the option of the Board of Directors, may at any
time redeem all and may from time to time redeem any part of the outstanding
shares of Series 12 Preferred Stock on any date fixed by the Board of Directors,
upon notice given as hereinafter provided, by paying in cash for each share
thereof to be redeemed an amount equal to the Market Price (as hereinafter
defined) of the Common Stock on the Trading Day (as hereinafter defined)
immediately prior to the date fixed for redemption, multiplied by one hundred
(the "Multiplier"), plus, in each case, an amount equal to all dividends thereon
accrued to the date fixed for redemption and unpaid whether or not earned or
declared but without interest (such amounts being in this subparagraph
(e) sometimes referred to as the "redemption price"). In case of the
redemption of a part only of the outstanding shares of Series 12 Preferred, the
shares to be redeemed shall be selected by lot in such manner as the Board of
Directors shall determine. Not less than thirty (30) nor more than ninety (90)
days prior written notice shall be given by mail, first class postage prepaid,
to the holders of record of the shares of Series 12 Preferred to be redeemed.
On or after the date fixed for redemption and stated in such notice, the
holder of each share of Series 12 Preferred Stock called for redemption shall
surrender the certificate therefor at the place designated in such notice and
shall thereupon be entitled to receive payment of the redemption price.
If such notice of redemption shall have been duly given as provided above
and if on the date fixed for redemption funds sufficient to redeem the shares
called for redemption shall be irrevocably set aside for the payment thereof,
then, notwithstanding that the certificate for any share of Series 12 Preferred
Stock so called for redemption shall not have been surrendered, from and after
such date the shares so called for redemption shall no longer be deemed to be
outstanding and dividends thereon shall cease to accrue and all rights with
respect to the shares so called for redemption, including rights, if any, to
receive notices and to vote, shall forthwith on such date cease and determine,
except only the right of the holders thereof to receive the redemption price
without interest upon surrender of the certificates therefor; provided, however,
that if such notice of redemption shall have
<PAGE>
-9-
been duly given as provided above and if on or prior to the date fixed for
redemption there shall have been deposited with a bank or trust company having a
capital and surplus of more than $5,000,000 named in such notice of redemption,
in trust for the account of the holders of the shares so called for redemption,
funds sufficient to redeem, on the date fixed for redemption, the shares called
for redemption, then upon the making of such deposit in trust (although made
prior to the date fixed for redemption), the shares so called and with respect
to which such deposit shall have been made shall no longer be deemed to be
outstanding and all rights with respect to such shares, including rights, if
any, to receive notices and to vote, shall forthwith cease and determine, except
only the right of the holders thereof to receive, out of the funds so deposited
in trust, forthwith and without awaiting the date fixed for redemption, the
redemption price thereof, without interest, upon surrender of the certificates
therefor, upon to but not after the close of business on the second business day
prior to the date fixed for redemption of such shares. Any interest accrued on
such funds shall belong to the Corporation and shall be paid to it from time to
time. In case any shares called for redemption shall be converted after deposit
of the redemption price thereof, the redemption price of the shares so converted
shall be returned to the Corporation. Any other funds so deposited and unclaimed
at the end of two years after the date fixed for redemption shall be repaid to
the Corporation upon its request, and thereafter the holders of the shares so
called for redemption shall be entitled to receive payment of the redemption
price, but without interest only from the Corporation.
In the event the Corporation shall at any time on or after the Original
Issue Date declare or pay any dividend on the shares of Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding Common Stock (by reclassification or otherwise than by
payment of a dividend in Common Stock), into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which holders of
Series 12 Preferred Stock were entitled (without giving effect to such event),
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
As used herein the term "Market Price" per share of the Common Stock on any
date of determination shall mean the average of the daily closing prices per
share of the Common Stock (determined as described below) on each of the 20
consecutive Trading Days through and including the Trading Day immediately
preceding such date; provided, however, that if the Company shall at any time
-------- -------
(i) declare a dividend on the Common Stock payable in Common Stock,
(ii) subdivide the outstanding Common Stock, (iii) combine the outstanding
Common Stock into a smaller number of shares of Common Stock or (iv) issue any
shares in a reclassification of the Common Stock, and such event or an event of
a type analogous to any such event shall have caused the closing prices used to
determine the Market Price on any Trading Days not to be fully comparable with
the closing price on such date of determination, each such closing price so used
shall be
<PAGE>
-10-
appropriately adjusted in order to make it fully comparable with the closing
price on such date of determination. The closing price per share of the Common
Stock on any date shall be the last sale price, regular way, or, in case no such
sale takes place on such date, the average of the closing bid and asked prices,
regular way, for each share of the Common Stock, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange or, if
the Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Common Stock is listed or admitted to trading or, if the Common
Stock is not listed or admitted to trading on any national securities exchange,
the average of the high bid and low asked prices for each share of Common Stock
in the over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotation System ("NASDAQ") or such other
system then in use, or, if on any such date the Common Stock is not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the securities
elected by the Board of Directors of the Corporation; provided, however, that if
-------- -------
on any such date the Common Stock is not listed or admitted for trading on a
national securities exchange or traded in the over-the-counter market, the
closing price per share of the Common Stock on such date shall mean the fair
value per share of Common Stock on such date as determined in good faith by the
Board of Directors of the Corporation, after consultation with a nationally
recognized investment banking firm with respect to the fair value per share of
such securities, and set forth in a certificate delivered to the Corporation.
As used herein, the term "Trading Day," when used with respect to the
Common Stock, shall mean a day on which the principal national securities
exchange on which the Common Stock is listed or admitted to trading is open for
the transaction of business or, if the Common Stock is not listed or admitted to
trading on any national securities exchange, a Business Day (defined to mean any
day other than a Saturday, Sunday or a day on which banking institutions in New
York, New York are generally authorized or obligated by law or executive order
to close.)
(f) Except as otherwise provided herein, the holders of shares of this
Series 12 Preferred Stock shall not have any rights herein to convert such
shares into or exchange such shares for shares of any other class or classes or
of any other series of any class or classes of capital stock of the Corporation.
(g) In case the Corporation shall enter into any consolidation, merger
combination, reclassification or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or
any other property, then in any such case the shares of Series 12 Preferred
Stock shall at the same time be similarly exchanged or changed in an amount per
share (subject to the provision for adjustment hereinafter set forth) equal to
one hundred times the aggregate amount of stock, securities, cash and/or any
other property (payable in kind), as the case may be, into which or for which
each share of Common Stock is
<PAGE>
-11-
changed or exchanged. In the event the Corporation shall at any time on or after
the Original Issue Date declare or pay any dividend on Common Stock payable in
shares of Common Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification or otherwise)
into a greater or lesser number of shares of Common Stock, then in each such
case the amount set forth in the preceding sentence with respect to the exchange
or change of shares of Series 12 Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(h) Upon the liquidation, dissolution or winding up of the Corporation,
the holders of the shares of this Series shall be entitled to receive and amount
equal to the greater of (x) $7,500 or (y) 100 times the aggregate per share
amount received by the holders of Common Stock upon such liquidation,
dissolution or winding up.
(i) Series 12 Preferred Stock may be issued in fractions of a share which
shall entitle the holder, in proportion to such holders fractional shares to
exercise voting rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series 12 Preferred Stock.
9. Express Terms of the Series BB Preferred Stock (Express Terms are
described as Adopted by Amendment on July 25, 1995)
----------------------------------------------------------------------
There is hereby established a series of the Serial Preferred Stock to be
known as Series BB Conversion Preferred Stock to which all of the Express Terms
of the Serial Preferred Stock set forth in 1 through 7 above as well as the
following provisions shall be applicable:
I. Designation and Number. The designation of the series is Series BB
----------------------
Conversion Preferred Stock. The number of shares of the series, which number
the Board of Directors may increase or decrease (but not below the number of
shares then outstanding) is 38,772 shares.
II. Dividend Rate and Dividend Payment Dates. The annual dividend rate of
----------------------------------------
the series shall be in an amount per share equal to, but no more than, $504.00.
The dividends provided above shall accrue from the date of original issue of the
Series BB Preferred Stock and be payable quarterly on January 1, April 1, July 1
and October 1 of each year, commencing October 1, 1995 (each such date being
referred to herein as a "Dividend Payment Date"), to holders of record as they
appear on the stock records of the Corporation at the close of business on such
record dates, not exceeding 60 days preceding the payment dates thereof, as
shall be fixed by the Board of Directors. Dividends payable on the Series BB
Preferred Stock for any period greater or less than a full dividend period will
be computed on the basis of a 360-day year consisting of twelve 30-day months.
Dividends payable
<PAGE>
-12-
on the Series BB Preferred Stock for each full dividend period will be computed
by dividing the annual dividend rate by four.
III. Conversion.
----------
(a) Mandatory Conversion. Unless earlier converted at the option of the
--------------------
holder in accordance with the provisions of paragraph (b), on October 1, 1998
(the "Mandatory Conversion Date"), each outstanding share of the Series BB
Preferred Stock shall convert automatically (the "Automatic Conversion") into
(i) shares of authorized Common Stock (the "Common Stock") at the Exchange Rate
(as hereinafter defined) in effect on the Mandatory Conversion Date and (ii) the
right to receive an amount in cash equal to all accrued and unpaid dividends on
such share to the Mandatory Conversion Date, whether or not earned or declared,
out of funds legally available therefor. The Exchange Rate is equal to (a) if
the Current Market Price is greater than or equal to $94.40 per share (the
"Threshold Price"), 81.965 shares of Common Stock (the "Upper Exchange Rate"),
(b) if the Current Market Price is less than the Threshold Price but greater
than the Initial Price, the number of shares of Common Stock having a value
(determined at the Current Market Price) equal to 100 times the Initial Price
(the "Middle Exchange Rate"), and (c) if the Current Market Price is less than
or equal to the Initial Price, 100 shares of Common Stock (the "Lower Exchange
Rate") per share of Series BB Preferred Stock, and is subject to adjustment as
set forth in paragraph (c) below. Dividends on the shares of Series BB
Preferred Stock shall cease to accrue and such shares of Series BB Preferred
Stock shall cease to be outstanding on the Mandatory Conversion Date. The
Corporation shall make such arrangements as it deems appropriate for the
issuance of certificates representing shares of Common Stock and for the payment
of cash in respect of such accrued and unpaid dividends, if any, or cash in lieu
of fractional shares, if any, in exchange for and contingent upon surrender of
certificates representing the shares of Series BB Preferred Stock, and the
Corporation may defer the payment of dividends on such shares of Common Stock
and the voting thereof until, and make such payment and voting contingent upon,
the surrender of such certificates representing the shares of Series BB
Preferred Stock, provided that the Corporation shall give the holders of the
shares of Series BB Preferred Stock such notice of any such actions as the
Corporation deems appropriate or is legally required and upon such surrender
such holders shall be entitled to receive such dividends declared and paid on
such shares of Common Stock subsequent to the Mandatory Conversion Date.
Amounts payable in cash in respect of the shares of Series BB Preferred Stock or
in respect of such shares of Common Stock shall not bear interest.
(b) Optional Conversion. Shares of Series BB Preferred Stock are convert-
-------------------
ible, in whole or in part, at the option of the holders thereof ("Optional
Conversion"), at any time after September 25, 1995 and prior to the Mandatory
Conversion Date, into shares of Common Stock at a rate of 81.965 shares of
Common Stock for each share of Series BB Preferred Stock (the "Optional
Conversion Rate"), subject to adjustment as set forth below.
<PAGE>
-13-
Optional Conversion of shares of Series BB Preferred Stock may be effected
by delivering certificates evidencing such shares, together with written notice
of conversion and a proper assignment of such certificates to the Corporation or
in blank (and, if applicable, payment of an amount equal to the dividend payable
on such shares), to the office of any transfer agent for the Series BB Preferred
Stock or to any other office or agency maintained by the Corporation for that
purpose and otherwise in accordance with Optional Conversion procedures
established by the Corporation. Each Optional Conversion shall be deemed to
have been effected immediately prior to the close of business on the date on
which the foregoing requirements shall have been satisfied. The Optional
Conversion shall be at the Optional Conversion Rate in effect at such time and
on such date.
Holders of shares of Series BB Preferred Stock at the close of business on
a dividend payment record date shall be entitled to receive the dividend payable
on such shares on the corresponding Dividend Payment Date notwithstanding the
Optional Conversion of such shares following such record date and prior to such
Dividend Payment Date. However, shares of Series BB Preferred Stock surrendered
for Optional Conversion after the close of business on a dividend payment record
date and before the opening of business on the next succeeding Dividend Payment
Date must be accompanied by payment in cash of an amount equal to the dividend
payable on such shares on such Dividend Payment Date. Except as provided above,
upon any Optional Conversion of shares of Series BB Preferred Stock, the
Corporation shall make no payment or allowance for unpaid Preferred Dividends,
whether or not in arrears, on such shares of Series BB Preferred Stock as to
which Optional Conversion has been effected or for dividends or distributions on
the shares of Common Stock issued upon such Optional Conversion.
(c) Adjustments to the Exchange Rate and the Optional Conversion Rate.
-----------------------------------------------------------------
The Exchange Rate and the Optional Conversion Rate shall each be subject to
adjustment from time to time as provided below in this paragraph (c).
(i) If the Corporation shall pay or make a dividend or other
distribution with respect to its Common Stock in shares of Common
Stock (including by way of reclassification of any shares of its
Common Stock), the Exchange Rate and the Optional Conversion Rate in
effect at the opening of business on the day following the date fixed
for the determination of stockholders entitled to receive such
dividend or other distribution shall each be increased by multiplying
such Exchange Rate and Optional Conversion Rate by a fraction of which
the numerator shall be the sum of the number of shares of Common Stock
outstanding at the close of business on the date fixed for such
determination plus the total number of shares of Common Stock
constituting such dividend or other distribution, and of which the
denominator shall be the number of shares of Common Stock outstanding
at the close of business on the date fixed for such
<PAGE>
-14-
determination, such increase to become effective immediately after the
opening of business on the day following the date fixed for such
determination.
(ii) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Exchange Rate and
the Optional Conversion Rate in effect at the opening of business on
the day following the day upon which such subdivision becomes
effective shall each be proportionately increased, and, conversely, in
case outstanding shares of Common Stock shall be combined into a
smaller number of shares of Common Stock, the Exchange Rate and the
Optional Conversion Rate in effect at the opening of business on the
day following the day upon which such combination becomes effective
shall each be proportionately reduced, such increases or reductions,
as the case may be, to become effective immediately after the opening
of business on the day following the day upon which such subdivision
or combination becomes effective.
(iii) If the Corporation shall, after the date hereof, issue rights
or warrants, in each case other than the Rights, to all holders of its
Common Stock entitling them (for a period not exceeding 45 days from
the date of such issuance) to subscribe for or purchase shares of
Common Stock at a price per share less than the Fair Market Value of
the Common Stock on the record date for the determination of
stockholders entitled to receive such rights or warrants, then in each
case the Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional Conversion
Rate in effect on such record date, by a fraction of which the
numerator shall be the number of shares of Common Stock outstanding on
the date of issuance of such rights or warrants, immediately prior to
such issuance, plus the number of additional shares of Common Stock
offered for subscription or purchase pursuant to such rights or
warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding on the date of issuance of such rights or
warrants, immediately prior to such issuance, plus the number of
shares of Common Stock which the aggregate offering price of the total
number of shares of Common Stock so offered for subscription or
purchase pursuant to such rights or warrants would purchase at such
Fair Market Value (determined by multiplying such total number of
shares by the exercise price of such rights or warrants and dividing
the product so obtained by such Fair Market Value). Shares of Common
Stock owned by the Corporation or by another company of which a
majority of the shares entitled to vote in the election of directors
are held, directly or indirectly, by the Corporation shall not be
deemed to be outstanding for purposes of such computation. Such
adjustment shall become effective at the
<PAGE>
-15-
opening of business on the business day next following the record date
for the determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not
delivered after the expiration of such rights or warrants, the
Exchange Rate and the Optional Conversion Rate shall each be
readjusted to the Exchange Rate and the Optional Conversion Rate which
would then be in effect had the adjustments made upon the issuance of
such rights or warrants been made upon the basis of the issuance of
rights or warrants in respect of only the number of shares of Common
Stock actually delivered.
(iv) If the Corporation shall pay a dividend or make a distribution
to all holders of its Common Stock consisting of evidences of its
indebtedness or other assets (including shares of capital stock of the
Corporation other than Common Stock but excluding any cash dividends
or any dividends or other distributions referred to in clauses (i) and
(ii) above), or shall issue to all holders of its Common Stock rights
or warrants to subscribe for or purchase any of its securities (other
than those referred to in clause (iii) above), then in each such case
the Exchange Rate and the Optional Conversion Rate shall each be
adjusted by multiplying the Exchange Rate and the Optional Conversion
Rate in effect on the record date for such dividend or distribution or
for the determination of stockholders entitled to receive such rights
or warrants, as the case may be, by a fraction of which the numerator
shall be the Fair Market Value per share of the Common Stock on such
record date), and of which the denominator shall be such Fair Market
Price per share of Common Stock less the fair market value (as
determined by the Board of Directors, whose determination shall be
conclusive) as of such record date of the portion of the assets or
evidences of indebtedness so distributed, or of such subscription
rights or warrants, applicable to one share of Common Stock. Such
adjustment shall become effective on the opening of business on the
business day next following the record date for such dividend or
distribution or for the determination of stockholders entitled to
receive such rights or warrants, as the case may be.
(v) Any shares of Common Stock issuable in payment of a dividend or
other distribution shall be deemed to have been issued immediately
prior to the close of business on the record date for such dividend or
other distribution for purposes of calculating the number of
outstanding shares of Common Stock under subparagraph (ii) above.
(vi) Anything in this subsection III notwithstanding, the
Corporation shall be entitled to make such upward adjustments in the
Exchange Rate and the Optional Conversion Rate, in addition to those
required by this subsection III as the Corporation in its sole
discretion shall
<PAGE>
-16-
determine to be advisable, in order that any stock dividends,
subdivision of shares, distribution of rights to purchase stock or
securities, or distribution of securities convertible into or
exchangeable for stock (or any transaction which could be treated as
any of the foregoing transactions pursuant to Section 305 of the
Internal Revenue Code of 1986, as amended) hereafter made by the
Corporation to its stockholders shall not be taxable.
(vii) In any case in which this paragraph (c) shall require that an
adjustment as a result of any event become effective at the opening of
business on the business day next following a record date and the date
fixed for conversion pursuant to paragraph (a) occurs after such
record date, but before the occurrence of such event, the Corporation
may in its sole discretion elect to defer the following until after
the occurrence of such event: (A) issuing to the holder of any shares
of Series BB Preferred Stock surrendered for conversion the additional
shares of Common Stock issuable upon such conversion over the shares
of Common Stock issuable before giving effect to such adjustment; and
(B) paying to such holder any amount in cash in lieu of a fractional
share of Common Stock pursuant to paragraph (g).
(viii) For purposes hereof, an "adjustment in the Exchange Rate"
means, and shall be implemented by, an adjustment of the nature and
amount specified, effected in the manner specified, in each of the
Upper Exchange Rate, the Middle Exchange Rate and the Lower Exchange
Rate. If an adjustment is made to the Exchange Rate pursuant to this
paragraph (c), an adjustment shall also be made to the Current Market
Price solely to determine which of clauses (a), (b) or (c) of the
definition of Exchange Rate in paragraph (a) will apply on the
Mandatory Conversion Date. Such adjustment shall be made by
multiplying the Current Market Price by a fraction of which the
numerator shall be the Exchange Rate immediately after such adjustment
pursuant to paragraph (c) and the denominator shall be the Exchange
Rate immediately before such adjustment. All adjustments to the
Exchange Rate and the Optional Conversion Rate shall be calculated to
the nearest 1/10,000th of a share of Common Stock. No adjustment in
the Exchange Rate or in the Optional Conversion Rate shall be required
unless such adjustment would require an increase or decrease of at
least one percent in the Lower Exchange Rate; provided, however, any
adjustments which by reason of this subparagraph are not required to
be made shall be carried forward and taken into account in any
subsequent adjustment. All adjustments to the Exchange Rate and the
Optional Conversion Rate shall be made successively.
<PAGE>
-17-
(ix) Before taking any action that would cause an adjustment
increasing the Exchange Rate or the Optional Conversion Rate such that
the conversion price (for purposes of this paragraph (c), an amount
equal to the liquidation value per share of Series BB Preferred Stock
divided by the Optional Conversion Rate, respectively, as in effect
from time to time) would be below the then par value of the Common
Stock, the Corporation will take any corporate action which may, in
the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and nonassessable shares of
Common Stock at the Optional Conversion Rate as so adjusted.
(d) Adjustment for Certain Consolidations or Mergers. In case of any con-
------------------------------------------------
solidation or merger to which the Corporation is a party (other than a merger or
consolidation in which the Corporation is the continuing corporation and in
which the Common Stock outstanding immediately prior to the merger or
consolidation remains unchanged), or in case of any sale or transfer to another
corporation of the property of the Corporation as an entirety or substantially
as an entirety, or in case of any statutory exchange of securities with another
corporation (other than in connection with a merger or acquisition), proper
provision shall be made so that each share of the Series BB Preferred Stock
shall, after consummation of such transaction, be subject to (i) conversion at
the option of the holder into the kind and amount of securities, cash or other
property receivable upon consummation of such transaction by a holder of the
number of shares of Common Stock into which such share of the Series BB
Preferred Stock might have been converted immediately prior to consummation of
such transaction, and (ii) conversion on the Mandatory Conversion Date into the
kind and amount of securities, cash or other property receivable upon
consummation of such transaction by a holder of the number of shares of Common
Stock into which such share of the Series BB Preferred Stock would have been
converted if the conversion on the Mandatory Conversion Date had occurred
immediately prior to the date of consummation of such transaction; assuming in
each case that such holder of Common Stock failed to exercise rights of
election, if any, as to the kind or amount of securities, cash or other property
receivable upon consummation of such transaction (provided that if the kind or
amount of securities, cash or other property receivable upon consummation of
such transaction is not the same for each nonelecting share, then the kind and
amount of securities, cash or other property receivable upon consummation of
such transaction for each nonelecting share shall be deemed to be the kind and
amount so receivable per share by a plurality of the nonelecting shares). The
kind and amount of securities into which the shares of the Series BB Preferred
Stock shall be convertible after consummation of such transaction shall be
subject to adjustment as described in paragraph (c) following the date of
consummation of such transaction. The Corporation may not become a party to any
such transaction unless the terms thereof are consistent with the foregoing.
<PAGE>
-18-
(e) Notice of Adjustments. Whenever the Exchange Rate and Optional Con-
---------------------
version Rate are adjusted as provided in paragraph (c), the Corporation shall:
(i) Forthwith compute the adjusted Exchange Rate and Optional
Conversion Rate and prepare a certificate signed by the Chief
Financial Officer, any Vice President, the Treasurer or the Controller
of the Corporation setting forth the adjusted Exchange Rate and
Optional Conversion Rate, the method of calculation thereof in
reasonable detail and the facts requiring such adjustment and upon
which such adjustment is based, which certificate shall be prima facie
evidence of the correctness of the adjustment, and file such
certificate forthwith with the Transfer Agent;
(ii) Make a prompt public announcement stating that the Exchange
Rate and Optional Conversion Rate have been adjusted and setting forth
the adjusted Exchange Rate and Optional Conversion Rate; and
(iii) Promptly mail a notice stating that the Exchange Rate and
Optional Conversion Rate have been adjusted, the facts requiring such
adjustment and upon which such adjustment is based and setting forth
the adjusted Exchange Rate and Optional Conversion Rate, to the
holders of record of the outstanding shares of the Series BB Preferred
Stock at or prior to the time the Corporation mails an interim
statement to its stockholders covering the fiscal quarter period
during which the facts requiring such adjustment occurred but in any
event within 45 days of the end of such fiscal quarter period.
(f) Notices of Proposed Actions. In case, at any time while any of the
---------------------------
shares of Series BB Preferred Stock are outstanding,
(i) the Corporation shall declare a dividend (or any other
distribution) on the Common Stock, (other than in cash out of profits
or surplus and other than the Rights), or
(ii) the Corporation shall authorize the issuance to all holders of
the Common Stock of rights or warrants (other than the Rights) to
subscribe for or purchase shares of the Common Stock or of any other
subscription rights or warrants, or
(iii) of any reclassification of the Common Stock (other than a
Subdivision or combination thereof) or of any consolidation or merger
to which the Corporation is a party and for which approval of any
stockholders of the Corporation is required (except for a merger of
the Corporation into one of its subsidiaries solely for the purpose of
changing the corporate domicile of the Corporation to another state of
the United States and in connection with which there is no substantive
<PAGE>
-19-
change in the rights or privileges of any securities of the
Corporation other than changes resulting from differences in the
corporate statutes of the then existing and the new state of
domicile), or of the sale or transfer of all or substantially all of
the assets of the Corporation,
then the Corporation shall cause to be filed at each office or agency
maintained for the purpose of conversion of the shares of Series BB Preferred
Stock, and shall cause to be mailed to the holders of shares of Series BB
Preferred Stock at their last addresses as they shall appear on the stock
register, as promptly as possible, but at least 15 days before the date
hereinafter specified (or the earlier of the dates hereinafter specified, in the
event that more than one date is specified), a notice stating (A) the date on
which a record is to be taken for the purpose of such dividend, distribution,
rights or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution,
rights or warrants are to be determined, or (B) the date on which any such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective, and the date as of
which it is expected that holders of Common Stock of record shall be entitled to
exchange their Common Stock for securities or other property (including cash),
if any, deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. The failure to give or
receive the notice required by this paragraph (f) or any defect therein shall
not affect the legality or validity of any such dividend, distribution, right or
warrant or other action.
(g) No Fractional Shares. No fractional shares of Common Stock shall be
--------------------
issued upon the conversion of any shares of the Series BB Preferred Stock. In
lieu of any fraction of a share of Common Stock which would otherwise be
issuable in respect of the aggregate number of shares of the Series BB Preferred
Stock surrendered by the same holder upon Automatic Conversion or Optional
Conversion, such holder shall have the right to receive an amount in cash
(computed to the nearest cent) equal to the same fraction of the Closing Price
of the Common Stock determined (A) as of the fifth Trading Day immediately
preceding the Mandatory Conversion Date, in the case of Automatic Conversion or
(B) as of the second Trading immediately preceding the effective date of
conversion, in the case of an Optional Conversion by a holder. If more than one
share of Series BB Preferred Stock shall be surrendered for conversion at one
time by or for the same holder, the number of full shares of Common Stock
issuable upon conversion thereof shall be computed on the basis of the aggregate
number of shares of the Series BB Preferred Stock so surrendered.
(h) Treasury Shares. For the purposes of this subsection III, the number
---------------
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Corporation but shall include shares issuable in respect
of scrip certificates issued in lieu of fractions of shares of Common Stock.
The Corporation will not pay any dividend or make any distribution on shares of
Common Stock held in the treasury of the Corporation.
<PAGE>
-20-
(i) Other Action. If the Corporation shall take any action affecting the
------------
Common Stock, other than action described in this subsection III, that in the
opinion of the Board of Directors would materially adversely affect the
conversion rights of the holders of the shares of Series BB Preferred stock, the
Exchange Rate and/or the Optional Conversion Rate for the Series BB Preferred
Stock may be adjusted, to the extent permitted by law, in such manner, if any,
and at such time, as the Board of Directors may determine to be equitable in the
circumstances.
(j) Conversion. The Corporation covenants that it will at all times
----------
reserve and keep available, free from preemptive rights, out of the aggregate of
its authorized but unissued shares of Common Stock for the purpose of effecting
conversion of the Series BB Preferred Stock, the full number of shares of Common
Stock deliverable upon the conversion of all outstanding shares of Series BB
Preferred Stock not theretofore converted. For purposes of this paragraph (j),
the number of shares of Common Stock that shall be deliverable upon the
conversion of all outstanding shares of Series BB Preferred Stock shall be
computed as if at the time of computation all such outstanding shares were held
by a single holder.
The Corporation covenants that any shares of Common Stock issued upon
conversion of the Series BB Preferred Stock shall be validly issued, fully paid
and non-assessable.
The Corporation shall endeavor to list the shares of Common Stock required
to be delivered upon conversion of the Series BB Preferred Stock, prior to such
delivery, upon each national securities exchange, if any, upon which the
outstanding Common Stock is listed at the time of such delivery.
Prior to the delivery of any securities that the Corporation shall be
obligated to deliver upon conversion of the Series BB Preferred stock, the
Corporation shall endeavor to comply with all federal and state laws and
regulations thereunder requiring the registration of such securities with, or
any approval of or consent to the delivery thereof by, any governmental
authority.
(k) Taxes. The Corporation will pay any and all documentary stamp or
-----
similar issue or transfer taxes payable in respect of the issue or delivery of
shares of Common Stock or other securities or property on conversion of the
Series BB Preferred Stock pursuant thereto; provided, however, that the
-------- -------
Corporation shall not be required to pay any tax that may be payable in respect
of any transfer involved in the issue or delivery of shares of Common Stock or
other securities or property in a name other than that of the holder of the
Series BB Preferred Stock to be converted and no such issue or delivery shall be
made unless and until the person requesting such issue or delivery has paid to
the Corporation the amount of any of such tax or established, to the reasonable
satisfaction of the Corporation, that such tax has been paid.
<PAGE>
-21-
IV. Definition. For purposes of the Series BB Preferred Stock, the
----------
following terms shall have the meanings indicated:
"business day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in the state of New York are authorized or obligated
by law or executive order to close.
"Initial Price" shall mean $77.375 per share of Common Stock.
"Current Market Price" per share of the Common Stock shall mean the average
Closing Price per share of the Common Stock of the Company on the 20 Trading
Days immediately prior to, but not including, the Mandatory Conversion Date.
"Closing Price" of a share of Common Stock on any date of determination
shall mean the closing sale price (or, if no closing sale price is reported, the
last reported sale price) of such share on the New York Stock Exchange (the
"NYSE") on such date or, if the Common Stock is not listed for trading on the
NYSE on any such date, as reported in the composite transactions for the
principal United States securities exchange on which the Common Stock is so
listed, or if it is not so listed on a United States national or regional
securities exchange, as reported by The Nasdaq Stock Market, or, if it is not so
reported, the last quoted bid price for the Common Stock in the over-the-counter
market as reported by the National Quotation Bureau or similar organization, or,
if such bid price is not available, the market value of a share of Common Stock
on such date as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company.
"Fair Market Value" on any day shall mean the average of the daily Closing
Prices of a share of Common Stock of the Company on the five (5) consecutive
Trading Days selected by the Corporation commencing not more than 20 Trading
Days before, and ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or distribution
requiring such computation. The term "'ex' date", when used with respect to any
issuance or distribution, means the first day on which the Common Stock trades
regular way, without the right to receive such issuance or distribution, on the
exchange or in the market, as the case may be, used to determine that day's
Closing Price.
"Rights" shall mean the rights of the Corporation which are issuable under
the Corporation's Stockholder Rights Plan adopted on February 10, 1988 and as
amended from time to time, or rights to purchase any capital stock of the
Corporation under any successor shareholder rights plan or plan adopted in
replacement of the Corporation's Stockholder Rights Plan.
"Trading Day" shall mean a day on which the Common Stock (a) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (b) has
traded at
<PAGE>
-22-
least once on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of such
security.
"Transfer Agent" means National City Bank or such other agent or agents of
the Corporation as may be designated by the Board of Directors as the transfer
agent for the Series BB Preferred Stock.
V. Liquidation, etc.. Upon the liquidation, dissolution or winding up of
-----------------
the Corporation, whether voluntary or involuntary, the holders of the shares of
this Series BB Preferred Stock shall be entitled to receive an amount equal to
$77.375 per share, plus accrued and unpaid dividends thereon (whether or not
earned or declared) at the date of final distribution to such holders.
VI. Issuance of Fractional Shares. Series BB Preferred Stock may be
-----------------------------
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of Series BB Preferred Stock.
Division B
Express Terms of the Common Stock
The Common Stock shall be subject to the express terms of the Serial
Preferred Stock. Each share of Common Stock shall be equal to every other share
of Common Stock. The holders of shares of Common Stock shall be entitled to one
vote for each share of such stock upon all matters presented to the
shareholders.
FIFTH: No holders of any class of shares of the Corporation shall have any
preemptive right to purchase or have offered to them for purchase any shares or
other securities of the Corporation.
SIXTH: The Corporation may from time to time, pursuant to authorization by
the Board of Directors and without action by the shareholders, purchase or
otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Board of Directors shall
determine; subject, however, to such limitation or restriction, if any, as is
contained in the express terms of any class of shares of the Corporation
outstanding at the time of the purchase or acquisition in question.
SEVENTH: A director or officer of the Corporation shall not be
disqualified by his office from dealing or contracting with the Corporation as a
vendor, purchaser, employee, agent or otherwise; nor shall any transaction,
contract or other act of the Corporation be void or voidable or in any way
affected or invalidated by reason of the fact that any director or officer, or
any firm in which such director or officer is a member, or any corporation of
which such director or officer is a member, or any corporation of which such
director or officer is a shareholder, director or officer, is in
<PAGE>
-23-
any way interested in such transaction, contract or other act, provided the fact
that such director, officer, firm or corporation is so interested shall be
disclosed or shall be known to the Board of Directors or such members thereof as
shall be present at any meeting of the Board of Directors at which action upon
any such transaction, contract or other act shall be taken; nor shall any such
director or officer be accountable or responsible to the Corporation for or in
respect of any such transaction, contract or other act of the Corporation or for
any gains or profits realized by him by reason of the fact that he or any firm
of which he is a member or any corporation of which he is a shareholder,
director or officer is interested in such transaction, contract or other act;
and any such director may be counted in determining the existence of a quorum at
any meeting of the Board of Directors of the Corporation which shall authorize
or take action in respect of any such transaction, contract or other act, and
may vote thereat to authorize, ratify or approve any such transaction, contract
or other act with like force and effect as if he or any firm of which he is a
member or any corporation of which he is a shareholder, director or officer were
not interested in such transaction, contract or other act.
EIGHTH: Notwithstanding any provision of the Ohio Revised Code now or
hereafter in force requiring for any purpose the vote, consent, waiver or
release of the holders of shares entitling them to exercise two-thirds, or any
other proportion, of the voting power of the Corporation or of any class or
classes of shares thereof, such action, unless otherwise expressly required by
statute or by these Articles, may be taken by the vote, consent, waiver or
release of the holders of shares entitling them to exercise a majority of the
voting power of the Corporation or of such class or classes.
NINTH: No shareholder of the Corporation may cumulate such shareholder's
voting power in the election of directors of the Corporation.
TENTH: Any and every statute of the State of Ohio hereafter enacted,
whereby the rights, powers or privileges of corporations or of the shareholders
of corporations organized under the laws of the State of Ohio are increased or
diminished or in any way affected, or whereby effect is given to the action
taken by any number, less than all, of the shareholders of any such corporation,
shall apply to the Corporation and shall be binding not only upon the
Corporation but upon every shareholder of the Corporation to the same extent as
if such statute had been in force at the date of filing these Amended and
Restated Articles of Incorporation of the Corporation in the office of the
Secretary of the State of Ohio.
ELEVENTH: These Amended and Restated Articles of Incorporation shall
supersede and take the place of the heretofore existing Amended Articles of
Incorporation as amended of the Corporation.
<PAGE>
ALCO STANDARD CORPORATION
CODE OF REGULATIONS
Adopted: January 19, 1970
Amended: February 9, 1982
Amended: January 25, 1996
ARTICLE I
SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of shareholders of the
corporation for the election of directors, the consideration of reports to be
laid before such meeting, and the transaction of such other business as may
properly be brought before such meeting shall be held on such day in January,
February or March in each year at such time and place, either within or without
the State of Ohio, as may be fixed by the board of directors and specified in
the notice of the meeting. If, prior to December 31 of the year next preceding
the annual meeting, the board of directors does not so fix the time, place and
date of the meeting, the annual meeting of the shareholders shall be held on the
last Tuesday in February, if not a legal holiday (and if a legal holiday, then
on the next succeeding business day) at such time and place, either within or
without the State of Ohio, as may be fixed by the chairman of the board or by
the president and specified in the notice of such meeting.
SECTION 2. Special Meetings. Special meetings of the shareholders of
the corporation may be held on any business day, when called by the chairman of
the board, or by the president, or by the vice president, or by the board of
directors acting at a meeting, or by a majority of the directors acting without
a meeting, or by the person who hold twenty-five per cent of all the shares
outstanding and entitled to vote thereat. Upon request in writing delivered
either in person or by registered mail to the president or the secretary by any
persons entitled to call a meeting of shareholders, such officer shall forthwith
cause to be given to the shareholders entitled thereto notice of a meeting to be
held on a date not less than ten or more than sixty days after the receipt of
such request, as such officer may fix. If such notice is not given within
thirty days after the delivery or mailing of such request, the persons calling
the meeting may fix the time of the meeting and give notice thereof in the
manner provided by law or as provided in these regulations, or cause such notice
to be given by any designated representative. Each special meeting shall be
called to convene between nine o'clock a.m., and four o'clock p.m., and shall be
held at the principal office of the corporation, unless the same is called by
the directors, acting with or without a meeting, in which case such meeting may
be held at any place either within or without the State of Ohio designated by
the board of directors and specified in the notice of such meeting.
SECTION 3. Notice of Meetings. Not less than ten or more than sixty
days before the date fixed for a meeting of shareholders, written notice stating
the time, place, and purposes of such meeting shall be given by or at the
direction of the secretary, or assistant secretary, or any other person or
persons required or permitted by these regulations to give such notice. The
notice shall be given by personal delivery or by mail to each shareholder
entitled to notice of the meeting who is of record as the day next preceding the
day on which notice is given or, if a record date therefor is duly fixed, of
record as of said date; if mailed, the notice shall be addressed to the
shareholders at their respective addresses as they appear on the records of the
corporation. Notice of the time, place, and purposes of any meeting of
shareholders may be waived in writing, either before or after the holding of
such meeting, by any shareholders, which writing shall be filed
1
<PAGE>
with or entered upon the record of the meeting. The attendance of any
shareholder at any such meeting without protesting, prior to or at the
commencement of the meeting, the lack of proper notice shall be deemed to be a
waiver by him of notice of such meeting.
SECTION 4. Quorum; Adjournment. Except as may be otherwise provided
by law or by the Articles of Incorporation, at any meeting of the shareholders
the holders of shares entitling them to exercise a majority of the voting power
of the corporation present in person or by proxy shall constitute a quorum for
such meeting; provided, however, that no action required by law, by the
Articles, or by these regulations to be authorized or taken by a designated
proportion of the share of any particular class or of each class of the
corporation may be authorized or taken by a lesser proportion; and provided,
further, that the holders of a majority of the voting shares represented
thereat, whether or not a quorum is present, may adjourn such meeting from time
to time; if any meeting is adjourned, notice of such adjournment need not be
given if the time and place to which such meeting is adjourned are fixed and
announced at such meeting.
SECTION 5. Proxies. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy. The person appointed
as proxy need not be a shareholder. Unless the writing appointing a proxy
otherwise provides, the presence at a meeting of the person having appointed a
proxy shall not operate to revoke the appointment. Notice to the corporation,
in writing or in open meeting, of the revocation of the appointment of a proxy
shall not affect any vote or act previously taken or authorized.
SECTION 6. Approval and Ratification of Acts of Offices and Board of
Directors. Except as otherwise provided by the Articles of Incorporation or by
law, any contract, act, or transaction, prospective or past, of the corporation,
or of the board of directors, or of the officers may be approved or ratified by
the affirmative vote at a meeting of the shareholders, or by the written
consent, with or without a meeting, of the holders of record of shares entitling
them or exercise a majority of the voting power of the corporation, and such
approval or ratification shall be as valid and binding as though affirmatively
voted for or consented to by every shareholder of the corporation.
ARTICLE II
BOARD OF DIRECTORS
SECTION 1. Number. The number of directors shall be such number as
is fixed by the shareholders, at any annual or special meeting called for the
purpose of electing directors at which a quorum is present, by the affirmative
vote of the holders of a majority of the shares which are represented at the
meeting and entitled to vote, but shall not be less than seven or more than
sixteen. If the shareholders at any meeting for the election of directors shall
fail to fix the number of directors to be elected, the number elected shall be
deemed to be the number of directors so fixed. Notwithstanding the foregoing,
the board of directors may change the number of directors fixed by the
shareholders, from time to time by resolution adopted by a majority of the board
of directors, provided, however, that in no event shall the number of directors
be less than seven or more than sixteen.
SECTION 2. Election of Directors; Vacancies. The directors shall be
elected at each annual meeting of shareholders or at a special meeting called
for the purpose of electing directors. At a meeting of shareholders at which
directors are to be elected, only persons nominated as candidates shall be
eligible for election as directors and the candidates receiving the greatest
number of votes shall be elected. In the event of the occurrence of any vacancy
or vacancies in the board of directors, however caused, the remaining directors,
though less than a majority of the whole authorized number of directors, may, by
the vote of a majority of their number, fill any such vacancy for the unexpired
term.
SECTION 3. Term of Office; Resignations. Each director shall hold
office until the next annual meeting of the shareholders and until his successor
is elected, or until his earlier resignation, removal from office, or death.
Any director may resign at any time by oral statement to that effect made at a
meeting of
2
<PAGE>
the board of directors or in a writing to that effect delivered to the
secretary, such resignation to take effect immediately or at such other time as
the director may specify.
SECTION 4. Organization Meeting. Immediately after each annual
meeting of the shareholders, the newly elected directors shall hold an
organization meeting for the purpose of electing officers and transacting any
other business. Notice of such meeting need not be given.
SECTION 5. Regular Meetings. Regular meetings of the board of
directors may be held at such times and places within or without the State of
Ohio as may be provided for in bylaws or resolutions adopted by the board of
directors and upon such notice, if any, as shall be so provided.
SECTION 6. Special Meetings. Special meetings of the board of
directors may be held at any time within or without the State of Ohio upon call
by the chairman of the board or the president or a vice president or by not less
than one-third of the directors. Notice of the time and place of each such
meeting shall be served upon or telephoned to each director at least twenty-four
hours, or mailed or telegraphed to each director at his address as shown by the
books of the corporation at least forty-eight hours prior to the time of the
meeting, which notice need not specify the purposes of the meeting; provided,
however, that attendance of any director at any such meeting without protesting,
prior to or at the commencement of the meeting; the lack of proper notice shall
be deemed to be a waiver by him of notice of such meeting and such notice may be
waived in writing, either before or after hold of such meeting, by any director,
which writing shall be filed with or entered upon the records of the meeting.
Unless otherwise indicated in the notice thereof, any business may be transacted
at any organization, regular or special meeting.
SECTION 7. Quorum; Adjournment. A quorum of the board of directors
shall consist of a majority of the directors then in office (but in no event
more than five); provided, that a majority of the directors present at a meeting
duly held, whether or not a quorum is present, may adjourn such meeting from
time to time; if any meeting is adjourned, notice of such adjournment need not
be given if the time and place to which such meeting is adjourned are fixed and
announced at such meeting. At each meeting of the board of directors at which a
quorum is present, all questions and business shall be determined by a majority
vote of those present except as in these regulations otherwise expressly
provided.
SECTION 8. Action Without a Meeting. Any action which may be
authorized or taken at a meeting of the board of directors may be authorized or
taken without a meeting with the affirmative vote or approval of, and in a
writing or writings signed by, all of the directors, which writing or writings
shall be filed with or entered upon the records of the corporation.
SECTION 9. Committees. The board of directors may at any time
appoint from its members an executive, finance, or other committee or
committees, consisting of such number of members, not less than three, as the
board of directors may deem advisable, together with such alternates as the
board of directors may deem advisable, to take the place of any absent member or
members at any meeting of such committee. Each such member and each such
alternate shall hold office during the pleasure of the board of directors. Any
such committee shall act only in the intervals between meetings of the board of
directors and shall have such authority of the board of directors as may, from
time to time, be delegated by the board of directors, except the authority to
fill vacancies in the board of directors or in any committee of the board of
directors. Subject to the aforesaid exceptions, any person dealing with the
corporation shall be entitled to rely upon any act or authorization of an act by
any such committee, to the same extent as an act or authorization of the board
of directors. Each committee shall keep full and complete records of all
meetings and actions, which shall be open to inspection by the directors.
Unless otherwise ordered by the board of directors, any such committee may
prescribe its own rules for calling and holding meetings, and for its own method
of procedure, and may act at a meeting by a majority of its members or without a
meeting by a writing or writings signed by all of its members.
3
<PAGE>
ARTICLE III
OFFICERS
SECTION 1. Election and Designation of Officers. The board of
directors shall elect a president, a secretary, a treasurer, and, in its
discretion, may elect a chairman of the board, one or more administrative or
managing directors, one or more vice presidents, one or more assistant
secretaries, one or more assistant treasurers, and such other officers as the
board of directors may deem necessary. The chairman of the board and the
president shall be directors, but no one of the other officers need be a
director. Any two or more of such offices may be held by the same person, but
no officer shall execute, acknowledge, or verify any instrument in more than one
capacity, if such instrument is required to be executed, acknowledged, or
verified by two or more officers.
SECTION 2. Term of Office; Vacancies. The officers of the
corporation shall hold office until the next organization meeting of the board
of directors and until their successors are elected, except in case of
resignation, removal from office, or death. The board of directors may remove
any officer at any time with or without cause by a majority vote of the
directors then in office. Any vacancy in any office may be filled by the board
of directors.
SECTION 3. Authority and Duties of Officers. The officers of the
corporation shall have such authority and shall perform such duties as are
customarily incident to their respective offices or as may be specified from
time to time by the board of directors, regardless of whether such authority and
duties are customarily incident to such office.
SECTION 4. Delegation of Authority and Duties. The board of
directors is authorized to delegate the authority and duties of any officer to
any other officer and generally to control the action of the officers and to
require the performance of duties to those mentioned herein.
ARTICLE IV
COMPENSATION
SECTION 1. Directors and Members of Committees. Members of the board
of directors and members of any committee of the board of directors shall, as
such, receive such compensation, which may be either a fixed sum for attendance
at each meeting of the board of directors, or at each meeting of the committee,
or stated compensation payable at intervals, or shall otherwise be compensated
as may be determined by or pursuant to authority conferred by the board of
directors or any committee of the board of directors, which compensation may be
in different amounts for various members of the board of directors or any
committee. No member of the board of directors and no member of any committee
of the board of directors shall be disqualified from being counted in the
determination of a quorum from acting at any meeting of the board of directors
or of a committee of the board of directors by reason of the fact that matters
affecting his own compensation as a director, member of a committee of the board
of directors, officer, or employee are to be determined.
SECTION 2. Officers and Employees. The compensation of officers and
employees of the corporation, or the method of fixing such compensation, shall
be determined by or pursuant to authority conferred by the board of directors or
any committee of the board of directors. Such compensation may include pension,
disability, an death benefits, and may be by way of fixed salary, or on the
basis of earnings of the corporation, or any combination thereof, or otherwise,
as my be determined or authorized from time to time by the board of directors or
any committee of the board of directors.
4
<PAGE>
ARTICLE V
INDEMNIFICATION
SECTION 1. Third Party Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, including all appeals (other than an
action, suit, or proceeding by or in the right of the corporation) by reason of
the fact that he is or was a director, officer or employee of the corporation,
or is or was serving at the request of the corporation as a director, trustee,
officer, or employee of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys' fees), judgments,
decrees, fines, penalties, and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit, or proceeding
if he acted in good faith and in a manner reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, has no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit, or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his conduct
was unlawful.
SECTION 2. Derivative Actions. The corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending, or completed action or suit, including all appeals, by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact that he is or was a director, officer, or employee of the corporation,
or is or was serving at the requires of the corporation as a director, trustee,
officer, or employee of another corporation, partnership, joint venture, trust,
or other enterprise, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the corporation, except that no
indemnification shall be made in respect of any claim, issue, or matter as to
which such person shall have been finally adjudged to be liable for negligence
or misconduct in the performance of his duty to the corporation unless and only
to the extent that the Court of Common Pleas or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses as the
Court of Common Please or such other court shall deem proper.
SECTION 3. Rights after Successful Defense. To the extent that a
director, trustee, officer, or employee has been successful on the merits or
otherwise in defense of any action, suit, or proceeding referred to in Section 1
or 2, or in defense of any claim, issue, or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection therewith.
SECTION 4. Other Determinations of Rights. Except in a situation
governed by Section 3, any indemnification under Section 1 or 2 (unless ordered
by a court) shall be made by the corporation only as authorized in the specific
case upon a determination that indemnification of the director, trustee,
officer, or employee is proper in the circumstances because he has met the
applicable standard of conduct set forth in Section 1 or 2. Such determination
shall be made (a) by a majority vote of directors acting at a meeting at which a
quorum consisting of directors who were not parties to such action, suit, or
proceeding is present, or (b) if such a quorum is not obtainable (or even if
obtainable), and a majority of disinterested directors so directs, by
independent legal counsel (compensated by the corporation) in a written opinion,
or (c) by the affirmative vote in person or by proxy of the holders of a
majority of the shares entitled to vote in the election of directors, without
regard to voting power which may thereafter exist upon default, failure, or
other contingency.
5
<PAGE>
SECTION 5. Advances of Expenses. Expenses of each person indemnified
hereunder incurred in defending a civil, criminal, administrative, or
investigative action, suit, or proceeding (including all appeals), or threat
thereof, may be paid by the corporation in advance of the final disposition of
such action, suit, or proceeding as authorized by the board of directors,
whether a disinterested quorum exists or not, upon receipt of an undertaking by
or on behalf of the director, trustee, office, or employee, to repay such amount
unless it shall ultimately be determined that he is entitled to be indemnified
by the corporation.
SECTION 6. Non-Exclusivity; Heirs. The indemnification provided by
this Article shall not be deemed exclusive of any other rights to which those
seeking indemnification may be entitled as a matter of law or under the
Articles, these regulations, any agreement, vote of shareholders, any insurance
purchased by the corporation, or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, trustee, officer,
or employee and shall inure to the benefit of the heirs, executors, and
administrators of such a person.
SECTION 7. Purchase of Insurance. The corporation may purchase and
maintain insurance on behalf of any person who is or was a director, officer,
or employee of the corporation, or is or was serving at the request of the
corporation as a director, trustee, officer, or employee of another corporation,
partnership, joint venture, trust, or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article or of
the Ohio General Corporation Law.
ARTICLE VI
RECORD DATES
For any lawful purpose, including, without limitation, the
determination of the shareholders who are entitled to receive notice of or to
vote at a meeting of shareholders, the board of directors may fix a record date
in accordance with the provisions of the Ohio General Corporation Law. The
record date for the purpose of the determination of the shareholders who are
entitled to receive notice of or to vote at a meeting of shareholders shall
continue to be the record date for all adjournments of such meetings, unless the
board of directors or the persons who shall have fixed the original record date
shall, subject to the limitations set forth in the Ohio General Corporation Law,
fix another date, and, in case a new record date is so fixed, notice thereof and
of the ate to which the meeting shall have been adjourned shall be given to
shareholders of record as of such date in accordance with the same requirements
as those applying to a meeting newly called. The board of directors may close
the share transfer books against transfers of shares during the whole or any
part of the period provided for in this Article, including the date of the
meeting of shareholders and the period ending with the date, if any, to which
adjourned. If no record date is fixed therefor, the record date for determining
the shareholders who are entitled to receive notice of or to vote at a meeting
of shareholders shall be the date next preceding the day on which notice is
given, or the date next preceding the day on which the meeting is held, as the
case may be.
ARTICLE VII
CERTIFICATES FOR SHARES
SECTION 1. Form of Certificates and Signatures. Each holder of
shares shall be entitled to one or more certificates, signed by the chairman of
the board or the president or a vice president and by the secretary, an
assistant secretary, the treasurer, or an assistant treasurer of the
corporation, which shall certify the number and class of shares held by him in
the corporation, but no certificate for shares shall be executed or delivered
until such shares are fully paid. When such a certificate is countersigned by
an incorporated
6
<PAGE>
transfer agent or registrar, the signature of any of said officers of the
corporation may be facsimile, engraved, stamped, or printed. Although any
officer of the corporation whose manual or facsimile signature is affixed to
such a certificate ceases to be such officer before the certificate is
delivered, such certificate nevertheless shall be effective in all respects when
delivered.
SECTION 2. Transfer of Shares. Shares of the corporation shall be
transferable upon the books of the corporation by the holders thereof, in
person, or by a duly authorized attorney, upon surrender and cancellation of
certificates for a like number of shares of the same class or series, with duly
executed assignment and power of transfer endorsed thereon or attached thereto,
and with such proof of the authenticity of the signatures to such assignment and
power of transfer as the corporation or its agents may reasonably require.
SECTION 3. Lost, Stolen, or Destroyed Certificates. The corporation
may issue a new certificate for shares in place of any certificate theretofore
issued by it and alleged to have been lost, stolen, or destroyed, and the board
of directors may, in its discretion, require the owner, or his legal
representatives, to give the corporation a bond containing such terms as the
board of directors or the president or a vice president and the secretary or the
treasurer may require to protect the corporation or any person injured by the
execution and delivery of a new certificate.
SECTION 4. Transfer Agent and Registrar. The board of directors may
appoint, or revoke the appointment of transfer agents and registrars and may
require all certificates for shares to bear the signatures of such transfer
agents and registrars, or any of them.
ARTICLE VIII
CORPORATE SEAL
The Ohio General Corporation Law provides in effect that the absence
of a corporate seal from any instrument executed on behalf of the corporation
does not affect the validity of the instrument; if in spite of that provision a
seal is imprinted on or attached, applied, or affixed to an instrument by
embossment, engraving, stamping, printing, typing, adhesion, or other means, the
impression of the seal on the instrument shall be circular in form and shall
contain the name of the corporation and the words "corporate seal".
ARTICLE IX
AMENDMENTS
The regulations of the corporation may be amended, or new regulations
may be adopted, by the shareholders at a meeting held for such purpose, by the
affirmative vote of the holders of shares entitling them to exercise a majority
of the voting power on such proposal or without a meeting by the written consent
of the holders of shares entitling them to exercise two-thirds of the voting
power on such proposal. If the regulations are amended or new regulations are
adopted without a meeting of the shareholders, the secretary of the corporation
shall mail a copy of the amendment or the new regulations to each shareholder
who would have been entitled to vote thereon and did not participate in the
adoption thereof.
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[EXECUTION COPY]
AMENDMENT NO. 2,
dated as of December 1, 1994
to the
$200,000,000
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT,
dated as of April 21, 1993,
among
Alco Standard Corporation
and
Unisource Canada, Inc.,
as the Borrowers,
The Toronto-Dominion Bank,
Canadian Imperial Bank of Commerce,
Royal Bank of Canada,
Deutsche Bank AG,
New York Branch and/or
Cayman Islands Branch
and
Deutsche Bank (Canada),
as the Banks
and
Toronto Dominion (Texas), Inc.,
<PAGE>
as Agent for the Banks
-2-
<PAGE>
AMENDMENT NO. 2
to the
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
THIS AMENDMENT NO. 2 (this "Amendment"), dated as of December 1, 1994, to
---------
the Revolving Credit and Acceptance Agreement, dated as of April 21, 1993 (as
heretofore amended and modified, the "Existing Credit Agreement") among ALCO
-------------------------
STANDARD CORPORATION, an Ohio corporation ("Alco"), UNISOURCE CANADA, INC., a
----
corporation continued under the federal laws of Canada ("Unisource", and
---------
together with Alco, the "Borrowers"), various financial institutions as are or
---------
may become parties thereto (collectively, the "Banks" and individually a "Bank")
----- ----
and TORONTO DOMINION (TEXAS), INC., as agent for the Banks thereunder (in such
capacity, the "Agent");
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers, the Banks and the Agent are parties to the Existing
Credit Agreement;
WHEREAS, the Borrowers have requested that certain provisions of the
Existing Credit Agreement be amended;
WHEREAS, the Banks and the Agent are willing, on the terms and subject to
the conditions hereinafter set forth, to grant the requested amendments;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrowers, the Banks and the Agent hereby agree as
follows:
1. Certain Definitions. The following terms (whether or
-------------------
not underscored) when used in this Amendment shall have
the following meanings:
"Agent" is defined in the preamble.
----- --------
<PAGE>
"Amended Credit Agreement" means the Existing Credit Agreement as amended
------------------------
by this Amendment.
"Amendment" is defined in the preamble.
--------- --------
"Banks" is defined in the preamble.
----- --------
"Borrowers" is defined in the preamble.
--------- --------
"Effective Date" is defined in Section 4.
-------------- ---------
"Existing Credit Agreement" is defined in the preamble.
------------------------- --------
2. Other Definitions. Terms for which meanings are provided in the
-----------------
Existing Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
3. Amendments to Existing Credit Agreement. Effective on the Effective
---------------------------------------
Date, the Existing Credit Agreement is hereby amended in accordance with this
Section 3.
- ---------
3.1. Section 1.1 of the Existing Credit Agreement is hereby amended by
adding the following definitions thereto in the appropriate alphabetical order:
"Amendment No. 2" means Amendment No. 2 to the Revolving Credit and
---------------
Acceptance Agreement, dated as of December 1, 1994, among the Borrowers,
the Banks and the Agent.
"Amendment No. 2 Effective Date" means December 1, 1994, the date on
------------------------------
which Amendment No. 2 to the Agreement became effective pursuant to Section
4 of Amendment No. 2.
"1994 Credit Agreement" shall have the meaning assigned to it in
---------------------
Section 2.15.
------------
3.2. Section 1.1 of the Existing Credit Agreement is hereby further amended
by deleting the definition of "Commitment
-2-
<PAGE>
Percentage" in its entirety and replacing such definition with the
following:
"Commitment Percentage" shall mean the percentage set forth opposite
---------------------
the name of such Bank on Exhibit A attached to Amendment No. 2, as adjusted
from time to time pursuant each Assignment Agreement.
3.3 Section 1.1 of the Existing Credit Agreement is hereby further amended
by deleting the definition of "Applicable Margin" in its entirety and replacing
such definition with the following:
"Applicable Margin" shall mean, with respect to any Eurodollar Rate
-----------------
Loan of any type and at any time of determination, a margin of .22% above
the interest rate for such type of Loan in the case of Facility A and a
margin of .20% above the interest rate for such type of Loan in the case of
Facility B; provided, however, that if Alco's Funded Debt is rated below
-------- -------
either BBB- by Standard and Poor's Ratings Group or Baa3 by Moody's
Investors Service, Inc., such Facility A margin shall be increased to .345%
and such Facility B margin above shall be increased to .325%.
3.4 Section 1.1 of the Existing Credit Agreement is hereby further amended
by deleting the definition of "Stamping Fee" in its entirety and replacing
such definition with the following:
"Stamping Fee" shall mean the fee charged by any Bank upon creation of
------------
an Acceptance, calculated at a rate per annum equal to .345% for Facility A
and equal to .325% for Facility B, of the face amount of such Acceptance
for the period from the date of creation of such Acceptance to but
excluding the maturity thereof; provided, however, that if Alco's Funded
-------- -------
Debt is rated below either BBB- by Standard and Poor's Ratings Group or
Baa3 by Moody's Investors Service, Inc., such Facility A fee shall be
increased to .470% and such Facility B fee shall be increased to .450%.
3.5. Section 1.1 of the Existing Credit Agreement is hereby further
amended by deleting the definition of "Facility A Amount" in its entirety and
replacing such definition with the following:
-3-
<PAGE>
"Facility A Amount" shall mean U.S.$50,000,000, as such amount may be
-----------------
reduced from time to time pursuant to Section 2.7(a) at the option of
--------------
either Borrower.
3.6. Section 1.1 of the Existing Credit Agreement is hereby further
amended by deleting the definition of "Facility B Amount" in its entirety and
replacing such definition with the following:
"Facility B Amount" shall mean U.S.$50,000,000, as such amount may be
-----------------
reduced from time to time pursuant to Section 2.7(a) at the option of
--------------
either Borrower.
3.7 Section 1.1 of the Existing Credit Agreement is hereby further amended
by deleting the definition of "U.S. Dollar Equivalent" in its entirety and
replacing such definition with the following:
"U.S. Dollar Equivalent" of any amount of Canadian Dollars on any date
----------------------
shall mean the equivalent amount in U.S. Dollars, after giving effect to a
conversion of such amount of Canadian Dollars to U.S. Dollars at the mid-
point of the spot rate quoted for wholesale transactions by The Toronto-
Dominion Bank in New York at approximately 11:00 A.M. (New York time) on
such date in accordance with its normal practice, and in the case of Credit
Extensions, calculated as of the later of (i) the date on which such Credit
Extension was made, or (ii) the most recent Recomputation Date.
3.8 Section 1.1 of the Existing Credit Agreement is hereby further amended
by deleting the definition of "Utilization Ratio" in its entirety.
3.9 Section 2.6 (Facility Fees) of the Existing Credit Agreement is hereby
amended in its entirety to read as follows:
"SECTION 2.6. Facility Fees. With respect to each Bank other than
-------------
the Deutsche Bank Parties, the Borrowers jointly and severally agree, and
with respect to the Deutsche Bank Parties, Alco agrees, to pay to the Agent
for the ratable account of each Bank in accordance with such
-4-
<PAGE>
Bank's Commitment Percentage, a facility fee (collectively, the "Facility
--------
Fees")
----
(a) during the period from the Closing Date through the Facility A
Commitment Termination Date, at the rate of .08% per annum on the Facility
A Amount, provided, however, that if Alco's Funded Debt is rated below
-------- -------
either BBB - by Standard and Poor's Ratings Group or Baa3 by Moody's
Investors Service, Inc., such Facility A facility fee shall be increased to
.125%, and
(b) during the period from the Closing Date through the Facility B
Commitment Termination Date, at the rate of .10% per annum on the Facility
B Amount, provided, however, that if Alco's Funded Debt is rated below
-------- -------
either BBB - by Standard and Poor's Ratings Group or Baa3 by Moody's
Investors Service, Inc., such Facility B facility fee shall be increased to
.20%,
computed on the basis of a year of 365 days (or 366 days, as the case
may be), payable on the last New York Business Day of each March, June,
September and December and on the relevant Commitment Termination Date."
3.10. Section 2 (The Loans) of the Existing Credit Agreement is hereby
further amended by inserting (in the correct numerical order) a new Section
2.15 to read in its entirety as follows:
"SECTION 2.15. 1994 Credit Agreement. For purposes of this Agreement,
---------------------
certain provisions of the $500,000,000 1994 Credit Agreement, dated as of
December 1, 1994, among Alco and certain of its Subsidiaries, Corestates
Bank, N.A., as agent and the banks named in Exhibit B thereto, together
---------
with all related definitions, exhibits and schedules thereto, attached as
Annex I to Amendment No. 2 (such $500,000,000 1994 Credit Agreement, as in
-------
effect on the Amendment No. 2 Effective Date, being hereinafter referred to
as the "1994 Credit Agreement", the terms defined therein being used herein
---------------------
as therein defined unless otherwise defined herein), are hereby
incorporated herein by reference
-5-
<PAGE>
as though specifically set forth in this Section 2.15, mutatis mutandis,
------------ ----------------
and will be deemed to be and to continue in effect for the benefit of the
Banks (as if the Banks held all of the promissory notes under the 1994
Credit Agreement), whether or not the 1994 Credit Agreement remains
outstanding or in effect between any of the parties thereto. All references
in the 1994 Credit Agreement to the "Company" shall for the purposes of
this Agreement be deemed to be a reference to "Alco". Any modification,
amendment or waiver after the Amendment No. 2 Effective Date of any
provision of the 1994 Credit Agreement incorporated herein by reference
shall not be effective with respect to such provision, as incorporated
herein. The Borrowers (as defined in the 1994 Credit Agreement) shall have
no obligations to the Banks under this Agreement with respect to the
promissory notes delivered to the Banks (as defined in the 1994 Credit
Agreement) under the 1994 Credit Agreement."
3.11. Section 6 (Covenants) of the Existing Credit Agreement is hereby
amended in its entirety to read as follows:
"SECTION 6. Covenants. The covenants of the Borrowers (as defined in
---------
the 1994 Credit Agreement) set forth in Article V of the 1994 Credit
Agreement shall be deemed to be the covenants of Alco made herein to the
Banks for purposes of this Agreement on the date hereof to the same extent
and with the same effect as if such covenants were specifically set forth
in full herein and shall be effective until the expiration or prior
termination of each Bank's Commitment or until payment in full of the
Notes, the Acceptance Obligations and other amounts owing hereunder,
whichever is later."
3.12. Amendment to Percentages of the Banks. By their signature below, each
-------------------------------------
of the parties hereto agree that, effective as of the Effective Date, each
Bank's Commitment Percentage under the Existing Credit Agreement is amended to
be the Commitment Percentage set forth opposite such Bank's name on Exhibit A
hereto.
-6-
<PAGE>
4. Effective Date. This Amendment shall become effective as of December
--------------
1, 1994 (the "Effective Date"); provided, however, that all of the conditions
-------------- -------- -------
set forth in this Section 4 have been satisfied, whereupon this Amendment shall
---------
be known, and may be referred to, as "Amendment No. 2 to the Revolving Credit
and Acceptance Agreement".
4.1. Execution of Counterparts of this Amendment. The Agent shall have
-------------------------------------------
received executed counterparts of this Amendment duly executed on behalf of each
of the Borrowers, each of the Banks, and the Agent.
4.2. Compliance with Warranties, No Default, etc. On the Effective Date,
-------------------------------------------
the following statements shall be true and correct:
(a) no Event of Default (or event which, with the giving of notice or
lapse of time, or both, would constitute an Event of Default) shall have then
occurred and be continuing; and
(b) the representations and warranties made by the Borrowers in
Section 4 of the Existing Credit Agreement shall be true on and as of such date
- ---------
with the same force and effect as if made on and as of such date;
and the Agent shall have received certificates from the Borrowers to such
effect.
4.3. Legal Details, etc. All documents executed or submitted pursuant
------------------
hereto shall be satisfactory in form and substance to the Agent and its counsel;
the Agent and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
the Agent or its counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to the
Agent and its counsel.
5. References. References in the Existing Credit Agreement and the Notes
----------
to the term "Agreement" shall hereinafter be deemed to be references to the
Amended Credit Agreement.
-7-
<PAGE>
6. Successors and Assigns. This Amendment shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns, subject to Section 11.3 of the Existing Credit Agreement.
------------
7. Expenses. The Borrowers shall pay all out-of-pocket expenses incurred
--------
by the Agent and the Banks in connection with the preparation, negotiation,
execution and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of Mayer, Brown, & Platt, as counsel for the
Agent.
8. Full Force and Effect. Except as expressly amended hereby, all of the
---------------------
representations, warranties, terms, covenants, and conditions of the Existing
Credit Agreement shall remain unchanged and shall remain in full force and
effect in accordance with its terms. The amendments set forth herein shall be
limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be an amendment of, consent to or modification
of any other term or provision of the Existing Credit Agreement or of any
transaction or further or future action on the part of the Borrowers which would
require the consent of the Banks or the Agent under the Existing Credit
Agreement.
9. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
-------------
UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
10. Counterparts. This Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
[Rest of page intentionally left blank]
-8-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2 to
the Existing Credit Agreement to be executed and delivered by their respective
officers thereunto duly authorized as of the day and year first above written.
ALCO STANDARD CORPORATION
By _____________________________
Title:
UNISOURCE CANADA, INC.
By _____________________________
Title:
TORONTO DOMINION (TEXAS), INC.,
as the Agent
By _________________________________
Title:
BANKS
-----
THE TORONTO-DOMINION BANK
By _________________________________
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
-9-
<PAGE>
By _________________________________
Title:
ROYAL BANK OF CANADA
By ________________________________
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By ________________________________
Title:
By ________________________________
Title:
DEUTSCHE BANK (CANADA)
By ________________________________
Title:
By ________________________________
Title:
-10-
<PAGE>
EXHIBIT A
BANKS' COMMITMENTS AND COMMITMENT PERCENTAGES
<TABLE>
<CAPTION>
Facility A Facility B Commitment
Bank Commitment Commitment Percentage
<S> <C> <C> <C>
The Toronto-Dominion Bank U.S.$22,500,000 U.S.$22,500,000 45.0%
- --------------------------------------------------------------------------------
Canadian Imperial Bank of U.S.$10,000,000 U.S.$10,000,000 20.0%
Commerce
- --------------------------------------------------------------------------------
Royal Bank of Canada U.S.$10,000,000 U.S.$10,000,000 20.0%
- --------------------------------------------------------------------------------
Deutsche Bank Parties U.S.$7,500,000 U.S.$7,500,000 15.0%
- --------------------------------------------------------------------------------
TOTAL U.S.$50,000,000 U.S.$50,000,000 100%
==============================================================================
</TABLE>
<PAGE>
ANNEX I
[1994 CREDIT AGREEMENT]
<PAGE>
EXECUTION COPY
AMENDMENT NO. 3,
dated as of March 17, 1995
to the
$200,000,000
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT,
dated as of April 21, 1993,
among
Alco Standard Corporation
and
Unisource Canada, Inc.,
as the Borrowers,
The Toronto-Dominion Bank,
Canadian Imperial Bank of Commerce,
Royal Bank of Canada,
Deutsche Bank AG,
New York Branch and/or
Cayman Islands Branch
and
Deutsche Bank (Canada),
as the Banks
and
Toronto Dominion (Texas), Inc.,
as Agent for the Banks
<PAGE>
AMENDMENT NO. 3
to the
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
THIS AMENDMENT NO. 3 (this "Amendment"), dated as of March 17, 1995, to the
---------
Revolving Credit and Acceptance Agreement, dated as of April 21, 1993 (as
heretofore amended and modified, the "Existing Credit Agreement") among ALCO
-------------------------
STANDARD CORPORATION, an Ohio corporation ("Alco"), UNISOURCE CANADA, INC., a
----
corporation continued under the federal laws of Canada ("Unisource", and
---------
together with Alco, the "Borrowers"), various financial institutions as are or
---------
may become parties thereto (collectively, the "Banks" and individually a "Bank")
----- ----
and TORONTO DOMINION (TEXAS), INC., as agent for the Banks thereunder (in such
capacity, the "Agent");
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers, the Banks and the Agent are parties to the Existing
Credit Agreement;
WHEREAS, the Borrowers have requested that certain provisions of the
Existing Credit Agreement be amended;
WHEREAS, the Banks and the Agent are willing, on the terms and subject to
the conditions hereinafter set forth, to grant the requested amendments;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrowers, the Banks and the Agent hereby agree as
follows:
1. Certain Definitions. The following terms (whether or not underscored)
-------------------
when used in this Amendment shall have the following meanings:
"Agent" is defined in the preamble.
----- --------
<PAGE>
"Amended Credit Agreement" means the Existing Credit Agreement as amended
------------------------
by this Amendment.
"Amendment" is defined in the preamble.
--------- --------
"Banks" is defined in the preamble.
----- --------
"Borrowers" is defined in the preamble.
--------- --------
"Effective Date" is defined in Section 4.
-------------- ---------
"Existing Credit Agreement" is defined in the preamble.
------------------------- --------
2. Other Definitions. Terms for which meanings are provided in the
-----------------
Existing Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
3. Amendments to Existing Credit Agreement. Effective on the Effective
---------------------------------------
Date, the Existing Credit Agreement is hereby amended in accordance with this
Section 3.
- ---------
3.1. Section 1.1 of the Existing Credit Agreement is hereby amended by
adding the following definitions thereto in the appropriate alphabetical order:
"Amendment No. 3" means Amendment No. 3 to the Revolving Credit and
---------------
Acceptance Agreement, dated as of March 17, 1995, among the Borrowers, the Banks
and the Agent.
"Amendment No. 3 Effective Date" means February 1, 1995, the date on
------------------------------
which Amendment No. 3 to the Agreement became effective pursuant to Section 4 of
Amendment No. 3.
3.2. Section 2 (The Loans) of the Existing Credit Agreement is hereby
amended by deleting the existing Section 2.15 in its entirety and inserting
therefor a new Section 2.15 to read in its entirety as follows:
"SECTION 2.15. 1994 Credit Agreement. For purposes of this Agreement,
---------------------
certain provisions of the $500,000,000 1994 Credit Agreement, dated as of
December 1, 1994, among Alco
-2-
<PAGE>
and certain of its Subsidiaries, Corestates Bank, N.A., as agent and the
banks named in Exhibit B thereto, together with all related definitions,
---------
exhibits and schedules thereto, as amended by the First Amendment thereto,
dated as of February 1, 1995, attached as
Annex I to Amendment No. 3 (such $500,000,000 1994 Credit Agreement, as so
-------
amended and in effect on the Amendment No. 3 Effective Date, being
hereinafter referred to as the "1994 Credit Agreement", the terms defined
---------------------
therein being used herein as therein defined unless otherwise defined
herein), are hereby incorporated herein by reference as though specifically
set forth in this Section 2.15, mutatis mutandis, and will be deemed to be
------------ ----------------
and to continue in effect for the benefit of the Banks (as if the Banks
held all of the promissory notes under the 1994 Credit Agreement), whether
or not the 1994 Credit Agreement remains outstanding or in effect between
any of the parties thereto. All references in the 1994 Credit Agreement to
the "Company" shall for the purposes of this Agreement be deemed to be a
reference to "Alco". Any modification, amendment or waiver after the
Amendment No. 3 Effective Date of any provision of the 1994 Credit
Agreement incorporated herein by reference shall not be effective with
respect to such provision, as incorporated herein. The Borrowers (as
defined in the 1994 Credit Agreement) shall have no obligations to the
Banks under this Agreement with respect to the promissory notes delivered
to the Banks (as defined in the 1994 Credit Agreement) under the 1994
Credit Agreement."
4. Effective Date. This Amendment shall become effective as of February
--------------
1, 1995 (the "Effective Date"), provided all of the conditions set forth in this
--------------
Section 4 shall have been satisfied, whereupon this Amendment shall be known,
- ---------
and may be referred to, as "Amendment No. 3 to the Revolving Credit and
Acceptance Agreement".
4.1. Execution of Counterparts of this Amendment. The Agent shall have
-------------------------------------------
received executed counterparts of this Amendment duly executed on behalf of each
of the Borrowers, each of the Banks, and the Agent.
-3-
<PAGE>
4.2. Compliance with Warranties, No Default, etc. On the Effective Date,
-------------------------------------------
the following statements shall be true and correct:
(a) no Event of Default (or event which, with the giving of notice
or lapse of time, or both, would constitute an Event of Default) shall have
then occurred and be continuing; and
(b) the representations and warranties made by the Borrowers in
Section 4 of the Existing Credit Agreement shall be true on and as of such
---------
date with the same force and effect as if made on and as of such date;
and the Agent shall have received certificates from the Borrowers to such
effect.
4.3. Legal Details, etc. All documents executed or submitted pursuant
------------------
hereto shall be satisfactory in form and substance to the Agent and its counsel;
the Agent and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
the Agent or its counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to the
Agent and its counsel.
5. References. References in the Existing Credit Agreement and the Notes
----------
to the term "Agreement" shall hereinafter be deemed to be references to the
Amended Credit Agreement.
6. Successors and Assigns. This Amendment shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their respective successors and
assigns, subject to Section 11.3 of the Existing Credit Agreement.
------------
7. Expenses. The Borrowers shall pay all out-of-pocket expenses incurred
--------
by the Agent and the Banks in connection with the preparation, negotiation,
execution and delivery of this Amendment, including, without limitation, the
reasonable fees and disbursements of Mayer, Brown, & Platt, as counsel for the
Agent.
-4-
<PAGE>
8. Full Force and Effect. Except as expressly amended hereby, all of the
---------------------
representations, warranties, terms, covenants, and conditions of the Existing
Credit Agreement shall remain unchanged and shall remain in full force and
effect in accordance with its terms. The amendments set forth herein shall be
limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be an amendment of, consent to or modification
of any other term or provision of the Existing Credit Agreement or of any
transaction or further or future action on the part of the Borrowers which would
require the consent of the Banks or the Agent under the Existing Credit
Agreement.
9. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
-------------
UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF NEW YORK.
10. Counterparts. This Amendment may be executed in any number of
------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed to be an original and all
of which taken together shall constitute but one and the same instrument.
[Rest of page intentionally left blank]
-5-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 3 to
the Existing Credit Agreement to be executed and delivered by their respective
officers thereunto duly authorized as of the day and year first above written.
ALCO STANDARD CORPORATION
By
-----------------------------
Title:
UNISOURCE CANADA, INC.
By
-----------------------------
Title:
TORONTO DOMINION (TEXAS), INC.,
as the Agent
By
-----------------------------
Title:
BANKS
-----
THE TORONTO-DOMINION BANK
By
-----------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
-6-
<PAGE>
By
-----------------------------
Title:
ROYAL BANK OF CANADA
By
-----------------------------
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By
-----------------------------
Title:
By
-----------------------------
Title:
DEUTSCHE BANK (CANADA)
By
-----------------------------
Title:
By
-----------------------------
Title:
-7-
<PAGE>
ANNEX I
<PAGE>
[EXECUTION COPY]
AMENDMENT NO. 4
dated as of March 26, 1996
to the
$200,000,000
(as reduced to $100,000,000 pursuant to Amendment No. 2,
dated as of December 1, 1994)
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
dated as of April 21, 1993
among
Alco Standard Corporation
and
Unisource Canada, Inc.,
Borrowers,
The Toronto-Dominion Bank,
Canadian Imperial Bank of Commerce,
Royal Bank of Canada,
Deutsche Bank AG,
New York Branch and/or
Cayman Islands Branch,
and
Deutsche Bank (Canada)
as the Banks
and
Toronto Dominion (Texas), Inc.,
<PAGE>
as Agent for the Banks
-2-
<PAGE>
AMENDMENT NO. 4
to the
REVOLVING CREDIT AND ACCEPTANCE AGREEMENT
THIS AMENDMENT NO. 4 (this "Amendment"), dated as of March 26, 1996, to the
---------
Revolving Credit and Acceptance Agreement, dated as of April 21, 1993 (as
heretofore amended and modified, the "Existing Credit Agreement") among ALCO
-------------------------
STANDARD CORPORATION, an Ohio corporation ("Alco"), UNISOURCE CANADA, INC., a
corporation continued under the federal laws of Canada ("Unisource", and
---------
together with Alco, the "Borrowers"), various financial institutions as are or
---------
may become parties hereto (collectively, the "Banks" and individually a "Bank")
----- ----
and TORONTO DOMINION (TEXAS), INC., as agent for the Banks under this agreement
(in such capacity, the "Agent");
-----
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers, the Banks and the Agent are parties to the Existing
Credit Agreement;
WHEREAS, the Borrowers have requested that (1) the Scheduled Facility A
Commitment Termination Date be extended pursuant to Section 2.14 of the Existing
------------
Credit Agreement and (2) the Facility B Commitment Termination Date be extended;
WHEREAS, the Banks and the Agent are willing, on the terms and subject to
the conditions hereinafter set forth, to grant the requested amendments and to
so extend the Scheduled Facility A Commitment Termination Date and to so extend
the Facility B Commitment Termination Date;
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein contained, the Borrowers, the Banks and the Agent hereby agree as
follows:
1. Certain Definitions. The following terms (whether or not underscored)
-------------------
when used in this Amendment shall have the following meanings:
<PAGE>
"Agent" is defined in the preamble.
----- --------
"Amended Credit Agreement" means the Existing Credit Agreement as amended
------------------------
by this Amendment.
"Amendment" is defined in the preamble.
--------- --------
"Banks" is defined in the preamble.
----- --------
"Borrowers" is defined in the preamble.
--------- --------
"Effective Date" is defined in Section 4.
-------------- ---------
"Existing Credit Agreement" is defined in the preamble.
------------------------- --------
2. Other Definitions. Terms for which meanings are provided in the
-----------------
Existing Credit Agreement are, unless otherwise defined herein or the context
otherwise requires, used in this Amendment with such meanings.
3. Amendments to Existing Credit Agreement. Effective on the Effective
---------------------------------------
Date, the Existing Credit Agreement is hereby amended in accordance with this
Section 3.
- ---------
3.1. Section 1.1 (Definitions). Clause (a) of the definition of "Facility
-------------------------
B Commitment Termination Date" in Section 1.1 of the Existing Agreement is
-----------
hereby amended to read as follows: "(a) April 17, 1997, or".
3.2. Section 2.14. (Extension of Scheduled Facility A Commitment
-----------------------------------------------------------
Termination Date). Pursuant to Section 2.14 of the Existing Credit Agreement,
- ----------------- ------------
the Scheduled Facility A Commitment Termination Date is hereby extended to April
17, 1997. Each of the Borrowers, each of the Banks, and the Agent hereby waives
any requirement of notice specified in Section 2.14 of the Existing Credit
------------
Agreement.
4. Effective Date. This Amendment shall become effective as of April
--------------
17, 1996 (the "Effective Date"); provided, however, that all of the conditions
-------------- -------- -------
set forth in this Section 4 have been
---------
-2-
<PAGE>
satisfied, whereupon this Amendment shall be known, and may be referred to, as
"Amendment No. 4 to the Revolving Credit and Acceptance Agreement".
4.1. Execution of Counterparts of this Amendment. The Agent shall have
-------------------------------------------
received executed counterparts of this Amendment duly executed on behalf of each
of the Borrowers, each of the Banks, and the Agent.
4.2. Compliance with Warranties, No Default, etc. On the Effective Date,
-------------------------------------------
the following statements shall be true and correct:
(a) no Event of Default (or event which, with the giving of notice
or lapse of time, or both, would constitute an Event of Default) shall have
then occurred and be continuing; and
(b) the representations and warranties made by the Borrowers in
Section 4 of the Existing Credit Agreement shall be true on and as of such
---------
date with the same force and effect as if made on and as of such date;
and the Agent shall have received certificates from the Borrowers to such
effect.
4.3. Legal Details, etc. All documents executed or submitted pursuant
------------------
hereto shall be satisfactory in form and substance to the Agent and its counsel;
the Agent and its counsel shall have received all information, and such
counterpart originals or such certified or other copies of such materials, as
the Agent or its counsel may reasonably request; and all legal matters incident
to the transactions contemplated by this Amendment shall be satisfactory to the
Agent and its counsel.
5. References. References in the Existing Credit Agreement and the
----------
Notes to the term "Agreement" shall hereinafter be deemed to be references to
the Amended Credit Agreement.
6. Successors and Assigns. This Amendment shall be binding upon and
----------------------
inure to the benefit of the parties hereto and their
-3-
<PAGE>
respective successors and assigns, subject to Section 10.10 of the Existing
-------------
Credit Agreement.
7. Full Force and Effect. Except as expressly amended hereby, all of
---------------------
the representations, warranties, terms, covenants, and conditions of the
Existing Credit Agreement shall remain unchanged and shall remain in full force
and effect in accordance with its terms. The amendments set forth herein shall
be limited precisely as provided for herein to the provisions expressly amended
herein and shall not be deemed to be an amendment of consent to or modification
of any other term or provision of the Existing Credit Agreement or of any
transaction or further or future action on the part of the Borrowers which would
require the consent of the Banks or the Agent under the Existing Credit
Agreement.
8. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE
-------------
UNDER, AND SHALL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
9. Counterparts. This Amendment may be signed in any number of
------------
counterparts with the same effect as if the signatures thereto were upon the
same instrument.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 4 to
the Credit Agreement to be executed and delivered by their respective officers
thereunto duly authorized as of the day and year first above written.
ALCO STANDARD CORPORATION
By
--------------------------------
Title:
UNISOURCE CANADA, INC.
By
--------------------------------
Title:
TORONTO DOMINION (TEXAS), INC.,
as the Agent
By
--------------------------------
Title:
THE BANKS
---------
THE TORONTO-DOMINION BANK
By
--------------------------------
Title:
CANADIAN IMPERIAL BANK OF COMMERCE
-5-
<PAGE>
By
--------------------------------
Title:
ROYAL BANK OF CANADA
By
--------------------------------
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH
AND/OR CAYMAN ISLANDS BRANCH
By
--------------------------------
Title:
By
--------------------------------
Title:
DEUTSCHE BANK CANADA
By
--------------------------------
Title:
By
--------------------------------
Title:
-6-
<PAGE>
FIRST AMENDMENT TO
RECEIVABLES TRANSFER AGREEMENT
------------------------------
THIS FIRST AMENDMENT TO RECEIVABLES TRANSFER AGREEMENT, dated as of
September 15, 1995 (this "Amendment"), is among Alco Capital Resource, Inc.
---------
("Transferor"), Twin Towers Inc. ("Transferee"), and Deutsche Bank AG, New York
- ------------ ----------
Branch, as agent for Transferee (the "Agent").
-----
BACKGROUND
1. Transferor, Transferee, and the Agent entered into a Receivables
Transfer Agreement, dated as of September 23, 1994 (the "Transfer Agreement").
------------------
2. The parties hereto desire to amend the Transfer Agreement in order to
extend the Scheduled Commitment Termination Date (as defined in the Transfer
Agreement) and in certain other respects as set forth herein.
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment and not
-----------
otherwise defined herein shall have the meanings assigned thereto in the
Transfer Agreement.
SECTION 2. Scheduled Commitment Termination Date. The Scheduled
-------------------------------------
Commitment Termination Date is hereby extended to March 18, 1996.
SECTION 3. Dealer. Schedule A-1 to the Transfer Agreement is hereby
------
amended by deleting the following dealer:
Remco Business Products, Inc.
9150 Clairemont Mesa Boulevard
San Diego, California 92123
SECTION 4. Representations and Warranties. Transferor hereby represents
------------------------------
and warrants that the representations and warranties set forth in Section 6.01
------------
of the Transfer Agreement are true and correct as of the date hereof, after
giving effect to the Amendment, as though made on and as of the date hereof (and
such representations and warranties shall be deemed to have been made on the
date hereof), except that the date in Section 6.01(i) shall be deemed to be
September 30, 1994 and that no Termination Event or Unmatured Termination Event
has occurred and is continuing.
<PAGE>
SECTION 5. Miscellaneous. The Transfer Agreement, as amended hereby,
-------------
remains in full force and effect. Any reference to the Transfer Agreement from
and after the date hereof shall be deemed to refer to the Transfer Agreement as
amended hereby, unless otherwise expressly stated. This Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York. This Amendment may be executed in any number of counterparts and by the
different parties hereby in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together
shall constitute on and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective duly authorized officers as of the date first above
written.
TWIN TOWERS INC.
By:____________________________________
Name Printed:_____________________
Title:____________________________
DEUTSCHE BANK, AG, NEW YORK BRANCH
By:____________________________________
Name Printed:_____________________
Title:____________________________
By:____________________________________
Name Printed:_____________________
Title:____________________________
ALCO CAPITAL RESOURCE, INC.
By:____________________________________
Name Printed: Kathleen M. Burns
__________________
Title: Assistant Treasurer
___________________________
<PAGE>
[CONFORMED COPY]
SECOND AMENDMENT TO
RECEIVABLES TRANSFER AGREEMENT
------------------------------
THIS SECOND AMENDMENT TO RECEIVABLES TRANSFER AGREEMENT, dated as of
March 15, 1996 (this "Amendment"), is among Alco Capital Resource, Inc.
---------
("Transferor"), Twin Towers Inc. ("Transferee") and Deutsche Bank AG, New York
----------
Branch, as agent for Transferee (the "Agent").
-----
BACKGROUND
1. Transferor, Transferee and the Agent entered into a Receivables
Transfer Agreement, dated as of September 23, 1994, as amended by the First
Amendment to Receivables Transfer Agreement, dated as of September 15, 1995 (the
"Transfer Agreement").
-------- ---------
2. The parties hereto desire to amend the Transfer Agreement in order
to extend the Scheduled Commitment Termination Date (as defined in the Transfer
Agreement).
NOW, THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. Definitions. Capitalized terms used in this Amendment and
-----------
not otherwise defined herein shall have the meanings assigned thereto in the
Transfer Agreement.
SECTION 2. Scheduled Commitment Termination Date. The Scheduled
-------------------------------------
Commitment Termination Date is hereby extended to March 14, 1997.
SECTION 3. Representations and Warranties. Transferor hereby
------------------------------
represents and warrants that the representations and warranties set forth in
Section 6.01 of the Transfer Agreement are true and correct as of the date
- ------------
hereof, after giving effect to this Amendment, as though made on and as of the
date hereof (and such representations and warranties shall be deemed to have
been made on the date hereof), except that the date in Section 6.01(i)(y) shall
be deemed to be September 30, 1995, and that no Termination Event or Unmatured
Termination Event has occurred and is continuing.
SECTION 4. Miscellaneous. The Transfer Agreement, as amended hereby,
-------------
remains in full force and effect. Any reference to the Transfer Agreement from
and after the date hereof shall be deemed to refer to the Transfer Agreement as
amended hereby,
<PAGE>
unless otherwise expressly stated. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York. This Amendment
may be executed in any number of counterparts and by the different parties
hereby in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which when taken together shall constitute one and
the same agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed
by their respective duly authorized officers as of the date first above written.
TWIN TOWERS INC.
By: /s/ Tiffany Percival
-------------------------------------------
Name Printed: Tiffany Percival
-----------------------------
Title: Vice President
------------------------------------
DEUTSCH BANK AG, NEW YORK BRANCH
By: /S/ Hans-Josef Thiele
-------------------------------------------
Name Printed: Hans-Josef Thiele
-----------------------------
Title: Vice President
------------------------------------
By: /S/ Flore F. Blaise Williams
-------------------------------------------
Name Printed: Flore F. Blaise Williams
-----------------------------
Title: Vice President
------------------------------------
ALCO CAPITAL RESOURCE, INC.
By: /S/Kathleen M. Burns
-------------------------------------------
Name Printed: Kathleen M. Burns
-----------------------------
Title: Assistant Treasurer
------------------------------------
<PAGE>
ALCO STANDARD CORPORATION
LONG TERM INCENTIVE COMPENSATION PLAN
(Effective October 1, 1992)
1. Purpose. The Alco Standard Corporation Long-Term Incentive Plan has
-------
been adopted for the purpose of motivating, recognizing and rewarding
performance at the corporate, group and business unit levels which enhances long
term shareholder value. The Plan has been designed and is intended to operate
in a manner consistent with Alco Standard Corporation's decentralized operating
philosophy and multitiered organizational structure.
2. Eligibility. Participation in the Plan shall be limited to full-
-----------
time key employees of Alco Standard Corporation ("Alco") or its subsidiaries
(collectively, the "Company").
3. Form of Awards. Awards may be made in the form of cash, Shares,
--------------
stock options, or such other form approved by the Plan Administrators. No more
than 2,500,000 shares of common stock, no par value, of Alco ("Shares") may be
issued under the Plan. Shares subject to awards which have been forfeited
pursuant to the terms of the Plan may again be awarded pursuant to the Plan.
4. Adjustments. If the outstanding Shares are increased, decreased or
-----------
exchanged for a different number or kind of shares or other securities, or if
additional Shares or other property (other than ordinary cash dividends) are
distributed with respect to such Shares or other securities, through merger,
consolidation, sale of all or substantially all of the assets of the Company,
reorganization, recapitalization, reclassification, dividend, stock split,
reverse stock split, spin off, split off, or other distribution with respect to
such Shares or other securities, an appropriate and proportionate adjustment may
be made in (i) the maximum number and kind of shares that may be issued under
the Plan and (ii) the number and kind of shares or other securities subject to
then outstanding awards. No fractional shares will be issued under the Plan on
account of any such adjustments.
5. Administration and Interpretation. The Plan as it applies to
---------------------------------
participants who are executive officers of Alco shall be administered by a
committee of the Board of Directors of Alco (the "Committee"), which shall
consist of two or more directors, each of whom is a "disinterested person"
within the meaning of Rule 16b-3(c) under the Securities Exchange Act of 1934
and an "outside director" within the meaning of Section 162(m) of the Internal
Revenue Code and applicable regulations thereunder. The Committee may make such
rules and establish such procedures as it deems appropriate for the
administration of the Plan as it applies to executive officers. In the event of
any disagreement as to the interpretation of the Plan or any rule or procedure
thereunder, the decision of the Committee shall be final and binding upon all
persons in interest.
The Plan as it applies to participants who are not executive officers of
Alco shall be administered by the Chief Executive Officer of Alco. The Chief
Executive Officer may make such rules and establish such procedures as it deems
appropriate for the administration of the Plan as it applies to non-executive
officers. In the event of any disagreement as to the interpretation of the Plan
or any rule or procedure thereunder, the decision of the Chief Executive Officer
shall be final and binding upon all persons in interest.
6. Awards. The Committee shall have the authority to make awards
------
("Awards") under the Plan to any executive officer. Awards may be made in the
form of cash, Shares, stock options, or any other form which the Committee deems
appropriate. At the time an Award is made, the Committee shall specify (i) the
amount and form of the Award, (ii) the objective performance goals that must be
met in order for the executive officer to receive all or any part of the Award
and (iii) the time period within which the performance goals must be met
("Performance Period"). The performance goals specified by the Committee may
relate to the performance of an executive officer's business unit or the
performance of the Company as a whole, or to any combination of the foregoing.
Measurements of performance may include stock price, sales, earnings per share,
return on equity, return on assets, growth in assets, total shareholder return
or such other objective performance goals as may be established by the
Committee. The number of Awards, if any, made each year, the executive officers
to whom Awards are made, the time or times at which Awards are made, the amount
or form of any Award, the performance goals applicable to each Award and the
other terms and provisions of such Award shall
<PAGE>
be wholly within the discretion of the Committee, subject to the limit on the
number of Shares described in Section 3.
The Chief Executive Officer shall have the authority to make awards
("Awards") under the Plan to any eligible non-executive officer employee.
Awards may be made in the form of cash, Shares, stock options, or any other form
which the Chief Executive Officer deems appropriate. At the time an Award is
made, the Chief Executive Officer shall specify (i) the amount and form of the
Award, (ii) the objective performance goals that must be met in order for the
employee to receive all or any part of the Award and (iii) the time period
within which the performance goals must be met ("Performance Period"). The
performance goals specified by the Chief Executive Officer may relate to the
performance of an employee's business unit or the performance of the Company as
a whole, or to any combination of the foregoing. Measurements of performance
may include stock price, sales, earnings per share, return on equity, return on
assets, growth in assets, total shareholder return or such other objective
performance goals as may be established by the Chief Executive Officer. The
number of Awards, if any, made each year, the non-executive officer employees to
whom Awards are made, the time or times at which Awards are made, the amount or
form of any Award, the performance goals applicable to each Award and the other
terms and provisions of such Award shall be wholly within the discretion of the
Chief Executive Officer, subject to the limit on the number of Shares described
in Section 3.
7. Certification; Forfeiture. If the Committee or Chief Executive
-------------------------
Officer (as applicable) shall certify, after the end of the Performance Period,
that the applicable performance goals have been met, Alco shall cause such
amount as is earned pursuant to the Award to be delivered to the employee,
subject to valid income tax deferral under any of Alco's deferred compensation
programs and/or reduction in the amount of the Award for tax withholding
purposes. If the Committee or Chief Executive Officer (as applicable) does not
so certify, the Award shall be forfeited. Unless otherwise determined by the
Committee or Chief Executive Officer, an Award will be forfeited if the
participant is not an employee of the Company on the last day of the Performance
Period, subject to the provisions of Section 9 hereof.
8. Certificate. Each Award shall be evidenced by an Award Certificate,
-----------
which shall specify the amount and form of the Award, the Performance Period,
and the applicable performance goals. In addition, the Committee or Chief
Executive Officer, as applicable, may specify additional terms, not inconsistent
with this Plan, by rules of general application or by specific direction in
connection with a particular Award or group of Awards.
9. Termination of Employment. Unless otherwise determined by the
-------------------------
Committee or Chief Executive Officer, as applicable, an Award will be forfeited
if the participant ceases to be a full-time active employee of Alco or its
subsidiaries before the end of the Performance Period for any reason other than
death or total disability. If the participant becomes totally disabled (as
defined in Alco's Long-Term Disability Plan) or dies before the end of the
Performance Period, the participant (or estate or legal heir) shall generally be
entitled to receive a prorated Award (payable, if earned, after the end of the
Performance Period). If the participant's full-time active employment
terminates prior to the end of the Performance Period due to early retirement,
voluntary or involuntary termination, demotion, transfer to part-time status, or
for any reason other than disability or death, the Award will generally be
forfeited.
In the event the participant transfers to a position as a full-time active
employee of another business unit within Alco prior to the end of the
Performance Period, the Committee or Chief Executive Officer, as applicable, may
make an adjustment in the amount of the Award, the Performance Period and/or
performance goals associated with the Award, and/or may determine that the Award
should be forfeited in part or its entirety. Any such adjustment is in the sole
discretion of the Committee or Chief Executive Officer, as applicable. Before
making any such adjustment for an executive officer, however, the Committee
shall take into consideration the requirements of Section 162(m) of the Internal
Revenue Code and the applicable regulations thereunder.
10. Common Stock Subject to Award. Any Shares issued pursuant to an
-----------------------------
Award may be unissued shares or treasury shares, including shares bought on the
open market.
11. Rights of Participant in Shares. A participant shall not be deemed
-------------------------------
to be the holder of, or to have the rights of a holder with respect to, any
Shares subject to an Award unless and until a stock certificate representing
such Shares is issued to such participant.
<PAGE>
12. Tax Withholding. The Company's obligation to issue amounts earned
---------------
pursuant to an Award is subject to all applicable tax withholding requirements.
At the election of the employee, the Company shall reduce and withhold the
amount which becomes deliverable pursuant to the Award by up to fifty percent of
such amount and shall apply the amount withheld to applicable federal, state,
city, non-U.S. and other taxes required to be withheld by the Company pursuant
to any statutes or other governmental regulation or ruling. In the alternative,
the employee may make such other arrangements as may be approved by the Company
in order to satisfy tax withholding requirements associated with an Award.
13. Nonassignment. Any Award and the rights and privileges conferred
-------------
hereby shall not be transferred, assigned, pledged or hypothecated in any way
(whether by operation of law or otherwise), and shall not be subject to
execution, attachment or similar process.
14. Plan and Award Not to Affect Employment. Neither this Plan nor any
---------------------------------------
Award shall confer upon any employee any right to continue in the employ of the
Company.
15. Amendment of Plan. The Board of Directors of Alco may terminate
-----------------
the Plan or make such amendments to the Plan as it deems necessary or advisable,
provided, however, that unless otherwise required by law, no such amendment may
impair the rights of any participant under any Award previously granted without
such participant's consent.
16. Successors. The Plan shall be binding upon and inure to the
----------
benefit of any successor, successors or assigns of Alco.
17. Severability. If any part of the Plan shall be determined to be
------------
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of the Plan which shall continue
in full force and effect.
18. Governing Law. The Plan and actions taken in connection herewith
-------------
shall be governed and construed in accordance with the laws of the Commonwealth
of Pennsylvania.
19. Construction. Wherever any words are used in the Plan in the
------------
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
20. Liability of Plan Administrators. No administrator of the Plan
--------------------------------
shall be liable, in the absence of bad faith or willful misconduct, for any act
or omission with respect to administration of the Plan. Service as a Plan
Administrator, whether on the Committee or as Chief Executive Officer, shall
constitute service as a director of the Company so that the plan administrators
named herein shall be entitled to indemnification and reimbursement as directors
of the Company pursuant to its Code of Regulations.
21. Other Benefits. Neither the receipt of an Award nor the delivery
--------------
of cash, stock options, Shares, or any other amounts pursuant to an Award shall
be deemed compensation for purposes of computing benefits under any retirement
plan nor affect any benefits under any other benefit plan now or hereafter in
effect under which the availability or amount of benefits is related to the
level of compensation.
22. Costs. Unless otherwise determined by the Board of Directors, the
-----
Company shall bear all expenses incurred in administering the Plan, including
expenses of issuing Shares or granting stock options pursuant to an Award.
23. Effective Date. The Plan shall be effective October 1, 1992.
--------------
24. Termination of the Plan. No Award shall be made after September 30,
-----------------------
2004. However, Awards made prior to such date shall continue to be governed in
accordance with the terms of the Plan and participants shall be entitled to
receive payment for such Awards under the terms of the Plan.
<PAGE>
ALCO STANDARD CORPORATION
PARTNERS' STOCK PURCHASE PLAN
1. Purpose. The purpose of this Partners' Stock Purchase Plan (the
-------
"Plan") of Alco Standard Corporation ("Alco"), is to secure for Alco and its
stockholders the benefits of the incentive which an interest in the ownership of
common stock of Alco will provide to directors and those employees and
consultants who will be responsible for Alco's future growth and continued
success.
2. Participation. Only "Eligible Persons" (as hereinafter defined)
-------------
shall be entitled to participate in the Plan. An "Eligible Person" shall be a
director of Alco, or a full-time or part-time employee of Alco, or of a
subsidiary, or a consultant to Alco or a subsidiary, who shall have been
designated as a "Partner of Alco" by the Board of Directors of Alco. A
subsidiary whose employees or consultants may be considered for participation in
the Plan is any present or future corporation of which Alco or a subsidiary of
Alco owns stock representing fifty percent or more of the combined voting power
of all classes of stock of such corporation ("Eligible Subsidiary" or
"Subsidiary"). An Eligible Subsidiary, for this purpose, may be either a
domestic or foreign corporation.
An Eligible Person may become a participant in the Plan
("Participant") by delivering to Alco or to a Subsidiary the prescribed election
form. The first election shall generally be effective on the first day of the
calendar month next succeeding the month in which the election form is delivered
(the "Entry Date"). Any election thereafter to increase, decrease, or
discontinue contributions to the Plan shall generally become effective as of the
next succeeding Entry Date. A succeeding Entry Date is the first day of the
succeeding month.
3. Contributions by Participants. All contributions by Participants
-----------------------------
shall be by pay deduction. The amount of such pay deduction shall be fixed in
the election form delivered by the Participant, but shall not be less than 2%
and shall not exceed 15% of the Participant's "Base Compensation," provided,
however, that a Participant shall also be entitled to contribute an amount which
is within the foregoing percentages of the Participant's cash bonus compensation
which may be payable on an annual basis to the Participant after September 30 of
each year as a percentage of Base Compensation. In the event a Participant also
participates in the Alco Standard Corporation Retirement Savings Plan or any
other qualified savings plan (other than deferred compensation plans maintained
by Alco or any of its subsidiaries) to which employee pre-tax or after-tax
contributions are currently being made, the foregoing 15% contribution
limitation shall be reduced by the amount which is used as the basis for
calculation of matching company contributions under such other plan. "Base
Compensation" shall mean (a) monthly base salary (and director and committee
fees in the case of directors who are employees), including amounts deferred
pursuant to the Alco Standard Corporation Retirement Savings Plan or any other
qualified savings plan described above, including amounts deferred pursuant to
the 1989 Directors' Stock Option Plan of Alco Standard Corporation (the
"Directors' Plan"), and including amounts deferred pursuant to any other non-
qualified deferred compensation plans maintained by Alco or any Subsidiary,
(b) annual director, committee and trustee fees in the case of directors who are
not employees, including fees deferred pursuant to the Directors' Plan or
(c) consulting fees in the case of consultants.
<PAGE>
4. Contributions by Alco or a Subsidiary. Alco or a Subsidiary shall
-------------------------------------
contribute into the Plan with respect to each Participant an amount equal to
66 2/3% of the Participant's contributions. In addition to the foregoing amount,
as soon as administratively practicable after September 30 of each year, Alco or
a Subsidiary shall contribute to each Participant's account an amount equal to
33-1/3% of the Participant's contributions during the preceding 12-month period
from October 1 to September 30 (the "Previous Fiscal Year"), provided the
following conditions are met:
a) the Company (as hereinafter defined) employing such Participant
has achieved its Target Performance (as hereinafter defined) for the Previous
Fiscal Year; and
b) except as otherwise authorized by the Plan Committee appointed
pursuant to Paragraph 13, the Participant is an employee of the Company on
September 30 of the Previous Fiscal Year.
"Company" shall mean Alco, or each division, subsidiary or other
grouping within Alco or a Subsidiary, as the case may be. "Target Performance"
shall, in the case of groups and companies, have the meaning set forth in the
Alco Standard Corporation Incentive Bonus Plan, as from time to time in effect
for each group and each company, and in the case of corporate partners,
including non-employee directors, the performance which earns a bonus for
corporate officers equal to 100% of target as established from time to time by
the Human Resources Committee of the Board of Directors. The contribution of
each Participant, together with Alco's or a Subsidiary's contribution, will be
applied to the purchase of shares of Alco common stock as hereinafter described.
5. Trustee. The Board of Directors shall name and designate a
-------
Trustee or Trustees (hereinafter "Trustee"), who shall enter into a Trust
Agreement with Alco in a form approved by the Board of Directors. The Board
shall have the power to approve amendments to the Trust Agreement, remove any
Trustee, and designate a successor Trustee or Trustees. The assets of the Plan
shall be held in trust by the Trustee for use in accordance with the Plan in
providing for the benefits hereunder. Before the satisfaction of all
liabilities under the Plan in the event of termination of the Plan, none of the
assets held by the Trustee shall be used for or diverted to purposes other than
for the exclusive benefit of Participants and their beneficiaries except as
expressly provided in this Plan and in the Trust Agreement. No persons shall
have any interest in, or right to, any part of the assets or income held by the
Trustee, except as and to the extent expressly provided in this Plan and the
Trust Agreement.
6. Purchases of Alco Common Stock. As soon as is practicable after
------------------------------
the end of each month, the Trustee shall allocate to the account of each
Participant, out of shares of Alco common stock acquired by the Trustee for such
purpose, such number of full shares and such fractional interest in a share of
Alco common stock as may be purchased by funds in each Participant's account at
the end of such month representing contributions by the Participant and by Alco
or a Subsidiary. Such allocation of shares shall be at the average cost to the
Trustee of the shares allocated to all Participants' accounts at such time.
Shares purchased with funds contributed by the Participant shall be registered
in the name of the Participant or in such other name or names as the Participant
may have designated in the prescribed election form. Shares purchased with
funds contributed by Alco or a Subsidiary shall be registered in the name of the
Trustee. Any dividends shall be paid on all shares held in the Plan at the
close of business on the record date.
<PAGE>
Shares of Alco common stock shall be purchased by the Trustee from
time to time out of funds received by the Trustee under the Plan, either (a) on
the open market, or (b) in private transactions, including, without limitation,
from Alco or a Subsidiary, any individual or any employee benefit plan
maintained by Alco or a Subsidiary; provided, however, that all such purchases
shall be at not more than the then current fair market value of Alco common
stock. The Trustee shall also hold for the purpose of allocation to the
accounts of Participants as above provided shares of Alco common stock forfeited
under the provisions of Paragraph 11 herein.
7. Stock Rights, Stock Splits and Stock Dividends. The Trustee, in
----------------------------------------------
its discretion, may exercise or sell any rights to purchase any securities
appertaining to shares of Alco common stock held by the Trustee, whether or not
allocated to individual accounts. The accounts of Participants shall be
appropriately credited. Securities received by the Trustee by reason of a stock
split, a stock dividend or other distribution shall also be appropriately
allocated to the accounts of Participants.
8. Voting of Alco Common Stock. The Trustee shall vote all shares of
---------------------------
Alco common stock purchased with the contributions of Alco or a Subsidiary and
held by the Trustee in such manner as the Trustee shall, in the Trustee's
discretion, determine. In the event of a tender offer for Alco stock, the
Trustee shall tender or not tender shares held by the Plan in the Trustee's
discretion.
9. Interest of the Participant in Shares. An account will be
-------------------------------------
maintained for each Participant showing the number of shares of Alco common
stock purchased from funds contributed by the Participant and from funds
contributed by Alco or a Subsidiary for the benefit of the Participant. A
Participant shall at all times have a vested interest in the shares of Alco
common stock in his account purchased with his contributions. A Participant's
interest in the shares purchased with the contributions of Alco or a Subsidiary
shall not be immediately vested but shall vest in five equal annual
installments, beginning January 2 of the second full calendar year following the
year of purchase of such shares. The foregoing vesting schedule is subject to
the provisions of Paragraph 11 hereof regarding termination of participation in
the Plan.
10. Share Certificates and Distribution of Dividends. After the end
------------------------------------------------
of each calendar month there shall be distributed to each Participant a stock
certificate registered in the name of the Participant, or in such other name or
names as he may have designated in the prescribed election form, representing
the number of whole shares of Alco common stock purchased during the preceding
calendar month from funds contributed by the Participant.
After the end of each calendar year, there shall be distributed to
each Participant a stock certificate registered in the name of the Participant,
or in such other name or names as he may have designated in the prescribed
election form, representing the number of whole shares of Alco common stock
purchased from funds contributed by Alco or a Subsidiary in which the
Participant's interest shall have vested. Concurrently, there shall be
furnished to each Participant an annual statement which shall reflect the amount
of his contributions to date, the corresponding contributions by Alco or a
Subsidiary to date, the aggregate cost of the shares represented by the
certificate distributed to the Participant, the fractional share, if any, to
which the Participant may be entitled, and the number of shares of Alco common
stock in the Participant's account in which his interest shall not have vested.
A similar statement will be furnished on termination of participation in the
Plan. Dividends on all shares of Alco common stock, whether or not such shares
have vested, will be distributed currently.
<PAGE>
11. Termination of Participation. If a Participant ceases to be an
----------------------------
Eligible Person because of death, retirement or termination of his employment by
reason of Alco's or a Subsidiary's termination of its business at a particular
geographic location or by reason of a decrease in Alco's direct or indirect
combined voting power of all classes of stock of a corporation to below 50%, his
participation in the Plan shall automatically terminate as of the end of the
calendar month of his death, retirement or termination of employment. Unless
such termination of Alco's or a Subsidiary's business at a particular geographic
location or such decrease in Alco's direct or indirect combined voting power
results from a sale, spin-off, split-off, dividend or other distribution to
Alco's shareholders, the Participant's interest in all shares of Alco common
stock in his account purchased with contributions by Alco or a Subsidiary shall
immediately vest and there shall be delivered to the Participant, or to the
estate of a deceased Participant (a) a stock certificate registered in the name
of the Participant, or such other name or names as he may have designated in the
prescribed election form, representing any whole shares in the Participant's
account purchased from funds contributed by the Participant which have not been
previously distributed to him, (b) a stock certificate registered in the name of
the Participant, or such other name or names as he may have designated,
representing the whole shares in the Participant's account purchased from funds
contributed by Alco or a Subsidiary, and (c) cash representing the value of any
fractional share to which the Participant is entitled as of the effective date
of termination of his participation in the Plan.
If a Participant ceases to be an Eligible Person because of any reason
other than death, retirement, or termination of employment under the
circumstances set forth in the preceding paragraph resulting in immediate
vesting, his participation in the Plan shall automatically terminate as of the
end of the calendar month of his cessation as an Eligible Person. Upon such
termination, the Participant will retain his interest in all shares of Alco
common stock in his account which have vested, but the Participant's interest
will terminate in all shares which have not yet vested. The Participant shall
receive a stock certificate representing any vested shares, together with cash
representing the value of any fractional share to which the Participant is
entitled. The shares of Alco common stock in the Participant's account which
have not vested will thereafter be available to reduce the number of shares
otherwise required to be purchased with contributions by Alco or a Subsidiary
under the Plan.
If a Participant ceases to be an Eligible Person because his
designation as a "Partner of Alco" is terminated, the Committee referred to in
Paragraph 13 may, in its discretion, determine that so long as such Participant
shall continue to be a director of Alco, or a full-time or part-time employee of
Alco or a Subsidiary, or a consultant to Alco or a subsidiary, he may no longer
contribute to the Plan but his interest in shares of Alco common stock
theretofore purchased with contributions of Alco or a Subsidiary shall continue
to vest in accordance with Paragraph 9 (subject to this Paragraph 11) as though
the Participant remained an Eligible Person.
12. Expenses. In addition to its contributions, Alco or its
--------
Subsidiary will pay all fees and expenses incurred in connection with the Plan,
except that brokerage fees or commissions incurred in the purchase of shares of
Alco common stock shall be considered part of the cost of the shares and shall
be paid from contributions under the Plan. No charge or deduction for any
expenses will be made to a Participant upon the termination of his participation
under the Plan or upon the distribution of certificates representing shares of
Alco common stock purchased with his contributions or the contributions of Alco
or a Subsidiary.
<PAGE>
13. Administration. The Board of Directors shall appoint a Plan
--------------
Committee, which Plan Committee shall consist of at least three persons to serve
at the pleasure of the Board. The Plan Committee shall appoint an
Administrator, who shall be responsible for the general administration of the
Plan under the policy guidance of the Plan Committee. The Administrator shall
be in the employ of Alco and shall receive no special or additional
compensation, other than reimbursement of expenses, for his service as
Administrator.
The Administrator and Plan Committee shall have all powers and duties
necessary to administer the Plan in accordance with its terms and applicable
law. Any construction, interpretation, or application of the Plan by the
Administrator or the Plan Committee shall be final, conclusive and binding on
all persons.
14. Powers and Duties of Plan Committee. In addition to any duties
-----------------------------------
and powers described elsewhere herein, the Plan Committee shall have the
following specific duties and powers:
(i) to retain such consultants, accountants and attorneys, as
deemed necessary or advisable, to render statements, reports
and advice with respect to the Plan and to assist the Plan
Committee in complying with all applicable rules and
regulations affecting the Plan (such consultants, accountants
or attorneys may be the same as those retained by Alco);
(ii) to decide appeals from adverse determinations of the
Administrator with respect to eligibility for or amounts of
benefits under the Plan; and
(iii) to supervise the duties of the Administrator.
15. Powers and Duties of Administrator. In addition to the duties and
----------------------------------
powers described elsewhere herein, the Administrator shall have the following
specific duties and powers:
(i) under the supervision of the Plan Committee, to establish
rules, regulations and procedures to carry out the provisions
of the Plan;
(ii) to resolve questions or disputes relating to eligibility for
benefits or the amount of benefits under the Plan;
(iii) to conduct the day-to-day administration of the Plan subject
to the control and guidance of the Plan Committee;
(iv) to interpret the provisions of the Plan;
(vi) to evaluate administrative procedures;
(vii) to retain such consultants, accountants and attorneys, as
deemed necessary or advisable, to render statements, reports
and advice with respect to the Plan and to assist the
Administrator in complying with all applicable rules and
regulations affecting the Plan (such consultants, accountants
or attorneys may be the same as those retained by Alco); and
(viii) to delegate such duties and powers as the Administrator shall
determine from time to time, to any person or persons.
16. Functioning of Administrator and Plan Committee. The Administrator
-----------------------------------------------
and Plan Committee shall keep accurate records and minutes of meetings,
interpretations and decisions. The Plan Committee shall act by majority vote of
the members.
17. Adverse Determinations. If, at any time, the Administrator makes
----------------------
a determination adverse to a Participant or other claimant with respect to a
written claim for benefits or
<PAGE>
participation under the Plan, the Administrator shall notify the claimant in
writing of such determination.
18. Appeals from Adverse Determinations. A Participant or any other
-----------------------------------
claimant who receives notice of an adverse determination by the Administrator
with respect to his claim may request in writing, within 60 days of receipt of
such notice, a review of the Administrator's determination by the Plan
Committee. The Plan Committee shall render a decision within 90 days of receipt
of a request for review.
19. Deemed Denials. If for any reason the written notice of denial
--------------
described in Paragraph 17 is not furnished within 90 days of the Administrator's
receipt of a claim for benefits, the claim shall be deemed denied. Likewise, if
for any reason the written decision on review described in Paragraph 18 is not
furnished within the time prescribed, the claim shall be deemed to be denied on
review.
20. Indemnification. The Administrator, each member of the Plan
---------------
Committee and each Trustee shall be indemnified by Alco against expenses (other
than amounts paid in settlement to which Alco does not consent) reasonably
incurred by him in connection with any action to which he may be a party by
reason of his performance of administrative functions and duties under the Plan,
except in relation to matters as to which he shall be adjudged in such action to
be personally guilty of willful misconduct or gross negligence in the
performance of his duties. The foregoing right to indemnification shall be in
addition to such other rights as the Administrator, Plan Committee member or
Trustee may enjoy as a matter of law or by reason of insurance coverage of any
kind. Rights granted hereunder shall also be in addition to and not in lieu of
any rights to indemnification to which the Administrator, the Plan Committee
member or Trustee may be entitled pursuant to the Code of Regulations of Alco.
21. Amendment and Termination. The Board of Directors of Alco may
-------------------------
terminate the Plan at any time and may amend the Plan from time to time in any
respect; provided, however, that upon any termination of the Plan, all unvested
assets in the Participants' account shall become fully vested, and shall be
distributed to the Participants as soon as administratively practicable, and
provided further that no amendment to the Plan shall materially affect the right
of a Participant to receive his interest in the assets in his account, whether
vested or unvested.
22. Government and Other Regulations. The obligation of Alco or a
--------------------------------
Subsidiary to make contributions under the Plan, and the obligation of Alco or a
Subsidiary to purchase shares of Alco common stock under the Plan, shall be
subject to all applicable laws, rules and regulations, and to such approvals by
any governmental agencies as may be required.
23. Non-Alienation. No Participant shall be permitted to assign,
--------------
alienate, sell, transfer, pledge, or otherwise encumber his interest under the
Plan prior to the distribution of stock certificates to him. Any attempt to
assign, alienate, sell, transfer, pledge, or otherwise encumber a Participant's
interest under the Plan prior to distribution of stock certificates shall be
void and of no effect.
<PAGE>
ALCO STANDARD CORPORATION 1995 STOCK OPTION PLAN
ARTICLE I
Purpose
The purpose of this 1995 Stock Option Plan (the "Plan") is to enable
Alco Standard Corporation (the "Company") to offer employees and consultants of
the Company and its subsidiaries equity interests in the Company, thereby
attracting, retaining and rewarding such persons, and strengthening the
mutuality of interests between such persons and the Company's shareholders.
ARTICLE II
Definitions
For purposes of this Plan, the following terms shall have the following
meanings:
2.1 "Board" shall mean the Board of Directors of the Company.
-----
2.2 "Code" shall mean the Internal Revenue Code of 1986, as amended.
----
2.3 "Committee" shall mean a committee appointed by the Board to
---------
administer the Plan, consisting of two or more Directors, each of whom is a
"disinterested person" as defined in Rule 16b-3(c) under the Securities Exchange
Act of 1934 and an "outside director" as defined in regulations under Section
162(m) of the Code.
2.4 "Common Stock" shall mean the Common Stock, no par value, of the
------------
Company.
2.5 "Company" shall mean Alco Standard Corporation.
-------
2.6 "Fair Market Value" as of any date shall mean, unless otherwise
-----------------
required by any applicable provision of the Code or any regulations issued
thereunder, the closing sales price of a share of Common Stock for the
applicable trading day as reported on the New York Stock Exchange Composite
Tape.
2.7 "Incentive Stock Option" shall mean any Stock Option awarded under
----------------------
this Plan intended to be and designated as an "Incentive Stock Option" within
the meaning of Section 422 of the Code or any successor section.
2.8 "Non-Qualified Stock Option" shall mean any Stock Option awarded
--------------------------
under this Plan that is not an Incentive Stock Option.
2.9 "Participant" shall mean a person to whom an Option has been granted
-----------
under this Plan.
2.10 "Stock Option" or "Option" shall mean any option to purchase shares
------------ ------
of Common Stock granted pursuant to Article VI.
<PAGE>
ARTICLE III
Administration
3.1 The Committee. The Plan shall be administered and interpreted by the
-------------
Committee.
3.2 Awards. The Committee shall have full authority to grant Stock
------
Options to persons eligible under Article V, including the authority:
(a) to select the persons to whom Stock Options may from time to
time be granted;
(b) to determine whether and to what extent Incentive Stock Options
or Non-Qualified Stock Options, or any combination thereof, are to be granted to
one or more persons eligible to receive Options under Article V;
(c) to determine the number of shares of Common Stock to be covered
by each Option granted; and
(d) to determine the terms and conditions, not inconsistent with the
terms of this Plan, of any Option granted (including, but not limited to, the
exercise price of the Option, the term of the Option, any restriction or
limitation affecting the exercisability of the Option and any conditions under
which the exercisability of the Option will be accelerated).
3.3 Guidelines. Subject to Article VII hereof, the Committee shall have
----------
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan as it shall, from time to time, deem
advisable; to interpret the terms and provisions of this Plan and any Option
granted under this Plan (and any agreements relating thereto); and to otherwise
supervise the administration of this Plan. The Committee may correct any defect,
supply any omission or reconcile any inconsistency in this Plan or in any Option
in the manner and to the extent it shall deem necessary to carry this Plan into
effect.
3.4 Decisions Final. Any decision, interpretation or other action made
---------------
or taken in good faith by the Committee arising out of or in connection with the
Plan shall be final, binding and conclusive on the Company, all employees and
Participants and their respective heirs, executors, administrators, successors
and assigns.
ARTICLE IV
Share Limitations
4.1 Shares. The maximum aggregate number of shares of Common Stock that
------
may be issued under this Plan shall be 2,500,000 (subject to any increase or
decrease pursuant to Section 4.3), which may be either authorized and unissued
Common Stock or issued Common Stock reacquired by the Company. If any Option
granted under this Plan expires, terminates or is cancelled for any reason
without having been exercised in full, the number of unpurchased shares shall
again be available for the purposes of the Plan.
4.2 Individual Limit. The maximum aggregate number of shares with
----------------
respect to which Options may be granted to any individual during any fiscal year
shall be 1,000,000 (subject to increase or decrease pursuant to Section 4.3).
<PAGE>
4.3 Adjustments. If the outstanding shares of Common Stock are
-----------
increased, decreased or exchanged for a different number or kind of shares or
other securities, or if additional shares or other property (other than ordinary
cash dividends) are distributed with respect to such shares of Common Stock or
other securities, through merger, consolidation, sale of all or substantially
all of the assets of the Company, reorganization, recapitalization,
reclassification, dividend, stock split, reverse stock split, spin off, split
off, or other distribution with respect to such shares of Common Stock, or other
securities, an appropriate and proportionate adjustment may be made in (i) the
maximum number and kind of shares that may be issued under the Plan, (ii) the
maximum number and kind of shares with respect to which Options may be granted
to any individual during any fiscal year, (iii) the number and kind of shares or
other securities subject to then outstanding Options, and (iv) the price for
each share subject to any then outstanding Options. No fractional shares will be
issued under the Plan on account of any such adjustments.
ARTICLE V
Eligibility
5.1 Employees. Officers and other employees of the Company (including
---------
directors of the Company who are also employees of the Company) and employees of
any subsidiary of the Company are eligible to be granted Options under this
Plan.
5.2 Consultants. Persons who directly or through a corporation in which
-----------
they own a majority of the outstanding shares of voting stock provide services
to the Company or any of its subsidiaries as independent contractors are
eligible to be granted Non-Qualified Stock Options under this Plan.
ARTICLE VI
Stock Options
6.1 Options. Each Stock Option granted under this Plan shall be either
-------
an Incentive Stock Option or a Non-Qualified Stock Option.
6.2 Grants. The Committee shall have the authority to grant to any
------
person eligible under Article V one or more Incentive Stock Options, Non-
Qualified Stock Options, or both types of Stock Options. To the extent that any
Stock Option does not qualify as an Incentive Stock Option (whether because of
its provisions or the time or manner of its exercise or otherwise), such Stock
Option or the portion thereof which does not qualify as an Incentive Stock
Option shall constitute a separate Non-Qualified Stock Option.
6.3 Incentive Stock Options. Anything in the Plan to the contrary
-----------------------
notwithstanding, no term of this Plan relating to Incentive Stock Options shall
be interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the Participant affected, to
disqualify any Incentive Stock Option under such Section 422.
6.4 Terms of Options. Options granted under this Plan shall be subject
----------------
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of this Plan, as the Committee
shall deem desirable:
(a) Stock Option Award. Each Stock Option shall be evidenced by, and
------------------
subject to the terms of, a Stock Option Award. The Stock Option Award shall
specify whether the Option is an Incentive Stock Option or a Non-Qualified Stock
Option, the number of shares of Common Stock subject to the Stock Option, the
option price, the option term, and the other terms and conditions applicable to
the Stock Option.
<PAGE>
(b) Option Price. The option price per share of Common Stock
------------
purchasable upon exercise of a Stock Option shall be determined by the Committee
at the time of grant but shall be not less than 100% of the Fair Market Value of
the Common Stock on the date of grant if the Stock Option is intended to be an
Incentive Stock Option.
(c) Option Term. The term of each Stock Option shall be fixed by the
-----------
Committee at the time of grant but shall not be exercisable more than ten years
after the date of grant if the Stock Option is intended to be an Incentive Stock
Option.
(d) Exercisability. Stock Options shall be exercisable at such time
--------------
or times and subject to such terms and conditions as shall be determined by the
Committee at the time of grant; provided, however, that the Committee may waive
any installment exercise or waiting period provisions, in whole or in part, at
any time after the date of grant, based on such factors as the Committee shall,
in its sole discretion, deem appropriate.
(e) Method of Exercise. Subject to such installment exercise and
------------------
waiting period provisions as may be imposed by the Committee, Stock Options may
be exercised in whole or in part at any time during the option term, by giving
written notice of exercise to the Company specifying the number of shares of
Common Stock to be purchased and the option price for such shares. The option
exercise price shall be paid in full in cash or check payable to the order of
Alco prior to the delivery of the shares (or by tendering such other property as
Alco may approve), or the options may be exercised through broker-assisted
exercises in which the broker may forward the exercise price. Upon payment in
full of the option price, a stock certificate or stock certificates representing
the number of shares of Common Stock to which the Participant is entitled shall
be delivered to the Participant (or the broker). A Participant shall not be
deemed to be the holder of Common Stock, or to have the rights of a holder of
Common Stock, with respect to shares subject to the Option, unless and until a
stock certificate representing such shares of Common Stock is issued.
(f) Termination of Employment. Unless otherwise determined by the
-------------------------
Committee, Stock Options held by a Participant who ceases to be an employee or
consultant of the Company and its subsidiaries shall be exercisable as follows:
(i) In the case of a Participant who dies, all Options that were
outstanding on the date of the Participant's death may be exercised by the legal
representative of the Participant's estate for a period of one year after the
date of death or until the expiration of the stated term of the Option,
whichever period is shorter.
(ii) In the case of a Participant who becomes disabled, all
Options that were outstanding on the date of termination of the Participant's
employment or consulting relationship may be exercised by the Participant for a
period of one year after such date or until the expiration of the stated term of
the Option, whichever period is shorter.
(iii) In the case of a Participant who ceases to be an employee
or consultant of the Company and its subsidiaries for any reason other than
death or disability, all Options that were exercisable on the date of
termination of the Participant's employment or consulting relationship may be
exercised by the Participant for a period of three months after such date or
until the expiration of the stated term of the Option, whichever period is
shorter.
(iv) Any Option that was not exercisable on the date on which the
Participant ceased to be an employee or consultant of the Company shall
generally terminate on such date.
(v) Any Option not exercised during the periods specified in
Subsections (i), (ii) or (iii) shall terminate at the end of such period;
provided, however, that the Committee may extend such period, based on such
factors as the Committee shall, in its sole discretion, deem appropriate. If an
Incentive Stock
<PAGE>
Option is exercised after the expiration of the exercise periods that apply for
purposes of Section 422 of the Code, such Option will thereafter be treated as a
Non-Qualified Stock Option.
(g) Incentive Stock Option Limitations. To the extent that the
----------------------------------
aggregate Fair Market Value (determined as of the date of grant) of the Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by the Participant during any calendar year under the Plan and/or any
other stock option plan of the Company or any subsidiary or parent corporation
(within the meaning of Section 424 of the Code) exceeds $100,000, such Options
shall be treated as Non-Qualified Stock Options.
Should the foregoing provisions not be necessary in order for the
Stock Options to qualify as Incentive Stock Options, or should any additional
provisions be required, the Board may amend this Plan accordingly.
ARTICLE VII
Termination or Amendment
7.1 Termination or Amendment of the Plan. The Board may at any time
------------------------------------
terminate this Plan or amend all or any part of this Plan; provided, however,
that, unless otherwise required by law, and subject to Article IV, the rights of
a Participant with respect to Options granted prior to such termination or
amendment may not be materially impaired without the consent of such
Participant.
7.2 Amendment of Options. The Committee may amend the terms of any
--------------------
outstanding Option, prospectively or retroactively, but, subject to Article IV,
no such amendment or other action by the Committee shall materially impair the
rights of any holder without the holder's consent.
ARTICLE VIII
General Provisions
8.1 Nonassignment. Except as otherwise provided in this Plan, Options
-------------
granted hereunder and the rights and privileges conferred thereby shall not be
sold, transferred, assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise), and shall not be subject to execution,
attachment or similar process.
8.2 Legend. All certificates representing shares of Common Stock
------
delivered under this Plan shall be subject to such stock transfer orders and
other restrictions as the Committee may deem advisable under the rules,
regulations and other requirements of the Securities and Exchange Commission,
any stock exchange upon which the Common Stock is listed or traded, any
applicable Federal or state securities law, and any applicable corporate law,
and the Committee may cause a legend or legends to be put on stock certificates
to make appropriate reference to such restrictions.
8.3 Other Plans. Nothing contained in this Plan shall prevent the Board
-----------
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.
8.4 No Right to Employment. Neither this Plan nor the grant of any
----------------------
Option shall give any Participant or other employee or consultant any right with
respect to continuance of employment or consulting relationship with the Company
or any subsidiary of the Company, nor shall there be a limitation in any way on
<PAGE>
the right of the Company or a subsidiary, as the case may be, to terminate such
Participant's employment or consulting arrangement at any time.
8.5 Withholding of Taxes. The Company shall have the right, prior to
--------------------
delivering a stock certificate representing the shares of Common Stock otherwise
deliverable to a Participant upon exercise of an Option, to (i) require the
Participant to remit to the Company an amount sufficient to satisfy all federal,
state, local and non-U.S. tax withholding requirements (including social
security and Medicare withholding requirements, if applicable), (ii) reduce the
number of shares of Common Stock otherwise deliverable to the Participant by an
amount that would have a Fair Market Value on the date of exercise equal to the
amount of all federal, state, local and non-U.S. taxes (including social
security and Medicare taxes, if applicable) required to be withheld, or
(iii) deduct the amount of such taxes from cash payments otherwise to be made to
the Participant. In connection with such withholding, the Committee may make
such arrangements as are consistent with this Plan as it may deem appropriate.
8.6 Listing and Other Conditions.
----------------------------
(a) The issuance of any shares of Common Stock upon exercise of an
Option shall be conditioned upon such shares being listed on the New York Stock
Exchange. The Company shall have no obligation to issue any shares of Common
Stock unless and until the shares are so listed, and the right to exercise any
Option shall be suspended until such listing has been effected.
(b) If at any time counsel to the Company shall be of the opinion
that any sale or delivery of shares of Common Stock upon exercise of an Option
is or may in the circumstances be unlawful or result in the imposition of excise
taxes under the statutes, rules or regulations of any applicable jurisdiction,
the Company shall have no obligation to make such sale or delivery, or to make
any application or to effect or to maintain any qualification or registration
under the Securities Act of 1933 or otherwise with respect to shares of Common
Stock or Options, and the right to exercise any Option shall be suspended until,
in the opinion of such counsel, such sale or delivery shall be lawful or shall
not result in the imposition of excise taxes.
(c) Upon termination of any period of suspension under this
Section 8.6, any Option affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before such
suspension and as to shares which would otherwise have become available during
the period of such suspension, but no such suspension shall extend the term of
any Option.
8.7 Governing Law. This Plan and actions taken in connection herewith
-------------
shall be governed and construed in accordance with the laws of the Commonwealth
of Pennsylvania.
8.8 Construction. Wherever any words are used in this Plan in the
------------
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
8.9 Liability of Committee Members. No member or former member of the
------------------------------
Committee shall be liable, in the absence of bad faith or willful misconduct,
for any act or omission with respect to service on the Committee. Service on the
Committee shall constitute service as a director of the Company so that members
of the Committee shall be entitled to indemnification and reimbursement as
directors of the Company pursuant to its Code of Regulations.
8.10 Other Benefits. The grant of an Option shall not be deemed
--------------
compensation for purposes of computing benefits under any retirement plan nor
affect any benefits under any other benefit plan now or hereafter in effect
under which the availability or amount of benefits is related to the level of
compensation.
8.11 Costs. Unless otherwise determined by the Board of Directors, the
-----
Company shall bear all expenses incurred in administering this Plan, including
expenses of issuing Common Stock upon the exercise of Options.
<PAGE>
8.12 Severability. If any part of this Plan shall be determined to be
------------
invalid or void in any respect, such determination shall not affect, impair,
invalidate or nullify the remaining provisions of this Plan which shall continue
in full force and effect.
8.13 Successors. This Plan shall be binding upon and inure to the
----------
benefit of any successor or successors of the Company.
8.14 Headings. Article and section headings contained in this Plan are
--------
included for convenience only and are not to be used in construing or
interpreting this Plan.
ARTICLE IX
Effective Date of Plan
9.1 Effective Date. This Plan shall be effective as of November 10,
--------------
1994, subject to approval by the Company's shareholders.
ARTICLE X
Term of Plan
10.1 Term. No Stock Option shall be granted pursuant to this Plan on or
----
after November 10, 2004, but Options granted prior to such date may extend
beyond that date.
/s/Hugh G. Moulton
-----------------------------
Date: May 9, 1996 Hugh G. Moulton
Executive Vice President
<PAGE>
EXHIBIT 11
ALCO STANDARD CORPORATION
COMPUTATIONS OF EARNINGS PER SHARE
(in thousands, except earnings per share)
<TABLE>
<CAPTION>
1996 1995
---------------------------- -----------------------------
Fully Fully
Primary Diluted(1) Primary Diluted(1)
--------- ----------- ---------- ------------
Three Months Ended March 31
<S> <C> <C> <C> <C>
Average Shares Outstanding
Common shares 126,709 126,709 109,308 109,308
Preferred stock
Senior Securities 848 9,016
Convertible loan notes 367
Options 1,742 1,941 2,010 2,168
--------- ----------- ---------- ------------
Total shares 128,451 129,865 111,318 120,492
========= =========== ========== ============
Income
Net Income $ 71,137 $ 71,137 $ 49,125 $ 49,125
Less: Preferred dividends 4,885 4,885 2,893
--------- ----------- ---------- -----------
Net income available to common shareholders $ 66,252 $ 66,252 $ 46,232 $ 49,125
========= =========== ========== ===========
--------- ----------- ---------- -----------
Earnings Per Share $0.52 $0.51 $0.42 $0.41
========= =========== ========== ===========
Six Months Ended March 31
Average Shares Outstanding
Common shares 122,054 122,054 109,188 109,188
Preferred stock
Senior Securities 4,793 9,016
Convertible loan notes 374
Options 1,784 2,054 2,088 2,270
--------- ----------- ---------- -----------
Total shares 123,838 129,275 111,276 120,474
========= =========== ========== ===========
Income
Net Income $ 132,552 $ 132,552 $ 94,594 $ 94,594
Less: Preferred dividends 12,549 9,770 5,786
--------- ----------- ---------- -----------
Net income available to common shareholders $ 120,003 $ 122,782 $ 88,808 $ 94,594
========= =========== ========== ===========
--------- ----------- ---------- -----------
Earnings Per Share $0.97 $0.95 $0.80 $0.79
========= =========== ========== ===========
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item 601(b)
(11) although not required by footnote 2 to paragraph 14 of APB Opinion
No. 15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF ALCO STANDARD CORPORATION AND SUBSIDIARIES
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 83,280,000
<SECURITIES> 0
<RECEIVABLES> 1,216,130,000
<ALLOWANCES> 43,835,000
<INVENTORY> 818,904,000
<CURRENT-ASSETS> 2,261,828,000
<PP&E> 824,705,000
<DEPRECIATION> 389,572,000
<TOTAL-ASSETS> 5,492,092,000<F1>
<CURRENT-LIABILITIES> 1,289,033,000
<BONDS> 772,809,000
0
290,170,000
<COMMON> 1,115,572,000
<OTHER-SE> 658,930,000
<TOTAL-LIABILITY-AND-EQUITY> 5,492,092,000<F2>
<SALES> 5,304,968,000
<TOTAL-REVENUES> 5,374,513,000
<CGS> 3,834,080,000
<TOTAL-COSTS> 3,864,819,000<F3>
<OTHER-EXPENSES> 1,258,581,000<F4>
<LOSS-PROVISION> 14,506,000
<INTEREST-EXPENSE> 32,692,000
<INCOME-PRETAX> 218,421,000
<INCOME-TAX> 85,869,000
<INCOME-CONTINUING> 132,552,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 132,552,000
<EPS-PRIMARY> 0.97
<EPS-DILUTED> 0.95
<FN>
<F1> Includes Finance Subsidiaries assets (primarily lease receivables) of
$1,277,060,000
<F2> Includes Finance Subsidiaries liabilities (primarily debt) of
$1,081,334,000
<F3> Includes Finance Subsidiaries interest of $30,739,000
<F4> Represents selling, general, and administrative expenses.
</FN>
</TABLE>
