<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Twenty-Four Weeks Ended June 17, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-3838
FEDERAL PAPER BOARD COMPANY, INC.
(Exact name of Registrant as specified in its charter)
NORTH CAROLINA 22-0904830
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
75 CHESTNUT RIDGE ROAD, MONTVALE, NEW JERSEY 07645
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: (201) 391-1776
Indicate by check mark ("X") 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 twelve months and (2) has been
subject to such filing requirements for the past 90 days.
YES X NO
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT JULY 15, 1995
Common stock, par value $5 share 45,805,446
<PAGE>
FEDERAL PAPER BOARD COMPANY, INC.
INDEX
PAGE
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheet 3
Condensed Consolidated Statement of Income 4
Condensed Consolidated Statement of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-12
PART II OTHER INFORMATION *
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 13
* Item numbers which are inapplicable or to which the answer is
negative have been omitted.
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<TABLE>
FEDERAL PAPER BOARD COMPANY, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
June 17, December 31,
In thousands 1995 1994
<S> <C> <C>
ASSETS
Cash $ 290 $ 293
Receivables - net 109,409 73,856
Inventories:
Raw materials 105,185 74,489
Work in process 22,621 18,365
Finished goods 107,575 90,316
Supplies 53,744 52,533
Subtotal 289,125 235,703
Lifo reserve (12,163) ( 5,156)
Total inventories 276,962 230,547
Other current assets 49,281 52,545
Total Current Assets 435,942 357,241
Property, plant and equipment 2,838,090 2,794,716
Accumulated depreciation (943,030) (897,077)
Property, plant and equipment - net 1,895,060 1,897,639
Timber and timberlands 188,179 188,896
Other assets 159,736 165,873
Total Assets $2,678,917 $2,609,649
LIABILITIES AND SHAREHOLDERS' EQUITY
Current portion of long-term debt $ 73,539 $ 74,544
Short-term bank debt 22,200 24,242
Accrued interest 19,079 19,443
Other current liabilities 223,619 219,526
Total Current Liabilities 338,437 337,755
Long-term debt 857,154 921,227
Other liabilities 80,550 78,832
Deferred tax liability 384,236 353,643
Capital stock 221,517 215,304
Other capital 255,474 250,183
Retained earnings 542,945 453,977
Treasury stock, at cost (1,396) (1,272)
Total Shareholders' Equity 1,018,540 918,192
Total Liabilities and Shareholders'
Equity $2,678,917 $2,609,649
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
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<TABLE>
FEDERAL PAPER BOARD COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
For the For the
Twelve Weeks Ended Twenty-Four Weeks Ended
In thousands, except June 17, June 18, June 17, June 18,
per share amounts 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net sales $463,379 $347,976 $899,171 $667,430
Costs and expenses:
Cost of products sold 295,694 260,391 583,871 506,914
Depreciation, amortization
and cost of timber harvested 35,148 32,932 71,276 65,817
Selling and administrative
expenses 21,327 16,351 41,963 31,350
Interest expense 20,976 18,996 42,592 38,838
Other - net (560) 4,592 (6,495) 15,236
Total costs and expenses 372,585 333,262 733,207 658,155
Income before taxes 90,794 14,714 165,964 9,275
Provision for income taxes 32,794 2,714 61,064 575
Net income 58,000 12,000 104,900 8,700
Preferred dividend requirements 1,331 1,524 2,777 3,049
Net income applicable to common
shares $ 56,669 $ 10,476 $102,123 $ 5,651
Average Common Shares Outstanding:
Assuming no dilution 42,838 42,210 42,712 42,192
Assuming full dilution 47,941 42,771 47,826 42,810
Earnings Per Common Share:
Assuming no dilution $1.32 $.25 $2.39 $.13
Assuming full dilution $1.21 $.25 $2.19 $.13
Dividends Per Common Share $.40 $.25 $.70 $.50
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
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<PAGE>
<TABLE>
FEDERAL PAPER BOARD COMPANY, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
For the Twenty-Four Weeks Ended
June 17, June 18,
In thousands 1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATIONS:
Net income $ 104,900 $ 8,700
Adjustments to reconcile net income
to net cash provided by operations:
Depreciation, amortization and
cost of timber harvested 71,276 65,817
Deferred income tax provision 27,778 (2,073)
Other - net 5,106 31,142
Net changes in current assets and liabilities (64,692) (16,669)
NET CASH PROVIDED BY OPERATIONS 144,368 86,917
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (54,720) (62,538)
Other - net (1,223) (12,346)
NET CASH USED FOR INVESTING ACTIVITIES (55,943) (74,884)
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (28,720) (24,393)
Increase in long-term debt 849 18,471
Payments on long-term debt (65,982) (2,498)
Other - net 5,425 (3,587)
NET CASH USED FOR FINANCING ACTIVITIES (88,428) (12,007)
(DECREASE) INCREASE IN CASH (3) 26
Cash: Beginning of year 293 271
End of period $ 290 $ 297
<FN>
See accompanying notes to condensed consolidated financial statements.
</FN>
</TABLE>
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<PAGE>
FEDERAL PAPER BOARD COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. In the opinion of management, the accompanying unaudited interim
condensed consolidated financial statements reflect all adjustments,
of a normal and recurring nature, necessary to present fairly the
results for the interim periods presented.
2. Net income used in the computation of earnings per common share
assuming no dilution is reduced by preferred dividend requirements.
Earnings per common share assuming full dilution for the second quarter
and year-to-date 1995 is based on the weighted number of common shares
outstanding during the quarter, including the dilutive effects of stock
options outstanding and the conversion of the Company's preferred
stocks. Earnings per common share assuming full dilution for the
second quarter and year-to-date of 1994 is based on the weighted number
of common shares outstanding during the quarter and does not assume the
conversion of the Company's preferred stocks or the conversion of stock
options outstanding as their effects are antidilutive.
3. The second quarter 1995 and 1994 dividends were declared on June 20,
1995 and June 21, 1994, respectively, and are presented in the
accompanying Condensed Consolidated Statement of Income for
presentation purposes only.
4. On July 10, 1995, the Company gave notice of its election to redeeem
its $2.875 cumulative convertible preferred stock. Under this
election, the Company will redeem all shares of the $2.875 cumulative
convertible preferred stock not submitted for conversion into common
stock by 5:00 p.m. Eastern Standard Time (EST), August 9, 1995, at the
redemption price of $51.00 per share which includes accrued and unpaid
dividends to the redemption date. The preferred stock may be converted
into 1.8182 shares of common stock. The right to convert expires at
the close of business (5:00 p.m. EST) on August 9, 1995. At July 15,
1995, 690,730 shares of the Company's $2.875 cumulative convertible
preferred stock were outstanding.
5. In managing interest rate sensitivity, the Company utilizes certain
financial instruments. At June 17, 1995 and June 18, 1994, the Company
was a party to both hedged and nonhedged interest rate swap agreements.
At June 17, 1995 and June 18, 1994, the nonhedged interest rate swap
agreements outstanding had notional principal amounts of $175 million.
During the first quarter of 1995, the Company amended the $175 million
interest rate swap agreements to eliminate the leveraged coupon rate
that was based on various interest rate spreads. The Company's market
risk under these agreements is primarily subject to the differential
between the London Inter Bank Offered Rate (LIBOR) and LIBOR in arrears
during a six month period. The Company does not believe a possible
change in LIBOR, during a six month period, would have a material
impact on its financial position or results of operations. The
estimated fair value of all nonhedged interest rate swap agreements was
a loss of $8.9 million and $15.9 million at June 17, 1995 and June 18,
1994, respectively.
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<PAGE>
FEDERAL PAPER BOARD COMPANY, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONT.)
(Unaudited)
The hedged interest rate swap agreements outstanding had notional
principal amounts of $160 million and $175 million at June 17, 1995 and
June 18, 1994, respectively. During the first quarter of 1995, the
Company also amended these agreements to limit its exposure to
fluctuations in LIBOR.
6. Other-net in the accompanying Condensed Consolidated Statement of
Income for the twenty-four weeks ended June 17, 1995, includes a net
pre-tax gain of $5.5 million resulting from a $9.5 million gain from
the sale of assets and a charge of $4.0 million related to a
restructuring program. Other-net for the second quarter and
year-to-date periods of 1994 includes pre-tax charges of $5.1 million
and $15.7 million, respectively, associated with certain financial
instrument transactions.
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<PAGE>
<TABLE>
FEDERAL PAPER BOARD COMPANY, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
For the For the
Twelve Weeks Ended Twenty-Four Weeks Ended
June 17, June 18, June 17, June 18,
In thousands 1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET SALES:
Paper, Paperboard and Pulp $354,455 $232,983 $687,349 $453,407
Wood Products 58,879 60,117 117,996 118,952
Converting Operations 87,688 80,697 157,205 148,188
Intersegment Eliminations (37,643) (25,821) (63,379) (53,117)
Total $463,379 $347,976 $899,171 $667,430
INCOME BEFORE TAXES:
Paper, Paperboard and Pulp $111,233 $ 25,188 $208,397 $ 35,794
Wood Products 6,089 16,379 15,139 36,484
Converting Operations 6,476 1,090 (890) 2,326
Intersegment Eliminations (2,234) 418 (5,783) 431
General Corporate Items - Net (9,795) (9,365) (8,307) (26,922)
Interest Expense (20,975) (18,996) (42,592) (38,838)
Total $ 90,794 $ 14,714 $165,964 $ 9,275
</TABLE>
RESULTS OF OPERATIONS:
Paper, Paperboard and Pulp
Net sales of paper, paperboard and pulp increased approximately 52% compared
to the prior year for the second quarter and year-to-date periods,
respectively. Factors contributing to the continued growth during the second
quarter include: higher market pulp sales due to more favorable selling prices
and market conditions, a rise in uncoated free-sheet paper sales of 79%
resulting from increased volume coupled with higher average selling prices and
an increase in bleached paperboard sales of 41%, due primarily to higher
average selling prices and increased demand. Recycled paperboard sales
increased 31% also as a result of higher average selling prices. The
year-to-date period was influenced by these same factors, with sales increases
of 85% in uncoated free-sheet paper, 37% in bleached paperboard and 24% in
recycled paperboard.
Operating profits for this segment improved markedly, compared to the prior
year for the second quarter and year-to-date periods. Growth was achieved
through an increase in selling prices, compared to the prior year periods
reported, for all products produced by this group. Market pulp has
experienced strong market demand which has allowed the Company to benefit from
improved selling prices. Uncoated free-sheet paper selling prices have also
improved dramatically, up approximately 70% from the prior year, reflecting the
improved economic conditions in the United Kingdom and Europe.
-8-
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont.)
Operating results for market pulp increased substantially over both periods of
the prior year, primarily as a result of increased average selling prices.
During the second quarter and year-to-date periods production and shipments
were relatively unchanged compared to the prior year period.
The bleached paperboard operations continued to perform well in the second
quarter of this year, with operating profits significantly improved compared
to the second quarter of the prior year. Average selling prices for this
product increased 48% compared to the second quarter of last year. Demand for
this product has remained strong, with shipments increasing 10% over the
comparable prior year period. On a year-to-date basis operating profits are
substantially higher as a result of a 36% increase in average selling prices
and a 9% increase in shipments compared to the prior year.
Operating profits for the Company's uncoated free-sheet paper operation
improved significantly compared to the prior year for the second quarter and
year-to-date periods. The increase in operating profits for the second quarter
is primarily attributable to a 68% rise in average selling prices coupled with
a 6% increase in shipments compared to the prior year. The increase in
operating profits year-to-date is primarily attributable to a 70% rise in
average selling prices coupled with a 8% increase in shipments compared to the
prior year. Continued improvement is expected throughout the remainder of the
year, due to favorable market conditions and strengthening demand. Production
costs for the year-to-date period have risen 33%, as a result of higher pulp
costs, slightly offset by reductions of other operating expenditures
reflecting greater efficiency.
Operating profits for recycled paperboard declined 38% and 42% compared to the
prior year for the quarter and year-to-date periods, respectively. During
1995, this segment has been adversely affected by sharply higher raw material
costs, particularly for old corrugated containers, a primary resource in the
manufacture of recycled paperboard. In the second quarter, production was up
7% and average selling prices increased 31%, while shipments were unchanged
compared to the prior year. On a year-to-date basis, production was up 5% and
average selling prices increased 25%, while shipments decreased 1% compared to
the prior year.
Wood Products
The wood products segment includes the results of the Company's lumber plants
and land management activities. Net sales for the wood products group were
relatively unchanged compared to the prior year for both the quarter and
year-to-date. The decline in net sales of lumber reflects lower average
selling prices during the first half of this year. Operating profits for the
year-to-date period of 1995 have been affected by increased wood costs,
primarily as a result of wood shortages brought on by the limitations on the
cutting of timber in the Pacific Northwest along with unfavorable weather
conditions in the Southeast during the first quarter of 1995. Nevertheless,
production and shipments are up 8% and 7%, respectively, for the quarter and
10% and 8%, respectively, for the year-to-date period.
-9-
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont.)
Converting Operations
Net sales for the converting operations increased 9% and 6% compared to the
prior year for the second quarter and year-to-date periods, respectively. For
the second quarter, net sales for the packaging operations and cup operations
increased 21% and 5%, respectively, compared to the prior year. The growth for
the twenty-four week period is attributable to a 19% net sales increase for the
packaging operations coupled with a 1% increase for the cup operations compared
to prior year.
Operating profits for this segment continued to show improvement from last year
for both periods presented. The major factor was steady growth in earnings
from the cup operations. For the second quarter, domestic cup operations
showed an increase in operating profits, primarily the result of increased
average selling prices, slightly offset by a decrease in shipments. On a
year-to-date basis, operating profits were up 22% for this segment due to
increased average selling prices. Operating profits were adversely affected in
the current year by $4.0 million in charges associated with the restructuring
of the Converting Operations.
Interest Expense
Interest expense for the second quarter and year-to-date was $21.0 million and
$42.6 million, respectively, representing increases of 11% and 10% over the
comparable prior year periods. The higher level of interest expense in the
current year is attributable to a decrease in the amount of interest
capitalized, higher borrowing rates for the Company's short-term bank debt and
borrowings under the revolving credit agreement and increased interest expense
on the Company's interest rate swap agreements. During 1995, capitalized
interest decreased due to reduced capital spending on projects qualifying for
interest capitalization.
Other Items
The Company is a party to nonhedged interest rate swap agreements. During the
second quarter of 1994, the Company was also a party to nonhedged foreign
currency option contracts. However, during the second quarter of 1995, the
Company was no longer a party to these foreign currency instruments. In the
year-to-date periods of 1995 and 1994, pre-tax charges were recorded associated
with nonhedged financial instrument transactions of $.5 million and $10.9
million, respectively. Also during the six periods ended June 17, 1995, the
Company recorded a pre-tax gain of $9.5 million related to the sale of assets.
The effects of these transactions are included in Other-net in the accompanying
Condensed Consolidated Statement of Income.
CAPITAL RESOURCES AND LIQUIDITY:
Cash provided by operations rose 66% in comparison to the prior year period.
The increase was primarily attributable to the improved level of earnings
slightly offset by increases in accounts receivable and inventories in the
current year. The growth in receivable levels during the first half of 1995
signifies an improvement in sales over the prior year. Increased production
and raw material purchases have caused inventory levels to rise approximately
20% compared to the year end 1994.
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<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont.)
Cash used for investing activities dropped approximately 25% compared to the
prior year, principally due to a decrease in net payments made for nonhedged
financial instrument transactions. Capital expenditures were $54.7 million in
the first half of 1995 compared to $62.5 million in the first half of 1994.
During the first twenty-four weeks of 1995, capital expenditures were
predominantly related to Phase I of the modernization program at the Riegelwood
mill and a program to rebuild the No. 2 paperboard machine at the Augusta mill.
Capital expenditures for the full year are expected to increase compared to the
prior year due to the projected spending for the two major programs
aforementioned. In the first twenty-four weeks of 1994, capital expenditures
were predominantly related to a program to expand and modernize the No. 18
paper machine at the Riegelwood mill. It also included amounts related to the
construction of a new warehouse for the Company's cup operations.
Cash used for financing activities increased significantly compared to the
prior year, principally due to increased payments on long-term debt and an
increase in cash dividends paid. During the second quarter of 1995, the
Company retired a $25 million bank note and reduced short-term borrowings by
$38.5 million. Also during the second quarter of 1995, the Company's Board of
Directors voted to increase the quarterly dividend on the Company's common
stock to $.40 per share from $.30 per share, an increase of 33%.
To manage interest rate volatility, the Company, during both years presented,
has entered into hedged and nonhedged interest rate swap agreements. At June
17, 1995 and June 18, 1994, the nonhedged agreements outstanding had notional
principal amounts of $175 million. During the first quarter of 1995, the
Company amended the nonhedged agreements to limit exposure to fluctuations in
LIBOR. As consideration for these amendments, the Company paid $2.1 million
and has accounted for this transaction in Other-net in the accompanying
Condensed Consolidated Statement of Income. The cash payment is included in
investing activities in the accompanying Condensed Consolidated Statement of
Cash Flows.
The hedged interest rate swap agreements outstanding had notional principal
amounts of $160 million and $175 million at June 17, 1995 and June 18, 1994,
respectively. The Company also amended these agreements during the first
quarter of the current year to eliminate the leveraged coupon rate that was
based on various interest rate spreads. These agreements are currently based
on the differential between LIBOR and LIBOR in arrears over a six month period.
As consideration for these amendments, the Company recorded a receivable of
$8.2 million, which was received in the second quarter of this year. These
proceeds were deferred and will be amortized over the life of the agreement.
At June 17, 1995 and June 18, 1994, the Company had deferred net losses of
$.2 million and $1.4 million, respectively and deferred net gains of $13.5
million and $10.1 million, respectively.
The Company is a party to a revolving credit agreement with a total commitment
of $250 million. At June 17, 1995, $10 million was outstanding under this
agreement. In addition, $75 million remains available for future debt
financings, under a previously filed shelf registration statement. The Company
believes it has adequate resources to finance its operations and future capital
spending programs.
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<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (Cont.)
Future Outlook:
The outlook for the remainder of the year is optimistic. Growth in our markets
and new capacity additions will increase sales and enhance earnings potential.
Furthermore, the Company will continue benefiting from capital spending
programs that have reduced costs by increasing efficiency, production and
quality.
-12-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
A list of the exhibits required to be filed as part of
this Report on Form 10-Q is set forth in the "Exhibit
Index", which immediately precedes such exhibits, and
is incorporated herein by reference.
(b) There were no reports on Form 8-K filed for the twelve
weeks ended June 17, 1995.
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.
FEDERAL PAPER BOARD COMPANY, INC.
(Registrant)
Date: July 25, 1995
/S/QUENTIN J. KENNEDY
Quentin J. Kennedy, Executive Vice
President, Secretary and Treasurer
Date: July 25, 1995
/S/ROGER L. SANDERS, II
Roger L. Sanders, II, Vice President
and Controller
(Principal Accounting Officer)
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<PAGE>
FEDERAL PAPER BOARD COMPANY, INC.
EXHIBIT INDEX
Exhibit No. Description Page No.
10 Amended 1992 Key Employees Stock Option Plan 15-21
10.1 Amended 1992 Stock Option Plan for Non-Employee
Directors 22-27
11 Computation of Earnings per Common Share 28-29
27 Financial Data Schedule
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<PAGE>
EXHIBIT 10
FEDERAL PAPER BOARD COMPANY, INC.
1992 KEY EMPLOYEES STOCK OPTION PLAN
(as amended April 18, 1995)
1. Purpose of Plan
The purpose of the Plan is to aid Federal Paper Board Company, Inc. and
its subsidiaries in securing and retaining key employees in the United
States of outstanding ability and in motivating such employees to exert
their best efforts on behalf of the Company and its subsidiaries. In
addition, the Company expects that it will benefit from the added
interest which the respective optionees will have in the welfare of the
Company as a result of their ownership or increased ownership of the
Company's Common Stock.
2. Stock Subject to the Plan
The total number of Shares of Common Stock of the Company that may be
optioned under the Plan and the Federal Paper Board Company, Inc.
U.K. Executives Share Option Scheme (herein called the "Scheme") in
total is 3,000,000. They may consist, in whole or in part, of unissued
Shares or treasury Shares. If any Shares that have been optioned cease
to be subject to option, they may again be optioned under the Plan or
Scheme.
3. Administration
A Stock Option Committee (herein called the "Committee") shall
administer the Plan and serve at the pleasure of the Board of Directors
(the "Board"). The Committee shall consist of three members of the
Board who are not eligible to participate in the Plan and who have not
been eligible for at least one year to be selected as persons to whom
stock may have been allocated or to whom stock options or stock
appreciation rights of the Company or any of its affiliates may have
been granted pursuant to the Plan or any other plan or scheme of the
Company or its affiliates. The Committee shall have the authority,
consistent with the Plan, to determine the provisions of the options to
be granted and the timing thereof, to interpret the Plan and the
options granted under the Plan, to adopt, amend and rescind rules and
regulations for the administration of the Plan and the options,
including rules with respect to limitations on the utilization of
shares of Common Stock of the Company in full or part payment of the
option price under paragraph 6(e) of the Plan, and generally to conduct
and administer the Plan and to make all determinations in connection
therewith which may be necessary or advisable, and all such actions of
the Committee shall be binding upon all participants.
The Committee may employ such legal counsel, consultants and agents as
it may deem desirable for the administration of the Plan and may rely
upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. The Committee
shall keep minutes of its actions under the Plan.
-15-
<PAGE>
EXHIBIT 10
(Continued)
No member of the Board or of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or
any options or stock appreciation rights granted under it.
4. Eligibility
Key employees, including officers of the Company and its subsidiaries,
(but excluding any member of the Committee and any person who serves
only as a director), who are from time to time responsible for the
management, growth and protection of the business of the Company or its
subsidiaries, are eligible to be granted options under the Plan. The
optionees under the Plan shall be selected from time to time by the
Committee, in its sole discretion, from among those eligible, and the
Committee shall determine in its sole discretion the number of Shares
to be covered by the option or options granted to each optionee.
5. Duration of the Plan
No option may be granted under the Plan after April 21, 2002, but
options theretofore granted may extend beyond that date.
6. Terms and Conditions of Stock Options
All options granted under the Plan shall be either Incentive Stock
Options as defined in section 422A of the (United States) Internal
Revenue Code of 1986, as amended (the "Code") or options other than
Incentive Stock Options. Each such option shall be subject to all the
applicable provisions of the Plan, including the following terms and
conditions, and to such other terms and conditions not inconsistent
therewith as the Committee shall determine.
(a) The option price per Share shall be determined by the
Committee, but shall not be less than 100% of the fair market
value at the time the option is granted.
(b) Each option shall be exercisable during and over such period
ending not later than ten years from the date it was granted,
as may be determined by the Committee and stated in the option.
(c) No option shall be exercisable within one year from the date of
the granting of this option, except as may be otherwise
provided in Paragraphs 6(h) and 6(i) and Sections 8 and 9 of
the Plan.
(d) Each option granted to any optionee shall state whether it will
or will not be treated as an Incentive Stock Option.
-16-
<PAGE> EXHIBIT 10
(Continued)
(e) Each option may be exercised by giving written notice to the
Company specifying the number of Shares to be purchased, which
shall be accompanied by payment in full including applicable
taxes, if any. Payment shall be (i) in cash, or (ii) if the
terms of the option so permit, in Shares of Common Stock of the
Company already owned by the optionee with such Stock valued at
its fair market value on the date of exercise, or (iii) by a
combination of cash and Shares of Common Stock of the Company.
No option shall be exercised for less than the lesser of 50
Shares or the full number of Shares for which the option is
then exercisable. No optionee shall have any rights to
dividends or other rights of a shareholder with respect to
Shares subject to his option until he has given written notice
of exercise of his option and paid in full for such Shares.
Upon due exercise of an option, the optionee shall be treated
for all purposes as having become the record owner of the
Shares purchased as of the close of business on the date of
exercise. Payment of taxes, if any, shall be in cash at time
of exercise or on the applicable tax date under section 83 of
the Code, if later; provided, however, tax withholding
obligations may be met by the withholding of Common Stock
otherwise deliverable to the optionee pursuant to procedures
approved by the Committee.
(f) Notwithstanding the foregoing Paragraph 6(e) of the Plan, each
option granted hereunder may provide, or be amended to provide,
the right either (i) to exercise such option in whole or in
part without any payment of the option price, or (ii) to
request the Committee to permit, in its sole discretion, such
exercise without any payment of the option price. If an option
is exercised without a payment of the option price, the
optionee shall be entitled to receive that number of whole
Shares as is determined by dividing (a) an amount equal to the
fair market value per Share on the date of exercise into (b) an
amount equal to the excess of the total fair market value of
the Shares on such date with respect to which the option is
being exercised over the total cash purchase price of such
Shares as set forth in the option. Fractional Shares will be
rounded to the next lowest number and the optionee will receive
cash in lieu thereof. At the sole discretion of the Committee,
or as specified in the option, the settlement of all or part of
an optionee's rights under this Paragraph 6(f) may be made in
cash in an amount equal to the fair market value of the Shares
otherwise payable hereunder. The number of Shares with respect
to which any option is exercised under this paragraph 6(f)
shall reduce the number of Shares thereafter available for
exercise under the option, and such Shares thereafter may not
again be optioned under the Plan.
(g) Each option may provide, or be amended to provide, that the
optionee may exercise the option without payment of the option
price by delivery to the Company of an exercise notice and
irrevocable instructions to deliver Shares of Common Stock
directly to the stockbroker named therein in exchange for
payment of the option price and withholding taxes by such
broker to the Company.
-17-
<PAGE>
EXHIBIT 10
(Continued)
(h) If an optionee's employment by the Company or a subsidiary
terminates by reason of his death, his option shall thereafter
be exercisable in full for a period of six months from the date
of his death or the expiration of the stated period of the
option, whichever period is the shorter.
(i) If an optionee retires at or after age 65 or on account of
disability under the Company's Retirement Plan, his option
shall thereafter be exercisable in full for a period of three
years from the date of such retirement or for the stated period
of the option, whichever period is the shorter. If an optionee
other than a member of the Company's Key Management Group
retires early under the Company's Retirement Plan, his option
shall thereafter be exercisable in full for a period of three
years from the date of such retirement or for the stated period
of the option, whichever period is the shorter. If an optionee
who is a member of the Company's Key Management Group retires
early under the Company's Retirement Plan, his option shall
thereafter be exercisable to the extent it was exercisable at
date of retirement for a period of three years from the date of
retirement or the stated period of the option, whichever is the
shorter; provided, however, the Committee may in its sole
discretion accelerate in whole or in part the exercisability of
any option held by a member of the Company's Key Management
Group who retires early for reasons approved by the Committee.
If any retired optionee dies within a period of three years
after termination of employment, any unexercised option shall
thereafter be exercisable to the extent it was exercisable at
date of termination for six months from the date of his death
or for the stated period of the option, whichever period is the
shorter.
(j) Unless otherwise determined by the Committee, if an optionee's
employment terminates for any reason other than death,
retirement or disability, his option shall thereupon terminate.
(k) In the event any resale by an optionee may be prohibited under
the (United States) Securities Act of 1933, the Committee may
require each person purchasing Shares pursuant to the option to
represent to and agree with the Company in writing that he is
acquiring the Shares without a view to distribution thereof.
The certificates for such may include any legend which the
Committee deems appropriate to reflect any restrictions on
transfers.
(l) The option by its terms shall be personal and shall not be
transferable by the optionee otherwise than by will or by the
laws of descent and distribution; provided, however, that the
optionee may designate in writing a beneficiary of the option
in the event of his death. During the lifetime of an optionee,
the option shall be exercisable only by him.
-18-
<PAGE> EXHIBIT 10
(Continued)
(m) Notwithstanding any intent to grant Incentive Stock Options,
an option granted to any optionee will not be considered an
Incentive Stock Option to the extent that it together with any
earlier Incentive Stock Options permits the exercise for the
first time in any calendar year of more than $100,000 in value
of Common Stock (determined at the time of grant).
7. Transfer, Leave or Absence, etc.
For the purposes of the Plan: (a) a transfer of an employee from the
Company to a subsidiary or vice versa, or from one subsidiary to
another, (b) a leave of absence, duly authorized in writing by the
Company, for military service or sickness or for any other purpose
approved by the Company if the period of such leave does not exceed 90
days, and (c) a leave of absence in excess of 90 days, duly authorized
in writing by the Company, provided the employee's right to
re-employment is guaranteed either by statute or by contract, shall not
be deemed a termination of employment.
8. Limited Rights
Any option granted under the Plan may, at the discretion of the
Committee, contain provision for limited rights, as described herein.
A limited right shall be exercisable upon the occurrence of an event
specified in the option as an exercisable event, but not within six
months of the date of grant of such right, and shall expire thirty
(30) days after the occurrence of such event. Exercise events may
include, at the discretion of the Committee and as specified in the
option, consummation of a tender or exchange offer for a least 20% of
the Company's Common Stock outstanding at the commencement of such
offer or a proxy contest the result of which is the replacement of a
majority of the members of the Company's Board, or consummation of a
merger or reorganization of the Company in which the Company does not
survive or in which the shareholders of the Company receive stock or
securities of another corporation or cash, or a liquidation or
dissolution of the Company or other similar events.
Limited rights shall permit optionee to receive in cash either (i) the
highest market price per Share for each Share covered by an option,
without regard to the date on which the option otherwise would be
exercisable, which the Company's Common Stock traded on the New York
Stock Exchange for the sixty days immediately preceding the exercise
event or (ii) if provided by the Committee in its discretion at the
time of grant, the highest market price per Share for each Share
covered by the option which the Company's Common Stock traded on the
New York Stock Exchange on the date of exercise, less the option price
per Share specified in the option. In the event the exercise event is
consummation of a tender or exchange offer, the value per Share set by
the tenderor or offeror shall be substituted for the highest market
price per Share provided in clause (i) in the preceding sentence if
such tender or exchange value is higher. Limited rights shall not
extend the exercise period of any option and, to the extent exercised,
shall reduce the Shares of the Company's Common Stock available under
the Plan and the Shares of such Stock covered by the options to which
the limited rights relate.
-19-
<PAGE>
EXHIBIT 10
(Continued)
9. Changes in Capital
For purposes of options granted to optionees, upon changes in the
Common Stock by a stock dividend, stock split, reverse split,
subdivision, recapitalization, merger, consolidation (whether or not
the Company is a surviving corporation), combination or exchange of
Shares, separation, reorganization or liquidation, the number and class
of Shares available under the Plan as to which stock options may be
awarded, the number and class of Shares under each option and the
option price per Share shall be correspondingly adjusted by the
Committee, such adjustments to be made in the case of outstanding
options without change in the total price applicable to such options.
In the event of a merger, consolidation, combination, reorganization or
other transaction in which the shareowners of the Company will receive
cash or securities (other than stock of the Company) or in the event
that an offer is made to the holders of Common Stock to sell or
exchange such Common Stock for cash, securities or stock of another
corporation and such offer, if accepted, would result in the offeror
becoming the owner of (a) at least 50% of the outstanding Common Stock
of the Company or (b) such lesser percentage of the outstanding Common
Stock which the Committee in its sole discretion determines may
materially adversely affect the market value of the Common Stock after
the tender offer, the Committee shall, prior to the shareowners' vote
on such transaction or prior to the expiration date (without
extensions) of the tender or exchange offer, (i) accelerate the time of
exercise so that all stock options which are outstanding shall become
immediately exercisable in full without regard to any limitations of
time or amount otherwise contained in the Plan or the options and/or
(ii) determine that the options shall be adjusted and make such
adjustments by substituting for Common Stock subject to options, stock
or other securities of the surviving corporation or offeror if such
stock or other securities of such corporation are publicly traded or,
if such stock or other securities are not publicly traded, by
substituting stock or other securities of a parent or affiliate of the
surviving corporation or offeror if the stock or other securities of
such parent or affiliate are publicly traded, in which event the
aggregate option price shall remain the same and the amount of Shares
or other securities subject to option shall be the amount of Shares or
other securities which could have been purchased on the closing day of
such transaction or the expiration date of the offer with the proceeds
which would have been received by the optionee if the option had been
exercised in full prior to such transaction or expiration date and the
optionee had exchanged all of such Shares in the transaction or sold or
exchanged all of such Shares pursuant to the tender or exchange offer.
No optionee shall have any right to prevent the consummation of any of
the foregoing acts affecting the number of Shares available to the
optionee.
10. Use of Proceeds
Proceeds from the sale of Shares pursuant to options granted
under the Plan shall constitute general funds of the Company.
-20-
<PAGE>
EXHIBIT 10
(Continued)
11. Amendments
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which
would impair the rights of any holder of an option theretofore
granted without his consent, or which, without the approval of
the shareholders, would:
(a) except as is provided in Paragraph 9 of the Plan, increase the
total number of Shares reserved for the purpose of the Plan;
(b) except as is provided in Paragraphs 6(f) and 8 of the Plan,
decrease the option price of an option to less than 100% of the
fair market value on the date of the granting of the option;
and/or
(c) extend the duration of the Plan.
The Committee may amend the terms of any option theretofore granted,
retroactively or prospectively, but no such amendment shall impair
the rights of any holder without his written consent.
Notwithstanding the foregoing, the Board may amend the Plan and the
Committee may amend the terms of any option, either retroactively or
prospectively and without the consent of any optionee, so as to
preserve or come within any exemptions from liability under section
16(b) of the Securities Exchange Act of 1934 pursuant to rules and
releases promulgated by the Securities Exchange Commission.
-21-
<PAGE>
EXHIBIT 10.1
FEDERAL PAPER BOARD COMPANY, INC.
1992 STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
(as amended February 1, 1995)
1. Purpose of the Plan
The purpose of the 1992 Stock Option Plan for Non-Employee Directors
(the "Plan") is to aid Federal Paper Board Company, Inc. (the
"Company") in securing and retaining experienced and highly qualified
non-employee members of its Board of Directors (the "Board").
2. Stock Subject to Plan
The total number of shares of Common Stock of the Company ("Shares")
that may be optioned under the Plan is 150,000. They may consist, in
whole or part, of unissued shares or Treasury shares. If any Shares
that have been optioned cease to be subject to option, they may again
be optioned.
3. Eligibility
Directors of the Company who are not and have never been officers or
employees of the Company or its subsidiaries.
4. Duration of the Plan
No option may be granted under the Plan after April 20, 2003, but
options granted prior to that date may be extended beyond that date.
5. Grant of Option
Subject to the approval of this Plan by the Stockholders of the Company
at or prior to the Company's 1993 Annual Stockholders' Meeting, each
eligible director who is a director on October 20, 1992, is hereby
granted an option on October 20, 1992, to purchase 10,000 shares of the
Common Stock of the Company.
Any person who becomes a director of the Company subsequent to October
20, 1992, and is an eligible director, provided there are sufficient
Shares available under the Plan, is hereby granted an option to
purchase 10,000 shares of the Common Stock of the Company on the date
of election or appointment as a director. If there are insufficient
Shares available to make all grants specified on the applicable date,
then all those who become entitled on that date shall share ratably in
the then available Shares.
Subject to the approval by the Stockholders of the Company at or prior
to the Company's 1995 Annual Stockholders' Meeting, each eligible
director who is a director on February 1, 1995, is hereby granted an
option on February 1, 1995, to purchase 5,000 shares of the Common
Stock of the Company.
In the event that the Plan is not approved by the Stockholders of the
Company as herein provided each option granted hereunder shall be void.
-22-
<PAGE>
EXHIBIT 10.1
(Continued)
6. Terms and Conditions of Stock Options
All options granted under the Plan shall be options other than
Incentive Stock Options as defined in section 422A of the (United
States) Internal Revenue Code of 1986, as amended (the "Code"). Each
such option shall be subject to all the applicable provisions of the
Plan, including the following terms and conditions:
(a) The option price per Share shall be 100% of the fair market
value at the time the option is granted. Fair market value
shall be the average of the high and low sales price of the
Common Stock on the date of grant as reported on the New York
Stock Exchange composite transactions tape.
(b) Each option shall be exercisable during the period ending ten
years from the date it was granted as follows:
(1) 25% after continuous service as a director for one (1)
year from the date of grant.
(2) 50% after continuous service as a director for two (2)
years from the date of grant.
(3) 75% after continuous service as a director for three
(3) years from the date of grant.
(4) 100% after continuous service as a director for four
(4) years from the date of grant.
(c) Each option may be exercised by giving written notice to the
Company specifying the number of Shares to be purchased, which
shall be accompanied by payment in full including applicable
taxes, if any. Payment shall be (i) in cash, or (ii) in Shares
of Common Stock of the Company already owned by the optionee
with such Stock valued at its fair market value on the date of
exercise or (iii) by a combination of cash and Shares of Common
Stock of the Company. No option shall be exercised for less
than the lesser of 50 Shares or the full number of shares for
which the option is then exercisable. No optionee shall have
any rights to dividends or other rights of a shareholder with
respect to Shares subject to the option until the option has
been exercised and the option price paid in full. Upon due
exercise of an option, the optionee shall be treated for all
purposes as having become the record owner of the Shares
purchased as of the close of business on the date of exercise.
Payment of taxes, if any, shall be in cash at time of exercise
or such later date as may be permitted by law; provided,
however, tax withholding obligations may be met by the
withholding of Common Stock otherwise deliverable to the
optionee.
-23-
<PAGE>
EXHIBIT 10.1
(Continued)
(d) If an optionee dies while serving as a director, the option
shall thereafter be exercisable in full for a period of six
months from the date of death or the expiration of the stated
period of the option, whichever period is the shorter.
(e) If an optionee ceases to be a director of the Company and is
eligible to receive a pension under the Retirement Plan for
Outside Directors, the option, to the extent exercisable on the
date the director ceases to be a director, shall thereafter be
exercisable for a period of three years or the expiration of
the stated period of the option, whichever period is the
shorter.
(f) The option by its term shall be personal and shall not be
transferable by the optionee otherwise than by will or by the
laws of descent and distribution; provided, however, that the
optionee may designate in writing a beneficiary of the option
in the event of death. During the lifetime of an optionee, the
option shall be exercisable only by the optionee.
7. Changes in Capital
For purposes of options granted to optionees, upon changes in the
Common Stock by a stock dividend, stock split, reverse split,
subdivision, recapitalization, merger, consolidation (whether or not
the Company is a surviving corporation), combination or exchange of
Shares, separation, reorganization or liquidation, the number and
class of shares available under the Plan as to which stock options may
be awarded, the number and class of Shares under each option and the
option price per Share shall be correspondingly adjusted, such
adjustments to be made in the case of outstanding options without
change in the total price applicable to such options.
8. Change of Control
(a) Notwithstanding other provisions of the Plan, but subject to
Section 8(c), in the event of a change in control of the
Company, (i) all of the options then outstanding shall
immediately become exercisable, unless directed otherwise by a
resolution by the Board adopted prior to and specifically
relating to the occurrence of such change in control, and (ii)
each optionee shall have the right within one (1) year after
such event to exercise the option in full notwithstanding any
limitation or restriction in the Plan.
-24-
<PAGE>
EXHIBIT 10.1
(Continued)
(b) For purposes of this Section 8, a "change of control" shall
be deemed to have occurred if:
(1) there shall be consummated
(i) any consolidation or merger of the
Company in which the Company is not the
continuing or surviving corporation or
pursuant to which any shares of Common
Stock are to be converted into cash,
securities or other property, provided
that the consolidation or merger is not
with a corporation which was a wholly-
owned subsidiary of the Company
immediately before the consolidation or
merger; or
(ii) any sale, lease, exchange or other
transfer (in one transaction or a
series of related transactions) of
all, or substantially all, of the
assets of the Company; or
(2) the Stockholders of the Company approve any
plan or proposal for the liquidation or
dissolution of the Company; or
(3) any "person", including a "group" as determined
in accordance with Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended
("Exchange Act"), is or becomes the beneficial
owner (within the meaning of Rule 13d-3 under
the Exchange Act), directly or indirectly, of
30% or more of the combined voting power of the
Company's then outstanding Common Stock,
provided that such person shall not be a wholly
-owned subsidiary of the Company immediately
before it becomes such 30% beneficial owner; or
(4) individuals who constitute the Board on October
20, 1992, (the "Incumbent Board") cease for any
reason to constitute at least a majority
thereof, provided that any person becoming a
director subsequent to October 20, 1992, whose
election, or nomination for election by the
Company's shareholders, was approved by a vote
of at least three quarters of the directors
comprising the Incumbent Board (either by a
specific vote or by approval of the proxy
statement of the Company in which such person
is named as a nominee for director, without
objection to such nomination) shall be, for
purposes of this clause (4), considered as
though such person were a member of the
Incumbent Board.
-25-
<PAGE>
EXHIBIT 10.1
(Continued)
(c) In no event, however, may any option be exercised (i) prior to
the Plan being approved by the Stockholders of the Company,
(ii) prior to the expiration of six (6) months from the date of
grant, or (iii) after ten (10) years from the date it was
granted.
9. Use of Proceeds
Proceeds from the sale of Shares pursuant to options granted
under the Plan shall constitute general funds of the Company.
10. Amendments
The Board may amend, alter or discontinue the Plan, but no
amendment, alteration or discontinuation shall be made which
would impair the rights of any holders of an option theretofore
granted without his consent, or which without the approval of
the shareholders, would:
(a) except as is provided in Paragraph 7 of the Plan, increase the
total number of Shares reserved for the purpose of the Plan;
(b) decrease the option price of an option to less than 100% of the
fair market value on the date of the granting of the option;
and/or
(c) extend the duration of the Plan.
Notwithstanding the foregoing, the Board may amend the Plan either
retroactively or prospectively and without the consent of any optionee,
so as to preserve or come within any exemptions from liability under
section 16(b) of the Securities Exchange Act of 1934 pursuant to rules
and releases promulgated by the Securities Exchange Commission
provided, however, that the Plan provisions affecting the amount of
Common Stock to be awarded eligible directors, the timing of those
awards or the determination of those eligible to receive such awards
may not be amended more than once every six months, other than to
comport with changes in the Code, the Employee Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
-26-
<PAGE>
EXHIBIT 10.1
(Continued)
11. Administration
The Plan shall be administered by the Board. The Board shall have all
the powers vested in it by the terms of the Plan, such powers to
include authority (within the limitations described herein) to
prescribe the form of all Option Agreements. The Board shall, subject
to the provisions of the Plan, grant options under the Plan and shall
have the power to construe the Plan, to determine all questions arising
thereunder and to adopt and amend such rules and regulations for the
administration of the Plan as it may deem desirable. Any decision of
the Board in the administration of the Plan, as described herein, shall
be final and conclusive. The Board may act only by a majority of its
members in office, except that the members thereof may authorize any
one or more of their number or the Secretary or any other officer of
the Company to execute and deliver documents on behalf of the Board.
No member of the Board shall be liable for anything done or omitted to
be done by such member or by any other member of the Board in
connection with the Plan, except as may expressly be provided by
statute.
-27-
<PAGE>
<TABLE>
EXHIBIT 11
FEDERAL PAPER BOARD COMPANY, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(Unaudited)
For the For the
Twelve Weeks Ended Twenty-Four Weeks Ended
In thousands, except June 17, June 18, June 17, June 18,
per share amounts 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Assuming No Dilution:
Net Income $58,000 $12,000 $104,900 $ 8,700
Preferred Dividend Requirements (1,331) (1,524) (2,777) (3,049)
Net Income Applicable to
Common Shares $56,669 $10,476 $102,123 $ 5,651
Actual Weighted Average Number
of Common Shares Outstanding 42,838 42,210 42,712 42,192
Earnings Per Common Share
Assuming No Dilution $1.32 $.25 $2.39 $.13
Assuming Full Dilution:
Net Income $58,000 $12,000 $104,900 $ 8,700
Preferred Dividend
Requirements - (1,524) - (3,049)
Net Income Applicable to
Common Shares, Common
Equivalent Shares and
Dilutive Securities $58,000 $10,476 $104,900 $ 5,651
Shares:
Adjusted Weighted Average
Number of Common Shares
Outstanding 42,808 42,202 42,692 42,187
Dilutive Common Equivalent
Shares Issuable Under Stock
Option Plans 949 281 949 334
Common Shares Issuable Assuming
Conversion of $1.20 Convertible
Preferred Stock 261 288 262 289
Common Shares Issuable Assuming
Conversion of $2.875 Convertible
Preferred Stock 3,923 (a) 3,923 (a)
Weighted Average Number of
Common and Dilutive Common
Equivalent Shares and Dilutive
Securities 47,941 42,771 47,826 42,810
Earnings Per Common Share
Assuming Full Dilution $1.21 $.25 $2.19 $.13
-28-
<PAGE>
</TABLE>
<TABLE>
EXHIBIT 11
(Continued)
FEDERAL PAPER BOARD COMPANY, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(Unaudited)
For the For the
Twelve Weeks Ended Twenty-Four Weeks Ended
In thousands, except June 17, June 18, June 17, June 18,
per share amounts 1995 1994 1995 1994
<S> <C> <C> <C> <C>
Primary Earnings Per Share (b):
Shares:
Weighted Average Number of
Common Shares Outstanding 42,838 42,210 42,712 42,192
Dilutive Common Equivalent
Shares Issuable Under
Stock Option Plans 757 164 693 334
Weighted Average Number of
Common and Dilutive Common
Equivalent Shares 43,595 42,374 43,405 42,526
Primary Earnings Per
Common Share $1.30 $.25 $2.35 $.13
<FN>
(a) Antidilutive issue.
(b) The calculation of primary earnings per share is presented in
accordance with Securities Exchange Act of 1934 Release No.
9083 although not required by footnote 3 paragraph 14 of APB
Opinion No. 15 because it results in dilution of less than 3%.
Earnings applicable to common shares are the same as in the
calculation assuming no dilution.
</FN>
</TABLE>
-29-
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extrracted from the
Company's Form 10-Q for the fiscal quarter ended June 17, 1995.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> QTR-2 6-MOS
<FISCAL-YEAR-END> DEC-30-1995 DEC-30-1995
<PERIOD-END> JUN-17-1995 JUN-17-1995
<CASH> 290 290
<SECURITIES> 0 0
<RECEIVABLES> 111289 111289
<ALLOWANCES> 0 0
<INVENTORY> 276962 276962
<CURRENT-ASSETS> 435942 435942
<PP&E> 2838090 2838090
<DEPRECIATION> 943030 943030
<TOTAL-ASSETS> 2678917 2678917
<CURRENT-LIABILITIES> 338437 338437
<BONDS> 857154 857154
<COMMON> 0 0
0 0
0 0
<OTHER-SE> 1018540 1018540
<TOTAL-LIABILITY-AND-EQUITY> 2678917 2678917
<SALES> 463379 899171
<TOTAL-REVENUES> 463379 899171
<CGS> 295694 583871
<TOTAL-COSTS> 352169 697110
<OTHER-EXPENSES> (560) (6495)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 20976 42592
<INCOME-PRETAX> 90794 165964
<INCOME-TAX> 32794 61064
<INCOME-CONTINUING> 58000 104900
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 58000 104900
<EPS-PRIMARY> 0 0
<EPS-DILUTED> 1.21 2.19
</TABLE>
