<PAGE>
UNITED STATES 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 December 31, 1997
__ 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 0-3279
KIMBALL INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-0514506
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1600 Royal Street, Jasper, Indiana 47549-1001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (812) 482-1600
Not Applicable
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___
The number of shares outstanding of the Registrant's common stock as of January
21, 1998 were:
Class A Common Stock - 14,422,756 shares
Class B Common Stock - 27,121,977 shares
- 1 -<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC.
FORM 10-Q
INDEX
<CAPTION>
PAGE NO.
<S> <C>
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements
Condensed Consolidated Balance Sheets
- December 31, 1997 (Unaudited) and June 30, 1997 . . . . . . . 3
Consolidated Statements of Income (Unaudited)
- Three Months and Six Months Ended December 31, 1997 and 1996. 4
Consolidated Statements of Cash Flows (Unaudited)
- Six Months Ended December 31, 1997 and 1996 . . . . . . . . . 5
Notes To Consolidated Financial Statements (Unaudited). . . . . 6-7
Item 2. Management's Discussion and Analysis Of
Financial Condition and Results of Operations . . . . . . . . . 8-11
PART II OTHER INFORMATION:
Item 2. Changes in Securities. . . . . . . . . . . . . . . . . . . . 12
Item 4(c). Submission of Matters to a Vote of Security Holders. . . . . 12-13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 13
SIGNATURES . . . . . . . . . . . . . . 13
- Exhibit #3a - Amended and Restated Articles of Incorporation
of the Company.
- Exhibit #3b - Restated Bylaws of the Company
- Exhibit #11 - Computation of Earnings Per Share
- Exhibit #27 - Financial Data Schedule
</TABLE>
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<PAGE>
<TABLE>
PART I.
FINANCIAL INFORMATION
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
(unaudited)
December 31, June 30,
<S> 1997 1997
ASSETS <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 31,397 $ 18,818
Short-term investments 133,639 149,677
Receivables, less allowances
of $4,250 and $4,017, respectively 120,956 110,142
Inventories 83,285 76,142
Other 22,451 21,994
Total Current Assets 391,728 376,773
PROPERTY AND EQUIPMENT - at cost, less
accumulated depreciation of $236,938
and $237,191, respectively 174,009 174,010
OTHER ASSETS 30,956 30,800
Total Assets $596,693 $581,583
LIABILITIES AND SHARE OWNERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ 2,423 $ 2,472
Current maturities of long-term debt 329 471
Accounts payable 51,070 53,063
Dividends payable 6,159 5,989
Accrued expenses 69,532 71,263
Total Current Liabilities 129,513 133,258
OTHER LIABILITIES:
Long-term debt, less current maturities 2,174 2,313
Deferred income taxes and other 24,087 23,186
Total Other Liabilities 26,261 25,499
SHARE OWNERS' EQUITY:
Common stock 2,151 6,723
Additional paid-in capital 6,155 1,607
Foreign currency translation adjustment 1,617 1,721
Unrealized gain (loss) on available-for-sale
securities 408 (73)
Retained earnings 451,021 434,665
Less: Treasury stock, at cost (20,433) (21,817)
Total Share Owners' Equity 440,919 422,826
Total Liabilities and Share Owners' Equity $596,693 $581,583
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands except per share amounts)
<CAPTION>
(unaudited) (unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net Sales $264,524 $253,780 $510,381 $501,480
Cost of Sales 184,572 178,611 356,149 353,177
Gross Profit 79,952 75,169 154,232 148,303
Selling, Administrative
and General Expenses 60,134 55,003 116,411 108,954
Operating Income 19,818 20,166 37,821 39,349
Other Income (Expense):
Interest Expense ( 98) (115) (193) (232)
Interest Income 2,309 2,082 4,587 3,995
Other - net 2,661 1,238 3,307 (1,559)
Other Income - net 4,872 3,205 7,701 2,204
Income Before Taxes on Income 24,690 23,371 45,522 41,553
Taxes on Income 9,205 8,750 17,008 13,411
Net Income $ 15,485 $ 14,621 $ 28,514 $ 28,142
Earnings Per Share of Common Stock:
Basic:
Class A Common Stock $ .37 $ .35 $ .68 $ .68
Class B Common Stock $ .38 $ .35 $ .69 $ .68
Diluted:
Class A Common Stock $ .36 $ .35 $ .67 $ .67
Class B Common Stock $ .37 $ .35 $ .68 $ .67
Dividends Per Share of Common Stock:
Class A Common Stock $ .14 1/2 $ .12 7/8 $ .28 7/8 $ .25 3/4
Class B Common Stock $ .15 $ .13 $ .29 1/2 $ .26
Average total number of shares
outstanding Class A and B
Common Stock:
Basic 41,523,445 41,413,500 41,498,745 41,501,996
Diluted 41,930,291 41,766,315 41,942,481 41,759,218
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<CAPTION>
(unaudited)
Six Months Ended
December 31,
1997 1996
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 28,514 $ 28,142
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 16,516 16,533
Gain on sales of assets (1,835) (446)
Deferred income tax and other deferred charges (652) 318
Change in current assets and liabilities:
Receivables (10,814) 7,889
Inventories (7,143) 12,609
Other current assets 1,096 (2,690)
Accounts payable (1,993) (1,202)
Accrued expenses (1,228) 4,207
Net Cash Provided By Operating Activities 22,461 65,360
Cash Flows From Investing Activities:
Capital expenditures (16,490) (18,825)
Proceeds from sales of assets 374 573
Proceeds from sale of division/subsidiary 3,150 2,345
Increase in other assets (2,132) (515)
Purchases of held-to-maturity investments (21,413) (397)
Maturities of held-to-maturity investments 34,932 27,420
Purchases of available-for-sale securities (20,000) (53,709)
Sales and maturities of available-for-sale securities 23,000 --
Net Cash Provided By/(Used For) Investing Activities 1,421 (43,108)
Cash Flows From Financing Activities:
Change in short-term borrowings (49) 496
Decrease in long-term debt (281) (341)
Dividends paid (11,988) (10,780)
Proceeds from exercise of stock options 1,039 215
Acquisition of treasury stock, net of sales -0- (4,326)
Other - net (14) 1,008
Net Cash Used For Financing Activities (11,293) (13,728)
Effect of Exchange Rate Change on
Cash and Cash Equivalents (10) 7
Net Increase in Cash and Cash Equivalents 12,579 8,531
Cash and Cash Equivalents-Beginning of Period 18,818 5,647
Cash and Cash Equivalents-End of Period $ 31,397 $ 14,178
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Income taxes $ 15,750 $ 17,173
Interest $ 207 $ 258
Total Cash, Cash Equivalents and
Short-Term Investments:
Cash and cash equivalents $ 31,397 $ 14,178
Short-term investments 133,639 135,111
Totals $165,036 $149,289
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
(1) The interim condensed consolidated financial statements included herein
have been prepared by the Company, without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. All
significant intercompany transactions and balances have been eliminated.
Management believes the financial statements include all adjustments,
consisting only of adjustments, of a normal recurring nature, necessary
to present fairly the financial statements of the interim period.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such
rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these financial statements be read in
conjunction with the financial statements and the notes thereto included
in the Company's latest annual report on Form 10-K.
<TABLE>
(2) Inventories consist of: (in thousands)
<CAPTION>
December 31, June 30,
1997 1997
<S> <C> <C>
Raw Materials $44,204 $40,468
Work-in-Process 12,035 11,852
Finished Goods 27,046 23,822
Total $83,285 $76,142
For interim reporting, LIFO inventories are computed based on estimated
year-end quantities and interim changes in price levels. Changes in such
estimates will be reflected in the interim financial statements in the
period in which they occur.
</TABLE>
(3) Earnings per share are computed under the method prescribed in Financial
Accounting Standards Board Statement No. 128 for computing earnings per
share for two class common stock due to the dividend preference of Class
B Common Stock. The Company adopted FASB Statement No. 128 effective
with the second quarter of fiscal year 1998, disclosing both basic and
diluted earnings per share. The Company's outstanding stock options are
considered when calculating diluted earnings per share. Prior period
amounts have been restated for the new disclosures.
(4) The Company recorded a $1.8 million pretax gain on the sale of an
automotive service center in the second quarter of the current fiscal
year. This pretax gain is reported in Other-net, and added $1.0 million
to net income, or $0.02 per common share.
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<PAGE>
(5) The Company sold its piano key and action production facility located in
the United Kingdom, Herrburger Brooks, PLC, during the first quarter of
the prior fiscal year. Included in the six month consolidated statement
of income ended December 31, 1996, is a $3.8 million pretax loss on the
sale reported in Other-net, with an offsetting $3.8 million income tax
benefit reported in Taxes on Income. This tax benefit was the result of
a higher U.S. tax basis in this subsidiary due to previously
nondeductible losses on the investment in this U.K. subsidiary. This
transaction resulted in no impact to fiscal year 1997 consolidated six
month net income.
(6) At the annual meeting held on October 28, 1997, the Company's Share
Owners approved a two-for-one stock split on the Company's Class A and
Class B Common Stock. The Share Owners also approved restating the
Company's Articles of Incorporation by increasing the number of
authorized shares to 150 million shares, reducing the par value of
common stock from $.3125 to $0.05, and increasing the annual dividend
preference on Class B Common Stock to $0.02 per share. The stock split
became effective on November 12, 1997. Financial information contained
in this report, including prior period share and per share amounts, has
been adjusted to reflect the impact of the common stock split.
$4,572,000 was reclassified from common stock to additional paid-in
capital during the second quarter of the current fiscal year, to reflect
the reduction in par value of common stock from $.3125 to $0.05. Refer
to Item 2 - Changes in Securities, which can be found in Part II of
this document.
(7) Certain prior period amounts have been reclassified to conform with the
current period presentations.
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<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
OVERVIEW
Net sales in the second quarter of fiscal year 1998 increased 4% over the prior
year second quarter and set a new quarterly record of $264,524,000. Net sales
of $510,381,000 for the current year six month period increased 2% over the same
period of the prior year. Second quarter net income and Class B basic earnings
per share were $15,485,000 and $0.38, respectively, an increase of 6% over one
year ago. Net income of $28,514,000 and earnings per share of $0.69 for the six
month period of fiscal year 1998 were 1% above the prior year. The current year
second quarter net income included a $1,008,000 after tax gain ($0.02 per share)
on the sale of an automotive service enter. Open orders as of December 31, 1997
were $227,572,000.
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO
THREE AND SIX MONTHS ENDED DECEMBER 31, 1996
Net sales for the three and six month periods ending December 31, 1997 were
$264,524,000 and $510,381,000, increases of 4% and 2%, respectively, over the
same periods in the prior year. Net sales in the Company's two largest
segments, Furniture and Cabinets and Electronic Contract Assemblies, increased
in both the three and six month periods when compared to the prior year. Net
sales in the Processed Wood and Other segment, the Company's smallest segment,
declined in both the three and six month periods when compared to the prior
year. Operating income was $19,818,000 in the second quarter and $37,821,000 in
the six month period, decreases of 2% and 4%, respectively, over the same
periods in the prior year.
FURNITURE AND CABINETS
Net sales in the Company's largest segment, Furniture and Cabinets, increased 3%
and 2%, respectively, for the three and six month periods when compared to one
year ago, primarily on office furniture volume increases.
Three and six month office furniture sales growth resulted from volume increases
in all major product lines, as sales of higher-end casegoods and seating as well
as value-oriented products increased. Internal re-engineering efforts continue
in the office furniture area, as a new order management information system is
implemented. In the interim, two systems are being supported, resulting in
increased costs. Current year three and six month period sales were benefited
by selected price increases on certain products. The Company's overall office
furniture sales growth is currently below the industry growth rate, although
growth in the metal product offerings outpaced the industry as a whole. The
Company introduced a new award-winning higher-end casegoods product, which has
had initial orders higher than budgeted levels.
Cabinets and furniture sales for the three and six month periods were lower than
the same periods in the prior year as television cabinets and stands, and audio
speaker cabinets experienced lower demand. The Company's production flexibility
allows it to utilize portions of the available production capacity created by
lower volumes within these product lines to support and balance increased
production schedules of other product lines within this segment. The relocation
of a large customer has resulted in a temporary decrease in volumes of Original
Equipment Manufacturer product lines, primarily television cabinets and stands,
as the customer's start up time has been longer than anticipated.
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<PAGE>
Sales of lodging furniture declined in the second quarter when compared to the
prior year, on lower volumes of hospitality product as well as furniture for
healthcare and other institutional facilities. Sales for the six month period
were flat with the prior year. The lodging industry remains competitive as
pricing pressures are evident in the marketplace.
Operating income in the Furniture and Cabinets segment declined in the three and
six month periods in spite of higher sales when compared to the same periods one
year ago. Lower material costs, as a percent of sales, due primarily to a shift
in the product mix were partially offset by increased labor costs, as a percent
of sales, in the three month period. Lower material costs, as a percent of
sales, were more than offset by increased labor costs, as a percent of sales,
for the six month period. Sales and administrative expenses increased in the
three and six month periods as a result of higher investments in people and
technology, as well as increased sales incentive costs, as the Company positions
itself for growth in selected markets.
ELECTRONIC CONTRACT ASSEMBLIES
Net sales in the Electronic Contract Assemblies segment increased 10% in the
second quarter when compared to the prior year, as demand increased in both
electronic automotive products and computer-related products. Net sales for the
six month period increased 3% over the prior year, as increases in electronic
automotive products were partially offset by decreases in computer-related
products. Rescheduling, production flexibility and material availability are
inherent risks in the contract electronic assemblies market. This segment's
working capital carries a higher degree of risk than the Company as a whole due
to the inherent risks in the industry and also due to being a supplier to
customers that bear risk associated with labor relations within their
industries. Included in this segment are sales to three customers which
combined accounted for 26% and 25%, respectively, of consolidated sales in the
three month and six month periods of fiscal 1998 and 25% in each of the same
periods of fiscal 1997. One of these customers accounted for 16% of
consolidated sales in both the three and six month periods in the current year.
This same customer accounted for 15% in the three and six month periods one year
ago.
Operating income increased in the three month period primarily due to higher
volumes and lower material costs, as a percent of sales, on a product mix
shift. Operating income decreased in the six month period when compared to
the prior year as lower material costs, as a percent of sales, were offset to
an extent by higher labor costs, as a percent of sales, both attributed
mainly to product mix shift; and higher overhead costs, as a percent of
sales, on increased investment in equipment. Investments in people and
technology resulted in increased selling and administrative expenses for
both the three and six month periods.
PROCESSED WOOD PRODUCTS AND OTHER
Net outside sales in the Company's smallest segment, Processed Wood Products and
Other, which accounted for only 5% of consolidated outside sales in the second
quarter, declined 13% in the second quarter compared to the prior year, on
decreased sales of lumber, dimension products and plastic components. Net sales
for the six month period declined 7% over the prior year, as decreased sales of
dimension products and plastic components were only partially offset by
increases in lumber, laminate and veneer products. Internal sales of this
segment to the Company's other operations, particularly the Furniture and
Cabinets segment, provide a key link in the Company's vertically integrated
supply chain. Operating income increased for the three and six month periods on
decreased labor costs. The three and six month periods in fiscal year 1997 also
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<PAGE>
included higher process reengineering expenses related to the Company's
logistics services unit.
CONSOLIDATED OPERATIONS
Other income in the three and six month periods increased over the prior year as
interest income increased on higher average investment balances. The Company
also recorded a $1.0 million after tax gain ($0.02 per share) on the sale of an
automotive service center in the second quarter of the current year. In
addition, the prior year six month period included a $3.8 million pretax loss
(no after tax affect) charged to Other - net related to the sale of a foreign
subsidiary.
The effective income tax rate decreased 0.1 percentage point in the second
quarter of fiscal 1998 over the prior year. The six month effective income tax
rate increased 5.1 percentage points due primarily to the above described $3.8
million tax benefit received on the sale of a foreign subsidiary. Excluding
this benefit, the effective income tax rate decreased 0.5 percentage point when
compared to the prior six month period due to reduced European operating losses.
The Company achieved second quarter net income and Class B basic earnings per
share of $15,485,000 and $0.38, respectively, an increase of 6% over one year
ago. Net income of $28,514,000 and earnings per share of $0.69 for the six
month period of fiscal year 1998 were 1% above the prior year. Diluted Class B
earnings per share for the current year three and six month periods were $0.37
and $0.68, respectively, compared to $0.35 and $0.67, for the same periods of
the prior year. The current quarter and six month earnings per share amounts
reflect a two-for-one stock split which occurred during the second quarter. All
prior year amounts have been restated.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity position remained strong with $165 million in cash, cash
equivalents, and short-term investments at December 31, 1997, compared to $168
million at the end of fiscal 1997. Working capital at December 31, 1997 was
$262 million with a current ratio of 3.0, compared to working capital of $244
million and a current ratio of 2.8 at June 30, 1997.
Operating activities generated $22 million of cash in the first six months of
fiscal year 1998, as the Company continues to build on record operating cash
flows from fiscal year 1997. The Company invested $19 million in capital
investments for the future, including facility and production equipment upgrades
and investments in the Company's information systems. An additional $11 million
was used for financing activities, primarily dividends to Share Owners. Cash
needs were funded by available cash balances provided by the Company's strong
liquidity position in cash and short-term investments on hand. Net cash flow,
excluding the purchases and maturities of short-term investments was a negative
$4 million for the six month period ending December 31, 1997. A $408,000
unrealized gain and $73,000 unrealized loss on the available-for-sale
securities are reflected in the short-term investments balances at December 31,
1997 and June 30, 1997, respectively, but had no cash flow impact.
The Company is in the process of modifying its computer information systems to
prepare for the year 2000. The Company is still gathering information, but
believes that the impact on its results of operations and financial position
will not be material. The Company is redeploying existing information
technology resources which are anticipated to account for approximately 50% of
the needed resources, with the balance being incremental costs to the Company.
While there are risks inherent in any technology project, the Company maintains
executive oversight on this issue to mitigate these risks.
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<PAGE>
The Company anticipates maintaining a strong liquidity position for the
remainder of the 1998 fiscal year and believes its available funds on hand,
borrowing capacity, and cash generated from operations will be sufficient for
working capital needs and to fund investments in the Company's future.
During fiscal year 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share, effective for both interim and annual
periods ending after December 15, 1997. The Company has begun disclosing both
basic and diluted earnings per share, beginning with the second quarter of
fiscal year 1998, and has restated the prior year, in accordance with the new
pronouncement.
This discussion contains certain statements which could be considered
forward-looking under the Private Securities Litigation Reform Act of 1995.
Cautionary statements regarding these statements have been included in this
discussion, when appropriate. Additional cautionary statements regarding these
statements and other factors that could have an effect on the future performance
of the Company are contained in the Company's Form 8-K filing dated April 10,
1997.
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<PAGE>
PART II.
OTHER INFORMATION
Item 2 - Changes in Securities
<TABLE>
(Amounts in thousands, except per share data)
<CAPTION>
---------------------Common Stock-----------------------------
--------Class A---------- -------Class B--------- Total Additional
Authorized ---Issued--- Authorized ---Issued--- Issued Paid-In
Shares Shares Amount Shares Shares Amount Amount Capital
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Amounts at June 30, 1997 . . . . 10,416 7,274 $2,273 30,000 14,238 $4,450 $6,723 $1,607
Increase number of authorized
shares. . . . . . . . . . . . . 39,584 70,000
2 for 1 stock split. . . . . . . 7,271 14,242
Change par value from $.31 1/4
pre stock split to $.05
post stock split. . . . . . . . (1,545) (3,027) (4,572) 4,572
Other transactions during
the period. . . . . . . . . . . (9) (1) 9 1 --- (24)
Amounts at December 31, 1997 . . 50,000 14,536 $ 727 100,000 28,489 $1,424 $2,151 $6,155
</TABLE>
Item 4 (c) - Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Share Owners was held on October 28, 1997.
The Board of Directors was elected in its entirety, based on the following
election results as restated for the 2 for 1 common stock split:
<TABLE>
<CAPTION>
Nominees as Directors by
Holders of Class A Common Stock Votes For* Votes Withheld
<S> <C> <C>
Thomas L. Habig 13,796,624 424
Douglas A. Habig 13,796,624 424
James C. Thyen 13,796,304 744
John B. Habig 13,796,624 424
Ronald J. Thyen 13,796,304 744
Christine M. Vujovich 13,796,624 424
Brian K. Habig 13,796,624 424
John T. Thyen 13,796,304 744
Gary P. Critser 13,796,624 424
Alan B. Graf, Jr. 13,796,624 424
* Votes for nominees as Directors by holders of Class A Common Stock
represented 96% of the total 14,432,592 Class A shares outstanding
and eligible to vote.
<CAPTION>
Nominee as Director by
Holders of Class B Common Stock Votes For* Votes Withheld
<S> <C> <C>
Dr. Jack R. Wentworth 24,242,858 230,690
* Votes for nominee as Director by holders of Class B Common Stock
represented 90% of the total 27,029,164 Class B shares outstanding
and eligible to vote.
</TABLE>
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<PAGE>
<TABLE>
Share Owners approved restating the Company's Articles of Incorporation by
increasing the number of authorized shares to 150 million shares, reducing the
par value of common stock from $.3125 to $0.05 and increasing the dividend
preference on Class B Common Stock to $0.02 per share, and approved a two-for-one
stock split, based on the following election results:
<CAPTION>
Votes For* Votes Against Votes Withheld
<S> <C> <C>
32,260,204 4,625,924 155,566
* Votes for restating the Company's Articles of Incorporation and a two-
for-one stock split represented 78% of the total 41,461,756 Class A and Class B
shares outstanding and eligible to vote.
</TABLE>
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
(3a) Amended and Restated Articles of Incorporation of the
Company
(3b) Restated Bylaws of the Company
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
On October 28, 1997, the Company filed a Form 8-K reporting
its press release under Item 5 - Other Events "Kimball
International anticipates FY98 sales and earnings will set new
records; Share Owners approve stock split".
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.
KIMBALL INTERNATIONAL, INC.
Douglas A. Habig
DOUGLAS A. HABIG
(Chairman, Chief Executive Officer)
Roy W. Templin
ROY W. TEMPLIN
(Vice President, Corporate Controller)
Date: February 4, 1998
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<TABLE>
Kimball International, Inc
Exhibit Index
<S> <C>
Exhibit No. Description
3a Amended and Restated Articles of Incorporation of the
Company
3b Restated By-laws of the Company
11 Computation of Earnings Per Share
27 Financial Data schedule
</TABLE>
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<PAGE>
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
KIMBALL INTERNATIONAL, INC.
Kimball International, Inc. (the "corporation"), a corporation
existing pursuant to the provisions of the Indiana Business
Corporation Law (the "Corporation Law"), hereby amends and restates
its Articles of Incorporation in accordance with Indiana Code
23-1-38-7. These Amended and Restated Articles of Incorporation shall
be effective as of November 12, 1997 (the "Effective Date"),
and shall supersede and take the place of the existing Restated
Articles of Incorporation of Kimball International, Inc., which are
dated April 9, 1991, and all subsequent amendments thereto.
ARTICLE I
NAME
The name of the corporation is Kimball International, Inc.
ARTICLE II
PURPOSES
The purposes for which the corporation is formed are:
(a) to transact any and all lawful businesses for which corporations
may be incorporated under the Corporation Law;
(b) to carry on the trade or business of manufacturing, purchasing,
buying, selling, handling, disposing of, merchandising and
dealing in, either at wholesale or at retail, manufactured
products of metal, wood, or other materials and/or the
combinations thereof, of the various and several kinds, and
especially furniture of the various and several kinds of
construction, parts, and accessories, and in general, the
engagement in manufacturing and merchandising and as before said,
either at wholesale or at retail, and all or either, in whole or
in part, as the further interests and opportunities may suggest,
and as the subsequent conditions may indicate or require;
(c) to engage and conduct a business in the United States and
internationally for the manufacture of products of metal, wood or
other materials and/or the combinations thereof; to buy, sell,
own, manufacture, assemble, build, construct and otherwise handle
and deal in all kinds of machinery, equipment, supplies, parts or
accessories, and to manufacture, build and construct furniture of
the various and several kinds of construction, parts and
accessories and to dispose and deal in the same as manufacturers,
jobbers, wholesalers and retailers;
(d) to acquire, hold, use, sell, assign, lease, grant licenses in
respect of, mortgage and otherwise deal in and dispose of Letters
Patent of the United States or any foreign country, patent
rights, licenses and privileges, inventions, improvements and
processes, copyrights, trademarks and trade names incident to or
useful in connection with any business of this corporation;
<PAGE>
(e) to acquire the capital stock, bonds or other evidences of
indebtedness, secured or unsecured, of any other corporation and
to acquire the good will, rights, assets and property and to
undertake and assume all or any part of the obligations or
liabilities of any other corporation, firm, association or
person;
(f) to acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer,
mortgage, pledge or otherwise dispose of or deal in and with any
of the shares of the capital stock, or any voting trust
certificates in respect of the shares of capital stock, scrip,
warrants rights, bonds, debentures, notes, trust receipts and
other securities, obligations, choses in action and evidences
of indebtedness or interest issued or created by any
corporations, joint stock companies, syndicates, associations,
firms, trusts or persons, public or private, or by the government
of the United States of America, or by any foreign government, or
by any state, territory, province, municipality or other
political subdivision or by any governmental agency, and as owner
thereof to possess and exercise all the rights, powers and
privileges of ownership, including the right to execute consents
and vote thereon, and to do any and all acts and things necessary
or advisable for the preservation, protection, improvement and
enhancement in value thereof;
(g) to buy, hold, own, improve, manage, operate, lease as lessee or
as lessor, sell, convey and/or mortgage either alone or in
conjunction with others, real estate of every kind, character and
description whatsoever and wheresoever situated, and any interest
therein; and to purchase, acquire, hold, mortgage, pledge,
hypothecate, exchange, sell, deal in and dispose of, alone or in
syndicates, or otherwise in conjunction with others, commodities
and other personal property of every kind, character and
description whatsoever and wheresoever situated, and any interest
therein;
(h) to act as agent or representative of others for any lawful
business purposes;
(i) to make contracts; to make any guaranty respecting stocks,
leases, securities, indebtedness, interest, contracts, or other
obligations; to borrow money; to issue bonds, promissory notes,
debentures and other evidences of indebtedness; to secure such
evidence of indebtedness by pledge, mortgage and/or hypothecation
of certain or all of the assets of the corporation; to enter into
indentures specifying the various terms and incidents of such
evidences of indebtedness; and to do any and all other incidental
acts and things necessary to borrow money on the part of the
corporation;
(j) to borrow or raise monies for any of the purposes of the
corporation and, from time to time without limit as to amount, to
draw, make, accept, endorse, execute and issue promissory notes,
drafts, bills of exchange, warrants, bonds, debentures and other
negotiable or nonnegotiable instruments and evidences of
indebtedness, and to secure the payment of any thereof and of the
interest thereon by mortgage upon or pledge, conveyance or
assignment in trust of the whole or any part of the property of
<PAGE>
the corporation, whether at the time owned or thereafter
acquired, and to sell, pledge or otherwise dispose of such bonds
or other obligations of the corporation for its corporate
purposes;
(k) to purchase, hold, sell and transfer the shares of its own
capital stock; provided it shall not use its funds or property
for the purchase of its own shares of capital stock when such use
would cause any impairment of its capital except as otherwise
permitted by law, and provided further that shares of its own
capital stock belonging to it shall not be voted upon directly or
indirectly;
(l) to have one or more offices, to carry on all or any of its
operations and business and without restriction or limit as to
amount, to purchase or otherwise acquire, hold, own, amortize,
sell, convey or otherwise deal in or dispose of real and personal
property of every class and description in any of the states,
districts, territories or colonies of the United States, and in
any and all foreign countries, subject to the laws of such state,
district, territory, colony or country;
(m) in general, to carry on any other businesses in connection with
the foregoing and to have and exercise all of the powers
conferred by the laws of the State of Indiana upon corporations
by the Corporation Law.
ARTICLE III
PERIOD OF EXISTENCE
The period during which the corporation shall continue is perpetual.
ARTICLE IV
SHARES
Section 1. Number. The total number of shares into which the
corporation's capital stock is to be divided is 150,000,000 shares,
identified by class and par value of shares as follows:
(a) 50,000,000 shares of Class A Common Stock of the par value
of $.05 per share; and
(b) 100,000,000 shares of Class B Common Stock of the par value
of $.05 per share.
Section 2. Share Split. On the Effective Date, and without any
further action on the part of the corporation or its shareholders,
each share of Class A Common Stock, $.31-1/4 par value, then issued
(including shares held by the corporation as treasury shares), shall
be split into two fully paid and nonassessable shares of Class A
Common Stock, $.05 par value per share, and each share of Class B
Common Stock, $.31-1/4 par value, then issued (including shares held
by the corporation as treasury shares), shall be split into two fully
paid and nonassessable shares of Class B Common Stock, $.05 par value
per share. To reflect the share split provided above, each
certificate representing shares of Class A Common Stock, $.31-1/4 par
value, theretofore issued and outstanding or theretofore issued and
held in the corporate treasury, and each certificate representing
shares of Class B Common Stock, $.31-1/4 par value, theretofore issued
<PAGE>
and outstanding or theretofore issued and held in the corporate
treasury, shall continue to represent, after the Effective Date, the
same number of shares of Class A Common Stock and Class B Common
Stock, respectively, theretofore represented by such certificate, and
each holder of shares of Class A Common Stock or Class B Common Stock
shall be entitled, as soon as practicable after the Effective Date, to
receive a new certificate representing a number of shares of Class A
Common Stock, $.05 par value, or Class B Common Stock, $.05 par value,
respectively, as authorized by the foregoing provisions, equal to the
number of shares theretofore held so that, upon the Effective Date,
each holder of record of a certificate theretofore representing issued
Class A Common Stock or Class B Common Stock will be entitled to
certificates representing in the aggregate two shares of Class A
Common Stock, $.05 par value, or Class B Common Stock, $.05 par value,
respectively, for each share of Class A Common Stock, $.31-1/4 par
value, or Class B Common Stock, $.31-1/4 par value, respectively,
of which the shareholder was the holder prior to the Effective Date.
Section 3. Terms. The relative rights, preferences, limitations
and restrictions of each class of shares of Common Stock are as
follows:
(a) Dividends. The holders of Class A Common Stock and Class B
Common Stock shall be entitled to receive, when and as
declared by the Board of Directors, from funds lawfully
available therefor, all dividends payable in cash or other
property of the corporation, and for this purpose Class A
Common Stock and Class B Common Stock shall be considered as
one class, and the holders thereof shall be entitled to
participate ratably, share for share, and without preference
of either class over the other, in all dividends so declared
and paid. Notwithstanding the foregoing, the holders of
Class B Common Stock shall be entitled to receive cash
dividends in each fiscal year of the corporation in an
amount which is $.02 per share (the "Differential") greater
than the amount of cash dividends which are paid on the
Class A Common Stock in such year; provided, however, that
(i) if any such fiscal year shall consist of less than 360
days, then the Differential for each quarterly dividend
declared during the resulting short fiscal year shall
be equal to one-fourth of the Differential applicable
to a full fiscal year (taking into account any
adjustments that may be made to the Differential in
accordance with Section 3(a)(iii) below);
(ii) with respect to the first fiscal year ending after the
Effective Date, the Differential for each quarterly
dividend declared during the remainder of that fiscal
year shall be equal to one-fourth of the Differential
applicable to a full fiscal year (taking into account
any adjustments that may be made to the Differential in
accordance with Section 3(a)(iii) below); and
(iii)in the event of a split or division of the outstanding
shares of Class B Common Stock into more shares of that
class (excluding the split effected pursuant to Article
IV, Section 2 above), or a combination of the
outstanding shares of Class B Common Stock into a
lesser number of shares of that class, or the
declaration and payment of a stock dividend payable in
<PAGE>
shares of Class B Common Stock on the outstanding
shares of Class B Common Stock, then, effective upon
the effectiveness of such split, division or
combination, or upon the payment of such stock
dividend, as the case may be, the Differential shall be
adjusted by multiplying the Differential theretofore in
effect by a fraction, the numerator of which is the
number of shares of Class B Common Stock outstanding
immediately prior to the effectiveness of such split,
division or combination, or the payment of such stock
dividend, as the case may be, and the denominator of
which is the number of shares of Class B Common
Stock outstanding immediately following such split,
division or combination, or the payment of such
dividend, as the case may be. The Differential as so
adjusted shall be rounded to the nearest tenth of a
cent.
All cash dividend payments to a holder of Class B
Common Stock on any payment date with respect to all
shares of Class B Common Stock held by such holder
shall be rounded to the nearest whole cent.
No stock dividend may be declared or paid on the
outstanding shares of any class of Common Stock unless
payable in shares of that class, and no stock dividend
may be declared or paid on the outstanding shares of
any class of Common Stock unless, at the same time, a
stock dividend, at the same rate, is declared and paid
on the outstanding shares of each class of Common
Stock, payable in shares of that class. The
outstanding shares of any class of Common Stock shall
not be split or divided into more shares of that class,
or combined into a lesser number of shares of that
class, unless, at the same time, the outstanding shares
of each class of Common Stock are similarly split,
divided or combined.
(b) Voting. Except as otherwise provided in this Article IV and
except as otherwise required by law, the voting power of the
corporation shall vest in the holders of Class A Common
Stock, the holder of each issued and outstanding share of
Class A Common Stock being entitled to one vote in person or
by proxy for each such share, on all matters requiring the
vote of shareholders, and the holders of Class B Common
Stock shall not be entitled by reason of their holdings
thereof to any voice or vote in the management or affairs of
the corporation. Notwithstanding the foregoing, the holders
of Class B Common Stock at any time issued and outstanding
shall be entitled, as a class, (i)to elect, at each meeting
of shareholders at which directors are elected, one member
of the Board of Directors of the corporation but shall not
be entitled to vote upon the election of the remaining
members of the Board of Directors of the corporation, and
(ii) to full voting powers at any meeting of the
shareholders of the corporation with respect to any proposed
amendment to this Article IV or with respect to any
consolidation, merger, sale, lease, exchange, mortgage,
pledge or other disposition of all or substantially all of
its fixed assets, or the dissolution of the corporation. In
<PAGE>
addition to the foregoing, the express terms and provisions
of any class of Common Stock shall not be changed without
the affirmative vote of the holders of at least a majority
of the issued and outstanding shares of such class of Common
Stock.
(c) Conversion. Any record holder of shares of Class A Common
Stock shall be entitled, at any time or from time to time,
to convert any or all of such shares held by such holder
into the same number of shares of Class B Common Stock. A
record holder desiring to effect the conversion of shares of
Class A Common Stock into shares of Class B Common stock
shall furnish the corporation with (i) a signed written
notice of the intended conversion, stating that such record
holder desires to convert such shares of Class A Common
Stock into the same number of shares of Class B Common Stock
and requesting that the corporation issue all of such shares
of Class B Common Stock to such holder, and (ii) the
certificate or certificates representing the shares of Class
A Common Stock to be converted, in proper form for transfer.
All Class A Common Stock surrendered for conversion
hereunder shall be canceled and retired permanently and
shall not be reissued.
(d) Dissolution. The Class A Common Stock and Class B Common
Stock shall participate equally per share in all
distributions of assets of the corporation upon voluntary or
involuntary dissolution.
(e) Elimination of the Foregoing Provisions. If, at any time,
the number of issued and outstanding shares of Class A
Common Stock shall constitute less than 15% of the aggregate
number of shares of Class A Common Stock and Class B Common
Stock then issued and outstanding or the corporation shall
not have paid any dividends on the Class B Common Stock for
a period of thirty-six consecutive calendar months, then
thereupon, all of the rights, preferences, limitations and
restrictions set forth in this Section 3 relating to Class B
Common Stock shall become the same as the rights,
preferences, limitations and restrictions of the Class A
Common Stock provided for herein, without any further action
on the part of the corporation or its shareholders, and all
distinctions between Class A Common Stock and Class B Common
Stock shall thereupon and thereby be eliminated, so that all
shares of Class B Common Stock shall be equal to shares of
Class A Common Stock with respect to all matters, including
without limitation, dividend payments and voting rights and
all holders of shares of Class A Common Stock and Class B
Common Stock shall vote as a single class (except as
otherwise required by applicable law) on all matters
submitted to a vote of the shareholders of the
corporation; provided, however, the right and power to
convert any shares of Class A Common Stock into shares of
Class B Common Stock shall continue and, upon written
request from the corporation to all holders of Class A
Common Stock, such holders shall promptly take such steps as
shall be necessary to convert the shares of Class A Common
Stock held by such holders into shares of Class B Common
Stock.
<PAGE>
ARTICLE V
DIRECTORS
Section 1. Number of Directors. The number of directors
of the corporation shall be not less than seven (7) nor more than
fifteen (15), as may from time to time be specified in the By-Laws,
and there shall be thirteen (13) Directors whenever the By-Laws do not
contain such authorized provision.
Section 2. Qualifications of Directors. Directors need
not be shareholders of the corporation. A majority of the Directors
at any time shall be citizens of the United States.
ARTICLE VI
PROVISIONS FOR REGULATION OF BUSINESS
AND CONDUCT OF AFFAIRS OF CORPORATION
The business and conduct of the affairs of the corporation
shall be regulated as follows:
(a) The corporate seal of this corporation shall be circular in
form and shall have around the circumference in raised
letters and words "Kimball International, Inc.," and in other
respects shall be in such form and device as the Board of
Directors may determine. The directors may change the form,
device and inscription of the seal at pleasure.
(b) The shares of this corporation may be issued by the
corporation for such amount of consideration as may be fixed
from time to time by the Board of Directors.
(c) Meetings of the shareholders of the corporation shall be held
at such place, within or without the State of Indiana, as may
be specified in the respective notices, or waivers of notice,
thereof.
(d) Meetings of the directors of the corporation shall be held at
such place, within or without the State of Indiana, as may be
specified in the respective notices, or waivers of notice,
thereof.
(e) The Board of Directors of the corporation shall have power,
without the assent or vote of the shareholders, to make,
alter, amend or repeal the Code of By-Laws of the
corporation, but the affirmative vote of a majority of the
members of the Board of Directors for the time being shall be
necessary to effect any alteration, amendment or repeal.
(f) The corporation reserves the right to amend, alter, change or
repeal any provisions contained in these Articles of
Incorporation in the manner now or hereafter prescribed by
the provisions of the Corporation Law, or any other pertinent
enactment of the General Assembly of the State of Indiana;
and all rights and powers conferred hereby on shareholders,
directors and/or officers are subject to this reserved power.
<PAGE>
(g) No contract or other transaction between this corporation and
any one or more members of the Board of Directors, or between
this corporation and another corporation, firm, partnership,
joint venture, trust or other enterprise of which any one or
more such interested members are directors, officers,
shareholders, partners, members, employees or agents or in
which any one or more such interested members are financially
interested, shall be void or voidable because of such
relationship or interest or because such interested member or
members are present at the meeting of the Board of Directors
at which such contract or transaction is authorized or
approved or because such interested member's or members'
votes are counted for such purposes, if (1) the fact of such
relationship or interest is disclosed or known to the
disinterested members of the Board of Directors who
authorize, approve or ratify such contract or transaction by
a vote or consent sufficient for the purpose without counting
the votes of such interested member or members of the Board
of Directors, or (2) the fact of such relationship or
interest is disclosed or known to the holders of shares of
this corporation and such holders authorize, approve or
ratify such contract or transaction by a vote or consent
sufficient for the purpose, or (3) such contract or
transaction is fair and reasonable insofar as this
corporation is concerned. Such interested member or members
of the Board of Directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors
at which such contract or transaction is authorized, approved
or ratified. This paragraph (g) shall not be construed to
invalidate any contract or other transaction which would
otherwise be valid under applicable common and statutory law.
(h) It is intended that this corporation may acquire and own
wasting assets or property having a limited life. The
depletion of such assets by sale, lapse of time or otherwise
need not be deducted in the computation of surplus available
for dividends.
(i) Any action required or permitted to be taken at any meeting
of the Board of Directors or of any committee thereof may be
taken without a meeting, if prior to such action the written
consent thereto is signed by all members of the Board or of
such committee, as the case may be, and such written consent
is filed with the minutes of the proceedings of the Board or
committee.
<PAGE>
RESTATED
BY-LAWS
OF
KIMBALL INTERNATIONAL, INC.
(Reflecting all amendments through December 9, 1997)
ARTICLE I: LOCATION OF OFFICES
Section 1 - Principal Office: The principal office of the
corporation shall be at 1600 Royal Street, Jasper, Indiana.
Section 2 - Other Offices: The corporation may have and maintain
such other offices as the Board of Directors may deem expedient.
ARTICLE II: CORPORATE SEAL
Section 1 - The corporation shall have a corporate seal which
shall be as follows: A circular disc, on the outer margin of which
shall appear the corporate name and State of Incorporation, with the
words "Corporate Seal" through the center, so mounted that it may be
used to impress these words in raised letters upon paper.
ARTICLE III: FISCAL YEAR
Section 1 - The fiscal year of the corporation shall begin with
the first day of July and terminate on the thirtieth day of June of
each year.
ARTICLE IV: STOCKHOLDERS' MEETINGS
Section 1 - Place of Meetings: All meetings of the stockholders
shall be held at the principal office of the corporation except such
meetings as the Board of Directors by resolution determine shall be
held elsewhere, in which case meetings may be held upon notice as
hereinafter provided at such place or places within or without the
State of Indiana as said Board of Directors may determine.
Section 2 - Annual Meeting: The annual meeting of the
stockholders shall be held on the third Tuesday of October in each
year or on such other date as may be fixed by the Board of Directors,
provided such annual meeting shall be held in any event within five
(5) months after the close of each fiscal year of the corporation, for
the purpose of electing directors and for the transaction of such
other business as may regularly come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday, such meeting
shall be held on the next succeeding business day.
<PAGE>
<PAGE>
Section 3 - Special Meetings: Special meetings of the
stockholders may be called only by the Board of Directors.
Section 4 - Notices: A written or printed notice stating the
place, day and hour of either annual or special meetings and, in the
case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered or mailed by the Secretary or by
the officers or persons calling the meeting to each holder of the
capital stock of the corporation at the time entitled to vote at such
address as appears upon the records of the corporation at least ten,
but not more than sixty, days before the date of the meeting. Notice
of any stockholders' meeting may be waived in writing by any
stockholder if the waiver sets forth in reasonable detail the purpose
or purposes for which the meeting is called and the time and place
thereof. Except as required by the Indiana Business Corporation Law,
no notice of the holding of an adjourned meeting shall be necessary.
Each stockholder who has in the manner above provided waived notice of
a stockholders' meeting or who is present in person or represented
thereat by a proxy complying with the requirements set forth in
Article IV, Section 8, shall be conclusively presumed to have been
given due notice of such meeting, except as required by the Indiana
Business Corporation Law.
Section 5 - Quorum: At any meeting of stockholders, a majority of
the shares of the capital stock outstanding and entitled by the
Articles of Incorporation to vote, represented in person or by proxy,
shall constitute a quorum for the transaction of business, but less
than a majority may convene and adjourn.
Section 6 - Voting: Stockholders entitled to vote by the Articles
of Incorporation shall be entitled to vote at all meetings in person
or by proxy. At all meetings, each share of stock entitled to vote by
the Articles of Incorporation shall be entitled to one vote on all
questions, and a majority of the votes of such stock cast at any such
meeting shall be sufficient for the adoption or rejection of any
question presented (other than the election of the Board of Directors)
unless otherwise provided by law or by the Articles of Incorporation
of the corporation. The Board of Directors shall be elected by a
plurality of the votes properly cast.
For the purpose of determining stockholders entitled to vote at
any meeting of the stockholders or any adjournment thereof, or
stockholders entitled to receive payment of any dividend, or in order
to make a determination of stockholders for any other purpose, only
those stockholders who are stockholders of record on the record date
fixed by the Board of Directors or as provided in Article XI, Section
2 hereof, shall be entitled to vote.
Shares standing in the name of a corporation may be voted by such
officers, agent or proxy as the Board of Directors of such corporation
may appoint. Shares held by fiduciaries may be voted by the
fiduciaries in such manner as the instrument or order appointing such
fiduciaries may direct. In the absence of any such direction or the
inability of the fiduciaries to act in accordance therewith, shares
held jointly by three (3) or more fiduciaries shall be voted in
accordance with the will of the majority and, where the fiduciaries or
a majority of them cannot agree or where they are equally divided upon
the questions of voting such shares, any Court of general equity
jurisdiction may, upon petition filed by any of such fiduciaries or by
any party in interest, direct the voting of such shares as it may deem
<PAGE>
for the best interest of the beneficiaries, and such shares shall be
voted in accordance with such direction. Shares that are pledged may,
unless otherwise provided in the agreement of pledge, be voted by the
stockholder pledging the same until the shares have been transferred
to the pledgee on the books of the corporation, and, thereafter, they
may be voted by the pledgee.
Section 7 - Voting Lists: The officer or agent having charge of
the stock transfer book shall make, at least five (5) business days
before each meeting of stockholders, a complete list of the
stockholders arranged in alphabetical order with the address and
number of shares held by each, which list shall be on file at the
principal office of the corporation and subject to inspection by any
stockholder. Such list shall be produced and kept open at the time
and place of meeting and subject to the inspection of any stockholder
during the holding of such meeting. The original stock register or
transfer book, or a duplicate thereof kept in the State of Indiana,
shall be the only evidence as to who are the stockholders entitled to
examine such list or the stock ledger or transfer book or to vote at
any meeting of the stockholders.
Section 8 - Proxies: A shareholder may vote his or her shares
either in person or by proxy. A shareholder may appoint a proxy to
vote or otherwise act for the shareholder (including authorizing the
proxy to receive, or to waive, notice of any shareholders' meetings
within the effective period of such proxy) by signing an appointment
form, either personally or by the shareholder's attorney-in-fact. An
appointment of a proxy is effective when received by the Secretary or
other officer or agent authorized to tabulate votes and is effective
for eleven (11) months unless a shorter or longer period is expressly
provided in the appointment form. The proxy's authority may be
limited to a particular meeting or may be general and authorize the
proxy to represent the shareholder at any meeting of shareholders held
within the time provided in the appointment form. Subject to the
Indiana Business Corporation Law and to any express limitation on the
proxy's authority appearing on the face of the appointment form, the
corporation is entitled to accept the proxy's vote or other action as
that of the shareholder making the appointment.
Section 9 - Written Consent: Any action required or permitted to
be taken at a shareholders' meeting may be taken without a meeting if
the action is taken by all the shareholders entitled to vote on the
action. The action must be evidenced by one (1) or more written
consents describing the action taken, signed by all the shareholders
entitled to vote on the action (facsimile signatures may be accepted),
and delivered to the corporation for inclusion in the minutes or
filing with the corporate records. Action taken under this Section 9
is effective when the last shareholder signs the consent, unless the
consent specifies a different prior or subsequent effective date, in
which case the action is effective on or as of the specified date.
Such consent shall have the same effect as a unanimous vote of all
shareholders and may be described as such in any document.
Section 10 - Participation by Conference Telephone: Any or all
shareholders may participate in any shareholders' meeting by, or
through the use of, any means of communication, such as conference
telephone, by which all shareholders participating may simultaneously
hear each other during the meeting. Any shareholder participating in
a meeting by such means is deemed to be present in person for all
purposes at the meeting.
<PAGE>
ARTICLE V: DIRECTORS
Section 1 - Number: The Board of Directors of this corporation
shall consist of twelve (12) members, eleven (11) of whom shall be
elected by holders of Class A Common Stock, voting as a class, and one
(1) of whom shall be elected by holders of Class B Common Stock,
voting as a class.
Section 2 - Election: Directors shall be elected annually at the
annual meeting of stockholders; provided that, in the event of failure
to hold such meeting or to hold such election thereat, they may be
elected at any special meeting of stockholders called for that
purpose. At such election, the Chairman of the Board or the Secretary
may appoint inspectors or judges who shall report to the meeting upon
the validity of all proxies received and count the votes cast and make
a report thereof to the stockholders' meeting, and, in the absence
of any such appointments, the Secretary of the corporation shall
report to the meeting upon the validity of all proxies received, count
the votes cast and make a report thereof at the stockholders' meeting.
Section 3 - Term of Office: The directors shall hold office from
the date of their election until the next succeeding annual meeting or
until their successors are elected and shall qualify.
Section 4 - Vacancies: Any vacancy, or vacancies, in the Board of
Directors, arising from any cause, shall be filled by a majority vote
of the remaining members of the Board until the next annual meeting of
the stockholders.
Section 5 - Fees: Each director of the corporation shall receive
an annual retainer in an amount, plus a sum for each of the six (6)
regular meetings of the Board, all as fixed and determined from time
to time by the Board of Directors and in addition thereto,
reimbursement for expenses incurred by each member of the Board in
attending each regular, special or adjourned meeting of the Board
which has been called, whether or not a quorum is present.
ARTICLE VI: DIRECTORS' MEETINGS
Section 1 - Regular Meetings: Regular meetings of the Board of
Directors shall be held in the months of February, April, June,
August, October and December of each year on such day of the month,
and at such time of day and place, within or without the State of
Indiana, as the Board of Directors may designate or as may be
determined by the Chairman of the Board or the Vice Chairman of the
Board, provided that each director shall be given at least two
(2) days' advance notice of the date, time and place of any regular
meeting set by any of the foregoing officers.
Section 2 - Special Meetings: Special meetings of the Board of
Directors may be held at any time at the principal office of the
corporation or elsewhere within or without the State of Indiana, as
shall be specified in the notice of such meeting.
The Secretary shall call a special meeting whenever and wherever
so requested by the Chairman of the Board, the Vice Chairman of the
Board, the Chief Executive Officer or the President, or by three (3)
directors.
<PAGE>
Section 3 - Organization Meeting: Immediately following the
meeting of the stockholders at which the directors are elected, the
Board of Directors shall meet and organize, and they may also transact
such other business as may be presented.
Section 4 - Notice: No notice shall be required for a regular
meeting of the Board of Directors, except as provided in Article VI,
Section 1. No notice shall be required for an "organization meeting",
if held on the same day as the stockholders' meeting at which the
directors were elected. No notice of the holding of an adjourned
meeting shall be necessary. Each director shall be given at least two
(2) days' advance notice of the date, time and place of each special
meeting of the Board of Directors. The notice of a special meeting
need not describe the purpose of such meeting. Notice of any meeting
may be waived in writing.
Section 5 - Quorum: At all meetings of the Board of Directors, a
majority of the whole Board shall be necessary to constitute a quorum
for the transaction of any business except the filling of vacancies,
but less than a majority may convene and adjourn.
Section 6 - Voting: All questions coming before any meeting of
the Board of Directors for action shall be decided by a majority vote
of the directors present at said meeting unless otherwise provided by
law, by the Articles of Incorporation or by these By-laws.
Section 7 - Written Consents: Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken
without a meeting if the action is taken by all members of the Board
of Directors. The action must be evidenced by one (1) or more written
consents describing the action taken, signed by each director
(facsimile signatures may be accepted), and included in the minutes or
filed with the corporate records reflecting the action taken. Action
taken under this Section 7 is effective when the last director signs
the consent, unless the consent specifies a different prior or
subsequent effective date, in which cases the action is effective on
or as of the specified date. A consent signed under this Section 7
shall have the same effect as a unanimous vote of all members of the
Board of Directors and may be described as such in any document.
Section 8 - Participation by Conference Telephone: Any or all
directors may participate in a regular or special meeting by, or
through the use of, any means of communication, such as conference
telephone, by which all directors participating may simultaneously
hear each other during the meeting. A director participating in a
meeting by such means shall be deemed to be present in person at the
meeting.
ARTICLE VII: EXECUTIVE COMMITTEE
Section 1 - Number, Qualifications, Appointment: The Board of
Directors may appoint, by a majority vote of all directors in office,
not less than two (2) directors who, together with the Chairman of the
Board, the Vice Chairman of the Board, the Chief Executive Officer (if
the Chief Executive Officer is also a director) and the President (if
the President is also a director), shall constitute the Executive
Committee of the corporation. The Chairman of the Board shall serve
as chairman of said committee.
<PAGE>
Section 2 - Powers and Duties: The Executive Committee shall
advise with and aid the officers of the corporation in all matters
concerning its interests and the management of its business, and, when
the Board of Directors is not in session, the Executive Committee
shall have and may exercise all of the powers of the Board of
Directors with reference to the conduct of the business of the
corporation, except as otherwise provided by the Indiana Business
Corporation Law.
Section 3 - Term of Office: The members of the Executive
Committee shall hold office from the date of their appointment until
the next succeeding organization meeting of the directors, provided
that the Board of Directors shall at all times have the power to
remove any member of the Executive Committee.
Section 4 - Vacancies: Any vacancy, or vacancies, in the
Executive Committee, arising from any cause, shall be filled by a
majority vote of the remaining members of the Board until the next
annual or special meeting of the shareholders.
Section 5 - Fees: Members of the Executive Committee, as such,
shall not receive any stated salary for their services, but expenses,
if any, of attendance and a fee in such an amount as may be determined
by the Board of Directors from time to time shall be paid for
attendance at each such Executive Committee meeting.
Section 6 - Meetings: The Executive Committee shall meet at such
times and places as the Chairman of the Board, the Vice Chairman of
the Board, the Chief Executive Officer (if the Chief Executive Officer
is a member of the Executive Committee) or the President (if the
President is a member of the Executive Committee) may designate,
provided that at least one day's advance notice of such meeting shall
be given to each member of the committee. A majority of the Executive
Committee shall constitute a quorum for the transaction of all
business. All questions coming before any meeting of the Executive
Committee for action shall be decided by a majority vote of the
members present at said meeting.
Section 7 - Written Consents: Any action required or permitted
to be taken at any meeting of the Executive Committee may be taken
without a meeting if the action is taken by all members of the
Executive Committee. The action must be evidenced by one (1) or more
written consents describing the action taken, signed by each member
(facsimile signatures may be accepted), and included in the minutes or
filed with the corporate records reflecting the action taken. Action
taken under this Section 7 is effective when the last member signs the
consent, unless the consent specifies a different prior or subsequent
effective date, in which cases the action is effective on or as of the
specified date. A consent signed under this Section 7 shall have the
same effect as a unanimous vote of all members of the Executive
Committee and may be described as such in any document.
Section 8 - Participation by Conference Telephone: Any or all
members of the Executive Committee may participate in any meeting of
the Executive Committee by, or through the use of, any means of
communication, such as conference telephone, by which all members
participating may simultaneously hear each other during the meeting.
A member participating in a meeting by such means shall be deemed to
be present in person at the meeting.
<PAGE>
ARTICLE VIII: AUDIT COMMITTEE
The Board of Directors shall appoint an Audit Committee
consisting of three (3) members of the Board of Directors. At least
two of the members of the Audit Committee shall be "independent
directors", meaning a person other than an officer or employee of the
corporation or its subsidiaries or any other individual having a
relationship which, in the opinion of the Board of Directors, would
interfere with the exercise of independent judgment in carrying out
the responsibilities of a director. The third member of the Audit
Committee may be an officer of the corporation who is a member of the
Board of Directors who is not either the Chairman of the Board, the
Vice Chairman of the Board, the Chief Executive Officer, the President
or the Chief Financial Officer. The committee shall have such
responsibilities and powers appropriate to the nature of said
committee including review of the annual audit prepared by the
independent auditors appointed by the Board of Directors with respect
to the corporation within the scope and area of responsibility of said
committee.
ARTICLE IX: OFFICERS
Section 1 - Titles: The officers of the corporation shall consist
of the Chairman of the Board, the Vice Chairman of the Board, the
Chief Executive Officer, the President, an Assistant to the Chief
Executive Officer, a Chief Financial Officer, a Chief Administrative
Officer, an Assistant to the President, one or more Chief Operations
Officer(s), a Secretary, a Treasurer, and a Chief Accounting Officer.
The Board of Directors may elect, at the request of the Chairman of
the Board, the Vice Chairman of the Board, the Chief Executive Officer
or the President, one or more Senior Executive Vice Presidents,
Executive Vice Presidents or Vice Presidents, and one or more
Assistants to the officers of the corporation.
Section 2 - Qualifications of the Chairman of the Board and Vice
Chairman of the Board: The Chairman of the Board and the Vice
Chairman of the Board shall be chosen from among the members of the
Board of Directors.
Section 3 - Election of Officers: The officers elected by the
Board of Directors shall be elected annually at the organization
meeting of the Board, provided that any officers not so elected at
such meeting may be elected subsequently at any regular or special
meeting of the Board.
Section 4 - Term of Office: All officers shall serve at the
pleasure of the Board and shall hold office from the date of their
election until the next succeeding annual organization meeting of the
Board of Directors or until their successors are elected and shall
qualify.
Section 5 - Vacancies: Any vacancy or vacancies among the
officers, arising from any cause, shall be filled by the Board of
Directors.
Section 6 - Combining Offices: Any two or more offices may be
held by the same person except that the duties of President and
Secretary shall not be performed by the same person.
<PAGE>
ARTICLE X: POWER AND DUTIES OF DIRECTORS AND OFFICERS
Section 1 - Directors: The business and affairs of the
corporation shall be managed by a Board of Directors except where
specifically excepted by law and these By-laws.
Section 2 - Executive Committee: In the interim between meetings
of the Board of Directors, the Executive Committee shall have and
exercise all the powers and authority of the Board of Directors,
except as otherwise provided by the Indiana Business Corporation Law,
provided that no action of the committee shall conflict with action
had or taken by the Board of Directors.
Section 3 - Officers: The Chairman of the Board, the Vice
Chairman of the Board, the Chief Executive Officer and the President,
in addition to the duties hereinafter specified, shall perform all
duties incident to the office held by them, as well as such other
duties as may be assigned to them from time to time by the Board of
Directors, and, in the case of the Vice Chairman of the Board, the
Chief Executive Officer and the President, such duties as may be
assigned to them from time to time by the Chairman of the Board. Each
of the other officers of the corporation shall perform all duties
incident to the office held by them, as well as such other duties as
may be assigned to them from time to time by the Board of Directors,
the Chief Executive Officer or the President.
Section 4 - Chairman of the Board: The Chairman of the Board
shall preside at all meetings of the Board of Directors and shall have
general control and management of the business of the corporation.
Section 5 - Vice Chairman of the Board: In addition to his or her
other duties, in the absence of the Chairman of the Board, the Vice
Chairman of the Board shall preside at meetings of the Board of
Directors.
Section 6 - Chief Executive Officer: The Chief Executive Officer
shall have day-to-day control and management of the business and
affairs of the corporation subject to the control of the Board of
Directors. He or she shall preside at all meetings of shareholders
and, in the absence of the Chairman of the Board and the Vice Chairman
of the Board, at meetings of the Board of Directors. The Chief
Executive Officer shall have specific charge and supervision of all
subordinate officers and all employees of the corporation and may
delegate or assign to such officers and employees such of his or her
duties and responsibilities as he or she may elect which are not
specifically prescribed by the By-laws or resolutions of the Board of
Directors.
Section 7 - President: In the absence of the Chairman of the
Board, the Vice Chairman of the Board and the Chief Executive Officer,
the President shall have the general control and management of the
business and affairs of the corporation.
Section 8 - Assistant to the Chief Executive Officer: The
Assistant to the Chief Executive Officer shall perform such duties as
may be assigned to him or her from time to time by the Chief Executive
Officer.
Section 9 - Chief Financial Officer: The Chief Financial Officer
shall be responsible for all financial matters of the corporation.
<PAGE>
Section 10 - Chief Operations Officer(s): The Chief Operations
Officer(s) shall be responsible for all manufacturing and production
of the corporation.
Section 11 - Chief Administrative Officer: The Chief
Administrative Officer shall be responsible for all administrative
functions of the corporation affecting the corporation as a whole.
Section 12 - Assistant to the President: The Assistant to the
President shall perform such duties as may be assigned to him or her
from time to time by the President.
Section 13 - Vice Presidents: The Senior Executive Vice
Presidents, Executive Vice Presidents or other Vice Presidents shall
perform such duties as may be respectively assigned to them from time
to time by the Board of Directors, the Chief Executive Officer or the
President. The Board of Directors or Executive Committee may
designate one or more of the Vice Presidents as Senior Executive Vice
Presidents or Executive Vice Presidents.
Section 14 - Secretary: Subject to the authority of the Board of
Directors, the Chief Executive Officer and the President, the
Secretary shall have the custody of the corporate seal and records of
the corporation and charge of all the records of the corporation. He
or she shall act as Secretary at meetings of the stockholders,
directors and the Executive Committee and enter the minutes of such
meetings in a book provided for that purpose and shall attend to
publishing, giving and serving all official notices of the
corporation. He or she shall perform such other duties as may be
assigned to him or her.
Section 15 - Assistant Secretaries: In the absence or disability
of the Secretary, the Assistant Secretaries shall act with all the
powers of the Secretary. They shall perform such other duties as may
be assigned to them.
Section 16 - Treasurer: Subject to the authority of the Board of
Directors, the Chief Executive Officer and the President, the
Treasurer shall have the custody of all negotiable instruments and
securities of the corporation and shall have responsibility for all
collections and disbursements of corporate funds. He or she may
endorse all commercial documents requiring endorsement for or on
behalf of the corporation. He or she shall perform such other duties
as may be assigned to him or her.
Section 17 - Assistant Treasurers: In the absence or disability
of the Treasurer, the Assistant Treasurers shall act with all the
powers of the Treasurer. They shall perform such other duties as may
be assigned to them.
Section 18 - Chief Accounting Officer: Subject to the authority
of the Board of Directors, the Chief Executive Officer and the
President, the Chief Accounting Officer shall have general supervision
of the accounting of the corporation. He or she shall perform such
other duties as may be assigned to him or her.
<PAGE>
ARTICLE XI: STOCK
Section 1 - Stock Certificates: Each stockholder shall be
entitled to a certificate signed by the Chairman of the Board, the
President or a Vice President and by the Secretary or an Assistant
Secretary of the corporation and sealed with the corporate seal of the
corporation, certifying to the number of shares owned by him or her in
the corporation. Where such certificate is also signed by a transfer
agent and a registrar, the signatures of any such Chairman of the
Board, President, Vice President, Secretary or Assistant Secretary and
the seal of the corporation may be facsimiles. In case any officer or
officers who shall have signed or whose facsimile signature shall have
been used on any such certificate or certificates shall cease to be
such officer or officers of the corporation before such certificate or
certificates shall have been delivered by the corporation, such
certificate or certificates may, nevertheless, be issued and delivered
by the corporation with the same effect as if such officer or officers
had not ceased to be such at the date of its issue.
Section 2 - Transfer of Shares: Stock shall be transferable on
the stock transfer books of the corporation in person or by an
attorney duly authorized and upon surrender and cancellation of the
old certificates therefor.
The Board of Directors of the corporation may close its stock
transfer books for a period of time up to the maximum period of time
permitted by rules and regulations of the Securities and Exchange
Commission and the Indiana Business Corporation Law preceding the date
of any meeting of stockholders or the date for the payment of any
dividend, provided, however, that in lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date
pursuant to any applicable rules and regulations of the Securities and
Exchange Commission (which, as to stockholders' meetings, shall be a
date not more than seventy (70) days prior to the meeting), as the
record date for the determination of the stockholders entitled to
notice of and to vote at any such meeting, or entitled to receive
payment of any such dividend, and in such case such stockholders and
only such stockholders as shall be stockholders of record on the date
so fixed shall be entitled to such notice of and to vote at such
meeting, or to receive payment of such dividend, as the case may be,
notwithstanding any transfer of any stock on the books of the
corporation after such record date fixed as aforesaid. If the stock
transfer books are not closed, and no record date is fixed by the
Board of Directors, no shares shall be voted at any meeting which
shall have been transferred on the books of the corporation within ten
(10) days next preceding the date of such meeting.
Section 3 - Replacing Certificates: In case of the loss or
destruction of any certificate of stock and the submission of proper
proof thereof by the owner, a new certificate may be issued in lieu
thereof under such regulations and restrictions as the Board of
Directors may prescribe.
ARTICLE XII: AUTHORIZED SIGNATURES
Section 1 - Negotiable Instruments: The Chief Executive Officer,
the President or the Treasurer may authorize the use of facsimile
signatures for certain types of accounts maintained by the corporation
or with respect to checks or drafts which are less than a designated
amount. The Chief Executive Officer, the President or the Treasurer
<PAGE>
also may authorize employees of particular business units of the
corporation to sign or authorize checks, drafts, other negotiable
instruments and electronic funds transfers up to a designated dollar
amount if the corporation's Audit and Management Group (or any
successor to such Group) certifies that such business unit meets such
standards regarding internal control as may be specified by the Chief
Executive Officer, the President or the Treasurer. Except as so
authorized, all checks, drafts, other negotiable instruments and
electronic funds transfers shall be made in the name of the
corporation and signed or authorized by one officer or employee of the
corporation and countersigned or counter authorized by a different
officer or employee of the corporation. The Chief Executive Officer,
the President and the Treasurer each are authorized and empowered to
designate in writing both officer and non-officer employees of the
corporation who shall be empowered to sign or countersign checks,
drafts, and negotiable instruments for and on behalf of the
corporation, and any such written designation shall have the same
force and binding legal effect on the corporation as a resolution of
the Board of Directors so empowering such officer or non-officer
employees. Any such written designation may be revoked at any time by
the Chief Executive Officer, the President or the Treasurer, and, in
their absence or unavailability, any member of the Executive Committee
of the Board of Directors may revoke such written designation.
Section 2 - Contracts and Documents: The Chairman of the Board,
the Vice Chairman of the Board, the Chief Executive Officer or the
President may, in the corporation's name, sign all deeds, leases,
contracts or similar documents that may be authorized by the Board of
Directors unless otherwise directed by the Board of Directors or
otherwise provided herein or in the Articles of Incorporation or as
otherwise required by law. The Chairman of the Board, the Chief
Executive Officer or the President is authorized and empowered to
designate in writing both officer and non-officer employees of the
corporation who shall be empowered to sign contracts or other
documents for and on behalf of the corporation, and any such written
designation shall have the same force and binding legal effect on the
corporation as a resolution of the Board of Directors so empowering
such officer or non-officer employees. Any such written designation
may be revoked at any time by the Chairman of the Board, the Chief
Executive Officer or the President, and, in their absence or
unavailability, any member of the Executive Committee of the Board of
Directors may revoke such written designation.
ARTICLE XIII: FIDELITY BONDS
Section 1 - The officers and employees of the corporation shall,
in the discretion of the Board of Directors, the Chairman of the Board
or the President, give bonds for the faithful discharge of their
respective duties, in such form and such amounts as may be directed by
the Board of Directors, the Chairman of the Board or the President.
ARTICLE XIV: INDEMNIFICATION
Section 1 - Every person (and the heirs, executors and
administrators of such person) who is or was a director or officer of
this corporation or of any subsidiary of this corporation or who, at
the request of the Board of Directors of this corporation, served in
any position or capacity or on any committee for this corporation or
for or in any other corporation, partnership, association, trust,
foundation, not-for-profit corporation, employee benefit plan or other
<PAGE>
organization or entity, shall be indemnified by the corporation
against any and all liability and reasonable expense that may be
incurred by him in connection with or resulting from any claim,
action, suit or proceeding in which either (i) such person is wholly
successful, thereby entitling such person to Mandatory
Indemnification, or (ii) such person is not wholly successful but it
is nevertheless determined, pursuant to the procedures set forth below
in Section 2 of this Article XIV of these By-laws, that such person
acted in good faith and that such person reasonably believed that (a)
in the case of conduct in his official capacity, his conduct was in
the corporation's best interests, or (b) in all other cases, his
conduct was at least not opposed to the best interests of such
corporation, entity or organization, and, in addition with respect to
any criminal action or proceeding, either had reasonable cause to
believe his conduct was lawful or had no reasonable cause to believe
his conduct was unlawful, thereby entitling such person to Permissive
Indemnification. A person shall be considered to have been serving an
employee benefit plan at the request of the corporation if his duties
to the corporation also impose duties on, or otherwise involve
services by, him to the plan or to participants in or beneficiaries of
the plan. The terms "claim", "action", "suit" or "proceeding" shall
mean and include any threatened, pending or completed claim, action,
suit or proceeding (whether brought by or in the right of the
corporation of any other corporation or otherwise), and all appeals
thereof, whether civil, criminal, administrative or investigative,
formal or informal, in which any person described in the first
sentence of this section may become involved as a party or otherwise:
(a) by reason of his being or having been a director or officer
of the corporation, or of any subsidiary corporation of the
corporation, or of any other corporation where he served as
such at the request of the corporation, or
(b) by reason of his acting or having acted in any position or
capacity or on any committee for this corporation or any
subsidiary corporation of this corporation, or in any
position or capacity in or for a partnership, association,
trust, foundation, not-for-profit corporation, employee
benefit plan or other organization or entity where he
served as such at the request of the corporation, or
(c) by reason of any action taken or not taken by him in any
such capacity, whether or not he continues in such capacity
at the time such liability or expense shall have been
incurred.
The terms "liability" and "expenses" shall include, but shall not be
limited to, counsel fees and disbursements and amounts of judgments,
fines or penalties against, and amounts paid in settlement by or on
behalf of, a person, and excise taxes assessed with respect to an
employee benefit plan, but shall not in any event include any
liability or expenses on account of profits realized by him in the
purchase or sale of securities of the corporation. The term "wholly
successful" shall mean (a) termination of any action, suit or
proceeding against the person in question without any finding of
liability or guilt against him, (b) the expiration of a reasonable
period of time after the making of any claim or threat of an action,
suit or proceeding without the institution of the same, without any
payment or promise made to induce a settlement, or (c) approval by a
court, with knowledge of the indemnity herein provided, of a
<PAGE>
settlement of any claim, action, suit or proceeding. The termination
of any claim, action, suit or proceeding by judgment, order,
settlement (whether with or without court approval), or conviction or
upon a plea of guilty or of nolo contendere, or its equivalent, shall
not by itself create a presumption that a person did not meet the
standards of conduct for Permissive Indemnification. The actions of a
person with respect to an employee benefit plan subject to the
Employee Retirement Income Security Act of 1974 shall be deemed to
have been taken in what the person reasonably believed to be the best
interests of the corporation if the person reasonably believed he was
acting in conformity with the requirements of such Act or he
reasonably believed his actions to be in the interests of the
participants in or beneficiaries of the plan.
Section 2 - With regard to Permissive Indemnification, the
determination that a person acted in good faith and that such person
reasonably believed that (a) in the case of conduct in his official
capacity, his conduct was in the corporation's best interests, or (b)
in all other cases, his conduct was at least not opposed to the best
interests of the corporation, and, in addition, with respect to any
criminal action or proceeding, either had reasonable cause to believe
that his conduct was lawful or had no reasonable cause to believe that
his conduct was unlawful with regard to a specific claim, action, suit
or proceeding in or as to which such person is not wholly successful
shall be made by or for the Board of Directors of the corporation in
the manner hereinafter described. Any requests for such
indemnification must first be proposed to the Board of Directors of
the corporation, and a motion for such indemnification may be made by
any director of the corporation, including a director who is seeking
such indemnification for himself. If a quorum of directors eligible
to decide the matter exists within the limitations and requirements of
I.C. 23-1-37-12 (b)(1), such directors may either (i) decide the
question themselves; (ii) refer the matter to Special Legal Counsel
for decision pursuant to I.C. 23-1-37-12 (b)(3)(A); or (iii) decline
to take any action to either decide the question of such
indemnification or refer the matter for decision to Special Legal
Counsel.
If there does not exist a quorum of directors eligible to
decide the matter within the limitations and requirements of I.C.
23-1-37-12(b)(1), a majority of the entire Board of Directors may
either (i) refer the matter to a committee of two or more directors
who are eligible to vote thereon pursuant to I.C. 23-1-37-12(b)(2) who
may either decide the matter themselves or refer the matter to Special
Legal Counsel for decision pursuant to I.C. 23-1-37-12 (b)(3)(A); (ii)
if such a committee cannot be appointed, refer the matter to Special
Legal Counsel pursuant to the procedures described in I.C. 23-1-37-12
(b)(3)(B); or (iii) decline to take any action to refer the matter of
such indemnification to a committee or to Special Legal Counsel. Any
decision on the question of entitlement to such Permissive
Indemnification by a majority of a quorum of the Board of Directors
eligible to vote pursuant to I.C. 23-1-37-12 (b)(1); by a special
committee of eligible directors pursuant to I.C. 23-1-37-12(b)(2); or
by Special Legal Counsel duly appointed pursuant to the provisions of
I.C. 23-1-37-12(b)(3), shall be in the sole and absolute discretion of
such person or persons who are to make such determination. If it is
determined and decided that such Permissive Indemnification should be
given in a specific situation, the authorization for such
indemnification and a determination of the amount thereof shall be
made in accordance with the procedures and requirements of I.C.
<PAGE>
23-1-37-12(c). For purposes of this Section 2 Permissive
Indemnification shall be deemed to have been denied (i) if a majority
of any group of persons who are to decide the question do not vote in
favor of the proposed indemnification; (ii) if the Board of Directors
or any committee thereof declines to take any permitted action to
either decide the question, refer it to a committee, or refer it to
Special Legal Counsel; (iii) if no decision is made by the person or
persons who were to decide such question within a period of six (6)
months after such indemnification was first proposed to the Board of
Directors of the corporation; or (iv) to the extent that the dollar
amount of any indemnification to be made by the corporation is less
than the total dollar amount of indemnification proposed or requested
to be made. If proposed Permissive Indemnification is denied, the
question may not be reconsidered at any subsequent time by the
corporation.
Section 3 - Expenses incurred with respect to any claim, action,
suit or proceeding may be advanced by the corporation (by action of
the Board of Directors, whether or not a disinterested quorum exists)
prior to the final disposition thereof upon receipt of an undertaking
by or on behalf of the recipient to repay such amount unless he is
entitled to indemnification under this Article of these By-laws.
Section 4 - The rights of mandatory and Permissive
Indemnification provided in this Article of the By-laws shall be in
addition to any rights to which any such person may otherwise be
entitled by contract, as matter of law, or pursuant to I.C. 23-1-37.
Any person claiming the right to indemnification pursuant to any
provisions of these By-laws may at any time apply for indemnification
to or seek review of any decision denying indemnification or
determining the amount thereof by a court pursuant to I.C. 23-1-37-11.
Persons who are not directors or officers of the corporation but who
are directors or officers of any subsidiary may be indemnified to the
extent authorized at any time or from time to time by the Board of
Directors.
Section 5 - Irrespective of the provisions of this Article of the
By-laws, the Board of Directors may, at any time or from time to time,
approve indemnification of directors and officers or other persons to
the full extent permitted by the provisions of the Indiana Business
Corporation Law at the time in effect, whether on account of past or
future transactions.
Section 6 - To the extent not inconsistent with Indiana law as in
effect from time to time, the Board of Directors may, at any time or
from time to time, approve the purchase and maintenance of insurance
on behalf of any person described in the first sentence of Section 1
of this Article XIV against any liability asserted against him in his
capacity or arising out of his status as such a person, whether or not
the corporation would have the power to indemnify him under the
provisions of this Article of the By-laws. In the event that any
expense or liability otherwise subject to indemnification hereunder is
covered entirely or in part by any insurance, the indemnification
provided for by this Article of these By-laws shall only be available,
if at all, as to any uninsured liability or expense or that portion
which is in excess of the amount of all available insurance coverage.
Under no circumstances shall any insurer or other person making
payment under such an insurance policy or contract be subrogated
to the rights of any person entitled to indemnification under this
Article of these By-laws.
<PAGE>
Section 7 - Any and all references contained in Article XIV of
these By-laws to any provision, section, subsection or portion of the
Indiana Code (I.C.) shall mean the Indiana Code as the same existed on
December 9, 1986, and no subsequent amendment, repeal, modification,
change, or judicial invalidation of any provision of the Indiana Code
subsequent to December 9, 1986, shall alter, modify, or otherwise
affect these By-laws, and these By-laws shall be construed and
interpreted under the statutory law of the State of Indiana as it
existed as of the date of adoption of these By-laws.
Section 8 - The indemnification herein required or permitted by
these amended indemnification By-laws shall be a contractual
obligation, undertaking and commitment of the corporation as to any
person who either continued to serve or commenced to serve, following
the date of the adoption of these amended indemnification By-laws, as
a director or officer of this corporation or any subsidiary of this
corporation, or in any other position or capacity, at the request of
this corporation or any subsidiary corporation, on any committee,
partnership, association, trust, foundation, not-for-profit
corporation, employee benefit plan, or other organization or entity,
and no subsequent amendment or repeal of these By-laws and no judicial
decision invalidating the legislation authorizing the indemnification
provided for by these By-laws or invalidating all or any part of these
indemnification By-laws shall in any manner deny, diminish, limit,
restrict, or qualify the indemnification herein provided for, for any
such person who so continued to serve or commenced to serve with
regard to any claim concerning any matter which occurred, which
commenced to occur, or which continued to occur subsequent to the
adoption of these amended indemnification By-laws and prior to any
such amendment, repeal, or judicial invalidation.
ARTICLE XV: REGULATION OF SHAREHOLDERS
Section 1 - Election not to be governed by Chapter 42 (Control
Share Acquisitions) of 1986 Indiana Business Corporation Law. This
Corporation, having filed with the Indiana Secretary of State on
August 18, 1986, its resolution electing to be governed by the Indiana
Business Corporation Law, I.C. 23-1-18 through I.C. 23-1-54, effective
September 15, 1986, now elects, pursuant to the provisions of I.C.
23-1-42-5, not to be governed by the provisions of Chapter 42 of the
1986 Indiana Business of Corporation Law (I.C. 23-1-42), the same
being Section 26 of House Enrolled Act No. 1257 as enacted by the
General Assembly of the State of Indiana at the Second Regular Session
of the 104th General Assembly.
Section 2 - Election not to be governed by Chapter 43 Five-Year
Freeze (Business Combinations) provisions of the 1986 Indiana Business
Corporation Law. This Corporation, having filed with the Indiana
Secretary of State on August 18, 1986, its resolution electing to be
governed by the Indiana Business Corporation Law, I.C. 23-1-18 through
I.C. 23-1-54, effective September 15, 1986, now, within 30 days of the
effective date of such new law and pursuant to the provisions of I.C.
23-1-43-22(B), hereby expressly elects not to be governed by the
provisions of Chapter 43 of the 1986 Indiana Business Corporation Law
(I.C. 23-1-43), the same being Section 27 of House Enrolled Act No.
1257 as enacted by the General Assembly of the State of Indiana at the
Second Regular Session of the 104th General Assembly.
ARTICLE XVI: MISCELLANEOUS
<PAGE>
Section 1 - Depositories: The funds of the corporation shall be
deposited in the name of the corporation with such depositories as may
be designated by the Board of Directors, the Chief Executive Officer,
the President or the Treasurer.
ARTICLE XVII: AMENDMENTS
Section 1 - These By-laws may be altered, amended or repealed by
a majority vote of the whole Board of Directors at any meeting, the
notice of which includes notice of the proposed alteration, amendment
or repeal.
<PAGE>
<TABLE> KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<CAPTION>
Available Average Earnings Per Share
Income Shares Class A Class B
----------- ---------- ------- -------
<S> <C> <C> <C> <C>
Net income, three months ended 12/31/97. . . . $15,485,000
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,092,000) $ .145
Class B dividends declared . . . . . . . . . (4,067,000) $ .150
Undistributed basic earnings . . . . . . . . . $ 9,326,000 41,523,445 .225 .225
Basic Earnings Per Share . . . . . . . . . . . $ .370 $ .375
Basic Earnings Per Share (rounded) . . . . . . $ .37 $ .38
Dilutive effect of stock options . . . . . . . (306,000) 406,846
Undistributed diluted earnings . . . . . . . . $ 9,020,000 41,930,291 .215 .215
Diluted Earnings Per Share . . . . . . . . . . $ .360 $ .365
Diluted Earnings Per Share (rounded) . . . . . $ .36 $ .37
586,000 of the 1,825,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period. Use of the treasury stock buy-back method
reduces the dilutive effect of stock options.
</TABLE>
<TABLE> KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
<CAPTION>
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, three months ended 12/31/96. . . . $14,621,000
Distributed earnings:
Class A dividends declared . . . . . . . . . (1,868,000) $ .12875
Class B dividends declared . . . . . . . . . (3,496,000) $ .13000
Undistributed basic earnings . . . . . . . . . $ 9,257,000 41,413,500 .22353 .22353
Basic Earnings Per Share . . . . . . . . . . . $ .35228 $ .35353
Basic Earnings Per Share (rounded) . . . . . . $ .35 $ .35
Dilutive effect of stock options . . . . . . . (46,000) 352,815
Undistributed diluted earnings . . . . . . . . $ 9,211,000 41,766,315 .22054 .22054
Diluted Earnings Per Share . . . . . . . . . . $ .34929 $ .35054
Diluted Earnings Per Share (rounded) . . . . . $ .35 $ .35
254,000 of the 1,462,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period. Use of the treasury stock buy-back method reduces the dilutive effect
of stock options.
</TABLE>
Exhibit(11)
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
SIX MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<CAPTION>
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, six months ended 12/31/97. . . . . $28,514,000
Distributed earnings:
Class A dividends declared . . . . . . . . . (4,166,000) $ .28875
Class B dividends declared . . . . . . . . . (7,992,000) $ .29500
Undistributed basic earnings . . . . . . . . . $16,356,000 41,498,745 .39413 .39413
Basic Earnings Per Share . . . . . . . . . . . $ .68288 $ .68913
Basic Earnings Per Share (rounded) . . . . . . $ .68 $ .69
Dilutive effect of stock options . . . . . . . (224,000) 443,736
Undistributed diluted earnings . . . . . . . . $16,132,000 41,942,481 .38462 .38462
Diluted Earnings Per Share . . . . . . . . . . $ .67337 $ .67962
Diluted Earnings Per Share (rounded) . . . . . $ .67 $ .68
318,000 of the 1,675,000 average outstanding stock options were antidulitive,
and were excluded from the dilutive computation for this period. Use of the
treasury stock buy-back method reduces the dilutive effect of stock options.
</TABLE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
SIX MONTHS ENDED DECEMBER 31, 1996
(UNAUDITED)
<CAPTION>
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, six months ended 12/31/96. . . . . $28,142,000
Distributed earnings:
Class A dividends declared . . . . . . . . . (3,741,000) $ .2575
Class B dividends declared . . . . . . . . . (7,010,000) $ .2600
Undistributed basic earnings . . . . . . . . . $17,391,000 41,501,996 .4190 .4190
Basic Earnings Per Share . . . . . . . . . . . $ .6765 $ .6790
Basic Earnings Per Share (rounded) . . . . . . $ .68 $ .68
Dilutive effect of stock options . . . . . . . (67,000) 257,222
Undistributed diluted earnings . . . . . . . . $17,324,000 41,759,218 .4149 .4149
Diluted Earnings Per Share . . . . . . . . . . $ .6724 $ .6749
Diluted Earnings Per Share (rounded) . . . . . $ .67 $ .67
231,000 of the 1,341,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period. Use of the treasury stock buy-back method
reduces the dilutive effect of stock options.
</TABLE>
Exhibit(11)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains six month summary financial information extracted from
Kimball International, Inc., and subsidiaries 1998 second quarter Form 10-Q and
is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 31,397
<SECURITIES> 133,639
<RECEIVABLES> 125,206
<ALLOWANCES> 4,250
<INVENTORY> 83,285
<CURRENT-ASSETS> 391,728
<PP&E> 410,947
<DEPRECIATION> 236,938
<TOTAL-ASSETS> 596,693
<CURRENT-LIABILITIES> 129,513
<BONDS> 0
0
0
<COMMON> 2,151
<OTHER-SE> 438,768
<TOTAL-LIABILITY-AND-EQUITY> 596,693
<SALES> 510,381
<TOTAL-REVENUES> 510,381
<CGS> 356,149
<TOTAL-COSTS> 356,149
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 360
<INTEREST-EXPENSE> 193
<INCOME-PRETAX> 45,522
<INCOME-TAX> 17,008
<INCOME-CONTINUING> 28,514
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,514
<EPS-PRIMARY> .69
<EPS-DILUTED> .68
</TABLE>
