<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, 1998
__ 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 February
9, 1999 were:
Class A Common Stock - 14,310,351 shares
Class B Common Stock - 26,326,110 shares
- 1 -<PAGE>
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<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, 1998 (Unaudited) and June 30, 1998 . . . . . . . 3
Consolidated Statements of Income (Unaudited)
- Three Months and Six Months Ended December 31, 1998 and 1997. 4
Consolidated Statements of Cash Flows (Unaudited)
- Six Months Ended December 31, 1998 and 1997 . . . . . . . . . 5
Notes To Consolidated Financial Statements (Unaudited). . . . . 6
Item 2. Management's Discussion and Analysis Of
Financial Condition and Results of Operations . . . . . . . . . 7-11
Item 3. Quantitative & Qualitative Disclosures about Market Risk. . . . 12
PART II OTHER INFORMATION:
Item 4(c). Submission of Matters to a Vote of Security Holders. . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 14
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
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<TABLE>
PART I.
FINANCIAL INFORMATION
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands)
<CAPTION>
(unaudited)
December 31, June 30,
<S> 1998 1998
ASSETS <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 784 $ 16,757
Short-term investments 132,988 156,010
Receivables, less allowances
of $4,523 and $4,023, respectively 134,747 119,170
Inventories 95,675 96,303
Other 23,460 24,697
Total Current Assets 387,654 412,937
PROPERTY AND EQUIPMENT - at cost, less
accumulated depreciation of $258,986
and $245,751, respectively 195,329 182,798
OTHER ASSETS 48,509 33,903
Total Assets $631,492 $629,638
LIABILITIES AND SHARE OWNERS' EQUITY
CURRENT LIABILITIES:
Loans payable $ 10,310 $ 4,318
Current maturities of long-term debt 446 434
Accounts payable 65,772 60,907
Dividends payable 6,441 6,521
Accrued expenses 67,668 81,030
Total Current Liabilities 150,637 153,210
OTHER LIABILITIES:
Long-term debt, less current maturities 2,391 1,856
Deferred income taxes and other 25,688 25,949
Total Other Liabilities 28,079 27,805
SHARE OWNERS' EQUITY:
Common stock 2,151 2,151
Additional paid-in capital 6,380 6,022
Retained earnings 479,497 464,880
Foreign currency translation adjustment 1,696 1,535
Unrealized gain on available-for-sale
securities 1,336 2,174
Less: Treasury stock, at cost (38,284) (28,139)
Total Share Owners' Equity 452,776 448,623
Total Liabilities and Share Owners' Equity $631,492 $629,638
See Notes to Consolidated Financial Statements
</TABLE>
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<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(amounts in thousands except per share amounts)
<CAPTION>
(unaudited) (unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net Sales $280,080 $264,524 $544,726 $510,381
Cost of Sales 197,027 184,572 383,116 356,149
Gross Profit 83,053 79,952 161,610 154,232
Selling, Administrative
and General Expenses 64,715 60,134 126,697 116,411
Operating Income 18,338 19,818 34,913 37,821
Other Income (Expense):
Interest Expense (168) ( 98) (273) (193)
Interest Income 1,570 2,309 3,534 4,587
Other - net 3,095 2,661 4,152 3,307
Other Income - net 4,497 4,872 7,413 7,701
Income Before Taxes on Income 22,835 24,690 42,326 45,522
Taxes on Income 7,900 9,205 14,828 17,008
Net Income $ 14,935 $ 15,485 $ 27,498 $ 28,514
Earnings Per Share of Common Stock:
Basic:
Class A Common Stock $ .36 $ .37 $ .67 $ .68
Class B Common Stock $ .37 $ .38 $ .68 $ .69
Diluted:
Class A Common Stock $ .36 $ .36 $ .66 $ .67
Class B Common Stock $ .37 $ .37 $ .67 $ .68
Dividends Per Share of Common Stock:
Class A Common Stock $ .155 $ .145 $ .310 $ .28875
Class B Common Stock $ .160 $ .150 $ .320 $ .295
Average total number of shares
outstanding Class A and B
Common Stock:
Basic 40,698 41,523 40,814 41,499
Diluted 40,971 41,930 41,073 41,942
See Notes to Consolidated Financial Statements
</TABLE>
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<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
<CAPTION>
(unaudited)
Six Months Ended
December 31,
1998 1997
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 27,498 $ 28,514
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 19,103 16,516
Gain on sales of assets (231) (1,835)
Deferred income tax and other deferred charges (51) (652)
Change in current assets and liabilities:
Receivables (15,577) (10,814)
Inventories (4,334) (7,143)
Other current assets 1,027 1,096
Accounts payable 4,865 (1,993)
Accrued expenses (8,089) (1,228)
Net Cash Provided By Operating Activities 24,211 22,461
Cash Flows From Investing Activities:
Capital expenditures (29,341) (16,490)
Proceeds from sales of assets 737 374
Proceeds from sale of division/subsidiary -0- 3,150
Increase in other assets (17,485) (2,132)
Purchases of held-to-maturity investments (400) (21,413)
Maturities of held-to-maturity investments 5,410 34,932
Purchases of available-for-sale securities (24,405) (20,000)
Sales and maturities of available-for-sale securities 41,580 23,000
Net Cash (Used For)/Provided By Investing Activities (23,904) 1,421
Cash Flows From Financing Activities:
Change in short-term borrowings 5,992 (49)
Net change in long-term debt 547 (281)
Dividends paid to share owners (12,962) (11,988)
Acquisition of treasury stock, net of sales (10,738) -0-
Proceeds from exercise of stock options 818 1,039
Other - net 62 (14)
Net Cash Used For Financing Activities (16,281) (11,293)
Effect of Exchange Rate Change on
Cash and Cash Equivalents 1 (10)
Net (Decrease)/Increase in Cash and Cash Equivalents (15,973) 12,579
Cash and Cash Equivalents-Beginning of Period 16,757 18,818
Cash and Cash Equivalents-End of Period $ 784 $ 31,397
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Income taxes $ 14,210 $ 15,750
Interest $ 287 $ 207
Total Cash, Cash Equivalents and
Short-Term Investments:
Cash and cash equivalents $ 784 $ 31,397
Short-term investments 132,988 133,639
Totals $133,772 $165,036
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 accompanying consolidated financial statements of Kimball
International, Inc. ("the Company") are unaudited and have been prepared
in accordance with the instructions to Form 10-Q. As such, certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. All significant intercompany transactions and balances have
been eliminated. Management believes the financial statements include all
adjustments (consisting only of normal recurring adjustments) considered
necessary to present fairly the financial statements of the interim period.
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,
1998 1998
<S> <C> <C>
Raw Materials $49,418 $51,967
Work-in-Process 12,390 12,971
Finished Goods 33,867 31,365
Total $95,675 $96,303
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.
(4) Effective July 1, 1998, the Company adopted Financial Accounting Standards
Board Statement No. 130 - Comprehensive Income. Comprehensive income
includes all changes in equity during a period except those resulting from
investments by, and distributions to, Share Owners. Comprehensive income,
shown net of tax if applicable, for the three month and six month periods
ending December 31, 1998 and 1997 is as follows: (in thousands)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1998 1997 1998 1997
<S> <C> <C> <C> <C>
Net Income $14,935 $15,485 $27,498 $28,514
Unrealized (Loss)/Gain on
Available-For-Sale-Securities (581) 123 (838) 481
Foreign Currency Translation Adjustment 173 70 161 (104)
Comprehensive Income $14,527 $15,678 $26,821 $28,891
</TABLE>
(5) On September 15, 1998, the Company acquired with available cash on hand,
the assets of Transwall, Inc. Of Pennsylvania, manufacturers of systems
office furniture products. The acquisition was accounted for as a purchase
with operating results included in the Company's Consolidated Statement of
Income from the date of acquisition. Transwall's results of operations
were immaterial to the Company's Consolidated Statements of Income for
the three month and six month periods ending December 31, 1998.
(6) The Company recorded a $2.1 million pretax gain on the sale of a stock
investment of which the Company held a minor interest, during the second
quarter of the current fiscal year. This pretax gain is reported in
Other-net, and added $1.3 million to net income, or $0.03 per common share.
The per share amount applies to both basic and diluted earnings per share.
(7) The Company recorded a $1.8 million pretax gain on the sale of
real estate in the second quarter of the prior fiscal year. This
pretax gain was reported in Other-net, and added $1.0 million to net
income, or $0.02 per common share. The per share amount applies to
both basic and diluted earnings per share.
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<PAGE>
Management's Discussion and Analysis
of Financial Condition and Results of Operations
OVERVIEW
Net sales for the second quarter of fiscal year 1999 set a new quarterly record
of $280,080,000, an increase of 6% over the prior year second quarter. Net
sales of $544,726,000 for the six month period ending December 31, 1998
surpassed the prior year sales by 7% and also set a record for six month sales.
Net income and Class B diluted earnings per share were $14,935,000 and $0.37,
respectively, for the second quarter of fiscal 1999, a decrease of 4% from the
prior year. Current year net income and Class B diluted earnings per share for
the six month period were $27,498,000 and $0.67, respectively, a decrease of 4%
from the prior year. Fiscal year 1999 second quarter net income results include
a $1,337,000 after tax gain ($0.03 per diluted share) on the sale of a stock
investment of which the Company held a minor interest. Fiscal 1998 second
quarter results include a $1,008,000 after tax gain ($0.02 per diluted share) on
the sale of real estate.
RESULTS OF OPERATIONS - THREE AND SIX MONTHS ENDED DECEMBER 31, 1998 COMPARED TO
THREE AND SIX MONTHS ENDED DECEMBER 31, 1997
Second quarter and six month period fiscal 1999 net sales increased in two of
the Company's three business segments when compared to the prior year - the
Furniture and Cabinets segment and the Processed Wood Products and Other
segment. The Electronic Contract Assemblies segment experienced a decline in
net sales during these same time periods. Current year second quarter operating
income declined 7% to $18,338,000, from $19,818,000 in the same period of 1998.
Operating income of $34,913,000 for the six month period declined 8% when
compared to the prior year's operating income of $37,821,000.
FURNITURE AND CABINETS
Net sales in the Company's largest segment, Furniture and Cabinets, increased 9%
and 11%, respectively, for the three and six month periods when compared to one
year ago.
Net sales of office furniture increased for both the three and six month periods
of fiscal 1999 over the prior year. Sales of systems products experienced
double-digit growth while sales of casegoods products showed a moderate increase
in both periods. Second quarter office furniture sales growth outpaced the most
recent Business and Institutional Furniture Manufacturer's Association (BIFMA)
industry statistics for the three-month period ending November 1998. On
September 15, 1998, the Company finalized the purchase of Transwall, Inc., a
manufacturer of stackable panel systems and floor-to-ceiling products, which
increased its already extensive office furniture product offering. The
acquisition was accounted for as a purchase, with results of operations included
in consolidated results from the date of acquisition, and was financed with
available cash on hand. Transwall's three and six month results were not
material to the consolidated operating results.
Fiscal 1999 net sales for both the three and six month periods for cabinets and
furniture product lines outpaced 1998 levels. Increased volumes of television
cabinets attributed largely to the sales growth, as calendar year 1998 sales
were up in the television industry as a whole. In the three and six month
periods of the prior year, the Company's sales of OEM cabinets were negatively
impacted by the relocation of a large customer and its longer than anticipated
start up time, resulting in lower volumes in fiscal 1998.
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<PAGE>
Net sales of lodging furniture declined in the second quarter of fiscal 1999
from 1998 levels on lower volumes of both standard product offerings and
custom-made product. Select segments of the lodging industry have recently been
experiencing a softening in demand. Lodging furniture net sales for the current
year six month period are ahead of the prior year.
Operating income in the Furniture and Cabinets segment for the second quarter of
fiscal 1999 decreased from one year ago. Operating income for the six month
period remained flat with one year ago. Cost of goods sold, as a percent of net
sales, was higher in the second quarter of fiscal 1999 as material costs
increased, as a percent of net sales. Cost of goods sold, as a percent of net
sales, for the six month period also increased, as increased price discounting
in the office furniture product lines reduced profit margins. Both selling and
administrative costs for the three and six month periods were higher in dollar
terms over the prior year. Selling expenses were lower, as a percent of net
sales, in the current year second quarter primarily the result of reduced sales
incentive costs in the office furniture product lines and a more aggressive
focus on cost reductions. Administrative costs were higher on increased people
and technology investments.
ELECTRONIC CONTRACT ASSEMBLIES
Net sales in the Electronic Contract Assemblies segment for the three and six
month periods decreased 3% and 4%, respectively, from the prior year. The sales
mix in this segment has been shifting more toward electronic automotive products
and away from computer related products, as evidenced by an increase in sales of
automotive products and a decrease in computer related products in both the
three and six month periods. Fiscal 1999 six month results were unfavorably
impacted by the General Motors (GM) labor strike which was settled in July 1998,
as the Electronic Contract Assemblies segment manufactures components that are
installed in GM vehicles.
Operating income declined in this segment in both the three and six month
periods, on lower sales. Due to the competitiveness of the marketplace, the
selling prices of selected products have been reduced, therefore adversely
affecting both sales and operating margins. Cost of goods sold, as a percent of
net sales, increased for both the three and six month periods as lower material
costs, as a percent of sales, were more than offset by higher direct labor and
overhead costs. Both selling and administrative costs increased for the three
and six month periods when compared to the prior year, on higher people and
technology costs, as well as increased bad debt allowance relating to a former
customer.
Included in this segment are sales to one customer, Lucas Varity, PLC, which
accounted for 16% and 14%, respectively, of consolidated net sales in the three
and six month periods of fiscal 1999. This same customer accounted for 16%
of consolidated net sales in both the three and six month periods one year ago.
Sales to this customer represent approximately one half of total sales in the
Electronic Contract Assemblies segment, which has historically carried a higher
operating income margin than the Company's other two business segments.
Consistent with the general trend of consolidation in the automotive supplier
business, this customer has recently announced tentative plans to sell its
operations to TRW, Inc. The Company is uncertain at this time what effect,
if any, this announcement may have on the contract production levels for this
customer. This statement is a forward-looking statement under the Private
Securities Litigation Reform Act of 1995 and is subject to certain risks and
uncertainties including, but not limited to, strategic business actions taken
by this customer.
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This segment's investment capital carries a higher degree of risk than the
Company's other segments due to rapid technological changes, the contract nature
of this industry and the importance of sales to one customer.
PROCESSED WOOD PRODUCTS AND OTHER
Outside sales in the Processed Wood Products and Other segment increased 23% and
18%, respectively, for the three and six month periods compared to the prior
year. The increase in sales resulted primarily from new product offerings and
an increased focus to grow external sales in this segment. Sales of most major
products within this segment increased in both the three and six month periods
over the prior year. 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 declined
for the second quarter and the six month period of fiscal 1999 when compared to
1998. Cost of goods sold, as a percent of net sales, increased for both the
three and six month comparisons partially due to higher labor costs, as a
percent of sales.
In the first quarter of fiscal 1999, the Company completed the purchase of an
11,700-acre land parcel which nearly doubled the timberland holdings of the
Company. The acquisition was made to help support the procurement of raw
materials in this segment and to provide possible future manufacturing facility
locations. The acquisition was financed with available cash on hand.
CONSOLIDATED OPERATIONS
Consolidated selling, general and administrative expenses increased, as a
percent of sales, .4 percentage point and .5 percentage point, respectively, for
the three and six months of fiscal 1999 compared to the prior year, due to
investments made in human resources, information technology and capacity and
product line expansions to support more aggressive, long-term growth. The
Company continues to review activities, processes and costs to assess where such
could be reduced while continuing to provide quality products and services to
the marketplace.
Other income decreased in both the three and six month periods of fiscal 1999
primarily the result of a decline in interest income caused by a combination of
lower average investment balances and a shift in the Company's investment
portfolio mix more heavily weighted toward tax-free municipal bonds with lower
pre-tax interest rates. In the second quarter of fiscal 1999 the Company
recorded a $1,337,000 after tax gain ($0.03 per diluted share) on the sale of a
stock investment of which the Company held a minor interest. Fiscal 1998 second
quarter income includes a $1,008,000 after tax gain ($0.02 per diluted share) on
the sale of real estate.
The effective income tax rate decreased 2.7 percentage points for the second
quarter of fiscal 1999 and 2.4 percentage points for the six month period when
compared to the prior year, primarily due to a decrease in the effective federal
income tax rate for the quarter as the Company utilized capital losses to offset
part of the capital gain on the above mentioned sale of stock.
Net income and Class B diluted earnings per share for the second quarter were
$14,935,000 and $0.37, respectively, a decrease of 4% from the prior year
levels. Net income of $27,498,000 and Class B diluted earnings per share of
$0.67 for the six month period of fiscal 1999 decreased 4% from the prior year.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's aggregate of cash, cash equivalents, and short-term investments
decreased from $173 million at the end of fiscal 1998 to $134 million at the end
of the second quarter in fiscal 1999 due primarily to cash outlays during the
first half of the fiscal year for strategic capital investments, dividends and
Class B common stock repurchases. Working capital at December 31, 1998 was $237
million with a current ratio of 2.6, compared to working capital of $260 million
and a current ratio of 2.7 at June 30, 1998.
Operating activities generated $24 million of cash flow in the first six months
of fiscal 1999 compared to $22 million in the first six months of 1998. Net
income and non-cash charges to net income were partially offset by increases in
receivables of $16 million. The Company reinvested $47 million into capital
investments for the future, including the purchase of 11,700 acres of timber and
harvest land, Transwall, Inc., computer equipment, production equipment, and a
child development facility. Financing cash flows were primarily in the form of
$11 million in share repurchases and $13 million in dividend payments. Net cash
flow, excluding the purchases and maturities of short-term investments was an
outflow of $38 million for the six month period ending December 31, 1998.
As the Company anticipates increased investment activity in the future, it
believes that available funds on hand, borrowing capacity, and cash generated
from operations will be sufficient for working capital needs and to fund
investments and acquisitions in the future. This statement is a forward-looking
statement under the Private Securities Litigation Reform Act of 1995 and is
subject to certain risks and uncertainties including, but not limited to a
downturn in the economy, loss of key customers or suppliers, availability or
cost of raw materials, or a natural disaster or similar unforeseen event.
SUBSEQUENT EVENT
On January 8, 1999, the Company announced the purchase of Southeast Millworks, a
privately held manufacturer of store display fixtures. This acquisition will
allow the Company to pursue new, potentially high-volume store fixture markets.
The acquisition was accounted for as a purchase and was financed with available
cash on hand.
YEAR 2000 READINESS DISCLOSURE
The Company continues to focus on the Year 2000 issue. Integrated testing of
interfaces between various applications used within the Company has been
completed. Contingency plans outlining recovery strategies for possible
failures are currently being developed. The estimated completion date for Year
2000 compliance for mission critical items for a majority of the Company's
operations is the end of March 1999 with a select few foreign operations being
compliant by the end of June 1999. The total gross cost of Year 2000 compliance
remains in the $9 million to $11 million range, as disclosed in the Company's
Form 10-K for the period ending June 30, 1998. Approximately 60% of the total
costs had been incurred as of December 31, 1998, compared to 45% at September
30, 1998. Redeployed information technology resources are anticipated to
account for approximately 50% of the total costs, with the balance being
incremental costs to the Company. Approximately 30% of the total gross costs
relate to machinery and other fixed assets which will be capitalized, with the
remaining costs being expensed as incurred.
The Company has not identified any additional material key risk factors
associated with the Year 2000 beyond those disclosed in its Form 10-K for the
period ending June 30, 1998.
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<PAGE>
The Year 2000 disclosure includes forward-looking statements under the Private
Securities Litigation Reform Act of 1995 and is subject to risks and
uncertainties including, but not limited to such factors as the availability and
cost of human resources with expertise in this area, the ability of its
customers and suppliers to meet Year 2000 compliance, the ability to locate and
correct all relevant computer codes and time constraints.
EURO CURRENCY
The European Union's adoption of a common currency, known as the Euro, is not
expected to have a material effect on the Company's financial condition or
results of operations. As the Company continues to explore investment
opportunities abroad, it will monitor the possible effects of this currency
conversion.
ACCOUNTING STANDARDS
In July 1998, the Company adopted Financial Accounting Standards No. 130,
comprehensive income. This standard requires the disclosure of all changes in
equity during a period except those resulting from investments by, and
distributions to, Share Owners. Comprehensive income is reported in Note 4 of
the Consolidated Financial Statements.
In June, 1998, the Financial Accounting Standards Board issued Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities, which requires the recognition of all derivatives as either assets
or liabilities in the balance sheet and the measurement of those instruments at
fair value. The Company engages in limited derivative activity and currently
does not expect this new standard to have a material effect on the Company's
financial condition or results of operations.
____________________________________________________________________
This document 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 document, when
appropriate. Additional cautionary statements regarding these types of
Statements and other factors that could have an effect on the future performance
of the Company are contained in the Company's Form 10-K filing for the period
ending June 30, 1998.
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<PAGE>
Item 3 - Quantitative and Qualitative Disclosures About Market Risk
As of December 31, 1998, the Company had an investment portfolio of fixed income
securities, excluding those classified as cash and cash equivalents, of $133
million. The Company classifies its short-term investments in accordance with
Financial Accounting Standards Board Statement No. 115, accounting for Certain
Investments in Debt and Equity Securities. Held-to-maturity securities are
stated at amortized cost and available-for-sale securities are stated at market
value with unrealized gains and losses being recorded net of tax related effect,
if any, as a component of share owners' equity. These securities, like all
fixed income instruments, are subject to interest rate risk and will decline in
value if market interest rates increase.
The Company operates internationally, and thus is subject to potentially adverse
movements in foreign currency rate changes. As of the latest fiscal year-end,
foreign sales, operating income and assets, each comprised less than 3% of
consolidated amounts. Historically, the effect of movements in the exchange
rates have been immaterial to the consolidated operating results of the Company.
- 12 -
<PAGE>
<PAGE>
PART II.
OTHER INFORMATION
Item 4 (c) - Submission of Matters to a Vote of Security Holders
The Company's Annual Meeting of Share Owners was held on October 20, 1998.
The Board of Directors was elected in its entirety, based on the following
election results:
<TABLE>
<CAPTION>
Nominees as Directors by
Holders of Class A Common Stock Votes For* Votes Withheld
<S> <C> <C>
Thomas L. Habig 13,753,921 39,440
Douglas A. Habig 13,754,561 38,800
James C. Thyen 13,754,561 38,800
John B. Habig 13,754,561 38,800
Ronald J. Thyen 13,753,537 39,824
Christine M. Vujovich 13,754,561 38,800
Brian K. Habig 13,754,561 38,800
John T. Thyen 13,754,561 38,800
Gary P. Critser 13,754,561 38,800
Alan B. Graf, Jr. 13,754,561 38,800
Polly B. Kawalek 13,754,561 38,800
* Votes for nominees as Directors by holders of Class A Common Stock
represented 96% of the total 14,382,596 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 23,397,204 365,680
* Votes for nominee as Director by holders of Class B Common Stock
represented 87% of the total 26,790,107 Class B shares outstanding
and eligible to vote.
</TABLE>
- 13 -<PAGE>
<PAGE>
Item 6. - Exhibits and Reports on Form 8-K
(a) Exhibits (numbered in accordance with Item 601 of Regulation S-K)
(3b) Restated By-laws of the Company
(11) Computation of Earnings Per Share
(27) Financial Data Schedule
(b) Reports on Form 8-K
On October 21, 1998, the Company filed a Form 8-K reporting
its press release under Item 5 - Other Events "Kimball
International holds Annual Meeting of Share Owners."
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 12, 1999
- 14 -
<PAGE>
<PAGE>
<TABLE>
Kimball International, Inc
Exhibit Index
<S> <C>
Exhibit No. Description
3b Restated By-laws of the Company
11 Computation of Earnings Per Share
27 Financial Data schedule
</TABLE>
- 15 -
<PAGE>
RESTATED BY-LAWS
OF
KIMBALL INTERNATIONAL, INC.
(Reflecting all amendments through December 8, 1998)
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 Meetings: 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. If the day fixed for the annual meeting shall be a legal holiday,
such meeting shall be held on the next succeeding business day. At each annual
meeting, the stockholders shall elect the directors and shall conduct only such
other business as shall have been properly brought before the meeting. To be
properly brought before an annual meeting, business must be (i) specified in
<PAGE>
the notice of the meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (ii)otherwise properly brought before
the meeting by or at the direction of the Board of Directors or (iii)
otherwise properly brought before the meeting by a stockholder of the
corporation who (A)was a stockholder of record at the time of giving the
notice provided for in this Section, (B)is entitled to vote at the meeting
and (C)complied with the notice procedures set forth in this Section. For
business to be properly brought before an annual meeting by a stockholder,
the stockholder must have given timely notice thereof in writing to the
Secretary of the corporation at the principal executive office of the
corporation. To be timely, a stockholder's notice shall be delivered not
less than 90 days nor more than 110 days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than 30 days or delayed by more
than 60 days from such anniversary date, notice by the stockholder, to be
timely, must be so delivered not earlier than the 110th day prior to such annual
meeting and not later than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement (as defined herein) of the date of such meeting is first made.
Such stockholder's notice shall set forth as to each matter the stockholder
proposes to bring before the annual meeting (i) a brief description of the
business desired to be brought before the meeting and the reasons for conducting
such business at the meeting and any material interest in such business of such
stockholder and the beneficial owner, if any, on whose behalf the proposal is
made; (ii) as to the stockholder giving the notice and the beneficial owner, if
any, on whose behalf the proposal is made (A)the name and address of such
stockholder, as they appear on the corporation's books, and the name and address
of such beneficial owner, (B)the class and number of shares of the corporation
which are owned beneficially and of record by such stockholder and such
beneficial owner as of the date such notice is given, and (C)a representation
that such stockholder intends to appear in person or by proxy at the meeting to
propose such business; (iii)in the event that such business includes a proposal
to amend either the Articles of Incorporation or the By-laws of the corporation,
the language of the proposed amendment; and (iv)if the stockholder intends to
solicit proxies in support of such stockholder's proposal, a representation to
that effect. The foregoing notice requirements shall be deemed satisfied by a
stockholder if the stockholder has notified the corporation of his or her
intention to present a proposal at an annual meeting and such stockholder's
proposal has been included in a proxy statement that has been prepared by
management of the corporation to solicit proxies for such annual meeting;
provided, however, that if such stockholder does not appear or send a qualified
representative to present such proposal at such annual meeting, the corporation
need not present such proposal for a vote at such meeting, notwithstanding that
proxies in respect of such vote may have been received by the corporation.
Notwithstanding anything in these By-laws to the contrary, no business shall be
conducted at any annual meeting except in accordance with this paragraph, and
the Chairman of the Board or other person presiding at an annual meeting of
stockholders may refuse to permit any business to be brought before an annual
meeting without compliance with the foregoing procedures or if the stockholder
solicits proxies in support of such stockholder's proposal without such
stockholder having made the representation required by clause (iv) of the second
preceding sentence.
For the purposes of this paragraph "public announcement" shall mean disclosure
in a press release reported by the Dow Jones News Service, Associated Press or
comparable national news service or in a document publicly filed by the
<PAGE>
corporation with the Securities and Exchange Commission pursuant to Sections 13,
14 or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). In addition to the provisions of this paragraph, a stockholder shall
also comply with all applicable requirements of the Exchange Act and the rules
and regulations thereunder with respect to the matters set forth herein.
Nothing in these By-laws shall be deemed to affect any rights of the
stockholders to request inclusion of proposals in the corporation's proxy
statement pursuant to Rule 14a-8 under the Exchange Act.
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
<PAGE>
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 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.
<PAGE>
<PAGE>
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.
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.
Section 6 - Nominations: Nominations of persons for election as directors may
be made by the Board of Directors or by any stockholder who is a stockholder of
record at the time of giving the notice of nomination provided for in this
Section 6 and who is entitled to vote in the election of directors. Any
stockholder of record entitled to vote in the election of directors at a meeting
may nominate a person or persons for election as directors only if timely
written notice of such stockholder's intent to make such nomination is given to
the Secretary of the corporation in accordance with the procedures for bringing
business before an annual meeting set forth in Section 2 of Article IV of these
By-laws. To be timely, a stockholder's notice shall be delivered (i) with
respect to an election to be held at an annual meeting of stockholders, not less
than 90 days nor more than 110 days prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is advanced by more than 30 days or delayed by more
than 60 days from such anniversary date, notice by the stockholder, to be
timely, must be so delivered not earlier than the 110th day prior to such annual
<PAGE>
<PAGE>
meeting and not later than the close of business on the later of the 90th day
prior to such annual meeting or the 10th day following the day on which public
announcement (as defined in Section 2 of Article IV of these By-laws) is first
made of the date of such meeting, and (ii) with respect to an election to be
held at a special meeting of stockholders, not earlier than the 110th day prior
to such special meeting and not later than the close of business on the later of
the 90th day prior to such special meeting or the 10th day following the day on
which public announcement is first made of the date of the special meeting and
of the nominees to be elected at such meeting.
Such stockholder's notice shall set forth: (a) the name and address of the
stockholder who intends to make the nomination, of the person or persons to be
nominated and of the beneficial owner, if any, on whose behalf the nomination is
made; (b) representation that the stockholder is a holder of record of stock of
the corporation entitled to vote at such meeting in such election and intends to
appear in person or by proxy at the meeting to nominate the person or persons
specified in the notice; (c) a description of all arrangements or understandings
between the stockholder, any such beneficial owner, each nominee and any other
person or persons (naming such person or persons) pursuant to which the
nomination or nominations are to be made by the stockholder; (d) such other
information regarding each nominee proposed by such stockholder as would have
been required to be included in a proxy statement filed pursuant to the proxy
rules of the Securities and Exchange Commission had each nominee been nominated,
or intended to be nominated, by the Board of Directors; (e) the consent of each
nominee to serve as a director if so elected; and (f) if the stockholder intends
to solicit proxies in support of such stockholder's nominee(s), a representation
to that effect. The chairman of any meeting of stockholders to elect directors
and the Board of Directors may refuse to acknowledge the nomination of any
person not made in compliance with the foregoing procedure or if the stockholder
solicits proxies in support of such stockholder's nominee(s) without such
stockholder having made the representation required by clause (f) of the
preceding sentence. In addition to the provisions of this paragraph, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth herein.
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>
<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>
<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>
<PAGE>
ARTICLE VIII: AUDIT COMMITTEE
The Board of Directors shall appoint an Audit Committee consisting of four (4)
members of the Board of Directors. At least three (3) 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 fourth 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.
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.
<PAGE>
<PAGE>
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.
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.
<PAGE>
<PAGE>
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.
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.
<PAGE>
<PAGE>
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 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 counterauthorized 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.
<PAGE>
<PAGE>
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
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:
<PAGE>
<PAGE>
(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 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.<PAGE>
<PAGE>
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. 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.
<PAGE>
<PAGE>
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.
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.
<PAGE>
<PAGE>
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
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, 1998
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, three months ended 12/31/1998. . . $14,935
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,220) $ .155
Class B dividends declared . . . . . . . . . (4,221) $ .160
Undistributed basic earnings . . . . . . . . . $ 8,494 40,698 $ .209 $ .209
Basic Earnings Per Share . . . . . . . . . . . $ .364 $ .369
Basic Earnings Per Share (rounded) . . . . . . $ .36 $ .37
Dilutive effect of stock options . . . . . . . (44) 273
Undistributed diluted earnings . . . . . . . . $ 8,450 40,971 $ .206 $ .206
Diluted Earnings Per Share . . . . . . . . . . $ .361 $ .366
Diluted Earnings Per Share (rounded) . . . . . $ .36 $ .37
568,000 of the 2,030,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period.
</TABLE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, three months ended 12/31/1997. . . $15,485
Distributed earnings:
Class A dividends declared . . . . . . . . . (2,092) $ .145
Class B dividends declared . . . . . . . . . (4,067) $ .150
Undistributed basic earnings . . . . . . . . . $ 9,326 41,523 $ .225 $ .225
Basic Earnings Per Share . . . . . . . . . . . $ .370 $ .375
Basic Earnings Per Share (rounded) . . . . . . $ .37 $ .38
Dilutive effect of stock options . . . . . . . (306) 407
Undistributed diluted earnings . . . . . . . . $ 9,020 41,930 $ .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.
</TABLE>
Exhibit(11)
<PAGE>
<PAGE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, six months ended 12/31/1998. . . . $27,498
Distributed earnings:
Class A dividends declared . . . . . . . . . (4,449) $ .310
Class B dividends declared . . . . . . . . . (8,433) $ .320
Undistributed basic earnings . . . . . . . . . $14,616 40,814 $ .358 $ .358
Basic Earnings Per Share . . . . . . . . . . . $ .668 $ .678
Basic Earnings Per Share (rounded) . . . . . . $ .67 $ .68
Dilutive effect of stock options . . . . . . . (83) 259
Undistributed diluted earnings . . . . . . . . $14,533 41,073 $ .354 $ .354
Diluted Earnings Per Share . . . . . . . . . . $ .664 $ .674
Diluted Earnings Per Share (rounded) . . . . . $ .66 $ .67
570,000 of the 1,903,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period.
</TABLE>
<TABLE>
KIMBALL INTERNATIONAL, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
SIX MONTHS ENDED DECEMBER 31, 1997
(UNAUDITED)
<CAPTION>
(Amounts in Thousands, Except Per Share Data)
Available Average Earnings Per Share
Income Shares Class A Class B
--------- ----------- ------- --------
<S> <C> <C> <C> <C>
Net income, six months ended 12/31/1997. . . . $28,514
Distributed earnings:
Class A dividends declared . . . . . . . . . (4,166) $ .28875
Class B dividends declared . . . . . . . . . (7,992) $ .29500
Undistributed basic earnings . . . . . . . . . $16,356 41,499 $ .39413 $ .39413
Basic Earnings Per Share . . . . . . . . . . . $ .68288 $ .68913
Basic Earnings Per Share (rounded) . . . . . . $ .68 $ .69
Dilutive effect of stock options . . . . . . . (224) 443
Undistributed diluted earnings . . . . . . . . $16,132 41,942 $ .38462 $ .38462
Diluted Earnings Per Share . . . . . . . . . . $ .67337 $ .67962
Diluted Earnings Per Share (rounded) . . . . . $ .67 $ .68
391,000 of the 1,675,000 average outstanding stock options were antidulitive, and were excluded from the
dilutive computation for this period.
</TABLE>
Exhibit(11)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains six month summary financial information extracted from
Kimball International, Inc., and subsidiaries 1999 second quarter Form 10-Q and
is qualified in its entirety by reference to such Form 10-Q filing.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> DEC-31-1998
<CASH> 784
<SECURITIES> 132,988
<RECEIVABLES> 139,270
<ALLOWANCES> 4,523
<INVENTORY> 95,675
<CURRENT-ASSETS> 387,654
<PP&E> 454,315
<DEPRECIATION> 258,986
<TOTAL-ASSETS> 631,492
<CURRENT-LIABILITIES> 150,637
<BONDS> 0
0
0
<COMMON> 2,151
<OTHER-SE> 450,625
<TOTAL-LIABILITY-AND-EQUITY> 631,492
<SALES> 544,726
<TOTAL-REVENUES> 544,726
<CGS> 383,116
<TOTAL-COSTS> 383,116
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 737
<INTEREST-EXPENSE> 273
<INCOME-PRETAX> 42,326
<INCOME-TAX> 14,828
<INCOME-CONTINUING> 27,498
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,498
<EPS-PRIMARY> .68
<EPS-DILUTED> .67
</TABLE>
