<PAGE>
<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] Quarterly report under Section 13 or 15(d) of the Securities Exchange
Act of 1934
For The Quarterly Period Ended March 31, 1995
Commission File Nos. 0-9115 and 0-24494
MATTHEWS INTERNATIONAL CORPORATION
(Exact Name of registrant as specified in its charter)
PENNSYLVANIA 25-0644320
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
TWO NORTHSHORE CENTER, PITTSBURGH, PA 15212-5851
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (412) 442-8200
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 each of the issuer's classes of common
stock, as of the latest practicable date:
Class of Common Stock Outstanding at April 30, 1995
Class A - $1.00 par value 2,582,618 shares
Class B - $1.00 par value 6,267,732 shares
<PAGE>
<PAGE> 2
PART I - FINANCIAL INFORMATION
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET (UNAUDITED)
<TABLE>
<CAPTION>
March 31, 1995 September 30, 1994
-------------- ------------------
<S> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 28,925,671 $ 24,264,967
Accounts and notes receivable, net 26,509,433 27,122,619
Inventories:
Materials and finished goods $ 8,980,295 $ 8,697,118
Labor and overhead in process 776,383 764,219
Supplies 551,861 540,557
Less LIFO reserve (241,530) (241,530)
---------- ----------
10,067,009 9,760,364
Other current assets 1,131,054 1,469,040
---------- ----------
Total current assets 66,633,167 62,616,990
Accounts receivable, noncurrent 1,413,577 1,402,129
Property, plant and equipment: Cost 61,733,225 60,070,477
Less accumulated depreciation (23,220,852) (21,821,201)
---------- ----------
38,512,373 38,249,276
Deferred income taxes and other assets 12,094,462 11,565,822
Goodwill 5,467,730 5,780,027
----------- -----------
Total assets $124,121,309 $119,614,244
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt, current maturities 438,420 423,263
Accounts payable 3,852,290 4,699,634
Accrued compensation 6,157,241 8,311,734
Accrued income taxes 1,161,512 1,248,377
Customer prepayments and other current liabilities 5,974,953 6,923,147
---------- ----------
Total current liabilities 17,584,416 21,606,155
Long-term debt 522,550 745,616
Estimated cemetery and finishing costs 4,901,105 4,761,113
Postretirement benefits 19,318,720 18,584,826
Deferred revenue and other liabilities 2,709,505 2,553,266
Shareholders' equity:
Common stock: Class A, par value $1.00 2,353,590 1,380,000
Class B, par value $1.00 6,496,760 7,470,350
Other shareholders' equity 70,234,663 62,512,918
---------- ----------
79,085,013 71,363,268
----------- -----------
Total liabilities and shareholders' equity $124,121,309 $119,614,244
=========== ===========
/TABLE
<PAGE>
<PAGE> 3
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
------------------------- --------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Sales $ 42,085,583 $ 39,734,580 $ 82,171,388 $ 77,715,907
Cost of sales 23,180,292 22,037,614 44,902,530 42,940,693
Selling and
administrative expenses 12,555,911 11,411,244 24,555,784 22,289,534
---------- ---------- ---------- ----------
Operating profit 6,349,380 6,285,722 12,713,074 12,485,680
Interest expense 21,824 98,883 40,365 190,690
Other (income) &
deductions, net (356,083) (11,325) (526,413) (103,718)
---------- ---------- ---------- ----------
Income before income taxes 6,683,639 6,198,164 13,199,122 12,398,708
Income taxes (1) 2,603,011 2,482,016 5,208,829 5,065,720
---------- ---------- ---------- ----------
Net income $ 4,080,628 $ 3,716,148 $ 7,990,293 $ 7,332,988
========== ========== ========== ==========
Earnings per share (4) $ .46 $ .42 $ .90 $ .80
===== ===== ===== =====
Dividends per share (4) $ .06 $ .01 $ .12 $ .02
===== ===== ===== =====
Weighted average number
of common shares
outstanding (4) 8,850,350 8,832,195 8,850,350 9,130,590
========= ========= ========= =========
/TABLE
<PAGE>
<PAGE> 4
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
--------------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net Income $ 7,990,293 $ 7,332,988
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,286,393 2,048,018
Deferred taxes (344,600) (289,532)
Net increase in certain working capital items (3,400,848) (1,863,073)
Increase in accounts receivable, noncurrent (11,448) (95,079)
(Increase) decrease in cemetery inventory (2,893) 27,356
Decrease in other noncurrent assets 22,840 (765,680)
Increase in estimated finishing and cemetery costs 139,992 228,253
Decrease in deferred revenue and expenses and
other liabilities (39,270) (7,906)
Increase in postretirement benefits 733,894 499,226
Net loss on sale of property, plant and equipment 20,659 20,896
Effect of exchange rate changes on operations 196,861 383,871
---------- ---------
Net cash provided by operating activities 7,591,873 7,519,338
---------- ---------
Cash flows from investing activities:
Acquisitions of property, plant and equipment (2,329,309) (1,951,216)
Proceeds from disposals of property,
plant and equipment 19,264 15,787
Collections on loans to officers and employees 692,636 381,623
--------- ---------
Net cash used in investing activities (1,617,409) (1,553,806)
--------- ---------
Cash flows from financing activities:
Payments on long-term debt (207,909) (3,314,342)
Proceeds from the sale of treasury stock - 104,579
Purchases of treasury stock - (6,100,893)
Dividends paid (1,061,647) (188,791)
--------- ---------
Net cash used in financing activities (1,269,556) (9,499,447)
--------- ---------
Effect of exchange rate changes on
cash and cash equivalents (44,205) 9,783
--------- ---------
Net increase (decrease) in cash and cash equivalents $ 4,660,703 $(3,524,132)
========= =========
Supplemental Cash Flow Information:
Cash paid during the period for:
Interest $ 40,365 $ 190,690
Income Taxes 5,640,294 4,395,148
/TABLE
<PAGE>
<PAGE> 5
MATTHEWS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995
Note 1. Income Taxes
The income tax provision for the period is based on the effective tax rate
expected to be applicable for the full year. The difference between the
estimated effective tax rate of 39.5% and the Federal statutory rate of 35% is
primarily due to state and foreign income taxes.
Note 2. Basis of Presentation
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information for commercial and industrial companies and the instructions to
Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered necessary
for fair presentation have been included. Operating results for the
three-month and six-month periods ended March 31, 1995 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the year ended September 30, 1994.
Note 3. Stock Option Plan
The Company has a stock incentive plan which provides for the grant of
incentive stock options, nonstatutory stock options and restricted share
awards. The aggregate number of shares of the Company's common stock which may
be issued upon exercise of the stock options and pursuant to the restricted
share awards under the stock incentive plan is 600,000 shares. The option
price for each stock option which may be granted under the plan may not be less
than fair market value of the Company's common stock on the date of grant. In
December 1994, by action of the Compensation Committee of the Company's Board
of Directors, certain officers and other management personnel were granted
nonstatutory stock options to purchase a combined total of 377,500 shares of
the Company's Class A Common Stock at an exercise price of $14.25 per share.
The options are exercisable in various share amounts based on the attainment
of certain market value levels of Class A Common Stock, but, in the absence of
such events, are exercisable in full during the period December 9, 1999 through
December 16, 1999. The options are not exercisable before June 9, 1995 and
expire December 9, 2004 if not exercised.
Note 4. Stock Split
Fiscal 1994 earnings and dividends per share and average share information have
been restated for the 15-for-1 common stock split which occurred in July 1994.
<PAGE>
<PAGE> 6
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following table sets forth certain income statement data of the Company
expressed as a percentage of net sales for the periods indicated.
Six months ended Years ended
March 31, September 30,
------------------ --------------------
1995 1994 1994 1993 1992
---- ---- ---- ---- ----
Sales 100.0% 100.0% 100.0% 100.0% 100.0%
Gross profit 45.4 44.7 45.1 42.4 43.5
Operating profit 15.5 16.1 15.1 11.6 12.0
Income before income taxes 16.1 16.0 14.9 11.0(1) 12.0
Net income 9.7 9.4 8.8 6.6(1) 7.1
(1) Excludes the cumulative effect of changes in accounting principles for
the adoptions of SFAS No. 106 and SFAS No. 109.
Sales for the six months ended March 31, 1995 were $82.2 million and were
$4.5 million, or 5.7%, higher than sales of $77.7 million for the first six
months of fiscal 1994. The increase for the first six months of fiscal 1995
reflected higher sales in all three of the Company's segments. The Marking
Products segment generated the largest sales increase, up 12.2% over the first
six months of fiscal 1994. The increase in this segment's sales is the result
of higher sales volume, principally in Europe and Australia. Bronze segment
sales for the first six months of fiscal 1995 were up 5.3% over the same period
of fiscal 1994 reflecting improvements in both selling price and unit volume.
Graphic Systems sales for the first six months of fiscal 1995 were up only
slightly over the first six months of fiscal 1994 as both sales volume and unit
prices were relatively consistent with the prior year. The Graphic Systems
sales volume also reflected a temporary decline in demand for printing plates
used in the corrugated packaging industry.
Gross profit for the six months ended March 31, 1995 was $37.3 million, or
45.4% of sales, compared to $34.8 million, or 44.7%, for the first six months
of fiscal 1994. The increase in gross profit of $2.5 million, or 7.2%, and the
increased percentage of gross profit to sales for the first six months of
fiscal 1995 were attributable principally to the higher sales levels of each
of the Company's segments and a reduction in certain employee benefit expenses
and other overhead costs for the period offset partially by increased prices
for certain raw materials.
Selling and administrative expenses for the six months ended March 31, 1995
were $24.6 million, representing an increase of $2.3 million, or 10.2%, from
$22.3 million for the first six months of fiscal 1994. Selling and
administrative expenses increased in connection with higher sales for the
period and also reflected an increase in domestic advertising costs of the
Marking Products segment combined with higher selling expenses in Australia and
Europe.<PAGE>
<PAGE> 7
Operating profit for the six months ended March 31, 1995 was $12.7 million and
was $227,000, or 1.8%, higher than operating profit of $12.5 million for the
first six months of fiscal 1994. Increased sales and related gross profit in
the Bronze and Marking Products segments were the primary factors contributing
to the higher operating profit level offset partially by an increase in
consolidated selling and administrative expenses.
Interest expense for the six months ended March 31, 1995 was approximately
$40,000, compared to $191,000 for the first six months of fiscal 1994. The
decrease in interest expense was principally a result of the repayment of all
amounts outstanding under the Term Loan Agreement during fiscal 1994.
Other income and deductions (net) for the six months ended March 31, 1995
resulted in a $526,000 increase in income before income taxes compared a
$104,000 increase for the first six months of fiscal 1994. Other income and
deductions (net) for the first six months of fiscal 1995 primarily reflected
an increase in interest income as a result of a higher cash position during the
current period and an increase in interest rates.
The Company's effective tax rate for the first six months of fiscal 1995 was
39.5%, compared to 40.8% for the year ended September 30, 1994. The lower
effective tax rate for fiscal 1995 is primarily the result of a reduction in
the effect of foreign income taxes on the Company's consolidated tax position.
The difference between the Company's effective tax rate and the Federal
statutory rate of 35% is primarily the impact of state and foreign income
taxes.
Liquidity and Capital Resources
Net cash provided by operating activities was $7.6 million for the six months
ended March 31, 1995, compared to $7.5 million for the first six months of
fiscal 1994. Operating cash flow for the first six months of both fiscal 1995
and 1994 was primarily generated by the Company's net income of $8.0 million
and $7.3 million, respectively.
Cash used in investing activities approximated $1.6 million for the six months
ended March 31, 1995, representing an increase of $64,000 over the same period
a year ago. Capital expenditures for the six months ended March 31, 1995
amounted to $2.3 million, compared to capital expenditures of $2.0 million for
the same period in fiscal 1994. The increase is due primarily to an increase
in the capital budget for fiscal 1995 and the timing of capital spending
projects in comparison to the prior period. The capital budget of the Company
for fiscal 1995 is $12.0 million. Capital spending for property, plant and
equipment has averaged approximately $6.4 million for the last three fiscal
years. The Company expects to generate sufficient cash from operations to fund
all anticipated capital spending projects.
<PAGE>
<PAGE> 8
Cash used in financing activities for the six months ended March 31, 1995 was
$1.3 million reflecting the payment of dividends ($.12 per share for the six
month period) and repayments under the Company's capital lease agreements.
Cash used in financing activities in the first six months of fiscal 1994 was
$9.5 million primarily consisting of repayments under the Company's Term Loan
Agreement and treasury stock redemptions under the Employees' Stock Purchase
Plan. Dividends for the first six months of fiscal 1994 were $.02 per share.
The Company currently has available lines of credit of approximately $11
million. There were no outstanding borrowings on any of the Company's lines
of credit at March 31, 1995. As of such date, the Company's outstanding
long-term debt, which consisted of capital lease obligations, was $961,000.
At March 31, 1995 and September 30, 1994 and 1993, the Company's current ratio
was 3.8, 2.9 and 3.0, respectively. The Company had cash and cash equivalents
at March 31, 1995 and September 30, 1994 of $28.9 million and $24.3 million,
respectively. Net working capital at March 31, 1995 was $49.0 million. The
Company believes that its current liquidity sources, combined with its
operating cash flow and additional borrowing capacity, are presently sufficient
to meet its capital needs (excluding acquisitions) for the next 12 months.
Stock Option Plan
The Company has a stock incentive plan which provides for the grant of
incentive stock options, nonstatutory stock options and restricted share
awards. The aggregate number of shares of the Company's common stock which may
be issued upon exercise of the stock options and pursuant to the restricted
share awards under the stock incentive plan is 600,000 shares. The option
price for each stock option which may be granted under the plan may not be less
than fair market value of the Company's common stock on the date of grant. In
December 1994, by action of the Compensation Committee of the Company's Board
of Directors, certain officers and other management personnel were granted
nonstatutory stock options to purchase a combined total of 377,500 shares of
the Company's Class A Common Stock at an exercise price of $14.25 per share.
The options are exercisable in various share amounts based on the attainment
of certain market value levels of Class A Common Stock, but, in the absence of
such events, are exercisable in full during the period December 9, 1999 through
December 16, 1999. The options are not exercisable before June 9, 1995 and
expire December 9, 2004 if not exercised.
Other Matters
The Company recently announced the appointment of David M. Kelly as President
and Chief Operating Officer of Matthews International Corporation. Prior to
the appointment, this position had been vacant. Mr. Kelly joins Matthews
International Corporation following a 22-year career with Carrier Corporation
where he was most recently responsible for worldwide operations of its
residential and light commercial business.<PAGE>
<PAGE> 9
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of Matthews International Corporation
was held on February 17, 1995. Total shares eligible for vote at such meeting
were:
Class A Common Stock (one vote per share) 1,380,000 shares
Class B Common Stock (ten votes per share) 7,470,350 shares
The matters voted upon at such meeting were as follows:
1. Election of Directors
The following individuals were nominated for election to the Board of
Directors for terms expiring at the Annual Meeting of Shareholders in the
year as set forth below. All nominations were made by the Board of
Directors and no other nominations were made by any shareholder. All
nominees had currently been members of the Board of Directors at the date
of the Annual Meeting.
Votes
-----------------------------
Term Withhold
Nominee Expiration For Authority
------- ---------- ----------- -----------
G.D. Barefoot 1997 65,384,155 1,172,700
R.T. Busteed 1996 65,382,455 1,174,400
W.A. Coates 1998 64,268,755 2,288,100
D.J. DeCarlo 1998 65,381,255 1,175,600
W.M. Hauber 1998 63,841,105 2,715,750
T.N. Kennedy 1997 65,383,955 1,172,900
G.C. Oehmler 1996 64,043,635 2,513,220
J.P. O'Leary, Jr. 1998 65,384,455 1,172,400
J.L. Parker 1996 65,383,955 1,172,900
W.J. Stallkamp 1997 65,246,755 1,310,100
2. Approval of the 1994 Director Fee Plan
At its meeting held December 9, 1994, the Board of Directors adopted and
recommended for shareholder approval a fee plan for outside directors.
The shareholders voted to adopt this plan, which will replace the
existing fee arrangement.
Votes For: 57,873,589
Votes Against: 6,120,455
Abstaining: 2,049,472
Broker Non-Votes: 513,339
3. Approval of the 1994 Employee Stock Purchase Plan
At its meeting held December 9, 1994, the Board of Directors adopted and
recommended for shareholder approval the 1994 Employee Stock Purchase
Plan to replace existing Employee Stock Purchase Plan. The shareholders
voted to adopt this plan.
Votes For: 63,715,865
Votes Against: 1,343,850
Abstaining: 980,510
Broker Non-Votes: 516,630<PAGE>
<PAGE> 10
Item 4. Submission of Matters to a Vote of Security Holders, continued
4. Selection of Auditors
The shareholders voted to ratify the appointment by the Board of Directors
of Coopers & Lybrand as independent certified public accountants to audit
the records of the Company for the year ending September 30, 1995.
Votes For: 64,530,573
Votes Against: 601,070
Abstaining: 1,425,212
Item 5. Other Information
At its meeting held March 10, 1995, the Board of Directors increased the size
of the full Board from 10 to 11 persons. Effective April 3, 1995, David M.
Kelly was appointed to fill the vacancy thereby created.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following Exhibits to this report are filed herewith:
Exhibit
No. Description
------- -----------
10.1 1994 Director Fee Plan
10.2 1994 Employee Stock Purchase Plan
(b) Reports on Form 8-K
A Form 8-K current report was filed by the Company on February 21, 1995
reporting under "Item 5 - Other Events,"
1. Matthews International Corporation (the "Company") adds the following
exhibits to Item 8 of its Form S-8 (the "Form S-8") Registration
Statement (Registration No. 2-48760) for its Employees' Stock Purchase
Plan (the "Plan"):
Exhibit No. Description
----------- --------------------------------------------------
4.1 Restated Articles of Incorporation of the Company,
incorporated by reference to Exhibit Number 3.1 to
Form 10-K for the year ended September 30, 1994
4.2 By-Laws of the Company, incorporated by reference
to Exhibit 3.2 to Form 10-K for the year ended
September 30, 1994
<PAGE>
<PAGE> 11
Item 6. Exhibits and Reports on Form 8-K, continued
(b) Reports on Form 8-K, continued
2. On July 20, 1994, the Company's Restated Articles of Incorporation
(the "Restated Articles") were filed with the Commonwealth of
Pennsylvania thereby converting each share of the Company's then
outstanding Common Stock, par value $.10 per share, into 15 shares of
Class B Common Stock, par value $1.00 per share (the "Class B Common
Stock"). The Restated Articles also authorized the issuance of
Class A Common Stock, par value $1.00 per share (the "Class A Common
Stock"). Either Class A Common Stock or Class B Common Stock can be
issued under the Plan. A description of the Class A Common Stock
containing the information required by Item 202 of Regulation S-K
is incorporated herein by reference to the Company's filed
Registration Statement on Form 8-A dated July 8, 1994. A description
of the Company's Class B Common Stock containing the information
required by Item 202 of Regulation S-K is incorporated herein by
reference to the "Description of Capital Stock" contained in Amendment
No. 2 to the Company's Registration Statement on Form S-2
(No. 33-79538) filed with the Securities and Exchange Commission on
July 8, 1994. These descriptions of Class A Common Stock and
Class B Common Stock, along with any amendment to or restatement of
such descriptions hereafter filed by the Company, are incorporated
into the Form S-8.
3. The description of Class B Common Stock set forth in No. 2 above also
updates and replaces the description of the Company's Common Stock
contained in any previous Registration Statement filed by the Company
under the Securities Exchange Act of 1934, as amended.
<PAGE>
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MATTHEWS INTERNATIONAL CORPORATION
(Registrant)
Date 5/10/95 T.N. Kennedy
------------- -------------------------------------
T. N. Kennedy, Senior Vice President,
Chief Financial Officer and Treasurer
Date 5/10/95 J.L. Parker
------------- -------------------------------------
J. L. Parker, Senior Vice President,
General Counsel and Secretary
<PAGE>
<PAGE> 1
EXHIBIT 10.1
MATTHEWS INTERNATIONAL CORPORATION
1994 DIRECTOR FEE PLAN
SECTION 1
Purposes; Reservation of Shares
The purposes of the 1994 Director Fee Plan (the "Plan") are to provide for each
Director of Matthews International Corporation (the "Corporation") who is not
also an employee of the Corporation or any of its Subsidiaries the payment of
retainer fees for future services to be performed by such Director ("Director
Fees") as a member of the Board of Directors of the Corporation (the "Board")
in shares of Class A Common Stock, par value $1.00 per share, of the
Corporation ("Common Stock") and to increase the identification of interests
between such Directors and the shareholders of the Corporation by paying
Directors the Director Fees in shares of Common Stock. The purposes of the Plan
also are to provide current payment in cash to each Director for fees paid for
attendance at meetings of the Board ("Board Meeting Fees"), fees paid to
members other than the Chairman of a Committee for attendance at meetings of
Committees of the Board ("Committee Meeting Fees") and fees paid to the
Chairman of a Committee for attendance at meetings of Committees ("Committee
Chairman Fees") (collectively, "Meeting Fees"). For purposes of the Plan, the
term "Subsidiary" means any corporation in an unbroken chain of corporations
beginning with the Corporation, if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock in one of the
other corporations in the chain. The aggregate number of shares of Common Stock
which may be issued under the Plan or credited to Deferred Stock Compensation
Accounts for subsequent issuance under the Plan is limited to 50,000 shares,
subject to adjustment and substitution as set forth in Section 5(b).
SECTION 2
Eligibility
Any non-employee Director of the Corporation who is separately compensated in
the form of Director Fees or Meeting Fees for services on the Board shall be
eligible to participate in the Plan.
SECTION 3
Payment of Director Fees in Common Stock
(a) Current Stock Payment. Subject to the provisions of Section 3(b), each
Director shall receive payment of Director Fees by the issuance to the Director
of 800 whole shares of Common Stock per calendar year, payable on the fifteenth
(15th) business day following the annual meeting of the shareholders of the
Corporation (each such date of payment referred to as a "Payment Date") to the
Directors as of that date.
<PAGE>
<PAGE> 2
(b) Deferred Stock Payment. Each Director may elect to defer the receipt of
Director Fees in shares of Common Stock for a calendar year (a "Stock Deferral
Election") by filing a Notice of Election with the Secretary of the Corporation
in the form prescribed by the Corporation, which shall be effective on January
1 of the year following the date on which the Notice of Election is filed. A
Stock Deferral Election shall be effective on the date on which the Notice of
Election is filed with respect to Director Fees payable after the time of a
persons initial election to the office of Director, or any subsequent
re-election if immediately prior thereto such person was not serving as a
Director, provided the Director files such Notice of Election within ten (10)
business days subsequent to being elected or re-elected as a Director. A Stock
Deferral Election shall apply to all Director Fees otherwise payable while such
Stock Deferral Election is effective. Each Director may terminate a Stock
Deferral Election and receive current payment of Director Fees in shares of
Common Stock by filing a Notice of Termination with the Secretary of the
Corporation in the form prescribed by the Corporation, which shall be effective
on January 1 of the year following the date on which a Notice of Termination
is filed. A Stock Deferral Election shall continue in effect until the
effective date of any Notice of Termination.
(c) Share Certificates; Securities Laws. As of the date on which the Director
Fees are payable in shares of Common Stock pursuant to Section 3(a) or, if a
Stock Deferral Election was made, Sections 5(c) and 6, the Corporation shall
issue share certificates to the Director for the shares of Common Stock
received under the Plan and the Director shall be a shareholder of the
Corporation with respect to any such shares. In order to qualify for the
exemption from Section 16(b) of the Securities Exchange Act of 1934, as amended
(the "1934 Act") provided by Rule 16b-3, no Director shall sell or otherwise
dispose of any shares of Common Stock (i) received under Section 3(a) or to be
received under Sections 5(c) and 6 attributable to deferred Director Fees until
six months have elapsed from the Payment Date related thereto, or (ii) to be
received under Sections 5(c) and 6 attributable to dividends or distributions
until six months have elapsed from the date on which shares attributable to the
dividends or distributions are credited to the Deferred Stock Compensation
Account. To prevent an inadvertent sale by the Director within such six month
periods, the Corporation shall hold the share certificates for shares payable
pursuant to Section 3(a) on behalf of the Director until such six month period
has elapsed and may hold share certificates in certain other situations in
which shares become payable under Sections 5(c) and 6.
SECTION 4
Payment of Meeting Fees in Cash
Each Director shall receive payment of Meeting Fees in cash in the following
amounts for attendance at each meeting:
Board Meeting Fees $ 800
Committee Meeting Fees $ 500
Committee Chairman Fees $ 700
<PAGE>
<PAGE> 3
Each Director shall receive payment of Meeting Fees within ten (10) business
days following the meeting with respect to which such fees are payable.
Directors may not elect to defer payment of all or any part of the Meeting
Fees. The amount and time of payment of Meeting Fees may be changed from time
to time by the Board in its sole discretion.
SECTION 5
Deferred Stock Compensation Account
(a) General. The amount of any Director Fees deferred in accordance with a
Stock Deferral Election shall be credited to a deferred stock compensation
account maintained by the Corporation in the name of the Director (a "Deferred
Stock Compensation Account"). A separate Deferred Stock Compensation Account
shall be maintained for each calendar year for which a Director has elected a
different number of payment installments or as otherwise determined by the
Board of Directors. On each Payment Date that a Stock Deferral Election is
effective for a Director, the Director's Deferred Stock Compensation Account
for that calendar year shall be credited on the Payment Date with the number
of whole shares of Common Stock which otherwise would have been payable to the
Director under Section 3(a). If a dividend or distribution is paid on the
Common Stock in cash or property other than Common Stock, on the date of
payment of the dividend or distribution to holders of the Common Stock, each
Deferred Stock Compensation Account shall be credited with a number of shares
of Common Stock (including fractional shares) equal to the number of shares of
Common Stock that had been credited to such Account on the date fixed for
determining the shareholders entitled to receive such dividend or distribution
multiplied by the amount of the dividend or distribution paid per share of
Common Stock divided by the Fair Market Value of one share of the Common Stock,
as defined in Section 10 hereof, on the date on which the dividend or
distribution is paid. If the dividend or distribution is paid in property other
than Common Stock, the amount of the dividend or distribution shall equal the
fair market value of the property on the date on which the dividend or
distribution is paid. The Deferred Stock Compensation Account of a Director
shall be charged on the date of distribution with any distribution of shares
of Common Stock made to the Director from such Account pursuant to Section 5(c)
hereof.
(b) Adjustment and Substitution. The number of shares of Common Stock credited
to each Deferred Stock Compensation Account, and the number of shares of Common
Stock available for issuance or crediting under the Plan in accordance with
Section 1 hereof, shall be proportionately adjusted to reflect any dividend or
other distribution on the outstanding Common Stock payable in shares of Common
Stock or any split or consolidation of the outstanding shares of Common Stock.
If the outstanding Common Stock shall, in whole or in part, be changed into or
exchangeable for a different class or classes of securities of the Corporation
or securities of another corporation or cash or property other than Common
Stock, whether through reorganization, reclassification, recapitalization,
merger, consolidation or otherwise, the Board of the Corporation shall adopt
such amendments to the Plan as it deems necessary to carry out the purposes of
the Plan, including the continuing deferral of any shares in any Deferred Stock
Compensation Accounts.
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(c) Manner of Payment. The balance of a Director's Deferred Stock Compensation
Account will be paid in shares of Common Stock to the Director or, in the event
of the Director's death, to the person designated by the Director in the
Director's Will, or, if the Director fails to make a testamentary disposition
of the shares or dies intestate, to the person entitled to receive the shares
pursuant to the laws of descent and distribution of the state of domicile of
the Director at the time of death (the "Director's Beneficiary"). A Director
may elect at the time of filing the Notice of Election for a Stock Deferral
Election to receive payment of the shares of Common Stock credited to the
Director's Deferred Stock Compensation Account in annual installments rather
than a lump sum, provided that the payment period for installment payments
shall not exceed ten (10) years following the Payment Commencement Date as
described in Section 6. The number of shares of Common Stock distributed in
each installment shall be determined by multiplying (i) the number of shares
of Common Stock in the Deferred Stock Compensation Account on the date of
payment of such installment, by (ii) a fraction, the numerator of which is one
and the denominator of which is the number of remaining unpaid installments,
and by rounding such result down to the nearest whole number of shares. The
balance of the number of shares of Common Stock in the Deferred Stock
Compensation Account shall be appropriately reduced in accordance with the
Section 5(a) to reflect the installment payments made hereunder. Shares of
Common Stock remaining in a Deferred Stock Compensation Account pending
distribution pursuant to this Section 5(c) shall continue to be credited with
respect to dividends or distributions paid on the Common Stock pursuant to
Section 5(a) and shall be subject to adjustment pursuant to Section 5(b). If
a lump sum payment or the final installment payment hereunder would result in
the issuance of a fractional share of Common Stock, such fractional share shall
not be issued and cash in lieu of such fractional share shall be paid to the
Director based on the Fair Market Value of a share of Common Stock, as defined
in Section 10, on the date immediately preceding the date of such payment. The
Corporation shall issue share certificates to the Director, or the Director's
Beneficiary, for the shares of Common Stock distributed hereunder. As of the
date on which the Director is entitled to receive payment of shares of Common
Stock pursuant to this Section 5(a), a Director or the Director's Beneficiary
shall be a shareholder of the Corporation with respect to such shares.
SECTION 6
Payment Commencement Date
Payment of shares in a Deferred Stock Compensation Account shall commence on
April 1 (or if April 1 is not a business day, on the first preceding business
day) of the calendar year following the calendar year in which the Director
ceases to be a member of the Board for any reason, including by reason of death
or disability.
SECTION 7
Non-Alienability of Benefits
Neither the Director nor the Director's Beneficiary shall have the right to,
directly or indirectly, alienate, assign, transfer, pledge, anticipate or
encumber (except by reason of death) any amounts or shares of Common Stock that
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are or may be payable hereunder nor shall any such amounts or shares be subject
to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment by creditors of the Director or the Director's
Beneficiary or to the debts, contracts, liabilities, engagements, or torts of
any Director or Director's Beneficiary, or transfer by operation of law in the
event of bankruptcy or insolvency of the Director or the Director's
Beneficiary, or any legal process.
SECTION 8
Nature of Deferred Stock Compensation Accounts
Any Deferred Stock Compensation Account shall be established and maintained
only on the books and records of the Corporation. No assets or funds of the
Corporation, a Subsidiary or the Plan shall be removed from the claims of the
Corporation's or a Subsidiary's general or judgment creditors or otherwise made
available, and no shares of Common Stock of the Corporation to be issued
pursuant to a Deferred Stock Compensation Account shall be issued or
outstanding, until such amounts and shares are actually payable to a Director
or a Director's Beneficiary as provided herein. The Plan constitutes a mere
promise by the Corporation to make payments in the future. Each Director and
Director's Beneficiary shall have the status of, and their rights to receive
a payment of shares of Common Stock under the Plan shall be no greater than the
rights of, general unsecured creditors of the Corporation. No person shall be
entitled to any voting rights with respect to shares credited to a Deferred
Stock Compensation Account and not yet payable to a Director or the Director's
Beneficiary. The Corporation shall not be obligated under any circumstances to
fund any financial obligations under the Plan and the Plan is intended to
constitute an unfunded plan for tax purposes. However, the Corporation may, in
its discretion, set aside funds in a trust or other vehicle, subject to the
claims of its creditors, in order to assist it in meeting its obligations under
the Plan, if such arrangement will not cause the Plan to be considered a funded
deferred compensation plan under the Internal Revenue Code of 1986, as amended,
and provided, further, that any trust created by the Corporation, and any
assets held by such trust to assist the Corporation in meeting its obligations
under the Plan, will conform to the terms of the model trust, as described in
Rev. Proc. 92-64, 1992-2 C.B. 422 or any successor.
SECTION 9
Administration of Plan; Hardship Withdrawal
Full power and authority to construe, interpret, and administer the Plan shall
be vested in the Board. Decisions of such Board shall be final, conclusive, and
binding upon all parties. Notwithstanding the terms of a Stock Deferral
Election made by a Director hereunder, the Board may, in its sole discretion,
permit the withdrawal of shares credited to a Deferred Stock Compensation
Account with respect to Director Fees previously payable upon the request of
a Director or the Director's representative, or following the death of a
Director upon the request of a Director's Beneficiary or such beneficiary's
representative, if such Board determines that the Director or the Director's
Beneficiary, as the case may be, is confronted with an unforeseeable emergency.
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<PAGE> 6
For this purpose, an unforeseeable emergency is an unanticipated emergency
caused by an event that is beyond the control of the Director or the Director's
Beneficiary and that would result in a severe financial hardship to the
Director or the Director's Beneficiary if an early hardship withdrawal were not
permitted. The Director or the Director's Beneficiary shall provide to such
Board evidence as the Board, in its discretion, may require to demonstrate such
emergency exists and financial hardship would occur if the withdrawal were not
permitted. The withdrawal shall be limited to the number of shares necessary
to meet the emergency. For this purpose, a hardship shall be considered to
constitute an immediate and unforeseen financial hardship if the Director or
Director's Beneficiary has an unexpected need for cash to pay for expenses
incurred by him or a member of his immediate family (spouse and/or natural or
adopted children) such as those arising from illness, casualty loss, or death.
Cash needs arising from foreseeable events, such as the purchase or building
of a house or education expenses, will not be considered to be the result of
an unforeseeable financial emergency. Payment shall be made, as soon as
practicable after the Board approves the payment and determines the number of
shares which shall be withdrawn, in a single lump sum from the portion of the
Deferred Stock Compensation Account with the longest number of installment
payments first. No Director shall participate in any decision of such Board
regarding such Director's request for a withdrawal under this Section 9.
SECTION 10
Fair Market Value
Fair Market Value of the Common Stock shall be the mean between the following
prices, as applicable, for the date as of which Fair Market Value is to be
determined as quoted in The Wall Street Journal (or in any other reliable
publication as the Board of the Corporation or its delegate, in its discretion,
may determine to rely upon): (a) if the Common Stock is listed on the New York
Stock Exchange, the highest and lowest sales prices per share of the Common
Stock as quoted in the NYSE-Composite Transactions listing for such date, (b)
if the Common Stock is not listed on such exchange, the highest and lowest
sales prices per share of Common Stock for such date on (or on any composite
index including) the principal United States securities exchange registered
under the 1934 Act on which the Common Stock is listed, or (c) if the Common
Stock is not listed on any such exchange, the highest and lowest sales prices
per share of the Common Stock for such date on the National Association of
Securities Dealers Automated Quotations System or any successor system then in
use ("NASDAQ"). If there are no such sale price quotations for the date as of
which Fair Market Value is to be determined but there are such sale price
quotations within a reasonable period both before and after such date, then
Fair Market Value shall be determined by taking a weighted average of the means
between the highest and lowest sales prices per share of the Common Stock as
so quoted on the nearest date before and the nearest date after the date as of
which Fair Market Value is to be determined. The average should be weighted
inversely by the respective numbers of trading days between the selling dates
and the date as of which Fair Market Value is to be determined. If there are
no such sale price quotations on or within a reasonable period both before and
after the date as of which Fair Market Value is to be determined, then Fair
Market Value of the Common Stock shall be the mean between the bona fide bid
and asked prices per share of Common Stock as so quoted for such date on
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<PAGE> 7
NASDAQ, or if none, the weighted average of the means between such bona fide
bid and asked prices on the nearest trading date before and the nearest trading
date after the date as of which Fair Market Value is to be determined, if both
such dates are within a reasonable period. The average is to be determined in
the. manner described above in this Section 10. If the Fair Market Value of the
Common Stock cannot be determined on the basis previously set forth in this
Section 10 on the date as of which Fair Market Value is to be determined, the
Board or its delegate shall in good faith determine the Fair Market Value of
the Common Stock on such date. Fair Market Value shall be determined without
regard to any restriction other than a restriction which, by its terms, will
never lapse.
SECTION 11
Securities Laws; Issuance of Shares
The obligation of the Corporation to issue or credit shares of Common Stock
under the Plan shall be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with respect to such
shares, if deemed necessary or appropriate by counsel for the Corporation, (ii)
the condition that the shares shall have been listed (or authorized for listing
upon official notice of issuance) upon each stock exchange, if any, on which
the Common Stock shares may then be listed and (iii) all other applicable laws,
regulations, rules and orders which may then be in effect. If, on the date on
which any shares of Common Stock would be issued pursuant to a Current Stock
Payment or credited to a Deferred Stock Compensation Account, sufficient shares
of Common Stock are not available under the Plan or the Corporation is not
obligated to issue shares pursuant to this Section 11, then no shares of Common
Stock shall be issued or credited but rather, in the case of a Current Stock
Payment, cash shall be paid in payment of the Director Fees payable, and in the
case of a Deferred Stock Compensation Account, Director Fees and dividends
which would otherwise have been credited in shares of Common Stock shall be
credited in cash to a deferred cash compensation account in the name of the
Director. The Board shall adopt appropriate rules and regulations to carry out
the intent of the immediately preceding sentence if the need for such rules and
regulations arises.
SECTION 12
Governing Law
The provisions of this Plan shall be interpreted and construed in accordance
with the laws of the Commonwealth of Pennsylvania.
SECTION 13
Effect of the Plan on the Rights of Corporation and Shareholders
Nothing in the Plan shall confer any right to any person to continue as a
Director of the Corporation or interfere in any way with the rights of the
shareholders of the Corporation or the Board to elect and remove Directors.
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SECTION 14
Amendment and Termination
The right to amend the Plan at any time and from time to time and the right to
terminate the Plan at any time are hereby specifically reserved to the Board;
provided that no amendment of the Plan shall (a) be made without shareholder
approval if shareholder approval of the amendment is at the time required for
shares of Common Stock issued or credited under the Plan to qualify for the
exemption from Section 16(b) of the 1934 Act provided by Rule 16b-3 or by the
rules of the NASDAQ National Market System or any stock exchange on which the
Common Stock may then be listed, (b) amend more than once every six months the
provisions of the Plan relating to the selection of the Directors to whom
shares of Common Stock shall be issued or credited under the Plan, the timing
of such issuance or credit, or the number of shares subject to such issuance
or credit, other than to comport with changes in the Internal Revenue Code of
1986 or the rules and regulations thereunder, or (c) otherwise amend the Plan
in any manner that would cause the shares of Common Stock issued or credited
under the Plan not to qualify for the exemption provided by Rule 16b-3. No
amendment Or termination of the Plan shall, without the written consent of the
holder of shares of Common Stock issued or credited under the Plan, adversely
affect the rights of such holder with respect thereto.
Notwithstanding anything contained in the preceding paragraph or any other
provision of the Plan, the Board shall have the power to amend the Plan in any
manner deemed necessary or advisable for shares of Common Stock issued or
credited under the Plan to qualify for the exemption provided by Rule 16b-3 (or
any successor rule relating to exemption from Section 16(b) of the 1934 Act),
and any such amendment shall, to the extent deemed necessary or advisable by
the Board, be applicable to any outstanding shares of Common Stock theretofore
issued or credited under the Plan.
SECTION 15
Effective Date
The effective date and date of adoption of the Plan shall be December 9, 1994,
the date of adoption of the Plan by the Board, provided that on or prior to
December 8, 1995 such adoption of the Plan by the Board is approved by the
affirmative vote of a majority of the votes cast by the holders of voting stock
of the Corporation represented in person or by proxy at a duly called and
convened meeting of such holders. No shares of Common Stock shall be issued or
credited under the Plan until approval of such holders is obtained.
<PAGE>
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EXHIBIT 10.2
MATTHEWS INTERNATIONAL CORPORATION
1994 EMPLOYEE STOCK PURCHASE PLAN
The purpose of the 1994 Employee Stock Purchase Plan (the "Plan") is to provide
the eligible employees of Matthews International Corporation ("Matthews") and
its Subsidiaries (collectively with Matthews, the "Company") with a convenient
means of purchasing shares of Class A Common Stock, par value $1.00 per share
(the "Common Stock"), of Matthews on the open market through regular payroll
deductions, matching employer contributions and investment of cash dividends.
For the purposes of the Plan, the term "Subsidiary" means any corporation in
an unbroken chain of corporations beginning with Matthews if each of the
corporations other than the last corporation in the unbroken chain owns stock
possessing at least fifty percent (50%) or, more of the total combined voting
power of all classes of stock in one of the other corporations in the chain.
For the purposes of the Plan, the term "Agent" shall mean Mellon Securities
Transfer Services or such successor agent as the Company may employ to
administer the Plan and to purchase in the open market the Common Stock
available under the Plan.
PARTICIPATION IN THE PLAN IS VOLUNTARY, AND NO RECOMMENDATION IS MADE TO
ELIGIBLE EMPLOYEES AS TO WHETHER THEY SHOULD OR SHOULD NOT PARTICIPATE IN THE
PLAN. THERE IS NO GUARANTEE UNDER THE PLAN AGAINST LOSS BECAUSE OF
FLUCTUATIONS IN THE MARKET PRICE OF THE COMMON STOCK. IN SEEKING THE BENEFITS
OF SHARE OWNERSHIP, EACH PARTICIPANT MUST ALSO ACCEPT THE RISKS ATTENDANT TO
SUCH OWNERSHIP.
SECTION 1
Eligibility
All regular full-time United States employees of the Company are eligible to
participate in the Plan, provided (i) they have attained the age of 18 years
and (ii) they have completed three months of service with the Company.
Employees of the Company whose wages and other conditions of employment are
covered by a collective bargaining agreement are not eligible to participate
in the Plan unless and until such agreement provides for the application of the
Plan to employees covered by such agreement.
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SECTION 2
Administration
The Plan shall be administered by the Executive Committee (the "Committee") of
the Board of Directors of the Company (the "Board").
The Committee shall interpret the Plan and prescribe such rules, regulations
and procedures in connection with the operations of the Plan as it shall deem
to be necessary and advisable for the administration of the Plan consistent
with the purposes of the Plan.
The Committee shall keep records of action taken at its meetings. A majority
of the Committee shall constitute a quorum at any meeting and the acts of a
majority of the members present at any meeting at which a quorum is present,
or acts approved in writing by all members of the Committee, shall be the acts
of the Committee.
The Company or the Agent shall maintain an account for each participant in the
name of each participant and shall maintain all records in connection with the
Plan.
Neither the Company or the Agent, nor the Committee, shall be liable for any
act done in good faith or for any good faith omission to act, including,
without limitation, any claim of liability with respect to the prices or times
at which shares of the Common Stock are purchased or sold for a participant or
with respect to any fluctuation in market value before or after any purchase
or sale of shares.
SECTION 3
Shares Available Under the Plan
The aggregate number of shares of Common Stock which may be sold under the Plan
is five hundred thousand (500,000) shares, subject to adjustment and
substitution as set forth in this Section 3. All shares available under the
Plan shall be purchased in the open market by the Agent. If a dividend or
other distribution shall be declared upon the Common Stock payable in shares
of the Common Stock, the number of shares of the Common Stock which may be sold
under the Plan but have not yet been sold shall be adjusted by adding thereto
the number of shares of the Common Stock which would be distributable thereon.
If the outstanding shares of the Common Stock shall be changed into or
exchangeable for a different number of shares of the Common Stock, then there
shall be substituted for each remaining share of the Common Stock which may be
sold under the Plan, the number of shares of the Common Stock into which each
outstanding share of the Common Stock shall be so changed or for which each
such share shall be exchangeable.
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SECTION 4
Participation
An eligible employee may enroll as a participant at any time by completing and
signing an enrollment and payroll deduction authorization form and delivering
it to the Treasurer of the Company. Enrollment shall become effective as soon
as administratively practicable following the receipt of an enrollment and
payroll deduction authorization form by the Company but in any event not later
than forty-five days following the receipt of such form.
An eligible employee whose participation in the Plan has terminated may
re-enroll in the Plan by following the above procedure; provided, however, that
no employee may re-enroll until the expiration of the one year anniversary of
the employee's termination of participation.
The Committee also reserves the right to reject any enrollment and payroll
deduction authorization form and to terminate the enrollment of a participant.
SECTION 5
Employee Contributions
Each eligible employee is permitted to authorize a deduction from his or her
pay, in even multiples of $1.00, of a minimum of $20.00 per pay period;
provided, however, that the maximum deduction for any bi-weekly pay period
shall not exceed $250 and for any monthly pay period shall not exceed $500.
Payroll deduction authorizations shall remain effective until changed or
discontinued by the participant. A participant may change or discontinue
payroll deduction authorizations at any time by completing and signing a
payroll deduction authorization change form and delivering it to the Treasurer
of the Company. A payroll deduction authorization change form shall become
effective as soon as administratively practicable following the receipt of such
form by the Company but in any event not later than forty-five days following
the receipt of such form. An officer or 10% shareholder who at the time of or
within six months prior to discontinuing payroll deductions under the Plan was
subject to Section 16 of the Securities and Exchange Act of 1934, as amended
(the "1934 Act") with respect to the Common Stock may not re-authorize payroll
deductions under the Plan until at least six months have elapsed from the
effective date of such discontinuance.
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Contributions by a participant through payroll deduction authorizations shall
be credited to the account under the Plan relating to the participant as of
each payment date and shall be used to purchase shares of Common Stock for
credit to such account as provided under Section 9 below.
SECTION 6
Employer Contributions
Subject to Section 9 below, on each Quarterly Effective Date (as defined in
Section 9 below) the account relating to each participant shall be credited
with an amount equal to ten percent (10%) of the amount contributed by the
participant (not including dividends or other distributions) since the previous
Quarterly Effective Date and credited to such account under Section 5 above.
Such amount shall be used to purchase shares of Common Stock for credit to the
account relating to the participant as provided under Section 9 below.
SECTION 7
Dividends and Other Distributions
Except as provided below, each account relating to a participant shall be
credited with all cash dividends and other cash distributions, if any, paid in
respect of the shares credited to the account, less any amount the Company is
required to deduct as backup withholding in respect of the dividend or
distribution received, or considered to be received. Cash dividends and other
cash distributions credited to a participant's account shall be invested in
Common Stock in accordance with Section 9 below.
Any stock dividends or stock splits in respect of shares of Common Stock
credited to an account shall be reflected in the account without charge. Any
distributions of other securities or rights to subscribe for additional shares
in respect of shares of Common Stock credited to an account relating to a
participant shall be made directly to the participant.
SECTION 8
No Interest on Amounts Credited to Accounts
No interest shall be paid on amounts credited to the accounts relating to the
participants. Amounts credited to the accounts shall be under the control of
the Company until paid to the Agent or to participants.
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SECTION 9
Purchase of Shares of Common Stock
Purchases of Common Stock for participants' accounts under the Plan shall be
made by or at the direction of the Agent, which shall be an independent bank
or registered broker-dealer acting as agent for the Plan participants. The
Company reserves the right to change the Agent without notice.
The shares of Common Stock purchased for participants' accounts under the Plan
shall be previously issued shares purchased by the Agent on the open market.
The Company will not receive any part of the purchase price, and the Plan will
not provide any new capital to the Company. Purchases of Common Stock by the
Agent shall be made at then current market prices, may be made on any
securities exchange where the Company's Common Stock is traded, in the
over-the-counter market or in negotiated transactions and may be on such terms
as to price, delivery and otherwise as the Agent or the broker selected by the
Agent for such purpose may determine.
On the last business day of each month (each, an "Effective Date"), the Company
shall pay over to the Agent the aggregate amount of all employee payroll
deductions received by the Company during such month. In addition, on the last
business day of each January, April, July and October (each, a "Quarterly
Effective Date"), the Company shall pay over to the Agent the aggregate amount
of all employer contributions to be credited to each participant. The Agent
shall apply such funds, along with any funds obtained by the Agent from cash
dividends and cash distributions with respect to the accounts, to the purchase
of Common Stock on the open market for the accounts of Plan participants.
Shares shall be purchased for participants as promptly as practicable,
consistent with the provisions of any applicable Federal securities laws and
market considerations, but no later than the 15th day of the following month.
The exact timing of purchases, including determining the number of shares, if
any, to be purchased on any day or at any time of that day, the prices paid for
such shares, the markets on which such purchases are made and the persons
(including other brokers and dealers) from or through whom such purchases are
made shall be determined by the Agent or the broker selected by it for such
purpose. The Agent may purchase Common Stock in advance of an Effective Date
for settlement on or after such date.
The purchase price of shares of Common Stock purchased for Plan participants
with respect to an Effective Date shall be the weighted average price of all
shares of Common Stock purchased by the Agent for the Plan for that date,
including a proportionate share of all brokerage commissions or similar charges
incurred by the Agent in making such purchases.
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The number of shares to be purchased for a participant's account with respect
to an Effective Date shall be equal to the total dollar amount to be invested
for the participant divided by the applicable purchase price. Each allocation
shall be made in full shares and in fractional interests in a share to the
ten-thousandth of a share.
Each participant with respect to an account shall acquire full ownership of all
shares and of any fractional interest in a share purchased for an account upon
the crediting of the shares to such account. All shares purchased shall be
registered in the name of the Agent or another nominee or custodian for the
benefit of the participants under the Plan. Although a participant may not
assign or hypothecate an interest in the Plan as such, upon crediting of shares
under the Plan such shares may be sold pursuant to the procedures set forth in
Sections 10 and 11 below or, following distribution of such shares to the
participant, may be sold, assigned, hypothecated or otherwise dealt with by the
participant as is the case with respect to any other shares of Common Stock the
participant may own.
Notwithstanding the foregoing, upon termination of an account relating to a
participant under Section 10 or Section 11 below, any employee contributions
credited to the account and not yet applied to the purchase of shares of Common
Stock shall not be so applied and shall be delivered to the participant, and
no employer contribution shall be made on the next succeeding Quarterly
Effective Date notwithstanding any employee contributions made during the
fiscal quarter when such termination occurs. Also, notwithstanding the
foregoing and the provisions of Section 7 above, cash dividends or
distributions with respect to shares of Common Stock credited to an account
shall be delivered to the participant instead of credited to the account if the
date as of which the account is terminated is more than ten (10) calendar days
prior to the record date of the cash dividend or distribution.
SECTION 10
Voluntary Sale or Withdrawal of Shares
A participant may direct at any time that any or all of the shares credited to
the account relating to the participant be sold. Upon such sale, a check for
the proceeds, less any brokerage commissions and other charges applicable to
the sale, shall be delivered to the participant. The participant may also
request at any time that a certificate or certificates representing any or all
of the full shares credited to the account relating to the participant be
delivered to the participant.
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<PAGE> 7
If the participant directs that all shares credited to the account relating to
the participant be sold and the net proceeds delivered to the participant or
requests that a certificate or certificates representing all full shares
credited to the account relating to the participant be delivered to the
participant, and the participant discontinues or has discontinued all payroll
deduction authorizations, the account shall be terminated as of the later of
the date the direction or request is received and the effective date of the
discontinuance of payroll deductions.
Notwithstanding the foregoing, an officer or 10% shareholder who at the time
of any purchase of Common Stock under the Plan was subject to Section 16 of the
1934 Act with respect to the Common Stock may not request the sale of any
shares held in his or her account until at least six months have elapsed from
the date of the purchase unless following such sale there would remain in the
account a number of shares at least equal to the sum of the number of shares
so purchased plus any additional shares subsequently purchased under the Plan.
Shares shall be deemed to be a on the first-in, first-out method of share
identification.
Each direction or request referred to in this Section 10 shall be made by the
participant by completing and signing a sale or withdrawal form and delivering
it to the Treasurer of the Company or an agent designated by the Company. Upon
termination (and for participants subject to Section 16 of the 1934 Act upon
expiration of the six-month period referred to in the preceding paragraph), any
fractional interest in a share credited to the account may be sold and the net
proceeds delivered to the participant or the value of the fractional interest
may be determined by reference to the current fair market value (determined as
set forth in Section 17 below) of the Common Stock and paid to the participant
in cash.
SECTION 11
Termination of Account Upon Termination of Employment
The account relating to a participant whose employment with the Company
terminates shall also be terminated as of the date of termination of
employment. The participant may direct that all shares credited to the account
be sold and the net proceeds delivered to the participant, or the participant
may request that a certificate or certificates representing all full shares
credited to the account be delivered to the participant. Any brokerage
commissions and other charges applicable to sales are payable by the
participant and will be deducted in determining the net proceeds. If no
direction is received from the participant prior to the time the account
relating to a participant would normally be settled, a certificate or
certificates representing all full shares credited to the account will be
delivered to the participant.
<PAGE>
<PAGE> 8
Each direction or request referred to in this Section 11 shall be made by the
participant by completing and signing a sale or withdrawal form and delivering
it to the Treasurer of the Company or an agent designated by the Company. Upon
termination, any fractional interest in a share credited to the account may be
sold and the net proceeds delivered to the participant or the value of the
fractional interest may be determined by reference to the current fair market
value (determined as set forth in Section 17 below) of the Common Stock and
paid to the participant in cash.
SECTION 12
Information For Participants; Voting Rights
Each participant shall receive at least quarterly each year a statement of all
transactions affecting the account relating to the participant and the number
of shares (including any fractional interests in a share) of the Common Stock
credited to the account. Each participant shall also receive copies of all
reports, proxy statements and other communications distributed by the Company
to its shareholders generally at the time and in the manner such material is
sent to such shareholders.
Participants shall receive proxy soliciting material in connection with each
meeting of shareholders of the Company. Shares can be voted only by the holder
of record. The shares of Common Stock credited to each account (including any
fractional interests in a share) shall be voted by the holder of record only
in accordance with the participant's signed proxy instructions duly delivered
to the holder of record.
SECTION 13
Effect of Plan on the Rights of Employees and Employer
Nothing in the Plan shall confer any rights to any employee to continue in the
employ of the Company or interfere in any way with the rights of the Company
to terminate the employment of any employee at any time.
<PAGE>
<PAGE> 9
SECTION 14
Withholding
The purchase of shares of the Common Stock under the Plan will result in
compensation income to participants because of the Company contributions under
Section 6 and may be subject to Federal income and employment tax, state income
and employment tax and/or local income tax withholding. The Company shall
withhold all applicable withholding taxes on any such compensation income from
the pay of the participant who realizes such compensation income. Each
participant's pay also shall be subject to withholding of all applicable
Federal income and employment, state income and employment, and local income
taxes without regard to any amounts deducted therefrom as payroll deductions
authorized under the Plan.
SECTION 15
Expenses of the Plan
The Company will pay all expenses incident to the operation of the Plan,
including the costs of record keeping, accounting fees, legal fees, the costs
of delivery of stock certificates to participants and the costs of delivery of
shareholder communications. The Company will not pay any expenses, broker's
or other commissions or taxes incurred in connection with the purchases of
Common Stock, or the sale of shares of Common Stock credited to an account at
the direction of the participant. Expenses in connection with any such sale
will be deducted from the proceeds of sale prior to any remittance to the
participant.
SECTION 16
Rights Not Transferable
The right to purchase shares of the Common Stock under the Plan shall not be
transferable by an eligible employee and such right shall be exercisable during
the eligible employee's lifetime only by the eligible employee. Upon the death
of a participant, any shares held for the account relating to the participant
and any cash payment for any fractional share shall be transferred to the
estate of the decedent and distributed in accordance with the Will of the
participant, or, if the participant dies intestate, the laws of descent and
distribution of the state of domicile of the participant at the time of death.
<PAGE>
<PAGE> 10
SECTION 17
Fair Market Value
Fair market value of the Common Stock shall be the mean between the following
prices, as applicable, for the date as of which fair market value is to be
determined as quoted in The Wall Street Journal (or in such other reliable
publication as the Committee, in its discretion, may determine to rely upon):
(a) if the Common Stock is listed on the New York Stock Exchange, the highest
and lowest sales prices per share of the Common Stock as quoted in the
NYSE--Composite Transactions listing for such date, (b) if the Common Stock is
not listed on such exchange, the highest and lowest sales prices per share of
the Common Stock for such date on (or on any composite index including) the
principal United States securities exchange registered under the 1934 Act on
which the Common Stock is listed or (c) if the Common Stock is not listed on
any such exchange, the highest and lowest sales prices per share of the Common
Stock for such date on NASDAQ. If there are no such sale price quotations for
the date as of which fair market value is to be determined but there are such
sale price quotations within a reasonable period both before and after such
date, then fair market value shall be determined by taking a weighted average
of the means between the highest and lowest sales prices per share of the
Common Stock as so quoted on the nearest date before and the nearest date after
the date as of which fair market value is to be determined. The average should
be weighted inversely by the respective numbers of trading days between the
selling dates and the date as of which fair market value is to be determined.
If there are no such sale price quotations on or within a reasonable period
both before and after the date as of which fair market value is to be
determined, then fair market value of the Common Stock shall be the mean
between the bona fide bid and asked prices per share of the Common Stock as so
quoted for such date on the NASDAQ, or if none, the weighted average of the
means between such bona fide bid and asked prices on the nearest trading date
before and the nearest trading date after the date as of which fair market
value is to be determined, if both such dates are within a reasonable period.
The average is to be determined in the manner described above in this Section
17. If the fair market value of the Common Stock cannot be determined on the
basis previously set forth in this Section 17 on the date as of which fair
market value is to be determined, the Committee shall in good faith determine
the fair market value of the Common Stock on such date. Fair market value
shall be determined without regard to any restriction other than a restriction
which, by its terms, will never lapse.
<PAGE>
<PAGE> 11
SECTION 18
Sale of Shares
The obligation of the Company to permit the sale of shares of the Common Stock
under the Plan shall be subject to (i) the effectiveness of a registration
statement under the Securities Act of 1933, as amended, with respect to such
shares, if deemed necessary or appropriate by counsel for the Company and (ii)
all other applicable laws, regulations, rules and orders which may then be in
effect.
SECTION 19
Amendment or Termination of Plan
The Board reserves the right to amend or terminate the Plan at any time in its
sole discretion. The Plan shall also terminate when all of the shares of the
Common Stock which may be sold under the Plan have been purchased. Any
amendment or termination shall not result in the forfeiture of any funds
deducted from the pay of any participant, or of any shares of the Common Stock
credited to an account, or of any dividends or other distribution in respect
of such shares, before the effective date of the amendment or termination.
Upon termination of the Plan, distribution of each account shall be made as
provided in Section 11 above in the case of a participant whose employment with
the Company has terminated.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S QUARTERLY REPORT ON FORM 10-Q FOR THE SIX-MONTH PERIOD ENDED
MARCH 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> MAR-31-1995
<CASH> $ 28,925,671
<SECURITIES> 0
<RECEIVABLES> 26,509,433
<ALLOWANCES> 0
<INVENTORY> 10,067,009
<CURRENT-ASSETS> 66,633,167
<PP&E> 61,733,225
<DEPRECIATION> 23,220,852
<TOTAL-ASSETS> 124,121,309
<CURRENT-LIABILITIES> 17,584,416
<BONDS> 0
<COMMON> 8,850,350
0
0
<OTHER-SE> 70,234,663
<TOTAL-LIABILITY-AND-EQUITY> 124,121,309
<SALES> 82,171,388
<TOTAL-REVENUES> 82,171,388
<CGS> 44,902,530
<TOTAL-COSTS> 44,902,530
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,365
<INCOME-PRETAX> 13,199,122
<INCOME-TAX> 5,208,829
<INCOME-CONTINUING> 7,990,293
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,990,293
<EPS-PRIMARY> .90
<EPS-DILUTED> .90
</TABLE>
