[TEXT]
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission File Number 0-11902
GIBSON GREETINGS, INC.
Incorporated under the laws IRS Employer
of the State of Delaware Identification No. 52-1242761
2100 Section Road, Cincinnati, Ohio 45237
Telephone Number: Area Code 513-841-6600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.01 par value; Preferred Stock Purchase Rights
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
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ X ]
The aggregate market value of the Common Stock, $.01 par value,
of the registrant held by non-affiliates of the registrant as of
March 11, 1994 was approximately $365,872,000.
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the latest
practicable date: 16,085,953 shares of Common Stock, $.01 par
value, at March 11 , 1994.
Documents incorporated by reference:
Portions of Gibson Greetings, Inc.'s Proxy Statement for the
1994 Annual Meeting of Stockholders are incorporated by
reference in Part III.
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PART I
Item 1. Business
Gibson Greetings, Inc. and its wholly-owned and majority-owned
subsidiaries (the "Company") operate in a single industry
segment -- the design, manufacture and sale of everyday and seasonal
greeting cards, gift wrap and accessories, paper partywares and
related specialty products.
Products
The Company's major products are extensive lines of greeting
cards (both everyday and seasonal) and gift wrap. Everyday
cards are categorized as conventional greeting cards and
alternative market cards. Seasonal cards are devoted to holiday
seasons, which include, in declining order of net sales,
Christmas, Valentine's Day, Mother's Day, Easter, Father's Day,
Graduation and Thanksgiving. In 1993, approximately 58% of net
sales of cards were derived from everyday cards and
approximately 42% from seasonal cards. The Company produces
gift wrap and gift wrap accessories (including tissue and kraft
paper, tags, ribbons, bows and gift trims) predominately for the
Christmas season. The Company's products also include paper
partywares, candles, calendars, gift items and holiday
decorations. The following table sets forth, in thousands of
dollars for the years indicated, the Company's net sales
attributable to each of the principal classes of the Company's
products:
Years Ended December 31,
----------------------------------
1993 1992 1991
-------- -------- --------
Greeting cards $268,952 $243,647 $270,579
Gift wrap 192,862 187,965 196,352
Other products 84,351 52,506 55,235
-------- -------- --------
Total net sales $546,165 $484,118 $522,166
======== ======== ========
Many of the Company's products incorporate well-known
proprietary characters. Net sales associated with licensed
properties accounted for approximately 14% of overall 1993 net
sales. The Company believes it benefits from the publication of
cartoon strips, television programming, advertising and other
promotional activities by the creators of such licensed
characters. The Company has also developed proprietary
properties of its own. See "Trademarks, Copyrights and
Licenses."
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Approximately 2% of the Company's revenues in 1993 were
attributable to export sales and royalty income from foreign
sources. During 1993, the Company acquired The Paper Factory of
Wisconsin, Inc. ("The Paper Factory"), a Wisconsin corporation, to
strengthen the Company's position in the rapidly-growing party segment
of the industry. During 1992, the Company formed Gibson de Mexico,
S.A. de C.V., a Mexican corporation, which purchased the net
assets of a Mexican manufacturer and marketer of greeting cards,
to market the Company's products primarily in Mexico. During
1991, the Company formed Gibson Greetings International Limited,
a Delaware corporation, to market the Company's products in the
United Kingdom and other European countries.
Sales and Marketing
The Company's products are sold in more than 50,000 retail
outlets worldwide. Because of the value consumers place on
convenience, the Company continues to concentrate its
distribution through one-stop-shopping outlets. To market
effectively through these outlets, the Company has developed
specific product programs and new product lines and introduced
new in-store displays. The Company's products are primarily
sold under the Gibson and Cleo brand names and are primarily
distributed to supermarkets, deep discounters, mass
merchandisers, variety stores and drug stores. During 1993, the
Company's five largest customers accounted for approximately 35%
of the Company's net sales and only one customer, Wal-Mart
Stores Inc., accounted for more than 10% of the Company's net
sales
The Company's products under the Gibson brand name are usually
stocked in a department where only these products are displayed.
Product displays are expressly designed for the presentation of
greeting cards, gift wrap, paper partywares, candles and other
products. The Company also supplies corrugated displays for
seasonal specialties. The Company's method of selling greeting
cards requires frequent and attentive merchandising service and
fast delivery of reorders. The Company employs a direct field
sales force that regularly visits most of the Company's
customers, supported by a larger, nationwide merchandising
service force.
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In order to properly display and service these products, a
sizable initial investment is made in store display fixtures,
sometimes totaling 300 linear feet, and in the hiring and
training of service associates. To minimize costs and
disruption, in the short-term, caused by the loss of a customer,
the Company has entered into longer term contracts with certain
retailers, consistent with general industry practice. These
contracts generally have terms of from three to six years, and
sometimes specify a minimum sales volume commitment. Some of
the advantages to the Company include: less disruption to its
distribution channels; the ability to plan product offerings
into the future; and establishment of a reliable service network
to ensure the best product display and salability. In certain
of these contracts, cash payments or credits are negotiated
constituting advance discounts against future sales. These
payments are capitalized and amortized over the initial term of
the contract. In the event of contract default by a retailer,
such as bankruptcy or liquidation, a contract may be deemed
impaired and unamortized amounts may be charged against
operations immediately following the default. Use of these
contracts has expanded in recent years within the industry and
the Company currently has contracts with a number of customers
including two of its top five customers.
Most of the Company's gift wrap is Christmas-related and is
sold under the Cleo brand name. These products are usually
shipped in corrugated cartons which may be used as temporary
free-standing displays. Separate free-standing product
displayers and display planning services are also made available
for the purpose of enhancing the presentation of Cleo products.
The Company's Cleo brand gift wrap is typically sold at lower
unit retail price levels than the Company's other brands of gift
wrap. In general, the Company does not provide in-store
merchandising services with respect to Cleo products but rather
ships these products directly to the retailers' stores or their
warehouses for subsequent distribution to individual stores.
It is characteristic of the Company's business and of the
industry that accounts receivable for seasonal merchandise are
carried for relatively long periods, typically as long as six
months. Consistent with general industry practice, the Company
allows customers to return for credit certain seasonal greeting
cards.
Design and Production
Most of the Company's greeting cards are designed, printed and
finished at its Cincinnati, Ohio facility and then sent to its
facilities in Berea or Covington, Kentucky for shipment directly
to retail stores. Most of the Company's gift wrap is designed,
printed and finished at the Company's facilities in Memphis,
Tennessee and distributed from the Company's facilities in
Memphis, Tennessee and Cerritos, California. The Company also
purchases for resale certain finished and semi-finished
products, such as gift items, from both domestic and foreign
sources.
The Company maintains a full-time staff of artists, writers,
art directors and creative planners who design a majority of the
Company's products. Design of everyday products begins
approximately 12 months in advance of shipment. The Company's
seasonal greeting cards and other items are designed and printed
over longer periods than the everyday cards. Designing seasonal
products begins approximately 18 months before the holiday date.
Seasonal designs go into production about 12 months before the
holiday date.
Production of the Company's products increases throughout the
year until late September. Because a substantial portion of the
Company's shipments are typically concentrated in the latter
half of the year, the Company normally is required to carry
large inventories.
The Company believes that adequate quantities of raw materials
used in its business are and will continue to be available from
many suppliers. Paper costs are the most significant component
of the Company's product cost structure.
Competition
The greeting card and gift wrap industry is highly competitive.
Based upon its general knowledge of the industry and the
limited public information available about its competitors, the
Company believes it is the third largest producer of greeting
cards and gift wrap in the United States. The Company's
principal competitors are Hallmark Cards, Inc. and American
Greetings Corporation, which are predominant in the industry,
and CPS/Artfaire, Inc. Certain of the Company's competitors
have greater financial and other resources than the Company.
The Company believes that the principal areas of competition
with respect to its products are quality, design, service to the
retail outlet, price and terms, which may include payments and
other concessions to retail customers under long-term
agreements, and that it is competitive in all of these areas.
See "Sales and Marketing".
Trademarks, Copyrights and Licenses
The Company has approximately 40 registrations of trademarks in
the United States and foreign countries. Although the Company does not
generally register its creative artwork and editorial text with the
U.S. Copyright Office, it does obtain certain copyright protection
by printing notice of a claim of copyright on its products.
The Company has rights under various license agreements to incorporate
well-known proprietary characters into its products. These
licenses, most of which are exclusive, are generally for terms of
one to four years and are subject to certain renewal options.
There can be no assurance that the Company will be able to
renew license agreements as to any particular proprietary
character. The Company believes that its business is not
dependent upon any individual trademark, copyright or license.
Employees
As of December 31, 1993, the Company employed approximately
4,600 persons on a full-time basis. In addition, as of December
31, 1993, the Company employed approximately 4,800 persons on a
part-time basis. Because of the seasonality of the Company's
sales, the number of the Company's production and warehousing
employees varies during the year, normally reaching a peak level
in September. Approximately 800 hourly employees in the
Company's Memphis, Tennessee facilities are represented by a
local union affiliated with the United Paper Workers
International Union and are employed under a contract which
expires in 1996. Approximately 300 hourly employees currently
on the payroll at the Company's Berea, Kentucky facility are
represented by a local union affiliated with the International
Brotherhood of Firemen and Oilers Union. Unfair labor practice
charges have been filed against the Company as an outgrowth of a
strike at the Berea facility in 1989. See "Legal Proceedings."
Environmental Issues
The Company, over the past ten years, has taken a proactive
approach to environmental concerns. In 1986,
Cleo, Inc. ("Cleo") converted its printing operations to water-based inks.
Likewise, since early 1990, the Company's subsidiary, the Gibson Card Division
("Gibson") has converted its card and related products production to
water-based inks. Previously, Gibson had its Cincinnati-produced waste
solvents incinerated. All but one underground storage tank on Company owned
and leased premises were removed in or before 1988. In 1990, the last
underground storage tank, which had contained isopropyl alcohol, was also
removed in accordance with governmental closure regulations.
For the past seven years, the Company has consulted with
professional firms for environmental audits before entering into
potential long-term real estate transactions. Historically,
expenditures associated with managing and limiting pollution or
hazardous substances, as well as expenditures to remediate
previously contaminated sites, have not been material to the
Company's financial statements. At December 31, 1993, the
Company was aware of two environmental liabilities as discussed
below:
DIAZ REFINERY - JACKSON COUNTY, ARKANSAS
In 1989, the Company was identified by the Arkansas Department
of Pollution Control and Ecology ("ADPC&E") as a potentially
responsible party ("PRP") in connection with the Diaz Refinery
Site in Jackson County, Arkansas. The Company is participating
with approximately 700 other PRPs in a settlement with ADPC&E
for remediation of the Site. To date, the Company's share of
total Site costs has been approximately $46,000. The nature and
extent of the contamination, if any, is still being
investigated. Thus, it is not possible at this time to provide
an estimate of total clean-up costs for the Site or the Company's
share of such costs.
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KIRK LANDFILL - DYER COUNTY, TENNESSEE
In December 1993, the Company was advised by the Tennessee
Department of Environment and Conservation ("TDEC") that Cleo had
been identified by the State as a potentially liable party for
reimbursement of Superfund Expenditures made by the State of
Tennessee for site identification, investigation, containment
and clean-up, including monitoring and maintenance activities.
The Company has ascertained that Cleo's alleged responsibility
involves the alleged disposal of certain waste solvents at the
Site during the period 1972-1975. At this time, insufficient
information is available to determine the Company's potential
liability, if any; however, the TDEC has requested payment of
approximately $13,000, representing full reimbursement of costs
incurred to date. The Company is investigating whether
insurance provisions under policies in existence during the time
period will be applicable.
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Item 2. Properties
The following is a summary of the Company's principal
manufacturing, distribution and administrative facilities:
Approximate
Floor Space
Location Principal Use (Sq Ft)
- -------------------- ------------------------------------- -----------
Cincinnati, Ohio Corporate headquarters, manufacturing
and administration 593,700
Memphis, Tennessee Manufacturing, distribution and
administration 1,002,800
Berea, Kentucky Manufacturing and distribution 597,100
Mexico City, Mexico Manufacturing and distribution 26,900
Telford, England Manufacturing, distribution and
administration 58,800
Memphis, Tennessee Manufacturing and distribution 1,153,200
Covington, Kentucky Manufacturing and distribution 293,000
Florence, Kentucky Manufacturing and distribution 80,000
Reynosa, Tamaulipas,
Mexico Manufacturing 86,700
Bloomington, Indiana Distribution 167,700
Memphis, Tennessee Distribution (3 facilities) 796,600
Cerritos, California Distribution 214,600
Neenah, Wisconsin Distribution 31,000
---------
Total 5,102,100
=========
The first three facilities listed above are all currently
leased for an initial term expiring in 2002. The Company has
the right to renew the lease for two additional terms of five
years each. The Company also has an option to purchase these
facilities in 2002 at the higher of $35,400,000 or the fair
market value of the properties at that time. For accounting
purposes, this lease has been treated as an operating lease.
See Note 11 of Notes to Consolidated Financial Statements
set forth in Item 8 below.
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The Company's 1.1 million square foot manufacturing and
distribution facility in Memphis, Tennessee has been financed
primarily through the issuance, by the Industrial Development
Board of the City of Memphis and County of Shelby, Tennessee
(the "Board"), of both taxable and tax-exempt economic
development revenue bonds for the benefit of the Company's
subsidiary, Cleo. Title to the facility will be held until
2004 by the Board. See Note 6 of Notes to Consolidated Financial
Statements set forth in Item 8 below.
The Telford, England, Covington, Kentucky and Bloomington,
Indiana manufacturing and distribution facilities are owned by
the Company. The Covington, Kentucky facility has been financed
principally through tax-exempt debt and is pledged to secure the
repayment of such debt. See Note 6 of Notes to Consolidated
Financial Statements set forth in Item 8 below.
The Florence, Kentucky facility, the Mexico City, Mexico
facility, the Reynosa, Tamaulipas, Mexico facility and the distribution
facilities at Memphis, Tennessee, Cerritos, California and Neenah,
Wisconsin are leased. The Company also leases sales offices, other
manufacturing, distribution and administrative facilities and, on
a temporary basis, uses public warehouse space in various locations
throughout the United States. The Paper Factory leases approximately
140 stores averaging approximately 3,000 to 4,000 square feet per store.
Certain of these leases contain contingent payments based upon individual
store sales. Leases for such facilities expire at various dates
through 2003.
The Company believes that its facilities are adequate for its
present needs and that its properties, including machinery and
equipment, are generally in good condition, well maintained and
suitable for their intended uses.
Item 3. Legal Proceedings
In 1989, unfair labor practice charges were filed against the
Company as an outgrowth of a strike at its Berea, Kentucky
facility. Remedies sought include back pay from August 8, 1989
and reinstatement of employment for approximately 200 employees.
In February 1990, the General Counsel of the National Labor
Relations Board ("NLRB") issued a complaint based on certain of
the allegations of these charges (In the Matter of Gibson
Greetings, Inc. and International Brotherhood of Fireman and
Oilers, AFL-CIO, Cases 9-CA-26706, 27660, 26875.) On December
18, 1991, an Administrative Law Judge of the NLRB issued a
recommended order, which included reinstatements and back pay
affecting approximately 160 strikers, based on findings that the
Company had violated certain provisions of the National Labor
Relations Act. On May 7, 1993, the NLRB upheld the
Administrative Law Judge's decision in some respects, and
enlarged the number of strikers entitled to back pay to
approximately 240. A prompt notice of appeal was filed in the
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United States Court of Appeals for the District of Columbia
Circuit. The Company believes it has substantial defenses to
the charges, and these defenses will be presented in briefs in
the Company's appeal. The appeal is scheduled to be heard on
September 14, 1994. In addition, the Company is a defendant in
certain other litigation. Management does not believe that an
adverse outcome as to any or all of these matters would have a
material adverse effect on the Company's net worth or total cash
flows; however, the impact on the statement of operations in a
given year could be material.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Executive Officers of the Registrant
See Item 10. Directors and Executive Officers of the
Registrant.
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PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters
The Company's debt agreements contain certain covenants
including limitations on dividends based on a formula related to
net income, stock sales and certain restricted investments. At
December 31, 1993, the amount of unrestricted retained earnings
available for dividends (in thousands of dollars) was $50,760.
The Company's business is seasonal with a significant amount of
its net sales and net income historically occurring in the last
two quarters of the year. The following table presents certain
consolidated quarterly financial data (unaudited) for 1993 and
1992:
<TABLE>
<CAPTION>
(Dollars in
thousands except First Second Third Fourth
per share amounts) Quarter Quarter Quarter Quarter Year
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
1993
- -------------------
Net sales $ 84,896 $ 83,796 $142,137 $235,336 $546,165
Total revenues 84,907 83,964 142,296 235,759 546,926
Cost of products
sold 30,996 30,813 76,119 130,375 268,303
Net income 1,802 1,215 4,145 18,690 25,852
Net income per share 0.11 0.08 0.26 1.16 1.61
Dividends per share 0.10 0.10 0.10 0.10 0.40
Market price of
common stock (1):
Low 17 7/8 18 17 7/8 18 3/4 17 7/8
High 20 3/8 20 3/4 22 5/8 21 1/4 22 5/8
1992
- -------------------
Net sales $ 79,097 $ 78,219 $115,238 $211,564 $484,118
Total revenues 79,428 78,736 115,556 212,103 485,823
Cost of products
sold 27,257 28,344 70,643 121,096 247,340
Income (loss)
before cumulative
effect of accounting
changes 2,427 1,202 (12,329) 16,685 7,985
Cumulative effect of
accounting changes,
net of income taxes
of $1,609 (1,449) - - - (1,449)
Net income (loss) 978 1,202 (12,329) 16,685 6,536
Income (loss) per
share before
cumulative effect
of accounting
changes 0.15 0.07 (0.75) 1.03 0.50
Cumulative effect of
accounting changes (0.09) - - - (0.09)
Net income
(loss) per share 0.06 0.07 (0.75) 1.03 0.41
Dividends per share 0.09 0.10 0.10 0.10 0.39
Market price of
common stock (1):
Low 25 1/8 22 16 1/4 16 1/4 16 1/4
High 31 27 5/8 24 1/4 20 31
</TABLE>
[FN]
(1) Per share prices are based on the closing price as quoted
in the Nasdaq National Market.
(2) Quarterly results for 1992 have been restated to reflect
the adoption of Statement of Financial
Accounting Standards (SFAS) No. 106 and SFAS No. 109 in the
first quarter. The impact of the
adoption of these standards was to reduce income before
cumulative effect of accounting changes
by $73 and $74 in the first and second quarters, respectively,
and reduce earnings per share in the
second quarter by $.01.
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Item 6. Selected Financial Data
The following summaries set forth selected financial data for
the Company for each of the five years in the period ended
December 31, 1993. Selected financial data should be read in
conjunction with the Consolidated Financial Statements set forth
in Item 8 below.
<TABLE>
<CAPTION>
Income Statement Data
(Dollars and shares in thousands except per share amounts)
Years Ended December 31,
--------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Revenues:
Net sales $546,165 $484,118 $522,166 $511,211 $463,290
Royalty income 761 1,705 2,148 1,985 1,980
-------- -------- -------- -------- --------
Total revenues 546,926 485,823 524,314 513,196 465,270
-------- -------- -------- -------- --------
Cost of products
sold 268,303 247,340 252,217 254,182 231,664
Selling,
distribution and
administrative
expenses 227,863 218,642 194,872 187,282 166,415
Interest expense 7,737 7,803 9,380 8,667 3,842
Interest income (949) (1,023) (342) (819) (2,319)
-------- -------- -------- -------- --------
Income before
income taxes and
cumulative effect
of accounting
changes 43,972 13,061 68,187 63,884 65,668
Income taxes 18,120 5,076 26,303 24,084 23,299
-------- -------- -------- -------- --------
Income before
cumulative effect
of accounting
changes 25,852 7,985 41,884 39,800 42,369
Cumulative effect
of accounting
changes - (1,449) - - -
-------- -------- -------- -------- --------
Net income $ 25,852 $ 6,536 $ 41,884 $ 39,800 $ 42,369
======== ======== ======== ======== ========
Income per share
before cumulative
effect of
accounting
changes $ 1.61 $ 0.50 $ 2.61 $ 2.51 $ 2.68
======== ======== ======== ======== ========
Net income
per share $ 1.61 $ 0.41 $ 2.61 $ 2.51 $ 2.68
======== ======== ======== ======== ========
Dividends
per share $ 0.40 $ 0.39 $ 0.36 $ 0.34 $ 0.33
======== ======== ======== ======== ========
Average common
shares and
equivalents 16,103 16,104 16,039 15,848 15,784
======== ======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
Other Financial Data
(Dollars in thousands except per share amounts)
December 31,
--------------------------------------------------------
1993 1992 1991 1990 1989
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Working capital $213,856 $224,261 $215,011 $128,489 $146,676
Plant and
equipment, net 116,900 112,712 110,769 101,996 75,067
Total assets 580,411 501,104 544,261 553,499 438,888
Debt due within
one year (1) 66,187 31,911 71,208 148,302 89,197
Long-term debt 74,365 70,175 71,079 21,755 30,425
Excess of fair
value of companies
acquired over
cost, net - - - 1,430 2,880
Stockholders'
equity 323,681 303,341 300,743 261,402 226,043
Equity per share 20.15 18.92 18.86 16.58 14.41
Capital
expenditures 31,049 30,970 31,736 42,706 31,959
</TABLE>
[FN]
(1) Includes the current portion of long-term debt which
consisted of $3,917 in 1993, $1,811 in 1992, $708 in 1991,
$6,702 in 1990 and $2,697 in 1989.
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Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Unless specifically stated otherwise, dollars in thousands except
per share amounts.
Results of Operations
The Company's 1993 results reflected a recovery from the prior
year which was adversely impacted by the Chapter 11 bankruptcy
filing by Phar-Mor, Inc. (Phar-Mor) during 1992. Total revenues
in 1993 increased 12.6% to $546.9 million compared to a decrease
of 7.3% in 1992 and an increase of 2.2% in 1991. The revenue
gains in 1993 were attributable to The Paper Factory of
Wisconsin, Inc. (The Paper Factory) which was acquired in June
1993, as well as increased domestic and international sales of
greeting cards, partially offset by a modest decline in sales of
gift wrap and related products. Consistent with general industry
practice, the Company allows customers to return for credit
certain seasonal greeting cards. Also, consistent with general
industry practice, and where deemed prudent to secure
substantial long-term volume commitments, the Company enters
into long-term sales contracts with certain retailers, some of
which include advance payments. Returns and allowances were
13.3% in 1993 compared to 15.9% in 1992 and 17.2% in 1991. The
decline in 1993 returns and allowances was due to lower returns
of certain seasonal products and lower allowances for certain
everyday products. The Company does not believe that its 1993
results were materially affected by recessionary pressures.
Royalty income of $.8 million for 1993 declined by $.9 million
from 1992 primarily due to the expiration of certain
international licensing agreements.
The Company's 1992 results reflected lower revenues from
Phar-Mor of $28.1 million, including the write-off of long-term
contracts totaling $16.4 million. In addition, lower unit sales
for everyday and seasonal greeting cards, partially offset by
higher unit sales of gift wrap and lower returns of certain
seasonal products contributed to the decline. The 1991 increase
in total revenues resulted from higher selling prices and unit
sales for everyday and seasonal greeting cards partially offset
by unit decreases in gift wrap and increased returns and
allowances.
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Total costs and expenses were $503.0 million or 92.0% of total
revenues in 1993 compared to 97.3% in 1992 and 87.0% in 1991.
Cost of products sold was 49.1% of total revenues in 1993
compared to 50.9% and 48.1% in 1992 and 1991, respectively. The
decline in 1993 compared to 1992 was due to higher revenues and
product sales mix, reflecting the acquisition of The Paper
Factory. The increase in 1992 compared to 1991 was due to lower
revenues and product sales mix. Selling, distribution and
administrative expenses were 41.7% of total revenues in 1993
compared to 45.0% in 1992 and 37.2% in 1991. The decline in
these expenses, as a percentage, reflected higher revenues,
partially offset by acquisition costs associated with The Paper
Factory and start-up costs for international operations.
Additionally, 1992 expenses included Phar-Mor related items
including write-offs of accounts receivable of $5.9 million and
card display fixtures of $5.1 million. Expenses associated with
international operations as well as domestic restructuring
charges also adversely impacted 1992.
Interest expense, net of interest income, decreased to 1.2% of
total revenues in 1993 compared to 1.4% and 1.7% in 1992 and
1991, respectively. Lower interest rates were partially offset
by higher average borrowings, largely resulting from the
acquisition of The Paper Factory as well as higher working
capital levels. The decrease in the 1992 percentage versus 1991
was attributable to lower average borrowing levels combined with
lower interest rates. Also included in 1991 were a $.5 million
prepayment penalty on the Company's 13.625% senior notes which
were retired and increased interest expense associated with debt
incurred to finance a new manufacturing and distribution center.
Income before income taxes and cumulative effect of accounting
changes was $44.0 million, an increase of $30.9 million over
1992 compared to a decrease in 1992 of $55.1 million from 1991
and an increase of $4.3 million in 1991 over 1990. This
represented 8.0% of total revenues in 1993 compared to 2.7% and
13.0% in 1992 and 1991, respectively.
The effective income tax rate for 1993 was 41.2% compared to
38.9% in 1992 and 38.6% in 1991. See Notes 1 and 7 of Notes to
Consolidated Financial Statements set forth in Item 8 below.
Income before cumulative effect of accounting changes was $25.9
million in 1993 compared to $8.0 million in 1992 and $41.9
million in 1991, and represented 4.7% of total revenues compared
to 1.6% and 8.0% in 1992 and 1991, respectively.
PAGE
<PAGE>
During 1992, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 106 - "Employer's Accounting for
Postretirement Benefits Other Than Pensions" retroactive to
January 1, 1992. Upon adoption, the Company incurred a
one-time charge of $2.5 million, net of income taxes of $1.6
million, attributable to the cumulative effect of the adoption
of this accounting change. The impact on net income per share
was $.15. In addition, the Company adopted SFAS No. 109 -
"Accounting for Income Taxes" which resulted in a credit of $1.1
million or $.06 per share for the cumulative effect of this
change.
Net income of $25.9 million in 1993 increased $19.3 million
compared to a decrease in 1992 of $35.3 million and an increase
of $2.1 million in 1991, and represented 4.7% of total revenues
compared to 1.3% and 8.0% in 1992 and 1991, respectively.
The Company attempts to minimize the impact of inflation by
controlling its cost of raw materials, labor and other expenses,
and pricing its products in light of general economic conditions.
Liquidity and Capital Resources
Cash flows from operating activities for 1993 provided $31.6
million in cash compared to $74.8 million in 1992 and $47.0
million in 1991. The decline in 1993 of $43.2 million was
primarily the result of decreased amortization of deferred costs
and other intangibles of $14.5 million combined with higher
working capital requirements. Trade receivables increased 13.3%
largely reflecting increased revenues. Inventories increased
12.8% resulting from the acquisition of The Paper Factory
combined with higher gift wrap and related products inventories.
The increase in other assets, excluding amortization, primarily
reflected additional commitments made for long-term customer
agreements combined with goodwill associated with the
acquisition of The Paper Factory.
Cash used in investing activities for plant and equipment
purchases totaled $31.0 million in both 1993 and 1992 compared
to $31.7 million in 1991. The Company anticipates that the 1994
expenditure levels will be in line with historical trends based
upon existing business conditions.
Cash provided by financing activities in 1993 was $23.7 million
compared to cash used in financing activities in 1992 and 1991
of $44.3 million and $30.4 million, respectively. The 1993
increase in short-term borrowings reflected higher working
capital levels combined with funds used to acquire The Paper
Factory. Long-term debt increased in 1993 due to the issuance
of unsecured notes to the former shareholders of The Paper
Factory, payable over the next four years. During 1991, the
Company prepaid $6.0 million of its 13.625% senior notes and
privately placed $50.0 million of 9.33% senior notes. Proceeds
from the private placements were used to reduce short-term debt.
PAGE
<PAGE>
In April 1993, the Company consummated a new $210 million,
three-year revolving credit facility, replacing a similar
existing facility. The facility will provide funds for general
corporate purposes and future growth. On March 4, 1994, the
Company announced that, based on trading of swap/derivative
positions subsequent to year-end, the Company entered into two
new contracts which will result in a minimum loss of $3.0 million and
a maximum potential loss of $27.5 million. The new contracts, which
mature in June and August 1995, may be liquidated at any time
prior to maturity and have an estimated cost of termination of
approximately $17.5 million at March 4, 1994.
Management believes that its cash flows from operations and
credit sources will provide adequate funds, both on a short-term
and on a long-term basis, for currently foreseeable debt
payments, lease commitments and payments under existing customer
agreements, all of which total approximately $19 million to $29
million per year for the next five years, as well as for
financing existing operations, currently projected capital
expenditures, anticipated long-term sales agreements consistent
with industry trends and other contingencies.
Management does not believe that there are any trends, events,
commitments or uncertainties, except for previously disclosed
items, and aside from normal seasonal fluctuations and general
industry competitive conditions, that should be expected to have
a material effect on the results of operations, financial
condition, liquidity, or capital resources of the Company.
For additional financial information see Consolidated Financial
Statements and Notes to Consolidated Financial Statements set
forth in Item 8 below.
PAGE
<PAGE>
Item 8. Financial Statements and Supplementary Data
<TABLE>
<CAPTION>
Gibson Greetings, Inc.
Consolidated Statements of Income
Years Ended December 31, 1993, 1992 and 1991
(Dollars in thousands except per share amounts)
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Revenues:
Net sales $ 546,165 $ 484,118 $ 522,166
Royalty income 761 1,705 2,148
--------- --------- ---------
Total revenues 546,926 485,823 524,314
--------- --------- ---------
Costs and expenses:
Cost of products sold 268,303 247,340 252,217
Selling, distribution and
administrative expenses 227,863 218,642 194,872
Interest expense, net of
capitalized interest 7,737 7,803 9,380
Interest income (949) (1,023) (342)
--------- --------- ---------
Total costs and expenses 502,954 472,762 456,127
--------- --------- ---------
Income before income taxes and
cumulative effect of
accounting changes 43,972 13,061 68,187
Income taxes 18,120 5,076 26,303
--------- --------- ---------
Income before cumulative effect
of accounting changes 25,852 7,985 41,884
--------- --------- ---------
Cumulative effect of change in
accounting for postretirement
benefits other than pensions,
net of income taxes of $1,609 - (2,487) -
Cumulative effect of change in
accounting for income taxes - 1,038 -
--------- --------- ---------
Net income $ 25,852 $ 6,536 $ 41,884
========= ========= =========
Income per share before
cumulative effect of
accounting changes $ 1.61 $ 0.50 $ 2.61
Cumulative effect per share
of change in accounting for
postretirement benefits
other than pensions, net of
income taxes - (0.15) -
Cumulative effect per share of
change in accounting for
income taxes - 0.06 -
--------- --------- ---------
Net income per share $ 1.61 $ 0.41 $ 2.61
========= ========= =========
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
<TABLE>
<CAPTION>
Gibson Greetings, Inc.
Consolidated Balance Sheets
December 31, 1993 and 1992
(Dollars in thousands except per share amounts)
1993 1992
--------- ---------
<S> <C> <C>
Assets
Current assets:
Cash and equivalents $ 9,477 $ 9,505
Trade receivables, net 192,163 169,605
Inventories 133,944 118,758
Prepaid expenses 4,207 4,301
Deferred income taxes 36,796 31,947
--------- ---------
Total current assets 376,587 334,116
Plant and equipment, net 116,900 112,712
Other assets, net 86,924 54,276
--------- ---------
$ 580,411 $ 501,104
========= =========
Liabilities and Stockholders' Equity
Current liabilities:
Debt due within one year $ 66,187 $ 31,911
Accounts payable 18,835 14,738
Income taxes payable 17,230 9,931
Other current liabilities 60,479 53,275
--------- ---------
Total current liabilities 162,731 109,855
Deferred income taxes (1,102) 2,693
Long-term debt 74,365 70,175
Other liabilities 20,736 15,040
--------- ---------
Total liabilities 256,730 197,763
--------- ---------
Stockholders' Equity:
Preferred stock, par value $1.00;
5,000,000 shares authorized,
none issued - -
Preferred stock, Series A, par
value $1.00; 300,000 shares
authorized, none issued - -
Common stock, par value $.01;
50,000,000 shares authorized,
16,533,267 and 16,506,919
shares issued, respectively 165 165
Paid-in capital 45,209 44,436
Retained earnings 283,904 264,469
Foreign currency adjustment 291 159
--------- ---------
329,569 309,229
--------- ---------
Less treasury stock, at cost,
473,344 and 473,344 shares,
respectively 5,888 5,888
--------- ---------
Total stockholders' equity 323,681 303,341
--------- ---------
Commitments and contingencies
(Notes 11 and 12)
$ 580,411 $ 501,104
========= =========
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
<TABLE>
<CAPTION>
Gibson Greetings, Inc.
Consolidated Statements of Cash Flows
Years Ended December 31, 1993, 1992 and 1991
(Dollars in thousands)
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $ 25,852 $ 6,536 $ 41,884
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and write-down of
display fixtures 22,688 24,870 18,495
Loss on disposal of plant
and equipment 5,817 3,816 4,441
Deferred income taxes (9,157) (6,708) (3,246)
Amortization of excess of fair value
of companies acquired over cost - - (1,430)
Amortization and write-down of
deferred costs and
other intangibles 19,547 34,087 15,822
Change in assets and liabilities:
(Increase) decrease in trade
receivables, net (22,529) 36,422 (5,466)
Increase in inventories (6,963) (4,119) (29)
(Increase) decrease in
prepaid expenses 286 (182) 3,898
Increase in other assets,
net of amortization (25,999) (23,356) (8,085)
Increase (decrease) in
accounts payable 2,579 (524) 386
Increase (decrease) in
income taxes payable 7,173 (9,967) 4,456
Increase (decrease) in other
current liabilities 6,603 6,169 (24,544)
Increase in other liabilities 5,696 7,511 457
All other, net (22) 272 (89)
--------- --------- ---------
Total adjustments 5,719 68,291 5,066
--------- --------- ---------
Net cash provided by
operating activities 31,571 74,827 46,950
--------- --------- ---------
Cash flows from investing activities:
Purchase of plant and equipment (31,049) (30,970) (31,736)
Proceeds from sale of
plant and equipment 550 63 27
Acquisition of The Paper Factory
of Wisconsin, Inc.,
net of cash acquired (24,782) - -
--------- --------- ---------
Net cash used in investing
activities (55,281) (30,907) (31,709)
--------- --------- ---------
Cash flows from financing activities:
Net increase (decrease) in
short-term borrowings 23,062 (40,400) (71,100)
Issuance of long-term debt, net 8,075 875 50,000
Payments on long-term debt (1,811) (708) (6,702)
Issuance of common stock 773 2,277 3,243
Acquisition of common stock
for treasury - (49) (222)
Dividends paid (6,417) (6,251) (5,638)
--------- --------- ---------
Net cash provided by (used in)
financing activities 23,682 (44,256) (30,419)
--------- --------- ---------
Net decrease in cash and equivalents (28) (336) (15,178)
Cash and equivalents at beginning of year 9,505 9,841 25,019
--------- --------- ---------
Cash and equivalents at end of year $ 9,477 $ 9,505 $ 9,841
========= ========= =========
Supplemental disclosure of
cash flow information
Cash paid during the year for:
Interest, net of amounts capitalized $ 7,544 $ 8,201 $ 9,264
Income taxes 20,243 19,015 24,851
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
<TABLE>
<CAPTION>
Gibson Greetings, Inc.
Consolidated Statements of Changes in Stockholder's Equity
Years Ended December 31, 1993, 1992 and 1991
(Dollars in thousands except per share amounts)
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Common stock, par value $.01:
Balance at beginning of year $ 165 $ 164 $ 162
Exercise of stock options - 1 2
--------- --------- ---------
165 165 164
--------- --------- ---------
Paid-in capital:
Balance at beginning of year 44,436 42,160 38,919
Exercise of stock options 773 2,276 3,241
--------- --------- ---------
45,209 44,436 42,160
--------- --------- ---------
Retained earnings:
Balance at beginning of year 264,469 264,184 227,938
Net income 25,852 6,536 41,884
Cash dividends paid ($.40, $.39,
and $.36 per share in 1993,
1992 and 1991, respectively) (6,417) (6,251) (5,638)
--------- --------- ---------
283,904 264,469 264,184
--------- --------- ---------
Foreign currency translation adjustment:
Balance at beginning of year 159 74 -
Aggregate adjustments resulting
from translation of financial
statements into U.S. dollars 132 85 74
--------- --------- ---------
291 159 74
--------- --------- ---------
Less treasury stock, at cost:
Balance at beginning of year 5,888 5,839 5,617
Common stock acquired - 49 222
--------- --------- ---------
5,888 5,888 5,839
--------- --------- ---------
Total stockholders' equity $ 323,681 $ 303,341 $ 300,743
========= ========= =========
</TABLE>
[FN]
See accompanying notes to consolidated financial statements.
PAGE
<PAGE>
Gibson Greetings, Inc.
Notes to Consolidated Financial Statements
Years Ended December 31, 1993, 1992 and 1991
(Dollars in thousands except per share amounts)
Note 1--Nature of Business and Statement of Accounting Policies
Principles of consolidation
The consolidated financial statements include the accounts of
Gibson Greetings, Inc. and its wholly-owned and majority-owned
subsidiaries (the Company). All intercompany transactions have
been eliminated.
Nature of business
The Company operates in a single industry segment: the design,
manufacture and sale of greeting cards, gift wrap and related
products. The Company sells to customers in several channels of
the retail trade principally located in the United States. The
Company recognizes sales at the time of shipment from its
facilities. Provisions for sales returns are recorded at the
time of the sale, based upon current conditions and the
Company's historic experience. The Company conducts business
based upon periodic credit evaluations of its customers'
financial condition and generally does not require collateral.
The Company does not believe a concentration of risk exists due
to the diversity of channels of distribution and geographic
location of its retail customers. During the year ended
December 31, 1993, the Company's largest customer accounted for
approximately 12% of total revenues and during the year ended
December 31, 1992, the same customer accounted for approximately
11% of total revenues. During the year ended December 31, 1991,
a different customer accounted for approximately 13% of total
revenues.
International Operations
During 1992, the Company formed Gibson de Mexico, S.A. de C.V.
(Gibson de Mexico) to purchase certain assets and assume certain
liabilities of Pagina Once, S.A. de C.V. (Pagina Once). Pagina
Once was primarily engaged in the manufacturing and marketing of
greeting cards. Minority stockholders of Gibson de Mexico are
principal officers of Gibson de Mexico. The total cost of the
acquisition exceeded the fair value of the net assets by $583.
During 1991, the Company formed Gibson Greetings International
Limited (Gibson International) to market the Company's products
primarily in the United Kingdom and other European countries.
The minority stockholders of Gibson International are principal
officers of Gibson International.
The activities of these subsidiaries were not material to
consolidated operations in either 1993 or 1992.
PAGE
<PAGE>
Retail Operations
On June 1, 1993, the Company acquired The Paper Factory of
Wisconsin, Inc. (The Paper Factory) for $25.1 million in a
business combination accounted for as a purchase. The Paper
Factory operates retail stores located primarily in
manufacturers' outlet shopping centers. The results of The
Paper Factory are not material and are included in the
consolidated financial statements since the date of acquisition.
The total cost of the acquisition exceeded the fair value of
the net assets of The Paper Factory by $26.2 million. In
connection with the acquisition, the Company assumed liabilities
of approximately $11.6 million. Accumulated goodwill
amortization at December 31, 1993 was $792.
Cash and equivalents
Cash and equivalents are stated at cost. Cash equivalents
include time deposits, money market instruments and short-term
debt obligations with original maturities of three months or
less. The carrying amount approximates fair value because of
the short maturity of these instruments.
Inventories
Inventories are stated at the lower of cost (first-in,
first-out) or market.
Plant and equipment
Plant and equipment are stated at cost. Plant and equipment,
except for leasehold improvements, are depreciated over their
related estimated useful lives, using the straight-line method.
Leasehold improvements are amortized over the terms of the
respective leases, using the straight-line method. Expenditures
for maintenance and repairs are charged to operations currently;
renewals and betterments are capitalized.
Other assets
Other assets include deferred and prepaid costs, goodwill and
other intangibles. Deferred and prepaid costs represent costs
incurred relating to long-term customer sales agreements.
Deferred and prepaid costs are amortized ratably over the terms
of the agreements, generally three to six years. Goodwill and
other intangibles are amortized over periods ranging from three
to twenty years, using the straight-line method.
PAGE
<PAGE>
Income taxes
Effective January 1, 1992, the Company adopted Statement of
Financial Accounting Standards (SFAS) No. 109 - "Accounting for
Income Taxes." This Statement utilizes the liability method of
accounting for income taxes. Deferred taxes are determined
based on the estimated future tax effects of differences between
the financial statement and tax bases of assets and liabilities
given the provisions of currently enacted tax laws. Prior to
1992, the Company accounted for income taxes using Accounting
Principles Board Opinion No. 11. Investment tax credits are
amortized to income over the lives of the related assets.
Excess of fair value of companies acquired over cost
The excess of fair value of companies acquired over cost was
amortized to income over ten years, using the straight-line
method. Amortization was complete in 1991. Accumulated
amortization at December 31, 1993 and 1992 was $14,480.
Interest rate swap agreements
The difference between the amount of interest to be paid and
the amount of interest to be received under interest rate swap
agreements due to changing interest rates is charged or credited
to interest expense over the life of the agreements. The fair
value of interest rate swaps (used for hedging purposes) is the
estimated amount that the Company would receive or pay to
terminate the swap agreements at the reporting date, taking into
account current interest rates and the current creditworthiness
of the swap counterparties.
Other Postretirement Benefits
Effective January 1, 1992, the Company adopted SFAS No. 106 -
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" (OPEB). This Statement requires that the cost of these
benefits be recognized in the financial statements during the
employee's active working career.
Computation of net income per share
The computation of net income per share is based upon the
weighted average number of shares of common stock and
equivalents outstanding during the year: 16,102,709 shares for
1993, 16,103,897 shares for 1992, and 16,039,259 shares for 1991.
PAGE
<PAGE>
Reclassifications
Certain prior year amounts in the consolidated financial
statements have been reclassified to conform to the 1993
presentation.
Note 2--Trade Receivables
Trade receivables at December 31, 1993 and 1992, consist of the
following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Trade receivables $ 245,682 $ 223,022
Less reserve for returns,
allowances, cash discounts
and doubtful accounts 53,519 53,417
--------- ---------
$ 192,163 $ 169,605
========= =========
</TABLE>
Note 3--Inventories
Inventories at December 31, 1993 and 1992, consist of the
following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Finished goods $ 83,074 $ 67,736
Work-in-process 13,147 12,867
Raw materials and supplies 37,723 38,155
--------- ---------
$ 133,944 $ 118,758
========= =========
</TABLE>
PAGE
<PAGE>
Note 4--Plant and Equipment
Plant and equipment at December 31, 1993 and 1992, consist of
the following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Land and buildings $ 35,936 $ 32,807
Machinery and equipment 60,842 54,010
Display fixtures 84,117 84,334
Leasehold improvements 10,001 9,164
Construction in progress 4,233 3,761
--------- ---------
195,129 184,076
Less accumulated depreciation 78,229 71,364
--------- ---------
$ 116,900 $ 112,712
========= =========
</TABLE>
Note 5--Other Assets
Other assets at December 31, 1993 and 1992, consist of the
following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Deferred and prepaid costs $ 112,157 $ 87,895
Goodwill and other intangibles 31,601 5,384
--------- ---------
143,758 93,279
Less accumulated amortization 56,834 39,003
--------- ---------
$ 86,924 $ 54,276
========= =========
</TABLE>
PAGE
<PAGE>
Note 6--Debt
Debt at December 31, 1993 and 1992, consists of the following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Debt due within one year:
Commercial paper bearing
interest at a weighted
average rate of 3.60% $ 13,020 $ -
Loans payable to banks
under a revolving credit
agreement bearing interest
at a weighted average rate
of 3.70% 10,000 -
Loans payable to banks under
uncommitted borrowing
facilities bearing interest
at weighted average rates of
3.55% and 3.58%, respectively 39,250 30,100
Current portion of long-term debt 3,917 1,811
--------- ---------
$ 66,187 $ 31,911
========= =========
Long-term debt:
Senior notes bearing interest
at 9.33%, with annual serial
maturities from 1995 through
2001 $ 50,000 $ 50,000
Economic development revenue
bonds (tax-exempt) bearing
interest at a weighted average
rate of 7.17%, with annual
serial maturities from 1993
through 1999 and a term maturity
in 2004, less unamortized
discount of $163 and $179 in
1993 and 1992, respectively, to
yield an effective rate of 7.29% 9,277 9,821
Economic development revenue
bonds (taxable) bearing interest
at 9.10%, with annual sinking
fund payments required in 1993
through 2004, less unamortized
discount of $159 and $175 in
1993 and 1992, respectively, to
yield an effective rate of 9.35% 6,431 6,760
Notes payable to former
shareholders of The Paper
Factory of Wisconsin, Inc.
bearing interest at 5.01%,
payable in annual installments
of $2,019 8,075 -
Industrial revenue bonds bearing
interest at 9.25%, payable in
semi-annual installments of $300,
secured by plant and equipment
with a carrying value of $6,275
and $6,792 at December 31, 1993
and 1992, respectively 3,000 3,600
Urban development action grant
bearing interest at 8.00%,
payable in quarterly
installments, secured by land,
building and equipment with a
carrying value of $16,183 and
$16,262 at December 31, 1993 and
1992, respectively 682 875
Other notes bearing interest at a
weighted average rate of 5.20%,
payable in quarterly
installments, secured by the same
assets securing the industrial
revenue bonds 817 930
--------- ---------
78,282 71,986
Less portion due within one year 3,917 1,811
--------- ---------
$ 74,365 $ 70,175
========= =========
</TABLE>
PAGE
<PAGE>
In 1991, the Company privately placed $50,000 in long-term
senior notes with proceeds being used for general corporate
purposes.
In 1993, the Company entered into a new three-year revolving
credit agreement, replacing a similar existing facility, which
expires April 26, 1996. The amount which can be borrowed under
this agreement is $210,000.
The fair value of the Corporation's long-term debt is estimated
based on the quoted market prices for the same or similar issues
or on the current rates offered to the Corporation for debt of
the same remaining maturities. The estimated fair value of the
Company's gross long-term debt at December 31, 1993 was $83,992.
The Company periodically enters into interest rate swap or
derivative transactions with the intent to manage the interest
rate sensitivity of portions of its debt. At December 31, 1993,
the Company had four outstanding interest rate swap/derivative
positions with a total notional amount of $96,000. Two
agreements, with terms similar to the related bonds, are
constituted as hedges and effectively change the Company's
interest rate on $3,000 of industrial revenue bonds to 6.67%
through February 1998. One of the other two agreements attempts
to limit the Company's exposure against rising short-term rates
on a notional amount of $60,000 through 1995. The last position
provides the Company with a maximum 1.0% annuity on $30,000
through August 1994 predicated on short-term rates remaining in
a specified range. Based on the estimated cost of terminating
these two positions, the Company has an unrealized net loss at
December 31, 1993 of approximately $1,000.
On March 4, 1994, the Company announced that, based on trading
of swap/derivative positions subsequent to year-end, the Company
entered into two new contracts which will result in a minimum
loss of $3,000 and a maximum potential loss of $27,500. The new
contracts, which mature in June and August 1995, may be
liquidated at any time prior to maturity and have an estimated
cost of termination of approximately $17,500 at March 4, 1994.
The annual principal payments due on long-term debt for each of
the years in the five-year period ended December 31, 1998, are
$3,917, $11,164, $11,269, $11,116 and $9,205, respectively.
Capitalized interest for the years ended December 31, 1993,
1992 and 1991 were $0, $74 and $322, respectively.
PAGE
<PAGE>
The Company's debt agreements contain certain covenants
including limitations on dividends based on a formula related to
net income, stock sales and certain restricted investments. At
December 31, 1993, the amount of unrestricted retained earnings
available for dividends was $50,760.
Note 7--Income Taxes
The Company adopted the provisions of SFAS No. 109 effective
January 1, 1992, and recorded a credit of $1,038 and increased
earnings per share by $.06 for the cumulative effect of this
change in accounting principle. There was no effect on income
before income taxes for the year ended December 31, 1992,
resulting from the adoption of SFAS No. 109.
The provision for income taxes for the years ended December 31,
1993, 1992 and 1991, consists of the following:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Federal:
Current $ 21,355 $ 7,257 $ 23,915
Deferred (7,052) (4,594) (2,617)
Deferred investment
tax credits, net (122) (124) (195)
--------- --------- ---------
14,181 2,539 21,103
--------- --------- ---------
State and local:
Current 5,240 2,093 5,829
Deferred (1,390) (1,076) (629)
--------- --------- ---------
3,850 1,017 5,200
--------- --------- ---------
Foreign:
Current - - -
Deferred 89 (89) -
--------- --------- ---------
89 (89) -
--------- --------- ---------
$ 18,120 $ 3,467 $ 26,303
========= ========= =========
</TABLE>
PAGE
<PAGE>
For the year ended December 31, 1992, provision for income
taxes was included in the financial statements as follows:
<TABLE>
<CAPTION>
1992
---------
<S> <C>
Continuing operations $ 5,076
Transition effect of change in
accounting for postretirement
benefits other than pensions (1,609)
---------
$ 3,467
=========
</TABLE>
Recently enacted tax laws raised the statutory tax rate for
corporations from 34% to 35%, retroactive to January 1, 1993.
Partially offsetting the adverse impact of the 1% increase in
effective tax rates in 1993 and future periods is the favorable
adjustment of $.7 million recorded in 1993 due to the
revaluation of certain deferred tax assets.
The effective income tax rate for the years ended December 31,
1993, 1992 and 1991, varied from the statutory federal income
tax rate as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Statutory federal
income tax rate 35.0% 34.0% 34.0%
State and local income taxes,
net of federal income tax
benefit 5.7 6.8 5.0
Other 0.5 (1.9) (0.4)
--------- --------- ---------
41.2% 38.9% 38.6%
========= ========= =========
</TABLE>
PAGE
<PAGE>
The tax effect of significant temporary differences
representing deferred tax assets and liabilities is as follows
for the year ended December 31, 1991:
<TABLE>
<CAPTION>
1991
---------
<S> <C>
Reserve for returns, allowances, cash
discounts and doubtful accounts $ (2,780)
Reserve for inventories and related items 616
Depreciation of plant and equipment 617
Reserve for display fixtures (500)
Accrued compensation and benefits (1,479)
Other 280
---------
$ (3,246)
=========
</TABLE>
Deferred taxes are determined based on the estimated future tax
effects of differences between the financial statement and tax
bases of assets and liabilities given the provisions of
currently enacted tax laws.
The net deferred taxes are comprised of the following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Current deferred taxes:
Gross assets $ 37,573 $ 32,646
Gross liabilities (777) (699)
--------- ---------
36,796 31,947
--------- ---------
Noncurrent deferred taxes:
Gross assets 12,745 8,180
Gross liabilities (11,241) (10,350)
Deferred investment
tax credits (402) (523)
--------- ---------
1,102 (2,693)
--------- ---------
$ 37,898 $ 29,254
========= =========
</TABLE>
The Company did not record any valuation allowances against
deferred tax assets at January 1, 1992, December 31, 1992 or
December 31, 1993, due to the substantial amounts of taxable
income generated over the last three to five years.
PAGE
<PAGE>
The tax balances of significant temporary differences
representing deferred tax assets and liabilities for the years
ended December 31, 1993 and 1992 were as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Reserve for returns, allowances,
cash discounts and doubtful
accounts $ 22,279 $ 21,828
Reserve for inventories
and related items 7,655 4,959
Postretirement benefits 1,885 1,851
Depreciation of plant
and equipment (11,078) (10,294)
Reserve for display fixtures 1,644 1,476
Accrued compensation and benefits 10,854 7,700
Other accruals and reserves 5,061 2,257
Deferred investment tax credits
benefits other than pensions (402) (523)
--------- ---------
$ 37,898 $ 29,254
========= =========
</TABLE>
Note 8--Other Current Liabilities
Other current liabilities at December 31, 1993 and 1992,
consist of the following:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Compensation, payroll taxes and
related withholdings $ 14,110 $ 10,626
Sales, service and
advertising costs 22,915 23,157
Other 23,454 19,492
--------- ---------
$ 60,479 $ 53,275
========= =========
</TABLE>
PAGE
<PAGE>
Note 9--Postretirement Benefits
The Company sponsors a defined benefit pension plan (the
Retirement Plan) covering substantially all employees who meet
certain eligibility requirements. Benefits are based upon years
of service and average compensation levels. The Company's
general funding policy is to contribute amounts deductible for
federal income tax purposes. Contributions are intended to
provide not only for benefits earned to date, but also for
benefits expected to be earned in the future.
The following table sets forth the Retirement Plan's funded
status on the measurement dates, September 30, 1993 and 1992,
and a reconciliation of the funded status to the amounts
recognized in the Company's consolidated balance sheets at
December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 49,995 $ 42,871
========= =========
Accumulated benefit
obligation $ 54,203 $ 46,296
========= =========
Projected benefit
obligation for services
rendered to date $ 66,183 $ 59,329
Plan assets at fair market value 62,106 56,457
--------- ---------
Plan assets less than projected
benefit obligation (4,077) (2,872)
Unrecognized net asset at
January 1, 1986, being
recognized over 9.9 years (873) (1,332)
Unrecognized prior service cost 1,852 2,553
Unrecognized net gain resulting
from experience different from
assumed and effects of changes
in assumptions (4,565) (3,639)
--------- ---------
Accrued pension expense included
in other liabilities $ (7,663) $ (5,290)
========= =========
</TABLE>
The fair market value of the Retirement Plan's assets at
December 31, 1993 and 1992, was $61,559 and $58,474,
respectively. The changes in asset values relative to the
measurement dates are primarily due to fluctuations in the
market value of the plan's equity investments.
PAGE
<PAGE>
In 1990, the Company established a nonqualified defined benefit
plan for employees whose benefits under the Retirement Plan are
limited by provisions of the Internal Revenue Code.
Additionally in 1990, the Company established a nonqualified
defined benefit plan to provide supplemental retirement benefits
for selected executives in addition to benefits provided under
other Company plans. A nonqualified plan was also established
to provide retirement benefits for members of the Company's
Board of Directors who are not covered under any of the
Company's other plans. All plans established in 1990 were
unfunded at December 31, 1993 and 1992, although assets for
those plans are held in certain grantor tax trusts known as
"Rabbi" trusts. These assets are subject to claims of the
Company's creditors but otherwise must be used only for purposes
of providing benefits under the plans.
The following table sets forth the nonqualified defined benefit
plans' benefit obligations on the measurement dates, September
30, 1993 and 1992, and a reconciliation of those obligations to
the amounts recognized in the Company's consolidated balance
sheets at December 31, 1993 and 1992:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Actuarial present value of
benefit obligations:
Vested benefit obligation $ 3,431 $ 2,402
========= =========
Accumulated benefit
obligation $ 4,396 $ 3,206
========= =========
Projected benefit
obligation for services
rendered to date $ 5,321 $ 3,870
Plan assets at fair market value - -
--------- ---------
Unfunded projected
benefit obligation (5,321) (3,870)
Unrecognized prior service cost 2,254 2,163
Unrecognized net loss resulting
from experience different from
assumed and effects of changes
in assumptions 834 169
--------- ---------
Accrued pension expense included
in other liabilities $ (2,233) $ (1,538)
========= =========
</TABLE>
PAGE
<PAGE>
The assumed weighted average discount rate and rate of increase
in future compensation levels used in determining the actuarial
present value of the projected benefit obligation for the plans
was 7.0% and 5.0% in 1993 and 8.0% and 6.0% in 1992,
respectively. The assumed long-term rate of return on plan
assets used for valuation purposes was 9.0% for 1993 and 1992.
A summary of the components of net pension expense for all of
the Company's defined benefit plans for the years ended December
31, 1993, 1992 and 1991, is as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Service cost-benefits earned
during the period $ 2,917 $ 2,834 $ 2,529
Interest cost on projected
benefit obligation 5,092 4,758 4,323
Net amortization and deferral
income tax benefit 128 159 6,923
Expected return on plan assets (4,941) (4,610) (11,064)
-------- --------- ---------
$ 3,196 $ 3,141 $ 2,711
======== ========= =========
</TABLE>
The Company has a defined contribution pension plan for
employees who are members of a collective bargaining unit.
Benefits under this plan are determined based upon years of
service and an hourly contribution rate. Pension expense for
this plan for the years ended December 31, 1993, 1992 and 1991,
was $451, $479 and $410, respectively.
The Company has two defined contribution plans pursuant to
Section 401(k) of the Internal Revenue Code. The plans provide
that employees meeting certain eligibility requirements may
defer a portion of their salary subject to certain limitations.
The Company pays certain administrative costs of the plans and
contributes to the plans based upon a percentage of the
employee's salary deferral and an annual additional contribution
at the discretion of the Board of Directors. The total expense
for these plans for the years ended December 31, 1993, 1992 and
1991, was $501, $481 and $511, respectively.
In addition to providing pension benefits, the Company provides
medical and life insurance benefits for certain eligible
employees upon retirement from the Company. Substantially all
employees may become eligible for such benefits upon retiring
from active employment of the Company. Medical and life
insurance benefits for employees and retirees are paid by a
combination of company and employee or retiree contributions.
Retiree insurance benefits are provided by insurance companies
whose premiums are based on claims paid during the year. The
PAGE
<PAGE>
Company adopted the provisions of SFAS No. 106 effective January
1, 1992. This standard requires companies to accrue an
actuarially determined charge for postretirement benefits during
the period in which active employees become eligible, under
existing plan agreements, for such future benefits. The
cumulative effect of this change resulted in a charge to net
income of $2,487 or $.15 per share, after taxes of $1,609. Prior
to January 1, 1992, the Company recognized these costs, which
were not significant to operations, on a cash basis.
Net periodic cost of these benefits for the years ended
December 31, 1993 and 1992 is as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Service cost-benefits earned
during the period $ 148 $ 139
Interest cost on
accumulated benefits 470 343
Net amortization 61 -
--------- ---------
$ 679 $ 482
========= =========
</TABLE>
A reconciliation of the accumulated postretirement benefit
obligation (APBO) measured as of September 30, 1993 and 1992 to
the Company's consolidated balance sheets at December 31, 1993
and 1992 was as follows:
<TABLE>
<CAPTION>
1993 1992
--------- ---------
<S> <C> <C>
Retirees $ 3,514 $ 2,681
Fully eligible active employees 1,228 1,257
Other active employees 1,084 479
--------- ---------
Accumulated benefit obligation 5,826 4,417
Unrecognized prior service cost (771) -
Unrecognized net loss (383) -
--------- ---------
Accrued APBO included in
other liabilities $ 4,672 $ 4,417
========= =========
</TABLE>
PAGE
<PAGE>
The accumulated benefit obligation for 1993 and 1992 was
determined using the following assumptions:
1993 1992
----------------------- -----------------------
Discount rate 7% 8%
Health care cost
trend rate 11% for 1994 graded down 16% for 1993 and 1994,
1% per year to 5% in the gradually declining to
year 2000, 5% thereafter a rate of 6% by 2003
The health care cost trend rate assumption does not have a
significant effect on the amounts reported. For example, a 1%
increase in the health care cost trend rate would increase the
accumulated postretirement benefit obligation as of December 31,
1993, and the net periodic cost for the year then ended by
approximately 5% and 4%, respectively.
Note 10--Stockholders' Equity
Employee stock plans
Under various stock option and incentive plans, the Company may
grant incentive and nonqualified stock options to purchase its
common stock. All incentive options are granted at the fair
market value on the date of grant. Incentive stock options
generally become exercisable one year after the date granted and
expire ten years after the date granted, if not earlier expired
due to termination of employment. Nonqualified stock options
become exercisable according to a vesting schedule determined at
the date granted and expire on the date set forth in the option
agreement, if not earlier expired due to termination of
employment.
A summary of stock option activity during the years ended
December 31, 1993, 1992 and 1991, is as follows:
<TABLE>
<CAPTION>
1993 1992 1991
--------- --------- ---------
<S> <C> <C> <C>
Number of options to purchase
common stock:
Outstanding at
beginning of year 1,073,470 646,958 782,529
Granted 47,500 534,900 37,000
Exercised (26,348) (93,021) (151,338)
Expired (31,580) (15,367) (21,233)
--------- --------- --------
Outstanding at end of year 1,063,042 1,073,470 646,958
========= ========= ========
Exercisable at end of year 666,594 439,641 408,294
========= ========= ========
</TABLE>
The exercise prices of options granted in 1993 ranged from
$18.88 to $21.25. The exercise prices of options granted in
1992 ranged from $18.38 to $28.63 and the exercise price of
options granted in 1991 ranged from $24.75 to $28.00. Options
exercised were at prices of $2.38 to $23.50, in 1993, 1992 and
1991. Options outstanding at December 31, 1993, are at prices
ranging from $11.38 to $28.63.
Under certain stock incentive plans, the Company may grant the
right to purchase restricted shares of its common stock. Such
shares are subject to restriction on transfer and to repurchase
by the Company. The purchase price of restricted shares is
determined by the Company and may be nominal. In 1993, 1992 and
1991, 0, 5,000 and 38,500 restricted shares, respectively, were
purchased at a price of $1.00 per share.
At December 31, 1993, 621,192 shares were available under the
stock option and incentive plans, of which 563,166 shares could
be issued as restricted shares.
Stock rights
On December 4, 1987, the Company's Board of Directors declared
a dividend distribution of one right for each outstanding share
of the Company's common stock to stockholders of record on
December 21, 1987. Each right entitles the holder to purchase,
for the exercise price of $40 per share, 1/100th of a share of
Series A Preferred Stock. Until exercisable, the rights are
attached to all shares of the Company's common stock outstanding.
The rights are exercisable only in the event that a person or
group of persons (i) acquires 20% or more of the Company's
common stock and there is a public announcement to that effect,
(ii) announces an intention to commence or commences a tender or
exchange offer which would result in that person or group owning
30% or more of the Company's common stock, or (iii) beneficially
owns a substantial amount (at least 15%) of the Company's common
stock and is declared to be an Adverse Person (as defined in the
Rights Agreement) by the Company's Board of Directors. Upon a
merger or other business combination transaction, each right may
entitle the holder to purchase common stock of the acquiring
company worth two times the exercise price of the right. Under
certain other circumstances (defined in the Rights Agreement)
each right may entitle the holder (with certain exceptions) to
purchase common stock, or in certain circumstances, cash,
property or other securities of the Company, having a value
worth two times the exercise price of the right.
The rights are redeemable at one cent per right at anytime
prior to 20 days after the public announcement that a person or
group has acquired 20% of the Company's common stock. Unless
exercised or redeemed earlier by the Company, the rights expire
on December 28, 1997.
PAGE
<PAGE>
Note 11--Commitments
Lease commitments
The Company has a long-term lease agreement for certain of its
principal facilities. The initial lease term runs through
January 31, 2002, with two five-year renewal options available.
The basic rent under the lease is subject to adjustment based on
changes in the Consumer Price Index for the preceding five
years, effective March 1, 1987, and every five years thereafter
including renewal periods. The lease provides a purchase option
exercisable in 2002. The option price is the higher of $35,400
or the fair market value on the date of exercise. As a
condition of the lease, all property taxes, insurance costs and
operating expenses are to be paid by the Company.
The Company also leases additional manufacturing, distribution
and administrative facilities, sales offices and personal
property under noncancellable leases which expire on various
dates through 2003. Certain of these leases contain renewal
and escalating rental payment provisions.
Rental expense for the years ended December 31, 1993, 1992 and
1991, on all real and personal property, was $20,297, $15,846
and $13,777, respectively. Minimum future annual rentals under
noncancellable leases for each of the years in the five-year
period ended December 31, 1998 are $17,444, $16,242, $14,190,
$12,759 and $9,842, respectively. After 1998, these commitments
aggregate $25,364.
Contract commitments
The Company has several long-term customer sales agreements
which require payments and credits for each of the years in the
five-year period ended December 31, 1998, of $3,959, $1,347,
$707, $443 and $242, respectively. After December 31, 1998,
these commitments aggregate $100. All of these amounts have
been recorded as other current liabilities or other liabilities
in the accompanying balance sheet as of December 31, 1993.
Employment agreements
The Company has employment agreements with certain executives
which provide for, among other things, minimum annual salaries
adjusted for cost-of-living changes, continued payment of
salaries in certain circumstances and incentive bonuses.
Certain agreements further provide for signing bonuses, deferred
compensation payable upon expiration of the agreements and
employment termination payments, including payments contingent
upon any person becoming the beneficial owner of 50% or greater
of the Company's outstanding stock.
PAGE
<PAGE>
Note 12--Legal Proceedings
In 1990, a complaint was issued against the Company alleging
certain unfair labor practices in connection with a strike at
one of its facilities. On December 18, 1991, an Administrative
Law Judge of the National Labor Relations Board ("NLRB") issued
a recommended order, which included reinstatement and back pay
affecting approximately 160 strikers, based on findings that the
Company had violated certain provisions of the National Labor
Relations Act. On May 7, 1993, the NLRB upheld the
Administrative Law Judge's decision in some respects, and
enlarged the number of strikers entitled to back pay to
approximately 240. A prompt notice of appeal was filed in the
United States Court of Appeals for the District of Columbia
Circuit. Management believes it has substantial defenses to
these charges and these defenses will be presented in briefs in
the Company's appeal. In addition, the Company is a defendant
in certain other litigation. Management does not believe that
an adverse outcome as to any or all of these matters would have
a material adverse effect on the Company's net worth or total
cash flows; however, the impact on the statement of operations
in a given year could be material.
PAGE
<PAGE>
Report of Independent Public Accountants
To Gibson Greetings, Inc.:
We have audited the accompanying consolidated balance sheets of
Gibson Greetings, Inc. (a Delaware corporation) and its
subsidiaries as of December 31, 1993 and 1992, and the related
consolidated statements of income, cash flows and changes in
stockholders' equity for each of the three years in the period
ended December 31, 1993. These financial statements and the
schedules referred to below are the responsibility of the
Company's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our
audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Gibson Greetings, Inc. and its subsidiaries as of December
31, 1993 and 1992, and the results of their operations and their
cash flows for each of the three years in the period ended
December 31, 1993 in conformity with generally accepted
accounting principles.
As discussed in notes to consolidated financial statements,
effective January 1, 1992, the Company changed its methods of
accounting for postretirement benefits other than pensions and
income taxes.
Our audits were made for the purpose of forming an opinion on
the basic financial statements taken as a whole. The schedules
listed in the index of financial statements are presented for
purposes of complying with the Securities and Exchange
Commission's rules and are not part of the basic financial
statements. These schedules have been subjected to the auditing
procedures applied in the audits of the basic financial
statements and, in our opinion, fairly state in all material
respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Cincinnati, Ohio,
March 4, 1994.
PAGE
<PAGE>
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure
Not applicable.
PART III
Except as set forth below, the information required by this Part
is included in the Company's definitive Proxy Statement, filed
with the Securities and Exchange Commission in connection with
the Company's 1994 Annual Meeting of Stockholders, and is
incorporated by reference herein.
Item 10. Directors and Executive Officers of the Registrant
The Executive Officers of the Company (at March 18, 1994) are
as follows:
Name Age Title
------------------- --- ----------------------------
Benjamin J. Sottile 56 Chairman of the Board,
President and
Chief Executive Officer
Ralph J. Olson 49 Vice President and Director
William L. Flaherty 46 Vice President, Finance and
Chief Financial Officer
James H. Johnsen 52 Vice President, Controller
and Treasurer
Stephen M. Sweeney 57 Vice President, Human
Resources
Information about Mr. Sottile is incorporated by reference from
the Company's definitive Proxy Statement for the 1994 Annual
Meeting of Stockholders.
RALPH J. OLSON. Mr. Olson is a Vice President of the Company
and is President and Chief Operating Officer of the Company's
Gibson Card Division, positions he has held since 1991. From
1989 until 1991, he was President of the E-Z Go Division of
Textron, Inc., a manufacturer of golf and utility vehicles.
During the period from 1984 until 1989, he was President of the
Material Handling Division of Interlake Corp., specializing in
material handling, automation and storage systems.
WILLIAM L. FLAHERTY. Mr. Flaherty has been Vice President,
Finance and Chief Financial Officer of the Company since
November 1993. Prior to that time, he served as Vice President
and Corporate Treasurer of FMR Corp., the parent company of
Fidelity Investments Group, a mutual fund management and
discount stock brokerage firm (1989 - 1992) and as Vice President
and Treasurer of James River Corporation , an integrated
manufacturer of pulp, paper and converted paper and plastic
products (1987 - 1989).
JAMES H. JOHNSEN. Mr. Johnsen is the Company's Vice President,
Controller and Treasurer and Assistant Secretary. He joined the
Accounting Department of the Company in 1964 and served as the
Company's Corporate Controller from 1978 until 1986 and as its
Treasurer from 1980 until 1986, at which time he was elected
Vice President, Control and Treasurer.
STEPHEN M. SWEENEY. Mr. Sweeney joined the Company as Vice
President, Human Resources in 1987. He held similar positions
with Coca Cola Enterprises, Inc. from 1985 until 1987, the
Tribune Company from 1983 until 1985 and Contel, Inc. from 1976
to 1983.
Officers serve with the approval of the Board of Directors.
PAGE
<PAGE>
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K
a) The following documents are filed as part of this report:
1. Financial Statements:
Page
Herein Financial Statement
------ -----------------------------------------------------
11 Consolidated Statements of Income for the years ended
December 31, 1993, 1992 and 1991
12 Consolidated Balance Sheets as of December 31, 1993
and 1992
13 Consolidated Statements of Cash Flows for the years
ended December 31, 1993, 1992 and 1991
14 Consolidated Statements of Changes in Stockholders'
Equity for the years ended December 31, 1993, 1992
and 1991
15 Notes to Consolidated Financial Statements
26 Report of Independent Public Accountants
2. Financial Statement Schedules required to be filed by Item 8
of this Form 10-K:
Schedules Filed:
Page
Herein Schedule
------ -----------------------------------------------------
30 II Amounts Receivable from Related Parties
31 VIII Valuation and Qualifying Accounts
32 IX Short-term Borrowings
33 X Supplementary Income Statement Information
All other schedules are omitted because of the absence of
conditions under which they are required or because the information
is shown in the financial statements or notes thereto.
3. Exhibits: See Index of Exhibits (page 34) for a listing of
all exhibits filed with this annual report on Form 10-K
b) Reports on Form 8-K: None.
PAGE
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 as
of the 18th day of March 1994.
Gibson Greetings, Inc.
By /s/ Benjamin J. Sottile
-----------------------
Benjamin J. Sottile
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed by the following persons on behalf of
the registrant and in the capacities indicated as of the 18th day of
March 1994.
Signature Title
---------- -----
Chairman of the Board,
/s/ Benjamin J. Sottile President and Chief Executive Officer
-------------------------
Benjamin J. Sottile (principal executive officer)
Vice President, Finance
/s/ William L. Flaherty Chief Financial Officer
-------------------------
William L. Flaherty (principal financial officer)
Vice President, Controller
/s/ James H. Johnsen and Treasurer
-------------------------
James H. Johnsen (principal accounting officer)
/s/ Thomas M. Cooney
-------------------------
Thomas M. Cooney Director
/s/ Julius Koppelman
-------------------------
Julius Koppelman Director
/s/ Charles D. Lindberg
-------------------------
Charles D. Lindberg Director
/s/ Ralph J. Olson
-------------------------
Ralph J. Olson Director
/s/ Albert R. Pezzillo
-------------------------
Albert R. Pezzillo Director
/s/ Thomas J. Smith
-------------------------
Thomas J. Smith Director
/s/ Burton B. Staniar
-------------------------
Burton B. Staniar Director
/s/ Frank Stanton
-------------------------
Frank Stanton Director
/s/ Charlotte St. Martin
-------------------------
Charlotte St. Martin Director
/s/ Roger T. Staubach
-------------------------
Roger T. Staubach Director
/s/ C. Anthony Wainwright
-------------------------
C. Anthony Wainwright Director
-------------------------
Harry N. Walters Director
PAGE
<PAGE>
<TABLE>
<CAPTION>
GIBSON GREETINGS, INC.
SCHEDULE II - AMOUNTS RECEIVABLE FROM RELATED PARTIES
(Thousands of dollars)
Column A Column B Column C Column D Column E
- ----------------------- ---------- --------- ------------------------- -----------------------
Deductions Balance at End of Period
Balance at ------------------------- ------------------------
Beginning Amounts Amounts
Name of Debtor of Period Additions Collected Written Off Current Noncurrent
- ----------------------- ---------- --------- --------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
M. Sillence,
Operations Director,
Gibson Greetings
International Limited:
Twelve months
ended 12/31/93 $ 249 $ - $ 249 $ - $ - $ -
Twelve months
ended 12/31/92 322 (72) (A) - - 249 -
Twelve months
ended 12/31/91 - 322 (B) - - 322 -
P.M. Osman,
Managing Director,
Gibson Greetings
International Limited:
Twelve months
ended 12/31/93 - - - - - -
Twelve months
ended 12/31/92 99 45 (A) 144 - - -
Twelve months
ended 12/31/91 - 99 (C) - - 99 -
S. Kosmalski,
Senior Vice President
Sales:
Twelve months
ended 12/31/93 - - - - - -
Twelve months
ended 12/31/92 - 120 (D) 120 - - -
Twelve months
ended 12/31/91 - - - - - -
</TABLE>
[FN]
- -----------------------
(A) Includes foreign currency translation adjustments.
(B) Real estate assistance loan, secured, bearing interest at 12%
if note not repaid by May 12, 1993 or upon sale of principal
residence, whichever occurs first.
(C) Real estate assistance loan, secured, bearing interest at 12%
if note not repaid by November 14, 1992 or upon sale of
principal residence, whichever occurs first.
(D) Real estate assistance loan, secured, bearing interest at 12%
if note not repaid by September 15, 1992 or upon sale of
principal residence, whichever occurs first.
PAGE
<PAGE>
<TABLE>
<CAPTION>
GIBSON GREETINGS, INC.
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(Thousands of dollars)
Column A Column B Column C Column D Column E
- -------------------- ---------- ------------------------- ---------- ----------
Additions
-------------------------
Balance at Charged to Charged to Balance at
Beginnng Costs and Other End of
Description of Period Expenses Accounts Deductions Period
- -------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Deducted from
trade receivables
Allowance for
doubtful accounts:
Twelve months
ended 12/31/93 $ 7,515 $ 4,188 $ - $ 1,102 (A) $ 10,601
Twelve months
ended 12/31/92 8,950 11,549 - 12,984 (A) 7,515
Twelve months
ended 12/31/91 6,850 4,094 - 1,994 (A) 8,950
Allowance for sales
returns, allowances
and cash discounts:
Twelve months
ended 12/31/93 45,902 89,987 - 92,971 (B) 42,918
Twelve months
ended 12/31/92 45,490 100,813 - 100,401 (B) 45,902
Twelve months
ended 12/31/91 41,020 116,414 - 111,944 (B) 45,490
</TABLE>
[FN]
- --------------------
(A) Accounts that were judged to be uncollectible and charged to the
reserve, net of recoveries.
(B) Includes actual cash discounts taken by customers and sales returns
and allowances that were granted to customers, all of which were
charged to the reserve.
PAGE
<PAGE>
<TABLE>
<CAPTION>
GIBSON GREETINGS, INC.
SCHEDULE IX - SHORT-TERM BORROWINGS
(Thousands of dollars)
Column A Column B Column C Column D Column E
- ---------------------- ---------- -------------------------- ----------- ----------
Weighted
Maximum Average Average
Weighted Amount Amount Interest
Balance at Average Outstanding Outstanding Rate
Category of Aggregrate End of Interest During the During the During the
Short-Term Borrowings Period Rate Period Period Period
- ---------------------- ---------- ---------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Bank Debt (D):
Twelve months
ended 12/31/93 $ 49,250 3.58 % $ 59,250 $ 17,133 3.55 %
Twelve months
ended 12/31/92 30,100 3.58 51,000 16,129 4.21
Twelve months
ended 12/31/91 70,500 6.10 99,200 60,603 6.59
Commercial Paper (D):
Twelve months
ended 12/31/93 13,020 3.60 20,000 1,609 3.36
Twelve months
ended 12/31/92 - - 49,000 4,589 3.63
Twelve months
ended 12/31/91 - - 7,000 2,333 7.14
</TABLE>
[FN]
- ----------------------
(A) The maximum amount outstanding during the period was
determined as of month-end.
(B) The average amount outstanding during the period was
computed based on the average daily outstanding balance.
(C) The weighted average interest rate during the period
was computed by dividing actual short-term interest expense
by the average amount outstanding during the period.
(D) See Note 6 of Notes to fiscal year 1993 and 1992
Consolidated Financial Statements and Note 8 of
Notes to fiscal year 1991 Consolidated Financial
Statements, each Note contained in or incorporated by
reference into the Company's annual report on Form 10-K
for that year, for information on short-term borrowing
facilities.
PAGE
<PAGE>
<TABLE>
<CAPTION>
GIBSON GREETINGS, INC.
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(Thousands of dollars)
Column A Column B
- ---------------------- ----------------------------------------
Twelve Months Ended December 31,
----------------------------------------
Item 1993 1992 1991
- ---------------------- ---------- ---------- ----------
<S> <C> <C> <C>
Royalty expense $ 7,086 $ 6,191 $ 6,419
</TABLE>
PAGE
<PAGE>
Index of Exhibits
Exhibit
Number Description
------- -----------------------------------------------------------------
3(a) Restated Certificate of Incorporation as amended (*1)
3(b) Bylaws
4(a) Article 4.01 of Restated Certificate of Incorporation
(included in Exhibit 3(a))
4(b) Rights Agreement dated as of December 4, 1987, between
Gibson Greetings, Inc. and The First National Bank of Boston,
Rights Agent, including Certificate of Designation, Preferences
and Rights of Series A Preferred Stock (*2)
10(a) Lease Agreement dated January 25, 1982 between
Corporate Property Associates 2 and Corporate Property
Associates 3 and Gibson Greeting Cards, Inc. (*3)
10(b) Sublease Agreement dated January 1, 1977 between B.F.
Goodrich and Cleo Wrap Division of Gibson Greetings Card, Inc.
(*3)
10(c) Amendment and Extension of Term of Sublease dated June
26, 1983, between B.F. Goodrich Company and Gibson Greeting
Cards, Inc. (*4)
10(d) Amendment dated June 25, 1985, to Lease Agreement,
dated January 25, 1982, by and between Corporate Property
Associates 2 and Corporate Property Associates 3 and Gibson
Greeting Cards, Inc. (*5)
10(e) Lease and Agreement dated March 7, 1986 between
Associated Warehouses, Inc. and Cleo Wrap Division of Gibson
Greetings, Inc. (*5)
10(f) Commercial Paper Issuing Agent Agreement dated as of
July 11, 1986, between Gibson Greetings, Inc. and Irving Trust
Corporation (*6)
10(g) Commercial Paper Dealer Agreement dated July 16, 1986,
between Gibson Greetings, Inc. and The First Boston Corporation
(*6)
10(h) Credit Agreement, dated as of April 26, 1993, by and
among Gibson Greetings, Inc.; Bankers Trust Company; The Bank of
New York; Mellon Bank, N.A.; The Fifth Third Bank; Harris Trust
and Savings Bank; NBD Bank, N.A.; Royal Bank of Canada; The
Sanwa Bank, Ltd.; Society National Bank; Union Bank of
Switzerland; Wachovia Bank of Georgia, N.A.; and Bankers Trust
Company, as agent (*7)
10(i) Form of Note Agreement between Gibson Greetings, Inc.
and Connecticut Mutual Life, The Minnesota Mutual Life Insurance
Company, The Reliable Life Insurance Company, Federated Life
Insurance Company, The Variable Annuity Life Insurance Company
and Nationwide Life Insurance Company, dated May 15, 1991 (*8)
10(j) Executive Compensation Plans and Arrangements
(i) 1982 Stock Option Plan
(ii) 1983 Stock Option Plan
(iii) 1985 Stock Option Plan
(iv) 1987 Stock Option Plan
(v) 1989 Stock Option Plan
(vi) 1989 Stock Option Plan for Nonemployee Directors
(vii) 1991 Stock Option Plan
(viii) Employment Agreement with Mr. Cooney (*9)
(ix) Form of Second Amendment to Employment Agreement with
Mr. Cooney (*1)
PAGE
<PAGE>
Exhibit
Number Description
------- -----------------------------------------------------------------
(x) Employment Agreement between Gibson Greetings, Inc.
and Benjamin J. Sottile, dated April 1, 1993 (*7)
(xi) Compensatory agreements (*10)
(xii) ERISA Makeup Plan (*11)
(xiii) Supplemental Executive Retirement Plan (*11)
(xiv) Agreements dated January 2, 1991 and December 10, 1993
between Gibson Greetings, Inc. and Stephen M. Sweeney
(xv) Agreement dated November 18, 1993 between Gibson
Greetings, Inc. and William L. Flaherty
(xvi) Agreement dated February 22, 1994 between Gibson
Greetings, Inc. and Michael A. Pietrangelo
11 Computation of Income per Share
21 Subsidiaries of the Registrant
23 Consent of Independent Public Accountants
- ----------------------
* Filed as an Exhibit to the document indicated and
incorporated herein by reference:
(1) The Company's Report on Form 10-K for the year ended
December 31, 1988.
(2) The Company's Report on Form 8-K dated December 28, 1987,
filed January 4, 1988.
(3) The Company's Registration Statement on Form S-8 (No.
2-82990).
(4) The Company's Registration Statement on Form S-8 (No.
2-96396).
(5) The Company's Report on Form 10-K for the year ended
December 31, 1985.
(6) The Company's Report on Form 10-Q for the quarter ended
September 30, 1986.
(7) The Company's Report on Form 10-Q for the quarter ended
June 30, 1993.
(8) The Company's Report on Form 10-Q for the quarter ended
June 30, 1991.
(9) The Company's Report on Form 10-K for the year ended
December 31, 1986.
(10) The Company's Report on Form 10-K for the year ended
December 31, 1991.
(11) The Company's Report on Form 10-K for the year ended
December 31, 1992.
- ----------------------
The Company will furnish to the Commission upon request its
long-term debt instruments not listed above.
<PAGE>
<PAGE>
Exhibit 10(j)(i)
GIBSON GREETINGS, INC.
1982 STOCK OPTION PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1982 Stock Option Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any section or sections of the Code of
like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options provided for herein as
it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Option.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan are the Company's
common shares, $.01 par value, which may be either authorized but
unissued shares or treasury shares.
(b) The aggregate number of common shares of the Company
which may be issued under the Plan shall not exceed one million
PAGE
<PAGE>
fifty thousand (1,050,000) shares; subject, however, to the
adjustment provided in Paragraph 8 in the event of stock splits,
stock dividends, exchanges of shares or the like occurring after
the effective date of this Plan. No option may be granted under
this Plan which could cause such maximum limit to be exceeded.
(c) Common shares covered by an option which is no longer
exercisable with respect to such shares shall again be available
for issuance in connection with other options granted under this
Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provisions of the Plan,
grant either nonqualified or Incentive Stock Options (as defined
in Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a nonqualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price. The option price per share shall be not
less than 100% of the fair market value of the Company's common
shares on the date the option is granted, as determined by the
Committee in a manner consistent with the requirements of the
Code for Incentive Stock Options.
(b) Period within which option may be exercised. The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder. Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
to an Eligible Employee who, at the time such option is granted
owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or its
Subsidiaries, the option price per share shall be at least 110%
of the fair market value of the common shares subject to the
option and such option may not be exercised after the expiration
of five years from the date the option is granted.
- 2 -
PAGE
<PAGE>
(d) Termination of option by reason of termination of
employment. If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of the following periods, or at such earlier time as
may be applicable under Paragraph 6(b) or 6(c) above: (i) thirty
(30) days following such termination of employment, if such
termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to nonqualified options which are exercisable on the
date of termination of employment.
(e) Non-transferability. Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a nonqualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee. More than
one option may be granted to an Optionee under this Plan and both
nonqualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws. Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission. With respect thereto, the
Committee may impose such conditions on transfer, restrictions
and limitations as it may deem necessary and appropriate to
assure compliance with such applicable securities laws.
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
- 3 -
PAGE
<PAGE>
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
shares in respect of which the option is being exercised, and
shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of common
shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the common shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares of stock
issuable upon exercise of such option until certificates
representing such shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's common shares resulting from stock splits, stock
dividends, combinations or exchanges or shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(1) the number of shares available for option grant under this
Plan, (2) the number of shares subject to options granted under
this Plan, and (3) the option price of optioned shares.
9. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
10. Amendment or Termination. The Board may terminate
this Plan at any time, and may amend the Plan at any time or from
time to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be amended (1) to
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
- 4 -
PAGE
<PAGE>
give effect to stock splits, etc.); (2) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (3) to change the requirement that the option
price per share of common stock covered by an option granted
under this Plan not be less than 100% of the fair market value of
the Company's common stock on the date such option is granted;
(4) to extend the time within which Incentive Stock Options may
be granted or the time within which a granted Incentive Stock
Option may be exercised; or (5) to change, without the consent of
the Optionee (or his, or his estate's, legal representative), any
option previously granted to him under the Plan. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms, except as provided in
Paragraph 9 above.
11. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
12. Implied Consent of Participants. Every Participant, by
his acceptance of an option under this Plan, shall be deemed to
have consented to be bound, on his own behalf and on behalf of
his heirs, assigns, and legal representatives, by all of the
terms and conditions of this Plan.
13. No Effect on Employment Status. The fact than an
employee has been granted an option under this Plan shall not
limit or otherwise qualify the right of his employer to terminate
his employment at any time.
14. Duration and Termination of the Plan. This Plan became
effective on January 26, 1982. No Incentive Stock Option shall
be granted subsequent to January 25, 1992, or subsequent to any
earlier date as of which the Plan is terminated pursuant to
Paragraph 10.
15. Delaware Law to Govern. This plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
1982opt.pol
- 5 -
PAGE
<PAGE>
Exhibit 10(j)(ii)
GIBSON GREETINGS, INC.
1983 STOCK OPTION PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1983 Stock Option Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any section or sections of the Code of
like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options provided for herein as
it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Option.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan are the Company's
common shares, $.01 par value, which may be either authorized but
unissued shares or treasury shares.
(b) The aggregate number of common shares of the Company
which may be issued under the Plan shall not exceed one hundred
PAGE
<PAGE>
twelve thousand five hundred (112,500) shares; subject, however,
to the adjustment provided in Paragraph 8 in the event of stock
splits, stock dividends, exchanges of shares or the like
occurring after the effective date of this Plan. No option may
be granted under this Plan which could cause such maximum limit
to be exceeded.
(c) Common shares covered by an option which is no longer
exercisable with respect to such shares shall again be available
for issuance in connection with other options granted under this
Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provisions of the Plan,
grant either nonqualified or Incentive Stock Options (as defined
in Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a nonqualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price. The option price per share shall be not
less than 100% of the fair market value of the Company's common
shares on the date the option is granted, as determined by the
Committee in a manner consistent with the requirements of the
Code for Incentive Stock Options.
(b) Period within which option may be exercised. The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder. Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
to an Eligible Employee who, at the time such option is granted
owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or its
Subsidiaries, the option price per share shall be at least 110%
of the fair market value of the common shares subject to the
- 2 -
PAGE
<PAGE>
option and such option may not be exercised after the expiration
of five years from the date the option is granted.
(d) Termination of option by reason of termination of
employment. If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of the following periods, or at such earlier time as
may be applicable under Paragraph 6(b) or 6(c) above: (i) thirty
(30) days following such termination of employment, if such
termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to nonqualified options which are exercisable on the
date of termination of employment.
(e) Non-transferability. Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a nonqualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee. More than
one option may be granted to an Optionee under this Plan and both
nonqualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws. Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission. With respect thereto, the
Committee may impose such conditions on transfer, restrictions
and limitations as it may deem necessary and appropriate to
assure compliance with such applicable securities laws.
- 3 -
PAGE
<PAGE>
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
shares in respect of which the option is being exercised, and
shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of common
shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the common shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares of stock
issuable upon exercise of such option until certificates
representing such shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's common shares resulting from stock splits, stock
dividends, combinations or exchanges or shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(1) the number of shares available for option grant under this
Plan, (2) the number of shares subject to options granted under
this Plan, and (3) the option price of optioned shares.
9. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
10. Amendment or Termination. The Board may terminate
this Plan at any time, and may amend the Plan at any time or from
time to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be amended (1) to
- 4 -
PAGE
<PAGE>
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
give effect to stock splits, etc.); (2) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (3) to change the requirement that the option
price per share of common stock covered by an option granted
under this Plan not be less than 100% of the fair market value of
the Company's common stock on the date such option is granted;
(4) to extend the time within which Incentive Stock Options may
be granted or the time within which a granted Incentive Stock
Option may be exercised; or (5) to change, without the consent of
the Optionee (or his, or his estate's, legal representative), any
option previously granted to him under the Plan. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms, except as provided in
Paragraph 9 above.
11. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
12. Implied Consent of Participants. Every Participant, by
his acceptance of an option under this Plan, shall be deemed to
have consented to be bound, on his own behalf and on behalf of
his heirs, assigns, and legal representatives, by all of the
terms and conditions of this Plan.
13. No Effect on Employment Status. The fact than an
employee has been granted an option under this Plan shall not
limit or otherwise qualify the right of his employer to terminate
his employment at any time.
14. Duration and Termination of the Plan. This Plan became
effective on May 13, 1983. No Incentive Stock Option shall be
granted subsequent to May 12, 1993, or subsequent to any earlier
date as of which the Plan is terminated pursuant to Paragraph 10.
15. Delaware Law to Govern. This plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
1983opt.pol
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PAGE
<PAGE>
Exhibit 10(j)(iii)
GIBSON GREETINGS, INC.
1985 STOCK OPTION PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1985 Stock Option Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any section or sections of the Code of
like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options provided for herein as
it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Option.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan are the Company's
common shares, $.01 par value, which may be either authorized but
unissued shares or treasury shares.
(b) The aggregate number of common shares of the Company
which may be issued under the Plan shall not exceed Three Hundred
PAGE
<PAGE>
Thousand (300,000) shares; subject, however, to the adjustment
provided in Paragraph 8 in the event of stock splits, stock
dividends, exchanges of shares or the like occurring after the
effective date of this Plan. No option may be granted under this
Plan which could cause such maximum limit to be exceeded.
(c) Common shares covered by an option which is no longer
exercisable with respect to such shares shall again be available
for issuance in connection with other options granted under this
Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provisions of the Plan,
grant either nonqualified or Incentive Stock Options (as defined
in Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a nonqualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price. The option price per share shall be not
less than 100% of the fair market value of the Company's common
shares on the date the option is granted, as determined by the
Committee in a manner consistent with the requirements of the
Code for Incentive Stock Options.
(b) Period within which option may be exercised. The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder. Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
to an Eligible Employee who, at the time such option is granted
owns stock possessing more than 10 percent of the total combined
voting power of all classes of stock of the Company or its
Subsidiaries, the option price per share shall be at least 110%
of the fair market value of the common shares subject to the
option and such option may not be exercised after the expiration
of five years from the date the option is granted.
- 2 -
PAGE
<PAGE>
(d) Termination of option by reason of termination of
employment. If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of the following periods, or at such earlier time as
may be applicable under Paragraph 6(b) or 6(c) above: (i) thirty
(30) days following such termination of employment, if such
termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to nonqualified options which are exercisable on the
date of termination of employment.
(e) Non-transferability. Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a nonqualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee. More than
one option may be granted to an Optionee under this Plan and both
nonqualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws. Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission. With respect thereto, the
Committee may impose such conditions on transfer, restrictions
and limitations as it may deem necessary and appropriate to
assure compliance with such applicable securities laws.
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
- 3 -
PAGE
<PAGE>
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
shares in respect of which the option is being exercised, and
shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of common
shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the common shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares of stock
issuable upon exercise of such option until certificates
representing such shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's common shares resulting from stock splits, stock
dividends, combinations or exchanges or shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(1) the number of shares available for option grant under this
Plan, (2) the number of shares subject to options granted under
this Plan, and (3) the option price of optioned shares.
9. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
10. Amendment or Termination. The Board may terminate this
Plan at any time, and may amend the Plan at any time or from time
to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be amended (1) to
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
- 4 -
PAGE
<PAGE>
give effect to stock splits, etc.); (2) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (3) to change the requirement that the option
price per share of common stock covered by an option granted
under this Plan not be less than 100% of the fair market value of
the Company's common stock on the date such option is granted;
(4) to extend the time within which Incentive Stock Options may
be granted or the time within which a granted Incentive Stock
Option may be exercised; or (5) to change, without the consent of
the Optionee (or his, or his estate's, legal representative), any
option previously granted to him under the Plan. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms, except as provided in
Paragraph 9 above.
11. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
12. Implied Consent of Participants. Every Participant, by
his acceptance of an option under this Plan, shall be deemed to
have consented to be bound, on his own behalf and on behalf of
his heirs, assigns, and legal representatives, by all of the
terms and conditions of this Plan.
13. No Effect on Employment Status. The fact than an
employee has been granted an option under this Plan shall not
limit or otherwise qualify the right of his employer to terminate
his employment at any time.
14. Duration and Termination of the Plan. This Plan became
effective on January 25, 1985. No Incentive Stock Option shall
be granted subsequent to January 24, 1995, or subsequent to any
earlier date as of which the Plan is terminated pursuant to
Paragraph 10.
15. Delaware Law to Govern. This plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
1985opt.pol
- 5 -
PAGE
<PAGE>
Exhibit 10(j)(iv)
GIBSON GREETINGS, INC.
1987 STOCK OPTION PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1987 Stock Option Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any section or sections of the Code of
like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options provided for herein as
it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Option.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan are the Company's
common shares, $.01 par value, which may be either authorized but
unissued shares or treasury shares.
PAGE
<PAGE>
(b) The aggregate number of common shares of the Company
which may be issued under the Plan shall not exceed Three Hundred
Thousand (300,000) shares; subject, however, to the adjustment
provided in Paragraph 8 in the event of stock splits, stock
dividends, exchanges of shares or the like occurring after the
effective date of this Plan. No option may be granted under this
Plan which could cause such maximum limit to be exceeded.
(c) Common shares covered by an option which is no longer
exercisable with respect to such shares shall again be available
for issuance in connection with other options granted under this
Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provisions of the Plan,
grant either nonqualified or Incentive Stock Options (as defined
in Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a nonqualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price. The option price per share shall be not
less than 100% of the fair market value of the Company's common
shares on the date the option is granted, as determined by the
Committee in a manner consistent with the requirements of the
Code for Incentive Stock Options.
(b) Period within which option may be exercised. The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder. Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
to an Eligible Employee who, at the time such option is granted
owns stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or its Subsidiaries,
the option price per share shall be at least 110% of the fair
- 2 -
PAGE
<PAGE>
market value of the common shares subject to the option and such
option may not be exercised after the expiration of five years
from the date the option is granted.
(d) Termination of option by reason of termination of
employment. If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of the following periods, or at such earlier time as
may be applicable under Paragraph 6(b) or 6(c) above: (i) thirty
(30) days following such termination of employment, if such
termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to nonqualified options which are exercisable on the
date of termination of employment.
(e) Non-transferability. Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a nonqualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee. More than
one option may be granted to an Optionee under this Plan and both
nonqualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws. Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission. With respect thereto, the
Committee may impose such conditions on transfer, restrictions
- 3 -
PAGE
<PAGE>
and limitations as it may deem necessary and appropriate to
assure compliance with such applicable securities laws.
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
shares in respect of which the option is being exercised, and
shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of common
shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the common shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares of stock
issuable upon exercise of such option until certificates
representing such shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's common shares resulting from stock splits, stock
dividends, combinations or exchanges or shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(1) the number of shares available for option grant under this
Plan, (2) the number of shares subject to options granted under
this Plan, and (3) the option price of optioned shares.
9. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
- 4 -
PAGE
<PAGE>
10. Amendment or Termination. The Board may terminate this
Plan at any time, and may amend the Plan at any time or from time
to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be amended (1) to
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
give effect to stock splits, etc.); (2) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (3) to change the requirement that the option
price per share of common stock covered by an option granted
under this Plan not be less than 100% of the fair market value of
the Company's common stock on the date such option is granted;
(4) to extend the time within which Incentive Stock Options may
be granted or the time within which a granted Incentive Stock
Option may be exercised; or (5) to change, without the consent of
the Optionee (or his, or his estate's, legal representative), any
option previously granted to him under the Plan. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms, except as provided in
Paragraph 9 above.
11. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
12. Implied Consent of Participants. Every Participant, by
his acceptance of an option under this Plan, shall be deemed to
have consented to be bound, on his own behalf and on behalf of
his heirs, assigns, and legal representatives, by all of the
terms and conditions of this Plan.
13. No Effect on Employment Status. The fact than an
employee has been granted an option under this Plan shall not
limit or otherwise qualify the right of his employer to terminate
his employment at any time.
14. Duration and Termination of the Plan. This Plan became
effective on January 28, 1987. No Incentive Stock Option shall
be granted subsequent to January 27, 1997, or subsequent to any
earlier date as of which the Plan is terminated pursuant to
Paragraph 10.
15. Delaware Law to Govern. This plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
1987opt.pol
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PAGE
<PAGE>
Exhibit 10(j)(v)
GIBSON GREETINGS, INC.
1989 STOCK INCENTIVE PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1989 Stock Incentive Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any other section or sections of the
Code of like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options and Restricted Shares
provided for herein as it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Plan.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan, or issued as
Restricted Shares under the Plan, are the Company's shares of
Common Stock, $.01 par value, ("Common Shares") which may be
either authorized but unissued shares or treasury shares.
PAGE
<PAGE>
(b) The aggregate number of Common Shares of the Company
which may be issued under the Plan shall not exceed Five Hundred
Thousand (500,000) shares; subject, however, to the adjustment
provided in Paragraph 8 in the event of stock splits, stock
dividends, exchanges of shares or the like occurring after the
effective date of this Plan. No option may be granted, or
Restricted Shares issued, under this Plan which could cause such
maximum limit to be exceeded.
(c) Common Shares covered by an option which is no longer
exercisable with respect to such shares, or Restricted Shares
which have been resold to the Company and in respect of which no
benefits of ownership have been received by the Participant,
shall again be available for issuance under this Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provisions of the Plan,
grant either nonqualified or Incentive Stock Options (as defined
in Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees". Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a nonqualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price. The option price per share shall be not
less than 100% of the fair market value of the Company's Common
Shares on the date the option is granted, as determined by the
Committee in a manner consistent with the requirements of the
Code for Incentive Stock Options.
(b) Period within which option may be exercised. The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder. Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
to an Eligible Employee who, at the time such option is granted
owns shares possessing more than 10% of the total combined voting
power of all classes of shares of the Company or its
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Subsidiaries, the option price per share shall be at least 110%
of the fair market value of the Common Shares subject to the
option and such option may not be exercised after the expiration
of five years from the date the option is granted.
(d) Termination of option by reason of termination of
employment. If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of the following periods, or at such earlier time as
may be applicable under Paragraph 6(b) or 6(c) above: (i) thirty
(30) days following such termination of employment, if such
termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to nonqualified options which are exercisable on the
date of termination of employment.
(e) Non-transferability. Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a nonqualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee. More than
one option may be granted to an Optionee under this Plan and both
nonqualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws. Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission and applicable state Blue Sky
Laws. With respect thereto, the Committee may impose such
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conditions on transfer, restrictions and limitations as it may
deem necessary and appropriate to assure compliance with such
applicable securities laws.
(h) Cancellation of Option. The Committee shall have the
authority to effect, at any time and from time to time, with the
consent of the affected Optionee or Optionees, the cancellation
of any or all outstanding options granted under this Plan and the
grant in substitution therefor of new options under this Plan
(subject to the limitations hereof) covering the same or
different numbers of Common Shares at an option price per share
in all events not less than fair market value on the date of the
new grant.
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
Common Shares in respect of which the option is being exercised,
and shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of Common
Shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the Common Shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares issuable
upon exercise of such option until certificates representing such
shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's Common Shares resulting from stock splits, stock
dividends, combinations or exchanges of shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(i) the number of shares available for option grant or issuance
under this Plan, (ii) the number of shares subject to options
granted under this Plan, and (iii) the option price of optioned
shares.
9. Allocation and Purchase of Restricted Shares.
(a) The Committee may from time to time, in its
discretion and subject to the provisions of the Plan, allocate
Common Shares to any or all Eligible Employees. Common Shares
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allocated under this Paragraph 9 of the Plan are referred to
herein as "Restricted Shares." Employees to whom Restricted
Shares have been allocated are herein referred to as
"Participants." Each Participant to whom an allocation of
Restricted Shares has been made shall be offered the right to
purchase such Restricted Shares as herein provided.
(b) The Committee shall advise each Participant to
whom an allocation of Restricted Shares has been made in writing
of the terms of the offer, including the number of shares which
such person shall be entitled to purchase, the purchase price per
share, and any other terms, conditions and restrictions relating
thereto. The Participant shall have thirty (30) days from the
date of the offer to accept such offer. The Committee may, in
the exercise of its discretion, extend the term of any offer.
Subject to the express provisions of the Plan, the Committee
shall have the power to make such offer subject to any terms and
conditions it may establish and the offers made to different
persons, or to the same person at different times, may be subject
to terms, conditions and restrictions which differ from each
other. Each allocation and offer shall be embodied in a
"Restricted Share Agreement" signed by the Participant and the
Company providing that the Restricted Shares shall be subject to
the provisions of this Plan and containing such other provisions
as the Committee may prescribe not inconsistent with the Plan.
(c) The purchase price of the Restricted Shares
offered under this Plan shall be any lawful consideration
established by the Committee in its discretion. If a Participant
elects to purchase Restricted Shares, he shall pay the purchase
price in full, at the principal office of the Company, prior to
expiration of the offer. Upon payment of the purchase price,
certificates representing the shares shall be issued to the
Participant, which certificates shall bear an appropriate legend
reflecting that such shares are subject to the restrictions
contained in the Plan. At the Committee's election, such
certificates may be held by the Company on behalf of the
Participant until the restrictions applicable to such shares
shall have lapsed.
10. Restrictions Applicable to Restricted Shares.
(a) By purchasing the Restricted Shares allocated to
him under this Plan, the Participant agrees and consents to the
restrictions described in this Plan for a period determined by
the Committee at the time of such allocation, said period
referred to herein as the "Restricted Period." For the duration
of the Restricted Period (unless the restrictions earlier lapse
or are removed by the Committee), Restricted Shares issued under
this Plan shall not be transferred, delivered, assigned, sold, or
disposed of in any manner, nor pledged or otherwise hypothecated.
On the last day of the Restricted Period, or upon the earlier
lapse or removal of restrictions, such Restricted Shares shall
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cease to be subject to the restrictions under this Paragraph
10(a) of the Plan.
(b) Restricted Shares issued by the Company under the
Plan shall be issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission and applicable state Blue Sky
laws. With respect thereto, the Committee may impose such
conditions on transfer, restrictions and limitations as it may
deem necessary and appropriate to assure compliance with such
applicable securities laws.
11. Termination of Employment During Restricted Period.
(a) If a Participant's employment with the Company and
its Subsidiaries terminates because of death or disability, the
restrictions under Paragraph 10(a) of this Plan shall
automatically terminate as to that number of the Restricted
Shares owned by the Participant which is equal to the total
number of such Restricted Shares multiplied by a fraction, the
numerator of which is the number of full months which have
elapsed from the date of allocation and the denominator of which
is the total number of months during the Restricted Period. The
Participant (or his estate, heirs, or legatees) shall be required
to resell the remaining Restricted Shares to the Company at a
price per share equal to the original purchase price paid by the
Participant for such shares, or such other price as may be set by
the Committee in the Restricted Share Agreement, unless the
Committee shall, in its discretion, waive the restrictions under
Paragraph 10(a) as to any part or all of such remaining
Restricted Shares.
(b) If a Participant's employment with the Company and
its Subsidiaries terminates during the Restricted Period other
than by reason of death or disability, the Participant shall be
required to resell all of the Restricted Shares to the Company at
a price per share equal to the original purchase price paid by
the Participant for such shares, or such other price as may be
set by the Committee in the Restricted Share Agreement, unless
the Committee shall, in its discretion, waive the restrictions
under Paragraph 10(a) as to any part or all of the Restricted
Shares.
12. Resale of Restricted Shares. In the event a
Participant is required to resell Restricted Shares to the
Company as the result of the termination of the Participant's
employment as described in Paragraph 11, the Company by written
notice to the Participant shall specify a date not less than five
nor more than ten days from the date of such notice to consummate
the purchase and sale of such Restricted Shares at the principal
office of the Company. The Participant shall deliver to the
Company certificates representing such Restricted Shares, duly
endorsed and in proper form for transfer, and upon the receipt of
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such share certificates, the Company shall deliver to the
Participant a check in the amount of the purchase price. If the
Participant fails to deliver the share certificates to the
Company at the time specified in such notice, the Company may
deposit the purchase price with the Treasurer of the Company, and
thereafter the shares shall be deemed to have been transferred to
the Company and the Participant, despite his failure to deliver
the share certificates, shall have no further rights as a
stockholder of the Company. In such event, the Treasurer of the
Company shall continue to hold the purchase price for such shares
and shall make payment thereof, without interest, upon delivery
of the share certificates to the Company.
13. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
14. Amendment or Termination. The Board may terminate this
Plan at any time, and may amend the Plan at any time or from time
to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be so amended (i) to
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
give effect to stock splits, etc.); (ii) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (iii) to change the requirement that the
option price per Common Share covered by an option granted under
this Plan not be less than 100% of the fair market value of the
Company's Common Shares on the date such option is granted;
(iv) to extend the time within which Incentive Stock Options may
be granted or the time within which a granted Incentive Stock
Option may be exercised; or (v) to change, without the consent of
the Optionee (or his, or his estate's, legal representative), any
option previously granted to him under the Plan. If the Plan is
terminated, any unexercised option shall continue to be
exercisable in accordance with its terms, except as provided in
Paragraph 13 above, and any Restricted Shares shall continue to
be subject to the terms of this Plan for the duration of the
Restricted Period.
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15. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
16. Tax Withholding. Any grant of an option or issue of
Restricted Shares hereunder shall provide as determined by the
Committee for appropriate arrangements for the satisfaction by
the Company and the Optionee or Participant of all federal,
state, local or other income, excise or employment taxes or tax
withholding requirements applicable to the exercise of the
option, the receipt of Restricted Shares or the later disposition
of the Common Shares thereby acquired and all such additional
taxes or amounts as determined by the Committee in its
discretion, including, without limitation, the right of the
Company or any subsidiary thereof to receive transfers of Common
Shares or other property from the Optionee or to deduct or
withhold in the form of shares from any transfer to an Optionee
or Participant, in such amount or amounts deemed required or
appropriate by the Committee in its sole and absolute discretion.
17. Implied Consent. Every Optionee or Participant, by his
acceptance of an option or Restricted Shares under this Plan,
shall be deemed to have consented to be bound, on his own behalf
and on behalf of his heirs, assigns, and legal representatives,
by all of the terms and conditions of this Plan.
18. No Effect on Employment Status. The fact than an
employee has been granted an option or Restricted Shares under
this Plan shall not limit or otherwise qualify the right of his
employer to terminate his employment at any time.
19. Duration and Termination of the Plan. This Plan became
effective on January 23, 1989. No Incentive Stock Option shall
be granted subsequent to January 22, 1999, or subsequent to any
earlier date as of which the Plan is terminated pursuant to
Paragraph 14.
20. Delaware Law to Govern. This Plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
1989opt.pol
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Exhibit 10(j)(vi)
GIBSON GREETINGS, INC.
1989 STOCK OPTION PLAN FOR NONEMPLOYEE DIRECTORS
(As amended and restated through April 29, 1993)
1. Purpose. The purpose of this Gibson Greetings, Inc.
1989 Stock Option Plan for Nonemployee Directors (the "Directors
Plan" or "Plan") is to enhance the value of the stockholders'
investment in Gibson Greetings, Inc. (the "Company") by
encouraging those directors of the Company who are not employees
of the Company or any of its subsidiaries (the "Directors") to
acquire or increase and retain a financial interest in the
Company and thereby also encourage the Directors to remain as
directors of the Company and to put forth maximum efforts for the
success of the Company.
It is intended that stock options ("Nonqualified Stock
Options" or "Options"), other than incentive stock options as
defined by the Internal Revenue Code of 1986, as amended (the
"Code"), may be granted under the Directors Plan.
2. Administration of the Directors Plan.
(a) General. The Directors Plan shall be administered
by the Board of Directors of the Company (the "Board") which,
subject to and not inconsistent with the express provisions of
the Directors Plan, shall exercise all the power and authority
specifically granted to it under the Plan or necessary or
advisable, in the sole and absolute discretion of the Board, to
the administration of the Plan.
(b) Rules and Interpretation. The Board shall have
the authority to establish, adopt or revise such rules and
regulations and to make all such determinations relating to the
Directors Plan as it may deem necessary or advisable for the
administration of the Plan and in order to preserve the exemption
of the Plan and any Plan Options under Rule 16b-3 promulgated by
the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as such Rule may be amended from time to
time, or any successor rule thereto. The Board's interpretation
of the Directors Plan or any Option granted hereunder, and all
decisions and determinations by the Board with respect to the
Plan, shall be final, binding and conclusive on all parties. No
member of the Board shall be personally liable for any action,
failure to act, determination, interpretation or construction
made in good faith with respect to the Directors Plan or any
Option or transaction thereunder.
(c) No Other Rights. Nothing contained in the
Directors Plan, nor any Option granted pursuant to the Directors
Plan, shall confer upon any Director covered by the Directors
Plan any right to continue as a director of the Company nor limit
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in any way the right of the Company to terminate his status as a
director at any time.
3. The Stock. The shares of stock available for issuance
pursuant to the grant of Options under the Directors Plan shall
consist of 80,000 shares of Common Stock, par value $0.01 per
share (the "Common Shares"), of the Company, subject to
adjustment as provided in Section 11 hereof. All shares acquired
upon the exercise of Options will be, in whole or in part, either
Common Shares purchased by the Company in the open market and
held in the treasury of the Company or authorized and unissued
Common Shares of the Company. Should an Option (or a portion
thereof) expire for any reason without being exercised, the
shares subject to the portion of such Option not so exercised
shall be available for subsequent grants under the Directors
Plan.
4. Effective Date and Termination of Plan. The Directors
Plan became effective on January 23, 1989 and shall terminate
upon the earlier of (i) January 23, 1999; or (ii) the date on
which all shares available for issuance under the Directors Plan
have been issued pursuant to the exercise of Options granted
hereunder; or (iii) the determination of the Board that the
Directors Plan shall terminate. No Options may be granted under
the Directors Plan after the termination date, provided that the
Options granted and outstanding on such date shall continue to
have force and effect in accordance with the provisions of the
instruments evidencing such Options.
5. Grant, Terms and Conditions of Options.
(a) Grant of Options. Under the Directors Plan, each
then serving Director of the Company shall be granted each year,
at the close of business on the date upon which the Company's
annual meeting of stockholders for that year is held, beginning
with the annual meeting to be held during 1989, Nonqualified
Stock Options to purchase 1,000 Common Shares. Each Director
receiving an Option may be referred to herein as an "Optionee."
Each Option shall be embodied in an option agreement signed by
the Optionee and the Company providing that the Option shall be
subject to the provisions of this Plan and containing such other
provisions as the Board may prescribe not inconsistent with the
Plan.
(b) When Exercisable. Options shall be exercisable
one year after the date of grant. No fractional shares shall be
issued, and fractional shares remaining in any Option shall be
rounded down to the nearest whole number of shares.
(c) Price. The exercise price per share of each
Option shall be equal to the fair market value of a Common Share
on the date of grant, as determined under Section 8 hereof,
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provided that the exercise price shall be subject to adjustment
only as provided in Section 11 hereof.
(d) Term of Options. Options shall be effective on
the date of grant and shall be of a term of ten (10) years from
the date of grant. Each such Option shall be subject to earlier
termination as provided in Section 6 hereof.
6. Termination of Director Status.
(a) Except as otherwise provided in the Directors
Plan, an Optionee's Options (i) are exercisable only by the
Optionee, (ii) are exercisable only while the Optionee is a
director of the Company and then only if the Options have become
exercisable by their terms, and (iii) if not exercisable by their
terms at the time the Optionee ceases to be a director of the
Company, shall immediately expire on the date the Optionee ceases
to be a director of the Company.
(b) Except as provided by this subsection (6)(b), any
Optionee's option which is exercisable by its terms at the time
the Optionee ceases to be a director of the Company must be
exercised on or before the earlier of (i) three years after the
date the Optionee ceases to be a director of the Company or
(ii) the fixed expiration date of such Option, after which
applicable period such option shall expire. If an Optionee's
status as a director is terminated on account of any act of fraud
or intentional misrepresentation, or embezzlement,
misappropriation or conversion of the assets or opportunities of
the Company or any of its subsidiaries, all Options granted to
such Optionee shall, to the extent not previously exercised,
expire immediately as of the date on which the director's status
as such is terminated.
(c) In the event of the death of the Optionee while a
director of the Company, each of that Optionee's unexercised
options (whether or not then exercisable by its terms) shall
become immediately exercisable by his estate for a period ending
on the earlier of the fixed expiration date of such Option or
three years after the date of death, after which period such
Option shall expire. For purposes hereof, the estate of an
Optionee shall be defined to include the legal representatives
thereof or any person who has acquired the right to exercise an
Option by reason of the death of the Optionee.
(d) In the event the Optionee ceases to be a director
by reason of permanent disability (as defined below), each of
that Optionee's unexercised Options (whether or not then
exercisable by its terms) shall become exercisable for a period
ending on the earlier of the fixed expiration date of such Option
or three years from the date the Optionee ceases to be a
director, after which period such Option shall expire. For
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purposes hereof "permanent disability" shall be deemed to be the
inability of the Optionee to perform the duties of a director of
the Company because of a physical or mental disability as
evidenced by the opinion of a Company-approved doctor of medicine
licensed to practice medicine in the United States of America.
7. Transferability of Options. Except that an Option may
be transferred pursuant to a "domestic relations order" as
defined in Section 414(p)(1)(B) of the Code, any Option granted
hereunder shall be transferable only by will or the laws of
descent and distribution and shall be exercisable during the
lifetime of the Optionee only by the Optionee or by his guardian
or legal representative.
8. Fair Market Value. The "fair market value" of a Common
Share on any relevant date for purposes of any provision of the
Directors Plan shall be the last reported sales price of a Common
Share on the NASDAQ National Market System on such date or, if
there are no reported sales on such date, then the last reported
sales price on the next preceding day on which such a sale was
transacted.
9. Compliance with Securities Laws. Options granted and
shares issued by the Company upon exercise of Options shall be
granted and issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission and applicable state Blue Sky
Laws. With respect thereto, the Board may impose such conditions
on transfer, restrictions and limitations as it may deem
necessary and appropriate to assure compliance with such
applicable securities laws.
10. Method of Exercise. An Option granted under this Plan
may be exercised by written notice to the Board, signed by the
Optionee, or by such other person as is entitled to exercise such
Option. The notice of exercise shall state the number of shares
in respect of which the Option is being exercised, and shall
either be accompanied by the payment of the full option price for
such shares, or shall fix a date (not more than ten business days
from the date of such notice) for the payment of the full option
price of the shares being purchased. All or any portion of the
payment may be made by the transfer of Common Shares of the
Company from the Optionee to the Company, to the extent permitted
by law. Such shares shall be valued for this purpose at their
fair market value on the date they are transferred to the Company
as payment, determined in the same manner as is provided in
Section 8 hereof. A certificate or certificates for the Common
Shares of the Company purchased through the exercise of an Option
shall be issued in regular course after the exercise of the
Option and payment therefor. During the option period no person
entitled to exercise any Option granted under this Plan shall
have any of the rights or privileges of a shareholder with
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respect to any Common Shares issuable upon exercise of such
Option until certificates representing such shares shall have
been issued and delivered.
11. Share Adjustments. In the event there is any change in
the Company's Common Shares resulting from stock splits, stock
dividends, combinations or exchanges of shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Board in (i)
the number of Common Shares available for Option grants under
this Directors Plan, (ii) the number of Common Shares subject to
Options granted under this Plan, and (iii) the option price of
optioned shares.
12. Merger, Consolidation or Sale of Assets.
(a) In the event the Company shall consolidate with,
merge into, or transfer all or substantially all of its assets to
another corporation or corporations (herein referred to as
"successor corporation"), such successor corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan. In the event that such successor corporation does not
obligate itself to continue this Plan as above provided, this
Plan shall terminate effective upon such consolidation, merger,
or transfer, and, except as provided in Subsection 12(d) hereof,
any Option previously granted hereunder shall terminate. If
practical, the Company shall give each Optionee twenty (20) days
prior notice of any possible transaction which might terminate
this Plan and the Options previously granted hereunder.
(b) In the event any person, by any means of purchase
or acquisition, becomes the "beneficial owner" (as defined in
Rule l3d-3 promulgated by the Securities and Exchange Commission
under the Securities Exchange Act of 1934 as in effect on January
23, 1989, or any successor provision thereto) of more than 50% of
the outstanding Common Shares of the Company, or commences a
tender offer pursuant to Regulation l4C promulgated by the
Securities and Exchange Commission under the Securities Exchange
Act of 1934 as in effect on April 26, 1985, or any successor
provision thereto, which if successful, would result in such
person becoming the beneficial owner of more than 50% of such
shares, then with respect to each Optionee all Options which were
outstanding at the time of such event shall immediately become
exercisable in full.
(c) In the event of the execution of an agreement of
reorganization, merger or consolidation of the Company with one
or more corporations as a result of which the Company is not to
be the surviving corporation (whether or not the Company shall be
dissolved or liquidated) or the execution of an agreement of sale
or transfer of all or substantially all of the assets of the
Company, then with respect to each Optionee all Options which
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were outstanding at the time of such event shall immediately
become exercisable in full.
(d) In the event of the consummation of any of the
transactions called for in an agreement referred to in Subsection
12(c) hereof, any Optionee who is subject to the filing
requirements imposed under Section 16(a) of the Securities
Exchange Act of 1934 (the "Act") with respect to the Company
shall receive a payment of cash equal to the difference between
the aggregate Fair Value of the Common Shares subject to such
accelerated Option and the aggregate option exercise price of
such shares. For this purpose, "Fair Value" shall mean the cash
value per share to be paid to stockholders pursuant to such
agreement, or if cash value is not to be paid, the highest
aggregate fair market value of the subject shares of Common Stock
during the 60-day period immediately preceding the date of the
consummation of the transaction. Payment of said cash shall be
made within ten (10) days after said consummation of the
transaction. The foregoing payments under this Subsection 12(d)
shall be made in lieu of and in full discharge of any and all
obligations of the Company in respect of all subject Options of
the Optionee.
(e) The grant of Options under the Directors Plan
shall in no way affect the right of the Company to adjust,
reclassify, reorganized or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate
or sell or transfer all or any part of its business or assets.
13. Amendment or Termination. The Board may terminate this
Plan at any time, and may amend the Plan at any time or from time
to time, without obtaining any approval of the Company's
stockholders; except that the Plan may not be so amended (i) to
increase the aggregate number of Common Shares issuable under the
Plan (excepting proportionate adjustments made under Section 11
to give effect to stock splits, etc.); (ii) to change the option
price of optioned stock (excepting proportionate adjustments made
under Section 11); (iii) to change the requirement that the
option price per Common Stock covered by an Option granted under
this Plan be 100% of the fair market value of the Company's
Common Shares on the date such Option is granted; or (iv) to
change, without the consent of the Optionee (or such Optionee's,
or such Optionee's estate's, legal representative), any Option
previously granted to such Optionee under the Plan.
Notwithstanding the foregoing, the provisions of this Directors
Plan governing the amount, price and timing of awards to
Directors may not be amended more frequently than once every six
months other than to comport with changes in the Code or the
rules thereunder. If the Plan is terminated, any unexercised
Option shall continue to be exercisable in accordance with its
terms, except as provided in Paragraph 12 above.
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14. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of Common Shares under the terms of the Plan, so long as the
Company acts in good faith.
15. Implied Consent. Every Optionee, by his acceptance of
an Option under this Plan, shall be deemed to have consented to
be bound, on his or her own behalf and on behalf of such
Optionee's heirs, assigns, and legal representatives, by all of
the terms and conditions of this Plan.
16. Delaware Law to Govern. This Plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
stckoptn.pol
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Exhibit 10(j)(vii)
GIBSON GREETINGS, INC.
1991 STOCK INCENTIVE PLAN
(As amended and restated through April 29, 1993)
1. Name and Purpose. This Plan, as it may be amended and
restated from time to time, shall be known as the "Gibson
Greetings, Inc. 1991 Stock Incentive Plan" (the "Plan"). The
purpose of the Plan is to advance the interests of Gibson
Greetings, Inc. (the "Company") by providing material incentive
for the continued services of key employees and by attracting
able executives to employment with the Company and its
Subsidiaries. The term "Subsidiary" as used herein means a
subsidiary corporation of the Company as the term is defined in
Section 424(f) of the Internal Revenue Code of 1986, as amended
(the "Code"). Reference to any Code Section in this Plan
includes the provisions of such Section as it may be amended or
as it may be replaced by any other section or sections of the
Code of like intent and purpose.
2. Administration. The Plan shall be administered by a
committee (the "Committee") of the Board of Directors of the
Company (the "Board") to consist of at least two directors, each
of whom is a "disinterested person" as defined in Rule 16b-3
promulgated by the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as such Rule may be amended from
time to time, or any successor rule thereto. Subject to and
consistent with the provisions of the Plan, the Committee shall
establish such rules and regulations as it deems necessary or
appropriate for the proper administration of the Plan, shall
interpret the provisions of the Plan, shall decide all questions
of fact arising in the application of Plan provisions and shall
make such other determinations and take such actions in
connection with the Plan and the options and Restricted Shares
provided for herein as it deems necessary or advisable.
3. Eligibility. Regular full-time employees of the
Company and its Subsidiaries who are key executive or other key
salaried employees, including officers, whether or not directors
of the Company, shall be eligible to participate in the Plan.
Such employees are herein referred to as "Eligible Employees."
Those directors who are not regular employees of the Company or
its Subsidiaries are not eligible to participate in the Plan.
4. Shares Subject to Plan.
(a) The shares to be issued and delivered by the Company
upon exercise of options granted under the Plan, or issued as
Restricted Shares under the Plan, are the Company's shares of
Common Stock, $.01 par value, ("Common Shares") which may be
either authorized but unissued shares or treasury shares.
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(b) The aggregate number of Common Shares of the Company
which may be issued under the Plan shall not exceed One Million
(1,000,000) shares; subject, however, to the adjustment provided
in Paragraph 8 in the event of stock splits, stock dividends,
exchanges of shares or the like occurring after the effective
date of this Plan. No option may be granted, or Restricted
Shares issued, under this Plan which could cause such maximum
limit to be exceeded.
(c) Common Shares covered by an option which is no longer
exercisable with respect to such shares, or Restricted Shares
which have been resold to the Company and in respect of which no
benefits of ownership have been received by the Participant,
shall again be available for issuance under this Plan.
5. Grant of Options. The Committee may from time to time,
in its discretion and subject to the provision of the Plan, grant
either non-qualified or Incentive Stock Options (as defined in
Section 422 of the Code) to Eligible Employees. Employees to
whom options have been granted are herein referred to as
"Optionees." Each option shall be embodied in an option
agreement signed by the Optionee and the Company providing that
the option shall be subject to the provisions of this Plan and
containing such other provisions as the Committee may prescribe
not inconsistent with the Plan. The option agreement shall
specify whether the option is a non-qualified option or an
Incentive Stock Option.
6. Terms and Conditions of Option. All options granted
under the Plan shall contain such terms and conditions as the
Committee from time to time determines, subject to the foregoing
and following limitations and requirements.
(a) Option price: The option price per share for Incentive
Stock Options shall be not less than 100% of the fair market
value of the Company's Common Shares on the date the option is
granted, as determined by the Committee in a manner consistent
with the requirements of the Code for Incentive Stock Options.
The option price per share for non-qualified options shall be at
least 50% of the fair market value of a Common Share on the date
of option grant, determined in the same manner.
(b) Period within which option may be exercised: The
period of each option shall be fixed by the Committee, but no
Incentive Stock Option may be exercised after the expiration of
ten years from the date the option is granted. The Committee
may, in its discretion, determine as a condition of any option
that a stated percentage of the shares covered by such option
shall be exercisable in any one year or other stated period of
time.
(c) 10% Shareholder: Notwithstanding any other provision
of this Plan, with respect to an Incentive Stock Option granted
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to an Eligible Employee who, at the time such option is granted
owns shares possessing more than 10% of the total combined voting
power of all classes of shares of the Company or its
Subsidiaries, the option price per share shall be at least 110%
of the fair market value of the Common Shares subject to the
option and such option may not be exercised after the expiration
of five years from the date the option is granted.
(d) Termination of option by reason of termination of
employment: If an Optionee's employment with the Company and its
Subsidiaries terminates, all options granted under this Plan to
such Optionee which are not exercisable on the date of such
termination of employment shall immediately terminate, and any
remaining options shall terminate if not exercised before the
expiration of one of the following periods, or at such earlier
time as may be applicable under Paragraph 6(b) or 6(c) above:
(i) thirty (30) days following such termination of employment, if
such termination was not a result of retirement under a Company
Pension Plan or of death or disability (disability within the
meaning of Section 22(e)(3) of the Code), or (ii) three (3)
months following the Optionee's termination of employment because
of retirement under a Company Pension Plan, or (iii) one (1) year
following date of death or commencement of disability, if the
Optionee was an employee of the Company and/or Subsidiary at the
time of his death or the commencement of his disability; provided
that such termination provisions may be varied by the Committee
with respect to non-qualified options which are exercisable on
the date of termination of employment.
(e) Non-transferability: Each option and all rights
thereunder shall be exercisable during the Optionee's lifetime
only by him, or by his guardian or legal representative, and
shall be non-assignable and non-transferable by the Optionee,
except that a non-qualified option may be transferred pursuant to
a "domestic relations order" as defined in Section 414(p)(1)(B)
of the Code. In the event of the Optionee's death, any option
shall be transferable by the Optionee's Will or by the laws of
descent and distribution, and the representative or
representatives of his estate, or the person or persons who
acquired (by bequest or inheritance) the rights to exercise his
options granted under this Plan, may exercise any of the
unexercised options in whole or in part prior to the expiration
of the applicable exercise period, as specified in Paragraph 6(d)
above.
(f) More than one option granted to an Optionee: More than
one option may be granted to an Optionee under this Plan and both
non-qualified and Incentive Stock Options may be granted to an
Optionee.
(g) Compliance with securities laws: Options granted and
shares issued by the Company upon exercise of options shall be
granted and issued only in full compliance with all applicable
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securities laws, including laws, rules and regulations of the
Securities and Exchange Commission and applicable state Blue Sky
Laws. With respect thereto, the Committee may impose such
conditions on transfer, restrictions and limitations as it may
deem necessary and appropriate to assure compliance with such
applicable securities laws.
(h) Cancellation of option: The Committee shall have the
authority to effect, at any time and from time to time, with the
consent of the affected Optionee or Optionees, the cancellation
of any or all outstanding options granted under this Plan and the
grant in substitution therefor of new options under this Plan
(subject to the limitations hereof) covering the same or
different numbers of Common Shares at an option price per share
in all events not less than fair market value on the date of the
new grant with regard to Incentive Stock Options and not less
than 50% of fair market value on the date of the new grant with
regard to non-qualified stock options.
7. Method of Exercise. An option granted under this Plan
may be exercised by written notice to the Committee, signed by
the Optionee, or by such other person as is entitled to exercise
such option. The notice of exercise shall state the number of
Common Shares in respect of which the option is being exercised,
and shall either be accompanied by the payment of the full option
price for such shares, or shall fix a date (not more than ten
business days from the date of such notice) for the payment of
the full option price of the shares being purchased. All or any
portion of the payment may be made by the transfer of Common
Shares of the Company from the Optionee to the Company, to the
extent permitted by law. Such shares shall be valued for this
purpose at their fair market value on the date they are
transferred to the Company as payment, determined in the same
manner as is provided in Paragraph 6(a) hereof. A certificate or
certificates for the Common Shares of the Company purchased
through the exercise of an option shall be issued in regular
course after the exercise of the option and payment therefor.
During the option period no person entitled to exercise any
option granted under this Plan shall have any of the rights or
privileges of a shareholder with respect to any shares issuable
upon exercise of such option until certificates representing such
shares shall have been issued and delivered.
8. Share Adjustments. In the event there is any change in
the Company's Common Shares resulting from stock splits, stock
dividends, combinations or exchanges of shares, or other similar
capital adjustments, equitable proportionate adjustments shall
automatically be made without further action by the Committee in
(i) the number of shares available for option grant or issuance
under this Plan, (ii) the number of shares subject to options
granted under this Plan, and (iii) the option price of optioned
shares.
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9. Allocation and Purchase of Restricted Shares.
(a) The Committee may from time to time, in its discretion
and subject to the provisions of the Plan, allocate Common Shares
to any or all Eligible Employees. Common Shares allocated under
this Paragraph 9 of the Plan are referred to herein as
"Restricted Shares." Employees to whom Restricted Shares have
been allocated are herein referred to as "Participants." Each
Participant to whom an allocation of Restricted Shares has been
made shall be offered the right to purchase such Restricted
Shares as herein provided.
(b) The Committee shall advise each Participant to whom an
allocation of Restricted Shares has been made in writing of the
terms of the offer, including the number of shares which such
person shall be entitled to purchase, the purchase price per
share, and any other terms, conditions and restrictions relating
thereto. The Participant shall have thirty (30) days from the
date of the offer to accept such offer. The Committee may, in
the exercise of its discretion, extend the term of any offer.
Subject to the express provisions of the Plan, the Committee
shall have the power to make such offer subject to any terms and
conditions it may establish and the offers made to different
persons, or to the same person at different times, may be subject
to terms, conditions and restrictions which differ from each
other. Each allocation and offer shall be embodied in a
"Restricted Share Agreement" signed by the Participant and the
Company providing that the Restricted Shares shall be subject to
the provisions of this Plan and containing such other provisions
as the Committee may prescribe not inconsistent with the Plan.
(c) The purchase price of the Restricted Shares offered
under this Plan shall be any lawful consideration established by
the Committee in its discretion. If a Participant elects to
purchase Restricted Shares, he shall pay the purchase price in
full, at the principal office of the Company, prior to expiration
of the offer. Upon payment of the purchase price, certificates
representing the shares shall be issued to the Participant, which
certificates shall bear an appropriate legend reflecting that
such shares are subject to the restrictions contained in the
Plan. At the Committee's election, such certificates may be held
by the Company on behalf of the Participant until the
restrictions applicable to such shares shall have lapsed.
10. Restrictions Applicable to Restricted Shares.
(a) By purchasing the Restricted Shares allocated to him
under this Plan, the Participant agrees and consents to the
restrictions described in this Plan for a period determined by
the Committee at the time of such allocation, said period
referred to herein as the "Restricted Period." For the duration
of the Restricted Period (unless the restrictions earlier lapse
or are removed by the Committee), Restricted Shares issued under
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this Plan shall not be transferred, delivered, assigned, sold, or
disposed of in any manner, nor pledged or otherwise hypothecated.
On the last day of the Restricted Period, or upon the earlier
lapse or removal of restrictions, such Restricted Shares shall
cease to be subject to the restrictions under this Paragraph
10(a) of the Plan.
(b) Restricted Shares issued by the Company under the Plan
shall be issued only in full compliance with all applicable
securities laws, including laws, rules and regulations of the
Securities and Exchange Commission and applicable state Blue Sky
laws. With respect thereto, the Committee may impose such
conditions on transfer, restrictions and limitations as it may
deem necessary and appropriate to assure compliance with such
applicable securities laws.
11. Termination of Employment During Restricted Period.
(a) If a Participant's employment with the Company and its
Subsidiaries terminates because of death or disability, the
restrictions under Paragraph 10(a) of this Plan shall
automatically terminate as to that number of the Restricted
Shares owned by the Participant which is equal to the total
number of such Restricted Shares multiplied by a fraction, the
numerator of which is the number of full months which have
elapsed from the date of allocation and the denominator of which
is the total number of months during the Restricted Period. The
Participant (or his estate, heirs, or legatee) shall be required
to resell the remaining Restricted Shares to the Company at a
price per share equal to the original purchase price paid by the
Participant for such shares, or such other price as may be set by
the Committee in the Restricted Share Agreement, unless the
Committee shall, in its discretion, waive the restrictions under
Paragraph 10(a) as to any part or all of such remaining
Restricted Shares.
(b) If a Participant's employment with the Company and its
Subsidiaries terminates during the Restricted Period other than
by reason of death or disability, the Participant shall be
required to resell all of the Restricted Shares to the Company at
a price per share equal to the original purchase price paid by
the Participant for such shares, or such other price as may be
set by the Committee in the Restricted Share Agreement, unless
the Committee shall, in its discretion, waive the restrictions
under Paragraph 10(a) as to any part or all of the Restricted
Shares.
12. Resale of Restricted Shares. In the event a
Participant is required to resell Restricted Shares to the
Company as the result of the termination of the Participant's
employment as described in Paragraph 11, the Company by written
notice to the Participant shall specify a date not less than five
nor more than ten days from the date of such notice to consummate
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the purchase and sale of such Restricted Shares at the principal
office of the Company. The Participant shall deliver to the
Company certificates representing such Restricted Shares, duly
endorsed and in proper form for transfer, and upon the receipt of
such share certificates, the Company shall deliver to the
Participant a check in the amount of the purchase price. If the
Participant fails to deliver the share certificates to the
Company at the time specified in such notice, the Company may
deposit the purchase price with the Treasurer of the Company, and
thereafter the shares shall be deemed to have been transferred to
the Company and the Participant, despite his failure to deliver
the share certificates, shall have no further rights as a
stockholder of the Company. In such event, the Treasurer of the
Company shall continue to hold the purchase price for such shares
and shall make payment thereof, without interest, upon delivery
of the share certificates to the Company.
13. Merger, Consolidation or Sale of Assets. In the event
the Company shall consolidate with, merge into, or transfer all
or substantially all of its assets to another corporation or
corporations (herein referred to as "successor employer
corporation"), such successor employer corporation may obligate
itself to continue this Plan and to assume all obligations under
the Plan in a manner consistent with the provisions of Section
424(a) of the Code. In the event that such successor employer
corporation does not obligate itself to continue this Plan as
above provided, this Plan shall terminate effective upon such
consolidation, merger, or transfer, and any option previously
granted hereunder shall terminate. If practical, the Company
shall give each Optionee twenty (20) days prior notice of any
possible transaction which might terminate this Plan and the
options previously granted hereunder.
14. Amendment or Termination. The Board may terminate this
Plan at any time, and may amend the Plan at any time or from time
to time, without obtaining any approval of the Company's
shareholders; except that the Plan may not be so amended (i) to
increase the aggregate number of shares issuable under the Plan
(excepting proportionate adjustments made under Paragraph 8 to
give effect to stock splits, etc.); (ii) to change the option
price of optioned stock (excepting proportionate adjustments made
under Paragraph 8); (iii) to change the requirement that the
option price per Common Share covered by an Incentive Stock
Option granted under this Plan not be less than 100% of the fair
market value of the Company's Common Shares on the date such
option is granted; (iv) to extend the time within which Incentive
Stock Options may be granted or the time within which a granted
Incentive Stock Option may be exercised; or (v) to change,
without the consent of the Optionee (or his, or his estate's,
legal representative), any option previously granted to him under
the Plan. If the Plan is terminated, any unexercised option
shall continue to be exercisable in accordance with its terms,
except as provided in Paragraph 13 above, and any Restricted
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Shares shall continue to be subject to the terms of this Plan for
the duration of the Restricted Period.
15. Company Responsibility. All expenses of this Plan,
including the cost of maintaining records, shall be borne by the
Company. The Company shall have no responsibility or liability
(other than under applicable Securities Acts) for any act or
thing done or left undone with respect to the price, time,
quantity, or other conditions and circumstances of the purchase
of shares under the terms of the Plan, so long as the Company
acts in good faith.
16. Tax Withholding. Any grant of an option or issue of
Restricted Shares hereunder shall provide as determined by the
Committee for appropriate arrangements for the satisfaction by
the Company and the Optionee or Participant of all federal,
state, local or other income, excise or employment taxes or tax
withholding requirements applicable to the exercise of the
option, the receipt of Restricted Shares or the later disposition
of the Common Shares thereby acquired and all such additional
taxes or amounts as determined by the Committee in its
discretion, including, without limitation, the right of the
Company or any subsidiary thereof to receive transfers of Common
Shares or other property from the Optionee or to deduct or
withhold in the form of shares from any transfer to an Optionee
or Participant, in such amount or amounts deemed required or
appropriate by the Committee in its sole and absolute discretion.
17. Implied Consent. Every Optionee or Participant, by his
acceptance of an option or Restricted Shares under this Plan,
shall be deemed to have consented to be bound, on his own behalf
and on behalf of his heirs, assigns, and legal representatives,
by all of the terms and conditions of this Plan.
18. No Effect on Employment Status. The fact that an
employee has been granted an option or Restricted Shares under
this Plan shall not limit or otherwise qualify the right of his
employer to terminate his employment at any time.
19. Duration and Termination of the Plan. This Plan became
effective on February 3, 1991. No Incentive Stock Option shall
be granted subsequent to February 2, 2001, or subsequent to any
earlier date as of which the Plan is terminated pursuant to
Paragraph 14.
20. Delaware Law to Govern: This Plan shall be construed
and administered in accordance with and governed by the laws of
the State of Delaware.
gib1991.pln
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Exhibit 10(j)(xiv)
January 2, 1991
Mr. Stephen M. Sweeney
Vice President - Human Resources
Gibson Greetings, Inc.
2100 Section Road
Cincinnati, OH 45237
Re: Employment Agreement
Dear Steve:
In accordance with our prior discussions, it is my pleasure to
confirm to you the following terms and conditions under which you
have agreed to continue serving as Vice President - Human
Resources of Gibson Greetings, Inc. ("Company").
1. You have agreed to serve the Company on a full-time basis as
a senior executive employee, and the Company agrees to
employ you as such, for a period of three years commencing
December 1, 1990 and ending November 30, 1993. Your annual
salary, effective December 1, 1990, shall be $136,000, which
amount may be increased from time to time by the Company
throughout the term of the Agreement in accordance with the
Company's salary administration program. In addition, you
will qualify for the Key Executives' Bonus Program.
2. In addition to the above salary and bonus, you will also be
included in Gibson's Supplemental Executive Retirement Plan
and in Gibson's other programs for executives which include:
executive physical examinations, supplemental life insurance
and tax preparation and estate planning assistance.
3. In the event you are unable to perform your duties hereunder
due to illness or other incapacity, which incapacity
continues for more than six consecutive or nonconsecutive
months in any twelve-month period, the Company shall have
the right, on not less than 30 days written notice to you,
to terminate this Agreement. In the event of your death
during your employment hereunder, your salary shall cease as
of the last day of the sixth full calendar month following
the month in which your death occurs. Except for such
salary continuation rights, this Agreement shall terminate
as of the date of death.
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Mr. Stephen M. Sweeney
January 2, 1991
Page 2
4. In the event any person becomes the beneficial owner of
fifty percent (50%) or more of the Company's securities, and
you are not retained by that person in substantially the
same capacity and salary as contemplated herein for at least
six (6) months from the date of said change in beneficial
ownership, then upon your termination hereunder, you will be
paid one year's salary reduced by 1/12 for each full month
of employment completed after said change in beneficial
ownership. Any amount to be paid hereunder would be further
reduced by the value of any severance package received by
you from the new ownership in connection with your
termination.
5. In the event you voluntarily terminate your employment
during the term of this Agreement, or if your employment is
terminated for cause, your right to all compensation
hereunder shall cease as of the date of termination.
"Cause" shall mean dishonesty, insubordination, gross
negligence, or willful misconduct in the performance of your
duties, failure to perform duties in a diligent and
competent manner, or any willful and material breach of this
Agreement. Termination of employment under this Paragraph
shall terminate this Agreement with the exception of the
provisions of Paragraphs 6, 7 and 9.
6. Also in the event you voluntarily terminate your employment
hereunder, or in the event the Company terminates this
Agreement and your employment for cause, you agree that for
a period of two years after such termination, you will not
compete, directly or indirectly, with the Company or with
any division, subsidiary or affiliate of the Company or
participate as a director, officer, employee, consultant,
advisor, partner or joint venturer in any business engaged
in the manufacture or sale of greeting cards, gift wrap or
other products produced by the Company, or by any division,
subsidiary or affiliate of the Company, without the
Company's prior consent. If this Agreement is not earlier
terminated as provided in this Paragraph, your said
obligation not to compete shall continue in effect for a
period of one year following the expiration of this
Agreement or of any renewal or extension hereof.
7. In connection with this Agreement, you agree to continue to
receive confidential information of the Company in
confidence, and not to disclose to others, assist others in
the application of, or use for your own gain, such
information, or any part thereof, unless and until it has
become public knowledge or has come into the possession of
others by legal and equitable means. You further agree
that, upon termination of employment with the Company, all
PAGE
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Mr. Stephen M. Sweeney
January 2, 1991
Page 3
documents, records, notebooks, and similar writings,
including copies thereof, then in your possession, whether
prepared by you or by others, will be left with the Company.
For purposes of this Paragraph, "confidential information"
means information concerning Company's finances, plans,
sales, products, processes and services, or those of
Company's subsidiaries, divisions or affiliates, which is
disclosed to you or known by you as a consequence of or
through your employment with the Company, and which is not
generally known in the industry in which the Company or its
subsidiaries, divisions or affiliates are or may become
engaged.
8. Nothing herein is intended to be granted to you in lieu of
any rights or privileges to which you may be entitled as an
executive employee of the Company under any retirement,
insurance, hospitalization, or other plan which may now or
hereafter be in effect.
9. This Agreement shall inure to the benefit of and be binding
upon you and your legal representatives as well as the
Company, its successors and assigns including, without
limitation, any person, partnership, corporation or other
entity which may acquire all, or substantially all, of the
Company's assets and business.
To indicate your acceptance of and willingness to be bound by
this Agreement, please sign and return one duplicate original of
this letter.
Sincerely,
GIBSON GREETINGS, INC.
/s/ Benjamin J. Sottile
Benjamin J. Sottile
President and C.E.O.
BJS/HLC/ss
ACCEPTED AND AGREED TO:
/s/ Stephen M. Sweeney
Stephen M. Sweeney
Date: January 2, 1991
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Exhibit 10(j)(xiv)
December 10, 1993
Mr. Stephen M. Sweeney
Vice President - Human Resources
Gibson Greetings, Inc.
2100 Section Road
Cincinnati, OH 45237
Dear Steve:
As you are probably aware, your employment agreement with Gibson
Greetings, Inc. was set to expire on November 30, 1993. Upon
that expiration, without an extension, you would have become an
at-will employee of the Company.
However, we believe that you, as a valued member of the Company,
have earned and continue to deserve the career and financial
security afforded by an employment agreement. Therefore, we are
hereby offering to extend your agreement indefinitely until it is
terminated by the Company upon one (1) year's advance written
notice to you. The agreement shall remain subject to earlier
termination for cause. All other terms and conditions of the
agreement shall remain the same.
Please be aware that, even if the Company decides to terminate
your employment agreement, that would not necessarily be a
termination of your employment relationship with the Company.
To indicate your acceptance of this amendment, please sign where
indicated below and, as promptly as possible, return the executed
original in the enclosed self-addressed envelope. Please be sure
to retain an executed copy for your records.
Sincerely,
GIBSON GREETINGS, INC.
/s/ Benjamin J. Sottile
Benjamin J. Sottile
Chairman of the Board,
President and
Chief Executive Officer
BJS/HLC/dk
ACCEPTED AND AGREED TO:
Stephen M. Sweeney
Date: 12/16/93
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Exhibit 10(j)(xv)
November 18, 1993
Mr. William L. Flaherty
Vice President - Finance
Gibson Greetings, Inc.
2100 Section Road
Cincinnati, OH 45237
Dear Bill:
Gibson Greetings, Inc. and I are very pleased that you have
agreed to serve as Vice President - Finance and Chief Financial
Officer of Gibson Greetings, Inc. ("the Company"). As such, you
will report directly to the Chairman and Chief Executive Officer
of the Company and will be responsible for all of the Finance,
Treasury, Accounting, Tax, Internal Audit and Risk Management
functions of the Company. The following terms and conditions
will govern your service to the Company.
1. You will serve the Company on a full-time basis as a senior
executive employee, and the Company will employ you as such,
for a period of three years commencing November 18, 1993 and
ending November 17, 1996 unless you are terminated at an
earlier date pursuant to Paragraph 11, 12 or 14 of this
Agreement. Your annual salary will be $175,000, which
amount will be reviewed every fifteen months and which may
be increased from time to time by the Company throughout the
term of this Agreement in accordance with the Company's
salary administration program.
No later than twelve months prior to expiration of the
initial term of this Agreement, it will be reviewed by the
Company for the purpose of deciding whether or not it will
be extended upon its expiration. You will be advised
promptly of a decision not to extend. If you are not
notified at that time of a decision not to extend the
Agreement, it will continue indefinitely until terminated by
the Company for any reason and at any time upon giving you
one (1) year's advance written notice. This Agreement at
all times shall remain subject to earlier termination for
cause pursuant to Paragraph 11, 12 or 14.
Notwithstanding anything herein to the contrary, if the
Company decides not to extend this Agreement at the end of
PAGE
<PAGE>
Mr. William L. Flaherty
November 18, 1993
Page 2
the initial term and elects to terminate your employment at
that time, you will receive a separation payment equal to
six months' salary and be provided with outplacement
services arranged by the Company at its expense.
2. You will receive a signing bonus of $30,000 paid in equal
installments of $7,500 on December 1, 1993 and on March 1,
June 1 and September 1, 1994, provided you are still in the
employ of the Company on those dates.
3. As a participant in the Company's Executive Bonus Plan, you
will be eligible for a bonus for 1994 and for the remaining
term of this Agreement and for each year of any extension
hereof.
4. As additional consideration for this Agreement, and
contingent upon approval by the Compensation Committee, you
will be granted a nonqualified stock option for 15,000
shares of the common stock of the Company. The options
shall become vested at the rate of thirty-three and one-
third percent (33 %) for each of the first three
anniversaries of the grant date. Such vesting and
subsequent exercisability shall be conditioned upon your
continuing to be employed by the Company on each such
anniversary date.
5. The Company will reimburse you for your reasonable expenses
of moving from Weston, Massachusetts to Cincinnati, Ohio,
including: household moving costs; your and your spouse's
travel expenses for house-hunting trips as approved in
advance by the Company; and realtor fees and transfer taxes
for the sale of your present home in Weston, Massachusetts.
6. You will be covered by the Company's special benefit
programs for executives which include: executive physical
examinations, life insurance, tax preparation and estate
planning assistance. The amount of your life insurance
shall be three (3) times your annual salary, not to exceed
$600,000.
7. Upon approval of the Compensation Committee, you will be
named a participant in the Company's Supplemental Executive
Retirement Plan (SERP).
8. You will be covered by the Company's health insurance plan
for which we will waive the usual waiting period.
PAGE
<PAGE>
Mr. William L. Flaherty
November 18, 1993
Page 3
9. You will be eligible for four (4) weeks of paid vacation
during each year this Agreement remains in effect.
10. In the event any person becomes the beneficial owner of
fifty percent (50%) or more of the Company's securities, and
you are not retained by that person in substantially the
same capacity and salary as contemplated herein for at least
six (6) months from the date of said change in beneficial
ownership, then, upon your termination hereunder, you will
be paid one year's salary reduced by 1/12 for each full
month of employment completed after said change in
beneficial ownership. Any amount to be paid hereunder would
be further reduced by the value of any severance package
received by you from the new ownership in connection with
your termination.
11. In the event you are unable to perform your duties hereunder
due to illness or other incapacity, which incapacity
continues for more than six consecutive or nonconsecutive
months in any twelve-month period, the Company shall have
the right, on not less than 30 days' written notice to you,
to terminate this Agreement. In the event of your death
during your employment hereunder, your salary shall cease as
of the last day of the sixth full calendar month following
the month in which your death occurs. Except for such
salary continuation rights and except for certain stock
option rights, this Agreement shall terminate as of the date
of death.
12. In the event you voluntarily terminate your employment
during the term of this Agreement, or if the Company
terminates this Agreement and your employment for cause,
your right to all compensation hereunder shall cease as of
the date of termination. As used in this Agreement, "cause"
shall mean dishonesty, gross negligence, or willful
misconduct in the performance of your duties or a willful
and material breach of this Agreement. Termination of
employment shall terminate this Agreement with the exception
of the provisions of Paragraphs 13, 14, 15 and 17.
13. Also in the event you voluntarily terminate your employment
hereunder or retire, or if the Company terminates this
Agreement and your employment for cause, you agree that for
a period of one and one-half years after such termination,
you will not compete, directly or indirectly, with the
Company or with any division, subsidiary or affiliate of the
Company or participate as a director, officer, employee,
PAGE
<PAGE>
Mr. William L. Flaherty
November 18, 1993
Page 4
consultant, advisor, partner or joint venturer in any
business engaged in the manufacture or sale of greeting
cards, gift wrap or other products produced or sold by the
Company, or by any division, subsidiary or affiliate of the
Company, without the Company's prior written consent. If
the Company chooses to terminate this Agreement any time
after the initial term and you continue to be employed by
the Company as an employee, agent, consultant or otherwise,
you agree that this Paragraph 13 shall continue to bind you
for a period of one (1) year after your separation from the
Company as an employee, agent, consultant or otherwise.
14. In the event the Company terminates this Agreement and your
employment without cause during the initial term of this
Agreement, you shall continue to be paid your then current
salary through the effective date of such termination.
15. In connection with this Agreement, you may receive
confidential information of the Company. You agree, both
during the term of this Agreement and after termination, not
to disclose to others, assist others in the application of,
or use for your own gain, such information, or any part
thereof, unless and until it has become public knowledge or
has come into the possession of others by legal and
equitable means. You further agree that, upon termination
of employment with the Company, all documents, records,
notebooks, and similar writings, including copies thereof,
then in your possession, whether prepared by you or by
others, will be left with or returned promptly to the
Company. For purposes of this Paragraph 15, "confidential
information" means information concerning Company's
finances, plans, sales, products, processes and services, or
those of Company's subsidiaries, divisions or affiliates,
which is disclosed to you or known by you as a consequence
of or through your employment with the Company, and which is
not generally known in the industry in which the Company or
its subsidiaries, divisions or affiliates are or may become
engaged. You agree that this Paragraph 15 shall continue to
bind you notwithstanding the termination of this Agreement
or your employment for any reason whatsoever. If the
Company chooses to terminate this Agreement any time after
the initial term and you continue to be employed by the
Company as an employee, agent, consultant or otherwise, you
agree that this Paragraph 15 shall continue to bind you
after your separation as an employee, agent or consultant.
PAGE
<PAGE>
Mr. William L. Flaherty
November 18, 1993
Page 5
16. Nothing herein is intended to be granted to you in lieu of
any rights or privileges to which you may be entitled as an
executive employee of the Company under any retirement,
insurance, hospitalization, or other plan which may now or
hereafter be in effect.
17. This Agreement shall inure to the benefit of and be binding
upon you and your legal representatives as well as the
Company, its successors and assigns including, without
limitation, any person, partnership, corporation or other
entity which may acquire all, or substantially all, of the
Company's assets and business.
18. If any provision of this Agreement is later deemed to be
void, the provision may be stricken and the remaining
portions of this Agreement enforced as if the provision so
stricken was never included herein.
To indicate your acceptance of and willingness to be bound by
this Agreement, please sign and return one duplicate original of
this letter.
Sincerely,
GIBSON GREETINGS, INC.
/s/ Benjamin J. Sottile
Benjamin J. Sottile
Chairman of the Board,
President and
Chief Executive Officer
ACCEPTED AND AGREED TO:
William L. Flaherty
William L. Flaherty
Date: 1/5/94
PAGE
<PAGE>
Exhibit 10(j)(xvi)
February 22, 1994
Mr. Michael A. Pietrangelo
Cleo, Inc.
4025 Viscount
Memphis, Tennessee
Dear Mike:
This letter sets forth our mutual agreement with respect to
your decision to leave the employment of Gibson Greetings, Inc.
("Gibson") and its wholly owned subsidiary, Cleo, Inc. ("Cleo")
(and both of which jointly herein are called "Gibson Companies").
In this connection, we have reached the following agreement:
1. Except as provided in Paragraph 11 herein, your
Employment Agreement, dated May 9, 1990 as interpreted by letter
of August 29, 1990, and your employment with the Gibson
Companies, both are hereby terminated, effective as of the close
of business on February 28, 1994 with no further obligations by
either party under said Agreement.
2. Cleo shall pay to you a total severance payment of
$550,000.00, with the payment to be made in forty-eight (48)
equal semi-monthly installments (subject to withholdings
appropriate for severance payments) commencing on March 15, 1994
and concluding on February 28, 1996.
3. Cleo shall pay to you forthwith a lump sum payment of
$21,153.85 which shall be in lieu of any accrued vacations and
vacation pay.
4. You shall be entitled to continue Cleo health coverage
for yourself and your wife and eligible dependents on the basis
currently enjoyed by you for the severance payment period,
provided this provision shall terminate in the event you obtain
employment during such period with an employer who offers
substantially similar health coverage to its employees.
5. You shall be entitled to participate in the Gibson
Companies' Group Insurance Plan during the severance payment
period provided premium payments (currently $30 monthly) are paid
by you to the Plan.
6. You shall be entitled to purchase the Infiniti
automobile currently provided to you by Cleo at Cleo's January 1,
1994 depreciated book value of $8,400.00, provided the election
to purchase and payment is made by you on or before March 15,
1994. In the event you determine not to purchase the automobile,
it shall be returned by you to Cleo on or before March 15, 1994.
PAGE
<PAGE>
Mr. Michael Pietrangelo
February 22, 1994
Page 2
7. Cleo shall continue its corporate membership in the TPC
Southwind Country Club for your usage during the severance
payment period, provided that periodic membership dues and
expenses are paid by you. In the event you determine not to make
said payments or if the Gibson Companies have another usage for
such membership, your membership usage shall cease.
Notwithstanding the foregoing, to the extent you entertain Gibson
Companies' customers at Cleo's request at the above Club, your
expenses shall be reimbursed by Cleo.
8. You may use your current Cleo telephone credit card
until May 31, 1994 for business purposes and with such credit
card to be returned to Cleo by you at the conclusion of said
period.
9. All outstanding stock options which you hold for common
stock of Gibson shall be exercised by you, if at all, no later
than March 28, 1994.
10. It is understood that, except as provided herein, you
have no further rights or benefits in any of Gibson Companies'
fringe benefit plans and including, without limitation, the
Supplemental Executive Retirement Plan and the Retirement Income
Plan.
11. The provisions of Paragraph 16 of the Employment
Agreement of May 9, 1990, which paragraph is attached to and made
a part of this Agreement as Exhibit A, shall remain in full force
and effect.
12. During the two year severance payment period, you agree
(a) not to represent or speak for the Gibson Companies in any
manner without the prior specific authorization of the CEO of
Gibson, (b) not to obtain employment from any competitor of
Gibson Companies, and (c) not to compete with Gibson Companies or
with the products of Gibson Companies as an employee of a third
party, as a consultant, as an owner or in another other
proprietary capacity, provided that subject to the foregoing you
otherwise may seek and obtain employment from a third party.
13. You hereby resign, effective February 28, 1994, as an
Officer and Director of Gibson and of all of its subsidiaries.
14. The foregoing understandings are in full settlement of
all severance rights and any claims of any nature arising out of
your employment and you waive and release and hold harmless
Gibson Companies, and its directors, officers, agents, employees
and affiliated organizations, from and against any and all
rights, claims, demands and causes of action arising out of your
employment relationship with Gibson Companies or out of
termination of your employment relationship. * /s/ MP
15. This Agreement shall be construed under the laws of the
State of Ohio.
Yours truly,
GIBSON COMPANIES
PAGE
<PAGE>
Mr. Michael Pietrangelo
February 22, 1994
Page 3
By /s/ Benjamin J. Sottile
AGREED:
/s/ M Pietrangelo
Michael A. Pietrangelo
Date: 2/23/94
/s/ MP * The Gibson Companies release and hold you harmless from and
against any and all rights, claims, demands and causes of action
arising out of your employment relationship with Gibson Companies
or out of termination of your employment relationship but
excepting such matters arising out of your conduct as a member
of the Board of Directors of Gibson and its subsidiaries but
with respect to which directorships certain provisions of law
and of Gibson Companies' Articles and Bylaws otherwise may
be applicable.
PAGE
<PAGE>
16. In connection with this Agreement, you agree to receive
confidential information of the Company in confidence, and
not to disclose to others, assist others in the application
of, or use for your own gain, such information, or any part
thereof, unless and until it has become public knowledge or
has come into the possession of such others by legal and
equitable means. You further agree that, upon termination
of employment with the Company, all documents, records,
notebooks, and similar writings, including copies thereof,
then in your possession, whether prepared by you or by
others, will be left with the Company. For purposes of this
Paragraph 16 "confidential information" means information
disclosed to you or known by you as a consequence of or
through your employment with Company, not generally known in
the industry in which the Company is or may become engaged,
concerning the Company's sales, products, processes and
services or those of its divisions, subsidiaries or
affiliates.
EXHIBIT A
PAGE
<PAGE>
Exhibit 11
GIBSON GREETINGS, INC.
COMPUTATION OF INCOME PER SHARE
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Twelve Months Ended December 31,
----------------------------------------
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Income before cumulative
effect of accounting
changes $ 25,852 $ 7,985 $ 41,884
Cumulative effect of
accounting changes,
net of income taxes - (1,449) -
---------- ---------- ----------
Net income $ 25,852 $ 6,536 $ 41,884
========== ========== ==========
Weighted average number
of shares of common
stock and equivalents
outstanding:
Common stock 16,042 16,022 15,876
Options 61 82 163
---------- ---------- ----------
16,103 16,104 16,039
========== ========== ==========
Income per share before
cumulative effect of
accounting changes $ 1.61 $ 0.50 $ 2.61
Cumulative effect per share
of accounting changes - (0.09) -
---------- ---------- ----------
Net income per share $ 1.61 $ 0.41 $ 2.61
========== ========== ==========
</TABLE>
PAGE
<PAGE>
Exhibit 21
GIBSON GREETINGS, INC.
Subsidiaries of the Registrant
As of December 31, 1993
NAME STATE OF INCORPORATION
-------------------------------------- ----------------------
Cleo, Inc. Tennessee
Gibson Greetings International Limited Delaware
Gibson de Mexico S.A. de C.V. Mexico
Greetings USA, Inc. Delaware
The Paper Factory of Wisconsin, Inc. Wisconsin
PAGE
<PAGE>
Exhibit 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated March 4, 1994 included in this
Form 10-K, into the Company's previously filed Registration
Statements File Nos. 2-88721, 33-2481, 33-18221, 33-32596,
33-32597 and 33-44633.
ARTHUR ANDERSEN & CO.
Cincinnati, Ohio,
March 18, 1994.
