FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1994
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 0-16255
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 39-1536083
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1326 Willow Road, Sturtevant, Wisconsin 53177
(Address of principal executive offices)
(414) 884-1500
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to section 12(g) of the Act:
Class A Common Stock, $.05 par value
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 _______
[ X ] 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.
As of November 15, 1994, 6,841,463 shares of Class A and 1,230,599
shares of Class B common stock of the Registrant were outstanding. The
aggregate market value of voting stock of the Registrant held by
non-affiliates of the registrant was approximately $98,538,000 on November
15, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Part and Item Number of Form
Document 10-K into which Incorporated
1. Johnson Worldwide Associates, Part I, Items 1 and 2, and
Inc. 1994 Annual Report Part II, Items 5, 6, 7 and 8
2. Johnson Worldwide Associates, Part III, Items 10, 11, 12
Inc. Notice of Annual Meeting of and 13
Shareholders and Proxy Statement
for the Annual Meeting of
Shareholders on January 25, 1995
<PAGE>
PART I
ITEM 1. BUSINESS
Johnson Worldwide Associates, Inc. and its subsidiaries (the "Company")
are engaged in the manufacture and marketing of recreational products.
The Company also manufactured and marketed marking systems, but on July
28, 1993 announced its intention to sell its marking systems business. In
accordance with this decision, the marking systems business is presented
as a discontinued operation in the Company's Consolidated Financial
Statements. Additional information regarding the marking systems business
is set forth at Note 3 to the Consolidated Financial Statements on page 20
in the Company's 1994 Annual Report, which is incorporated herein by
reference. Financial information for the foreign and domestic operations
of the Company's recreational business is set forth at Note 13 to the
Consolidated Financial Statements on page 25 in the Company's 1994 Annual
Report which is incorporated herein by reference.
The Company's primary focus is on marketing and product innovation and
design to achieve strong brand names and consumer recognition. Research
and development activities for each of the Company's principal businesses
emphasize new products and innovations to differentiate the Company's
products from those of its competitors.
The Company and S. C. Johnson & Son, Inc. ("SCJ") are controlled by Samuel
C. Johnson, members of his family, and related entities.
Recreational Products
Fishing and Camping Products
The Company's fishing and camping products include Minn Kota electric
fishing motors, Mitchell reels and rods, Johnson reels, Beetle Spin soft
body lures, Johnson spoons, Deckhand electric boat anchor systems, Eureka!
and Camp Trails tents and backpacks, Old Town canoes, Carlisle paddles,
Silva compasses, and Jack Wolfskin camping tents, backpacks and outdoor
clothing.
The overall fishing and camping markets in which the Company competes have
grown modestly in recent years. The Company believes it has been able to
maintain or increase its share of most markets primarily as a result of
the Company's emphasis on marketing and product innovation. Research and
development emphasizes new products and innovations to provide
demonstrable product differentiation and expanded product lines. Consumer
advertising and promotion include advertising on regional television and
in outdoor, general interest and sports magazines, in-store displays and
sponsorship of fishing tournaments. Packaging and point-of-purchase
materials are used to increase consumer appeal and sales.
Electric Fishing Motors. The Company manufactures, under its Minn Kota
name, battery powered motors used on fishing boats for quiet trolling
power. The Company's Minn Kota motors and related accessories are sold
primarily in the United States through large retail store chains such as
K-Mart and Wal-Mart.
Rods and Reels. The Company markets Johnson fishing reels, which are
primarily closed-face reels, as well as Mitchell reels, which are
open-faced reels. Reels are sold individually and in rod and reel
combinations, primarily through large retail store chains in the United
States and Canada and specialty fishing shops in Europe. The Company's
closed-face reels compete in a segment of the U.S. fishing reel market
which is dominated by larger manufacturers. Marketing support for the
Company's reels is focused on building brand names, emphasizing product
features and innovations and on developing specific segments of the reel
market through advertising in national outdoor magazines, through trade
and consumer support at retail and through sponsorship of fishing
tournaments.
Lure Products. The Company's artificial lure products consist of Beetle
Spin soft body lures, and Johnson spoons. These products are sold
primarily through large retail store chains.
Tents and Backpacks. The Company's Eureka! and Camp Trails tents and
backpacks compete primarily in the mid- to high-price range of their
respective markets and are sold in the United States through independent
sales representatives primarily to sporting goods stores, catalog and mail
order houses and camping and backpacking specialty stores. Marketing of
the Company's tents and backpacks is focused on building the Eureka! and
Camp Trails brand names and establishing the Company as a leader in
product design and innovation. The Company's tents and backpacks are
produced by off-shore manufacturing sources.
The Company markets both Eureka! camping and commercial tents. The
Company's camping tents have outside self-supporting aluminum frames
allowing quicker and easier set-up, a design approach first introduced by
the Company. Most of the Eureka! tents are made from breathable nylon.
The Company's commercial tents include party tents and tents for fairs.
Party tents are sold primarily to general rental stores while other
commercial tents are sold directly to tent erectors. Commercial tents are
manufactured by the Company in the United States. In 1994, the Company
introduced a line of Camp Trails tents to compete in the promotional
product category.
Camp Trails backpacks consist primarily of internal and external frame
backpacks for hiking and mountaineering. The Company's line of Camp
Trails backpacks also includes soft back bags, day packs and travel packs.
Jack Wolfskin, a German marketer of camping tents, backpacks and outdoor
clothing, distributes its products primarily through camping and
backpacking specialty stores in Germany with additional distribution in
other European countries and Japan. In 1994, the Company introduced a
line of Eureka! backpacks to compete in the mid to high performance
product category.
Canoes. The Company's canoes are sold under the Old Town name and consist
of whitewater, tripping, touring and general recreational purpose canoes
for the high quality and mid-price segments of the canoe market. The
Company has developed a proprietary roto-molding process for manufacturing
polyethylene canoes to compete in the higher volume mid-priced range of
the market. These canoes maintain many of the design and durability
characteristics of higher priced canoes. The Company also manufactures
canoes from fiberglass, Royalex (ABS) and wood. The Company's canoes are
sold primarily to sporting goods stores, catalog and mail order houses
such as L. L. Bean, canoe specialty stores and marine dealers in the
United States and Europe. The United States' market for canoes is
relatively constant, but the Company believes, based on industry data,
that it is the leading manufacturer of canoes in the United States in unit
and dollar sales. Carlisle Paddles, a manufacturer of composite canoe
paddles, supplies certain paddles that are sold with the Company's canoes
as well as supplying paddles which are distributed through the same
channels as the Company's canoes.
Diving and Marine Products
Diving. The Company believes that it is one of the world's largest
manufacturers and distributors of underwater diving products which it
sells under the Scubapro name. The Company markets a full line of
snorkeling and underwater diving equipment including regulators,
stabilizing jackets, tanks, depth gauges, masks, fins, snorkels, diving
electronics and other accessories. Scubapro products are marketed to the
high quality, premium priced segment of the market. The Company maintains
a marketing policy of limited distribution and sells primarily through
independent specialty diving shops worldwide. These diving shops
generally provide a wide range of services to divers, including
instruction and repair service. Scubapro products are marketed primarily
in the United States, Europe and the Pacific Basin.
The Company focuses on maintaining Scubapro as the market leader in
innovations and new products. The Company maintains a research and
development staff both in the United States and Italy and has obtained
several patents on Scubapro products and features. Consumer advertising
focuses on building the Scubapro brand name and position as the high
quality and innovative leader in the industry. The Company advertises its
Scubapro equipment in diving magazines and through in-store displays.
The Company maintains manufacturing and assembly facilities in the United
States and Italy. The Company procures a number of its rubber and plastic
products and components from offshore sources.
Marine Products. The Company is a leading supplier in Europe of marine
products and accessories primarily for sailing, which are sold under the
Plastimo name. Plastimo products and accessories include safety products
(such as buoyancy vests and inflatable life rafts), mooring products (such
as anchors, fenders and ladders), navigational equipment (such as cockpit
instruments, automatic pilots and compasses) and jib reefing systems.
Plastimo products are also sold in the United States and other markets
worldwide.
The Company's line of Airguide marine, weather and automotive instruments
are distributed primarily in the United States through large retail store
chains and original equipment manufacturers.
Sales by Category
The following table depicts net sales of continuing operations by major
product category:
Year Ended
September 30, October 1, October 2,
1994 1993 1992
(thousands of dollars)
Fishing $ 94,363 $ 84,773 $ 81,074
Camping 87,529 86,118 84,068
Diving 66,884 66,225 64,382
Marine 35,567 43,176 46,321
------ ------ --------
$284,343 $280,292 $275,845
======= ======= =======
Marking Systems
The Company manufactured and marketed marking systems throughout the world
under the Porelon, First Edition, Perma Stamp, Stamp-Ever, Phoenix, Eagle,
Trident and other trade names. The Company's primary marking systems
products included hand stamps; ink roll and cartridge replacement units
for calculators, adding machines and computers; extruded rolls for the
printing industry; and liquid ink jets. The hand stamps and replacement
units were distributed through office supply retail stores, including the
super store segment of the market. The liquid ink jets were sold to
original equipment manufacturers primarily for applications in financial
institutions and the postal industry.
On July 28, 1993, the Company announced its intention to sell its marking
systems business. As a result, the marking systems operations have been
reclassified as discontinued for financial reporting purposes. The
Company completed the divestiture of the marking systems business in the
second calendar quarter of 1994.
International Operations
See Note 13 to the Consolidated Financial Statements on page 25 of the
Company's 1994 Annual Report which is incorporated herein by reference,
for financial information comparing the Company's domestic and
international operations.
Research and Development
The Company commits significant resources to research and new product
development. The Company expenses research and development costs as
incurred. The amounts expended by the Company in connection with research
and development activities for each of the last three fiscal years is set
forth in the Consolidated Statements of Operations on page 16 of the
Company's 1994 Annual Report which is incorporated herein by reference.
Competition
The markets for most of the Company's products are quite competitive. The
Company believes its products compete favorably on the basis of product
innovation, product performance and strong marketing support, and to a
lesser extent, price.
Employees
At September 30, 1994, the Company had approximately 1,275 employees
working in its businesses. The Company considers its employee relations
to be excellent.
Patents, Trademarks and Proprietary Rights
The Company owns no single patent which is material to its business as a
whole. However, the Company holds several patents, principally for diving
products and roto-molded canoes and has filed several applications for
patents. The Company also has numerous trademarks and trade names which
the Company considers important to its business.
Seasonality
The Company's business is seasonal. The following table shows total net
sales and operating profit of the Company's continuing operations for each
quarter, as a percentage of the total year. An inventory writedown of
$5.4 million is included as a component of fourth quarter operating loss
in 1994. Restructuring charges of $13.0 million and $4.5 million for 1993
and 1992, respectively, are included as a component of the fourth quarter
operating loss in those years.
<TABLE>
<CAPTION>
Year Ended
September 30, 1994 October 1, 1993 October 2, 1992
Net Operating Net Operating Net Operating
Quarter Ended Sales Profit(Loss) Sales Profit(Loss) Sales Profit(Loss)
<S> <C> <C> <C> <C> <C> <C>
December 16% (8)% 17% (11)% 17% 7%
March 30 61 30 99 33 86
June 33 78 33 110 30 31
September 21 (31) 20 (98) 20 (24)
--- --- --- --- --- ---
100% 100% 100% 100% 100% 100%
=== === === === === ===
</TABLE>
Executive Officers of the Registrant
Pursuant to General Instruction of G(3) of Form 10-K, the following list
is included as an unnumbered Item in Part I of this report in lieu of
being included in the Company's Proxy Statement for the January 25, 1995
Annual Meeting of Shareholders.
Mr. Crabb, age 51, became President and Chief Executive Officer in January
1994. He served as President and Chief Operating Officer of the Company
from 1992 to January 1994. Mr. Crabb served as Executive Vice
President-Regional Director, Consumer Products, Europe of S.C. Johnson and
Son, Inc. ("SCJ") from 1990 to 1992 and from 1984 to 1990 was Vice
President-Regional Director of Asia/Pacific of SCJ. Mr. Crabb joined SCJ
in 1970. He was previously employed by Lever Bros., Ltd., Toronto,
Canada.
Mr. Malone, age 64, retired as Chairman and Chief Executive Officer of the
Company in January 1994. He was President and Chief Executive Officer of
the Company from 1984 to 1992.
Mr. Blime, age 53, became a Vice President of the Company and President of
JWA Europe in 1993. From 1982 to 1993, Mr. Blime was President and
Directeur General of Mitchell Sports, S.A., a subsidiary of the Company
since 1990.
Mr. Inslee, age 56, became Vice President-Human Resources of the Company
in 1991. From 1988 to 1991, Mr. Inslee was Director of Human Resources of
the Company. He was Director of Personnel at SCJ from 1981 to 1988. Mr.
Inslee joined SCJ in 1960.
Mr. Schmidt, age 38, became Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company in July 1994. From 1988 to July
1994 he was a partner in the firm of KPMG Peat Marwick LLP.
Mr. Chilton, age 48, resigned as Vice President-Business Development in
July 1994, which position he had held since November 1991. From 1987 to
1991 Mr. Chilton was President of Oregon Farms, Inc.
Mr. Caulk, age 42, resigned as Vice President of the Company and President
of JWA North America in October 1994, which positions he had held since
July 1993. From 1991 to 1993, Mr. Caulk was Vice President and General
Manager of Scubapro USA, a division of the Company. From 1989 to 1991, he
was Director of Corporate Acquisitions and Planning for the Company.
Mr. Cahill, age 37, resigned as Vice President, Chief Financial Officer,
Secretary and Treasurer of the Company in July 1994, which positions he
had held since 1992. He served as Corporate Controller of the Company
from 1989 to 1992.
There are no family relationships between the above executive officers.
ITEM 2. PROPERTIES
The Company maintains both leased and owned manufacturing, warehousing,
distribution and office facilities throughout the world.
The Company's manufacturing processes are primarily assembly operations
and the Company prefers to lease rather than own facilities to maintain
operational flexibility and control the investment of financial resources
in property. See Note 6 to the Consolidated Financial Statements on Page
21 of the Company's 1994 Annual Report for a discussion of lease
obligations.
The Company believes that its facilities are well maintained and have a
capacity adequate to meet the Company's current needs.
The Company's principal manufacturing locations and distribution centers
are:
Antibes, France
Bad Sakingen, Germany
Barcelona, Spain
Binghamton, New York
Bruxelles, Belgium
Burlington, Ontario, Canada
Chicago, Illinois
Eastleigh, Hampshire, England
Genoa, Italy
Grayling, Michigan
Henan, Sweden
Henggart, Switzerland
Lorient, France
Mankato, Minnesota
Marignier, France
Mitcham, Surrey, England
Morfelden-Walldorf, Germany
Nykoping, Sweden
Old Town, Maine
Oslo, Norway
Racine, Wisconsin
Rancho Dominguez, California
Salzburg-Glasenbach, Austria
Silverwater, Australia
Tokyo (Kawasaki), Japan
The Company's Marking Systems' principal locations were:
Boras, Sweden
Brookfield, Connecticut
Cookeville, Tennessee
Houston, Texas
Utica, New York
The Company's corporate headquarters is in Mount Pleasant, Wisconsin. The
Company's mailing address is Sturtevant, Wisconsin.
ITEM 3. LEGAL PROCEEDINGS
The Company is subject to various legal actions and proceedings in the
normal course of business, including those related to environmental
matters. Although litigation is subject to many uncertainties and the
ultimate exposure with respect to these matters cannot be ascertained,
management does not believe the final outcome will have a significant
effect on the Consolidated Financial Statements.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the
last quarter of the year ended September 30, 1994.
<PAGE>
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
Information with respect to this item is included on pages 21, 23, 24 and
27 and the inside back cover of the Company's 1994 Annual Report and is
incorporated herein by reference.
There is no public market for the Registrant's Class B Common Stock.
However, the Class B Common Stock is convertible at all times at the
option of the holder into shares of Class A Common Stock on a share for
share basis. As of November 15, 1994, the Company had 817 Holders of
Record of its Class A Common Stock and 75 Holders of Record of its Class B
Common Stock.
The Company has never paid a dividend on its Common Stock.
ITEM 6. SELECTED FINANCIAL DATA
Information with respect to this item is included on page 27 of the
Company's 1994 Annual Report and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
Information with respect to this item is included on pages 12 to 14 of the
Company's 1994 Annual Report and is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements and supplemental data of
the registrant and subsidiaries, included on pages 15 through 27 of the
Company's 1994 Annual Report, are herein incorporated by reference:
Consolidated Balance Sheets - September 30, 1994 and October 1, 1993
Consolidated Statements of Operations - Years ended September 30,
1994, October 1, 1993 and October 2, 1992
Consolidated Statements of Shareholders' Equity - Years ended
September 30, 1994, October 1, 1993 and October 2, 1992
Consolidated Statements of Cash Flows - Years ended September 30,
1994, October 1, 1993 and October 2, 1992
Notes to Consolidated Financial Statements
Independent Auditors' Report
Five Year Financial Summary
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Information with respect to this item, except for information on the
Executive Officers which appears at the end of Part I of this report, is
included in the Company's January 25, 1995 Proxy Statement under the
headings "Election of Directors" and "Other Matters" and is incorporated
herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
Information with respect to this item is included in the Company's January
25, 1995 Proxy Statement under the heading "Executive Compensation" and is
incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information with respect to this item is included in the Company's January
25, 1995 Proxy Statement under the heading "Stock Ownership of Management
and Others" and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information with respect to this item is included in the Company's January
25, 1995 Proxy Statement under the heading "Certain Transactions" and is
incorporated herein by reference.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
A. The following documents are filed as a part of this Form 10-K:
1. Financial Statements:
Included in Item 8 of Part II of this Form 10-K are the
following Consolidated Financial Statements, related notes
thereto, and independent auditors' report which are incorporated
herein by reference from the 1994 Annual Report:
Consolidated Balance Sheets - September 30, 1994 and October 1,
1993
Consolidated Statements of Operations - Years ended September
30, 1994, October 1, 1993 and October 2, 1992
Consolidated Statements of Shareholders' Equity - Years ended
September 30, 1994, October 1, 1993 and October 2, 1992
Consolidated Statements of Cash Flows - Years ended September
30, 1994, October 1, 1993 and October 2, 1992
Notes to Consolidated Financial Statements
Independent Auditors' Report
Five Year Financial Summary
2. Financial Statement Schedules and Independent Auditors' Report:
Included in Part IV of this Form 10-K are the following
financial statement schedules and independent auditors' report:
Independent Auditors' Report
Schedule VIII - Valuation and Qualifying Accounts
Schedule IX - Short-term Borrowings
Schedule X - Supplementary Income Statement Information
All other schedules are omitted because they are not applicable,
are not required or equivalent information has been included in
the Consolidated Financial Statements or notes thereto.
3. Exhibits
See Exhibit Index on page 16.
B. Reports on Form 8-K:
No reports on Form 8-K were filed during the fiscal year ended
September 30, 1994.
<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, in
the Town of Mount Pleasant and State of Wisconsin, on the 13th day of
December, 1994.
JOHNSON WORLDWIDE ASSOCIATES, INC.
(Registrant)
By /s/ John D. Crabb
John D. Crabb
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, the
report has been signed by the following persons in the capacities
indicated on the 13th day of December, 1994.
/s/ Samuel C. Johnson Chairman of the Board
(Samuel C. Johnson) and Director
/s/ John D. Crabb President and Chief
(John D. Crabb) Executive
Officer and Director
/s/ Donald W. Brinckman Director
(Donald W. Brinckman)
/s/ Raymond F. Farley Director
(Raymond F. Farley)
/s/ Helen P. Johnson-Leipold Director
(Helen P. Johnson-Leipold)
/s/ Thomas F. Pyle, Jr. Director
(Thomas F. Pyle, Jr.)
/s/ Carl G. Schmidt Vice President, Chief
(Carl G. Schmidt) Financial Officer,
Secretary and Treasurer
(Principal Financial and
Accounting Officer)
<PAGE>
INDEPENDENT AUDITORS' REPORT
Shareholders and Board of Directors
Johnson Worldwide Associates, Inc.:
Under date of November 10, 1994, we reported on the consolidated balance
sheets of Johnson Worldwide Associates, Inc. and subsidiaries as of
September 30, 1994 and October 1, 1993 and the related consolidated
statements of operations, shareholders' equity and cash flows for each of
the years in the three year period ended September 30, 1994, as contained
in the 1994 Annual Report. These consolidated financial statements and
our report thereon are incorporated by reference in the Annual Report on
Form 10-K for the fiscal year 1994. In connection with our audits of the
aforementioned consolidated financial statements, we also audited the
related consolidated financial statement schedules as listed in Item 14A.
These financial statement schedules are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these financial statement schedules based on our audits.
In our opinion, such financial statement schedules, when considered in
relation to the basic consolidated financial statements taken as a whole,
present fairly, in all material respects, the information set forth
therein.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
November 10, 1994
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
<TABLE>
SCHEDULE VIII - VALUATION AND QUALIFYING ACCOUNTS
(thousands of dollars)
<CAPTION>
Additions
Balance at Charged to Balance
Beginning Costs and at End
of Year Expenses Deductions <F1> of Year
<S> <C> <C> <C> <C>
Year ended September 30, 1994:
Allowance for doubtful accounts $1,606 $1,421 $ 710 $2,317
Year ended October 1, 1993:
Allowance for doubtful accounts 1,867 994 1,255 1,606
Year ended October 2, 1992:
Allowance for doubtful accounts 1,715 1,213 1,061 1,867
<FN>
<F1> Includes the impact of foreign currency fluctuations on these
balance sheet accounts.
</TABLE>
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
<TABLE>
SCHEDULE IX - SHORT-TERM BORROWINGS
(thousands of dollars)
<CAPTION>
Weighted
Maximum Average Average
Weighted Amount Amount Interest
Balance at Average Outstanding Outstanding Rate During
Category of Aggregate End of Interest During During the
Short-term Borrowings Year <F1> Rate the Year the Year Year <F2>
<S> <C> <C> <C> <C> <C>
Year ended September 30, 1994:
Notes payable $9,264 7.9% $66,903 $37,495 5.9%
Year ended October 1, 1993:
Notes payable 31,175 5.7 65,907 44,840 7.3
Year ended October 2, 1992:
Notes payable 26,054 8.1 68,101 46,652 8.6
<FN>
<F1> The difference between amounts per this schedule and the notes
payable per the respective consolidated balance sheet represents
current maturities of long-term obligations.
<F2> The weighted average interest rate was computed by dividing
actual interest expense by the average borrowings outstanding.
</TABLE>
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(thousands of dollars)
Charged to Costs and Expenses
Year Ended
September 30, October 1, October 2,
1994 1993 1992
5. Advertising costs $12,078 $12,042 $10,854
(1) Items 1, 3 and 4 have been omitted as the amounts did not exceed
one percent of total sales and revenues.
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC.
EXHIBIT INDEX
Exhibits Title Page No.
3.1 Articles of Incorporation of the *
Company. (Filed as Exhibit 3.1 to the
Company's Form S-1 Registration
Statement No. 33-16998, and incorporated
herein by reference.)
3.2 Bylaws of the Company as Amended through -
January 27, 1994
4.1 Note Agreement dated May 1, 1991. *
(Filed as Exhibit 4 to the Company's
Form 10-Q for the quarter ended June 28,
1991 and incorporated herein by
reference).
4.2 Revolving and Term Loan Agreement dated *
October 2, 1991. (Filed as Exhibit 4.4
to the Company's Form 10-K for the year
ended September 27, 1991 and
incorporated herein by reference.)
4.3 Revolving Loan Agreement dated April 2, *
1993. (Filed as Exhibit 4 to the
Company's Form 10-Q for the quarter
ended April 2, 1993 and incorporated
herein by reference.)
4.4 Note Agreement dated May 1, 1993. *
(Filed as Exhibit 4 to the Company's
Form 10-Q for the quarter ended July 2,
1993 and incorporated herein by
reference.)
4.5 Letter Amendment No. 1 dated September *
30, 1993 to Note Agreement dated May 1,
1991
4.6 Letter Amendment No. 1 dated September *
27, 1993 to Revolving and Term Loan
Agreement dated October 2, 1991
4.7 Letter Amendment No. 1 dated September *
27, 1993 to Revolving Loan Agreement
dated April 2, 1993
4.8 Letter Amendment dated September 30, *
1993 to Note Agreement dated May 1, 1993
4.9 Letter Amendment No. 2 dated September -
30, 1994 to Revolving and Term Loan
Agreement dated October 2, 1991
4.10 Letter Amendment No. 2 dated August 29, -
1994 to Revolving Loan Agreement dated
April 2, 1993
9. Johnson Worldwide Associates, Inc. Class *
B Common Stock Voting Trust Agreement,
dated December 30, 1993 (Filed as
Exhibit 9 to the Company's Form 10-Q for
the quarter ended December 31, 1993 and
incorporated herein by reference.)
10.1 Acquisition Agreement between S. C. *
Johnson & Son, Inc. and Johnson
Worldwide Associates, Inc. dated
December 18, 1985. (Filed as Exhibit
10.1 to the Company's Form S-1
Registration Statement No. 33-16998, and
incorporated herein by reference.)
10.2 Discretionary Bonus Option Plan. (Filed *
as Exhibit 10-2 to the Company's Form
S-1 Registration Statement No. 33-16998,
and incorporated herein by reference.)
10.3 Johnson Worldwide Associates, Inc. *
Amended and Restated 1986 Stock Option
Plan. (Filed as Exhibit 10 to the
Company's Form 10-Q for the quarter
ended July 2, 1993 and incorporated
herein by reference.)
10.4 Registration Rights Agreement regarding *
Johnson Worldwide Associates, Inc.
Common Stock issued to the Johnson
family prior to the acquisition of
Johnson Diversified, Inc. (Filed as
Exhibit 10.6 to the Company's Form S-1
Registration Statement No. 33-16998, and
incorporated herein by reference.)
10.5 Registration Rights Agreement regarding *
Johnson Worldwide Associate, Inc. Class
A Common Stock held by Mr. Samuel C.
Johnson. (Filed as Exhibit 28 to the
Company's Form 10-Q for the quarter
ended March 29, 1991 and incorporated
herein by reference.)
10.6 Lease Agreement between Johnson *
Worldwide Associates, Inc. and Johnson
Redevelopment Corporation (lease relates
to the Company's executive office).
(Filed as Exhibit 10.6 to the Company's
Form 10-K for the year ended October 2,
1992 and incorporated herein by
reference.)
10.7 Form of Restricted Stock Agreement. *
(Filed as Exhibit 10.8 to the Company's
Form S-1 Registration Statement No.
33-23299, and incorporated herein by
reference.)
10.8 Form of Supplemental Retirement *
Agreement of Johnson Diversified, Inc.
(Filed as Exhibit 10.9 to the Company's
Form S-1 Registration Statement No.
33-16998, and incorporated herein by
reference.)
10.9 Johnson Worldwide Associates Retirement *
and Savings Plan. (Filed as Exhibit 10.9
to the Company's Form 10-K for the year
ended September 29, 1989 and
incorporated herein by reference.)
10.10 Form of Agreement of Indemnity and *
Exoneration with Directors and Officers.
(Filed as Exhibit 10.11 to the Company's
Form S-1 Registration Statement No.
33-16998, and incorporated herein by
reference.)
10.11 Consulting and administrative agreements *
with S. C. Johnson & Son, Inc. (Filed
as Exhibit 10.12 to the Company's Form
S-1 Registration Statement No.33-16998,
and incorporated herein by reference.)
10.12 Johnson Worldwide Associates, Inc. Stock *
Option Plan for Non-Employee Directors.
(Filed as Exhibit 4.2 to the Company's
Form S-8 Registration Statement No.
33-19805 and incorporated herein by
reference.)
10.13 Sublease Agreement between Johnson *
Worldwide Associates, Inc. and S.C.
Johnson and Son, Inc. (sublease relates
to the Company's former executive
office).
10.14 Lease Agreement between Johnson *
Worldwide Associates, Inc. and Johnson
Redevelopment Corporation (lease relates
to the Company's former executive
office).
10.15 Johnson Worldwide Associates, Inc. 1994 *
Long-Term Stock Incentive Plan (Filed as
Exhibit 4 to the Company's S-8
Registration Statement No. 33-52073 and
incorporated herein by reference.)
11. Statement regarding computation of per Incorporated by
share earnings. reference to
Note 14 to the
Consolidated
Financial
Statements on
page 25 of the
Company's 1994
Annual Report.
13. Johnson Worldwide Associates, Inc. 1994 -
Annual Report. With the exception of the
Consolidated Financial Statements,
independent auditors' report thereon and
certain other information expressly
incorporated herein by reference, the
Company's 1994 Annual Report is not to
be deemed filed as part of this report.
21. Subsidiaries of the Company as of -
September 30, 1994.
23. Consent of KPMG Peat Marwick LLP. -
27. Financial Data Schedule -
28. Definitive Proxy Statement (to be filed *
with the Securities and Exchange
Commission within 120 days of the end of
the Company's fiscal year covered by
this Form 10-K pursuant to Instruction
(G)3 of this Form 10-K and Regulation
14A of the Securities Exchange Act of
1934).
* Incorporated by reference.
BYLAWS
OF
JOHNSON WORLDWIDE ASSOCIATES, INC.
(A Wisconsin Corporation)
(As amended through January 27, 1994)
ARTICLE ONE
Offices
1.01. Principal and Business Office. The corporation may have
such principal and other business offices, either within or without the
State of Wisconsin, as the Board of Directors may from time to time
determine or as the business of the corporation may require from time to
time.
1.02. Registered Office. The registered office of the
corporation required by the Wisconsin Business Corporation Law to be
maintained in the State of Wisconsin may be, but need not be, identical
with the principal office in the State of Wisconsin, and the address of
the registered office may be changed from time to time by the Board of
Directors or by the registered agent. The business office of the
registered agent of the corporation shall be identical to such registered
office.
ARTICLE TWO
Meetings of the Shareholders
2.01. Annual Meetings. An annual meeting of the shareholders
shall be held at such time and date as may be fixed by or under the
authority of the Board of Directors and as designated in the notice
thereof, for the purpose of electing directors and for the transaction of
such other business as may come before the meeting.
2.02. Special Meetings.
(a) Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute, may be called by the
Chairman of the Board, if any, the President or the Board of Directors of
the corporation. The Chairman of the Board, if any, or the President
shall call a special meeting of the shareholders upon demand, in
accordance with this Section 2.02, of the holders of at least ten percent
(10%) of all of the votes entitled to be cast on any issue proposed to be
considered at the proposed special meeting.
(b) In order that the corporation may determine the
shareholders entitled to demand a special meeting, the Board of Directors
may fix a record date to determine the shareholders entitled to make such
a demand (the "Demand Record Date"). The Demand Record Date shall not
precede the date upon which the resolution fixing the Demand Record Date
is adopted by the Board of Directors and shall not be more than 10 days
after the date upon which the resolution fixing the Demand Record Date is
adopted by the Board of Directors. Any shareholder of record seeking to
have shareholders demand a special meeting shall, by sending written
notice to the Secretary of the corporation by hand or by certified or
registered mail, return receipt requested, request the Board of Directors
to fix a Demand Record Date. The Board of Directors shall promptly, but
in all events within 10 days after the date on which a valid request to
fix a Demand Record Date is received, adopt a resolution fixing the Demand
Record Date and shall make a public announcement of such Demand Record
Date. If no Demand Record Date has been fixed by the Board of Directors
within 10 days after the date on which such request is received by the
Secretary, the Demand Record Date shall be the 10th day after the first
date on which a valid written request to set a Demand Record Date is
received by the Secretary. To be valid, such written request shall set
forth the purpose or purposes for which the special meeting is to be held,
shall be signed by one or more shareholders of record (or their duly
authorized proxies or other representatives), shall bear the date of
signature of each such shareholder (or proxy or other representative) and
shall set forth all information about each such shareholder and about the
beneficial owner or owners, if any, on whose behalf the request is made
that would be required to be set forth in a shareholder's notice described
in paragraph (a) (ii) of Section 2.12 of these bylaws.
(c) In order for a shareholder or shareholders to demand a
special meeting, a written demand or demands for a special meeting by the
holders of record as of the Demand Record Date of shares representing at
least 10% of all the votes entitled to be cast on any issue proposed to be
considered at the special meeting must be delivered to the corporation.
To be valid, each written demand by a shareholder for a special meeting
shall set forth the specific purpose or purposes for which the special
meeting is to be held (which purpose or purposes shall be limited to the
purpose or purposes set forth in the written request to set a Demand
Record Date received by the corporation pursuant to paragraph (b) of this
Section 2.02), shall be signed by one or more persons who as of the Demand
Record Date are shareholders of record (or their duly authorized proxies
or other representatives), shall bear the date of signature of each such
shareholder (or proxy or other representative), and shall set forth the
name and address, as they appear in the corporation's books, of each
shareholder signing such demand and the class and number of shares of the
corporation which are owned of record and beneficially by each such
shareholder, shall be sent to the Secretary by hand or by certified or
registered mail, return receipt requested, and shall be received by the
Secretary within 70 days after the Demand Record Date.
(d) The corporation shall not be required to call a special
meeting upon shareholder demand unless, in addition to the documents
required by paragraph (c) of this Section 2.02, the Secretary receives a
written agreement signed by each Soliciting Shareholder (as defined
below), pursuant to which each Soliciting Shareholder, jointly and
severally, agrees to pay the corporation's costs of holding the special
meeting, including the costs of preparing and mailing proxy materials for
the corporation's own solicitation, provided that if each of the
resolutions introduced by any Soliciting Shareholder at such meeting is
adopted, and each of the individuals nominated by or on behalf of any
Soliciting Shareholder for election as a director at such meeting is
elected, then the Soliciting Shareholders shall not be required to pay
such costs. For purposes of this paragraph (d), the following terms shall
have the meanings set forth below:
(i) "Affiliate" of any Person (as defined herein) shall
mean any Person controlling, controlled by or under common control
with such first Person.
(ii) "Participant" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(iii) "Person" shall mean any individual, firm, corporation,
partnership, joint venture, association, trust, unincorporated
organization or other entity.
(iv) "Proxy" shall have the meaning assigned to such term
in Rule 14a-1 promulgated under the Exchange Act.
(v) "Solicitation" shall have the meaning assigned to such
term in Rule 14a-11 promulgated under the Exchange Act.
(vi) "Soliciting Shareholder" shall mean, with respect to
any Special Meeting demanded by a shareholder or shareholders, any of
the following Persons:
(A) if the number of shareholders signing the demand
or demands of meeting delivered to the corporation pursuant
to paragraph (c) of this Section 2.02 is 10 or fewer, each
shareholder signing any such demand;
(B) if the number of shareholders signing the demand
or demands of meeting delivered to the corporation pursuant
to paragraph (c) of this Section 2.02 is more than 10, each
Person who either (I) was a Participant in any Solicitation
of such demand or demands or (II) at the time of the
delivery to the corporation of the documents described in
paragraph (c) of this Section 2.02 had engaged or intended
to engage in any Solicitation of Proxies for use at such
Special Meeting (other than a Solicitation of Proxies on
behalf of the corporation); or
(C) any Affiliate of a Soliciting Shareholder, if a
majority of the directors then in office determine,
reasonably and in good faith, that such Affiliate should be
required to sign the written notice described in paragraph
(c) of this Section 2.02 and/or the written agreement
described in this paragraph (d) in order to prevent the
purposes of this Section 2.02 from being evaded.
(e) Except as provided in the following sentence, any special
meeting shall be held at such hour and day as may be designated by
whichever of the Chairman of the Board, if any, the President or the Board
of Directors shall have called such meeting. In the case of any special
meeting called by the Chairman of the Board, if any, or the President upon
the demand of shareholders (a "Demand Special Meeting"), such meeting
shall be held at such hour and day as may be designated by the Board of
Directors; provided, however, that the date of any Demand Special Meeting
shall be not more than 70 days after the record date for the meeting (as
established in Section 2.05 hereof); and provided further that in the
event that the directors then in office fail to designate an hour and date
for a Demand Special Meeting within 10 days after the date that valid
written demands for such meeting by the holders of record as of the Demand
Record Date of shares representing at least 10% of all the votes entitled
to be cast on each issue proposed to be considered at the special meeting
are delivered to the corporation (the "Delivery Date"), then such meeting
shall be held at 2:00 P.M. local time on the 100th day after the Delivery
Date or, if such 100th day is not a Business Day (as defined below), on
the first preceding Business Day. In fixing a meeting date for any
special meeting, the Chairman of the Board, if any, the President or the
Board of Directors may consider such factors as he or it deems relevant
within the good faith exercise of his or its business judgment, including,
without limitation, the nature of the action proposed to be taken, the
facts and circumstances surrounding any demand for such meeting, and any
plan of the Board of Directors to call an annual meeting or a special
meeting for the conduct of related business.
(f) The corporation may engage regionally or nationally
recognized independent inspectors of elections to act as an agent of the
corporation for the purpose of promptly performing a ministerial review of
the validity of any purported written demand or demands for a special
meeting received by the Secretary. For the purpose of permitting the
inspectors to perform such review, no purported demand shall be deemed to
have been delivered to the corporation until the earlier of (i) 5 Business
Days following receipt by the Secretary of such purported demand and (ii)
such date as the independent inspectors certify to the corporation that
the valid demands received by the Secretary represent at least 10% of all
the votes entitled to be cast on each issue proposed to be considered at
the special meeting. Nothing contained in this paragraph (f) shall in any
way be construed to suggest or imply that the Board of Directors or any
shareholder shall not be entitled to contest the validity of any demand,
whether during or after such 5 Business Day period, or to take any other
action (including, without limitation, the commencement, prosecution or
defense of any litigation with respect thereto).
(g) For purposes of these bylaws, "Business Day" shall mean any
day other than a Saturday, a Sunday or a day on which banking institutions
in the State of Wisconsin are authorized or obligated by law or executive
order to close.
2.03. Place of Meeting. The Board of Directors, the Chairman
of the Board, if any, or the President may designate any place, either
within or without the State of Wisconsin, as the place of meeting for any
annual or special meeting of the shareholders. If no designation is
made, the place of meeting shall be the principal business office of the
corporation in the State of Wisconsin. Any meeting may be adjourned to
reconvene at any place designated by the Board of Directors, the Chairman
of the Board, if any, or the President.
2.04. Notice. Written or printed notice of every annual or
special meeting of the shareholders, stating the place, date and time of
such meeting shall be delivered not less than ten nor more than sixty days
before the date of the meeting (unless a different period is required by
the Wisconsin Business Corporation Law or the Articles of Incorporation),
either personally or by mail, by or at the direction of the Board of
Directors, the Chairman of the Board, if any, the President or Secretary,
to each shareholder of record entitled to vote at such meeting and to
other shareholders as may be required by the Wisconsin Business
Corporation Law. In the event of any Demand Special Meeting, such notice
of meeting shall be sent not more than 30 days after the Delivery Date.
Notices which are mailed shall be deemed to be delivered when deposited in
the United States mail addressed to the shareholder at his or her address
as it appears on the stock record books of the corporation, with postage
thereon prepaid. Unless otherwise required by the Wisconsin Business
Corporation Law or the articles of incorporation of the corporation, a
notice of an annual meeting need not include a description of the purpose
for which the meeting is called. In the case of any special meeting, (a)
the notice of meeting shall describe any business that the Board of
Directors shall have theretofore determined to bring before the meeting
and (b) in the case of a Demand Special Meeting, the notice of meeting (i)
shall describe any business set forth in the statement of purpose of the
demands received by the corporation in accordance with Section 2.02 of
these bylaws and (ii) shall contain all of the information required in the
notice received by the corporation in accordance with Section 2.12(b) of
these bylaws. If an annual or special meeting of the shareholders is
adjourned to a different place, date or time, the corporation shall not be
required to give notice of the new place, date or time if the new place,
date or time is announced at the meeting before adjournment; provided,
however, that if a new record date for an adjourned meeting is or must be
fixed, the corporation shall give notice of the adjourned meeting to
persons who are shareholders as of the new record date.
2.05. Fixing of Record Date. The Board of Directors may fix in
advance a date not less than ten days and not more than seventy days prior
to the date of any annual or special meeting of the shareholders as the
record date for the purpose of determining shareholders entitled to notice
of and to vote at such meeting. In the case of any Demand Special
Meeting, (i) the meeting record date shall be not later than the 30th day
after the Delivery Date and (ii) if the Board of Directors fails to fix
the meeting record date within 30 days after the Delivery Date, then the
close of business on such 30th day shall be the meeting record date. If
no record date is fixed by the Board of Directors or by the Wisconsin
Business Corporation Law for the determination of the shareholders
entitled to notice of and to vote at a meeting of shareholders, the record
date shall be the close of business on the day before the first notice is
given to shareholders. The Board of Directors may also fix in advance a
date as the record date for the purpose of determining shareholders
entitled to demand a special meeting as contemplated by Section 2.02 of
these bylaws, shareholders to take any other action or shareholders for
any other purposes. Such record date shall not be more than seventy days
prior to the date on which the particular action, requiring such
determination of shareholders, is to be taken. If no record date is fixed
by the Board of Directors or by the Wisconsin Business Corporation Law for
the determination of shareholders entitled to demand a special meeting as
contemplated in Section 2.02 of these bylaws, the record date shall be the
date that the first shareholder signs the demand. The record date for
determining shareholders entitled to a distribution (other than a
distribution involving a purchase, redemption or other acquisition of the
corporation's shares) or a share dividend is the date on which the Board
of Directors authorized the distribution or share dividend, as the case
may be, unless the Board of Directors fixes a different record date.
Except as provided by the Wisconsin Business Corporation Law for a court-
ordered adjournment, a determination of shareholders entitled to notice of
and to vote at a meeting of the shareholders is effective for any
adjournment of such meeting unless the Board of Directors fixes a new
record date, which it shall do if the meeting is adjourned to a date more
than 120 days after the date fixed for the original meeting.
2.06. Shareholder Lists. After a record date for a special or
annual meeting of the shareholders has been fixed, the corporation shall
prepare a list of the names of all of the shareholders entitled to notice
of the meeting. The list shall be arranged by class or series of shares,
if any, and show the address of and number of shares held by each
shareholder. Such list shall be available for inspection by any
shareholder, beginning two business days after notice of the meeting is
given for which the list was prepared and continuing to the date of the
meeting, at the corporation's principal office or at a place identified in
the meeting notice in the city where the meeting will be held. A
shareholder or his agent may, on written demand, inspect and, subject to
the limitations imposed by the Wisconsin Business Corporation Law, copy
the list, during regular business hours and at his or her expense, during
the period that it is available for inspection pursuant to this Section
2.06. The corporation shall make the shareholders' list available at the
meeting and any shareholder or his or her agent or attorney may inspect
the list at any time during the meeting or any adjournment thereof.
Refusal or failure to prepare or make available the shareholders' list
shall not affect the validity of any action taken at a meeting of the
shareholders.
2.07. Quorum and Voting Requirements; Postponements;
Adjournments.
(a) Shares entitled to vote as a separate voting group may take
action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. If at any time the corporation has only one
class of common stock outstanding, such class shall constitute a separate
voting group for purposes of this Section 2.07. Except as otherwise
provided in the Articles of Incorporation, any bylaw adopted under
authority granted in the Articles of Incorporation or by the Wisconsin
Business Corporation Law, a majority of the votes entitled to be cast on
the matter shall constitute a quorum of the voting group for action on
that matter. Once a share is represented for any purpose at a meeting,
other than for the purpose of objecting to holding the meeting or
transacting business at the meeting, it is considered present for purposes
of determining whether a quorum exists for the remainder of the meeting
and for any adjournment of that meeting unless a new record date is or
must be set for the adjourned meeting. If a quorum exists, except in the
case of the election of directors, action on a matter shall be approved if
the votes cast within the voting group favoring the action exceed the
votes cast within the voting group opposing the action, unless the
Articles of Incorporation, any bylaw adopted under authority granted in
the Articles of Incorporation or the Wisconsin Business Corporation Law
requires a greater number of affirmative votes. Unless otherwise provided
in the Articles of Incorporation, directors shall be elected by a
plurality of the votes cast within the voting group entitled to vote in
the election of such directors at a meeting at which a quorum is present.
For purposes of this Section 2.08, "plurality" means that the individuals
who receive the largest number of votes cast, within the voting group
entitled to vote in the election of such directors, are elected as
directors up to the maximum number of directors to be chosen at the
meeting by such voting group.
(b) The Board of Directors acting by resolution may postpone
and reschedule any previously scheduled annual meeting or special meeting;
provided, however, that a Demand Special Meeting shall not be postponed
beyond the 100th day following the Delivery Date. Any annual meeting or
special meeting may be adjourned from time to time, whether or not there
is a quorum, (i) at any time, upon a resolution of shareholders if the
votes cast in favor of such resolution by the holders of shares of each
voting group entitled to vote on any matter theretofore properly brought
before the meeting exceed the number of votes cast against such resolution
by the holders of shares of each such voting group or (ii) at any time
prior to the transaction of any business at such meeting, by the Chairman
of the Board or the President or pursuant to a resolution of the Board of
Directors. No notice of the time and place of adjourned meetings need be
given except as required by the Wisconsin Business Corporation Law. At
such adjourned meeting at which a quorum shall be present or represented,
any business may be transacted which might have been transacted at the
meeting as originally notified, provided that no business shall be
transacted at such adjourned meeting on which any class of stock is
entitled to be voted which class shall not have been permitted to
participate in the vote to adjourn the meeting.
2.08. Proxies. At all meetings of the shareholders, a
shareholder entitled to vote may vote either in person or by proxy. A
shareholder may appoint a proxy to vote or otherwise act for the
shareholder by signing an appointment form, either personally or by his or
her attorney-in-fact. An appointment of a proxy is effective when
received by the Secretary or other officer or agent of the corporation
authorized to tabulate votes. An appointment is valid for eleven months
from the date of its signing unless a different period is expressly
provided in the appointment form. Unless otherwise conspicuously stated
on the appointment form, a proxy may be revoked at any time before it is
voted, either by written notice delivered to the Secretary or other
officer or agent of the corporation authorized to tabulate votes or by
oral notice given by the shareholder to the presiding person during the
meeting. The Board of Directors shall have the power and authority to
make rules establishing presumptions as to the validity and sufficiency of
proxies.
2.09. Conduct of Meetings. The Chairman of the Board, if any,
and in his absence the President, shall call the meeting of the
shareholders to order, shall act as chairman of the meeting and shall
otherwise preside at the meeting. In the absence of the Chairman of the
Board, if any, and the President, a person designated by the Board of
Directors shall preside. The person presiding at any meeting of the
shareholders shall have the power to determine (i) whether and to what
extent proxies presented at the meeting shall be recognized as valid, (ii)
the procedure for tabulating votes at such meeting, (iii) procedures for
the conduct of such meeting, and (iv) any questions which may be raised at
such meeting. The person presiding at any meeting of the shareholders
shall have the right to delegate any of the powers contemplated by this
Section 2.09 to such other person or persons as the person presiding deems
desirable. The Secretary of the corporation shall act as secretary of all
meetings of shareholders, but, in the absence of the Secretary, the
presiding person may appoint any other person to act as secretary of the
meeting.
2.10. Acceptance of Instruments Showing Shareholder Action. If
the name signed on a vote, consent, waiver or proxy appointment
corresponds to the name of a shareholder, the corporation, if acting in
good faith, may accept the vote, consent, waiver or proxy appointment and
give it effect as the act of a shareholder. If the name signed on a vote,
consent, waiver or proxy appointment does not correspond to the name of a
shareholder, the corporation, if acting in good faith, may accept the
vote, consent, waiver or proxy appointment and give it effect as the act
of the shareholder if any of the following apply:
(a) The shareholder is an entity and the name signed purports
to be that of an officer or agent of the entity.
(b) The name purports to be that of a personal representative,
administrator, executor, guardian or conservator representing the
shareholder and, if the corporation requests, evidence of fiduciary status
acceptable to the corporation is presented with respect to the vote,
consent, waiver or proxy appointment.
(c) The name signed purports to be that of a receiver or
trustee in bankruptcy of the shareholder and, if the corporation requests,
evidence of this status acceptable to the corporation is presented with
respect to the vote, consent, waiver or proxy appointment.
(d) The name signed purports to be that of a pledgee,
beneficial owner, or attorney-in-fact of the shareholder and, if the
corporation requests, evidence acceptable to the corporation of the
signatory's authority to sign for the shareholder is presented with
respect to the vote, consent, waiver or proxy appointment.
(e) Two or more persons are the shareholders as co-tenants or
fiduciaries and the name signed purports to be the name of at least one of
the co-owners and the person signing appears to be acting on behalf of all
co-owners.
The corporation may reject a vote, consent, waiver or proxy appointment if
the Secretary or other officer or agent of the corporation who is
authorized to tabulate votes, acting in good faith, has reasonable basis
for doubt about the validity of the signature on it or about the
signatory's authority to sign for the shareholder.
2.11. Waiver of Notice by Shareholders. A shareholder may
waive any notice required by the Wisconsin Business Corporation Law, the
Articles of Incorporation or these bylaws before or after the date and
time stated in the notice. The waiver shall be in writing and signed by
the shareholder entitled to the notice, contain the same information that
would have been required in the notice under applicable provisions of the
Wisconsin Business Corporation Law (except that the time and place of the
meeting need not be stated) and be delivered to the corporation for
inclusion in the corporate records. A shareholder's attendance at a
meeting, in person or by proxy, waives objection to all of the following:
(a) lack of notice or defective notice of the meeting, unless the
shareholder at the beginning of the meeting or promptly on arrival objects
to holding the meeting or transaction business at the meeting; and (b)
consideration of a particular matter at the meeting that is not within the
purpose described in the meeting notice, unless the shareholder objects to
considering the matter when it is presented.
2.12. Notice of Shareholder Business and Nomination of
Directors.
(a) Annual Meetings.
(i) Nominations of persons for election to the Board of
Directors of the corporation and the proposal of business to be
considered by the shareholders may be made at an annual meeting (A)
pursuant to the corporation's notice of meeting, (B) by or at the
direction of the Board of Directors or (C) by any shareholder of the
corporation who is a shareholder of record at the time of giving of
notice provided for in this by-law and who is entitled to vote at the
meeting and complies with the notice procedures set forth in this
Section 2.12.
(ii) For nominations or other business to be properly
brought before an annual meeting by a shareholder pursuant to clause
(C) of paragraph (a)(i) of this Section 2.12, the shareholder must
have given timely notice thereof in writing to the Secretary of the
corporation. To be timely, a shareholder's notice shall be received
by the Secretary of the corporation at the principal offices of the
corporation not earlier than the 90th day prior to the date of such
annual meeting and not later than the close of business on the later
of (x) the 60th day prior to such annual meeting and (y) the 10th day
following the day on which public announcement of the date of such
meeting is first made. Such shareholder's notice shall be signed by
the shareholder of record who intends to make the nomination or
introduce the other business (or his duly authorized proxy or other
representative), shall bear the date of signature of such shareholder
(or proxy or other representative) and shall set forth: (A) the name
and address, as they appear on this corporation's books, of such
shareholder and the beneficial owner or owners, if any, on whose
behalf the nomination or proposal is made; (B) the class and number
of shares of the corporation which are beneficially owned by such
shareholder or beneficial owner or owners; (C) a representation that
such shareholder is a holder of record of shares of the corporation
entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to make the nomination or introduce the other
business specified in the notice; (D) in the case of any proposed
nomination for election or re-election as a director, (I) the name
and residence address of the person or persons to be nominated, (II)
a description of all arrangements or understandings between such
shareholder or beneficial owner or owners and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nomination is to be made by such shareholder, (III) such
other information regarding each nominee proposed by such shareholder
as would be required to be disclosed in solicitations of proxies for
elections of directors, or would be otherwise required to be
disclosed, in each case pursuant to Regulation 14A under the Exchange
Act, including any information that would be required to be included
in a proxy statement filed pursuant to Regulation 14A had the nominee
been nominated by the Board of Directors and (IV) the written consent
of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected; and (E) in the case of any
other business that such shareholder proposes to bring before the
meeting, (I) a brief description of the business desired to be
brought before the meeting and, if such business includes a proposal
to amend these bylaws, the language of the proposed amendment, (II)
such shareholder's and beneficial owner's or owners' reasons for
conducting such business at the meeting and (III) any material
interest in such business of such shareholder and beneficial owner or
owners.
(iii) Notwithstanding anything in the second sentence of
paragraph (a)(ii) of this Section 2.12 to the contrary, in the event
that the number of directors to be elected to the Board of Directors
of the corporation is increased and there is no public announcement
naming all of the nominees for director or specifying the size of the
increased Board of Directors made by the corporation at least 60 days
prior to the annual meeting, a shareholder's notice required by this
Section 2.12 shall also be considered timely, but only with respect
to nominees for any new positions created by such increase, if it
shall be received by the Secretary at the principal offices of the
corporation not later than the close of business on the 10th day
following the day on which such public announcement is first made by
the corporation.
(b) Special Meetings. Only such business shall be conducted at
a special meeting as shall have been described in the notice of meeting
sent to shareholders pursuant to Section 2.04 of these bylaws.
Nominations of persons for election to the Board of Directors may be made
at a special meeting at which directors are to be elected pursuant to such
notice of meeting (i) by or at the direction of the Board of Directors or
(ii) by any shareholder of the corporation who (A) is a shareholder of
record at the time of giving of such notice of meeting, (B) is entitled to
vote at the meeting and (C) complies with the notice procedures set forth
in this Section 2.12. Any shareholder desiring to nominate persons for
election to the Board of Directors at such a special meeting shall cause a
written notice to be received by the Secretary of the corporation at the
principal offices of the corporation not earlier than 90 days prior to
such special meeting and not later than the close of business on the later
of (x) the 60th day prior to such special meeting and (y) the 10th day
following the day on which public announcement is first made of the date
of such special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. Such written notice shall be
signed by the shareholder of record who intends to make the nomination (or
his duly authorized proxy or other representative), shall bear the date of
signature of such shareholder (or proxy or other representative) and shall
set forth: (A) the name and address, as they appear on the corporation's
books, of such shareholder and the beneficial owner or owners, if any, on
whose behalf the nomination is made; (B) the class and number of shares of
the corporation which are beneficially owned by such shareholder or
beneficial owner or owners; (C) a representation that such shareholder is
a holder of record of shares of the corporation entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to make
the nomination specified in the notice; (D) the name and residence address
of the person or persons to be nominated; (E) a description of all
arrangements or understandings between such shareholder or beneficial
owner or owners and each nominee and any other person or persons (naming
such person or persons) pursuant to which the nomination is to be made by
such shareholder; (F) such other information regarding each nominee
proposed by such shareholder as would be required to be disclosed in
solicitations of proxies for elections of directors, or would be otherwise
required to be disclosed, in each case pursuant to Regulation 14A under
the Exchange Act, including any information that would be required to be
included in a proxy statement filed pursuant to Regulation 14A had the
nominee been nominated by the Board of Directors; and (G) the written
consent of each nominee to be named in a proxy statement and to serve as a
director of the corporation if so elected.
(c) General.
(i) Only persons who are nominated in accordance with the
procedures set forth in this Section 2.12 shall be eligible to serve
as directors. Only such business shall be conducted at an annual
meeting or special meeting as shall have been brought before such
meeting in accordance with the procedures set forth in this Section
2.12. The chairman of the meeting shall have the power and duty to
determine whether a nomination or any business proposed to be brought
before the meeting was made in accordance with the procedures set
forth in this Section 2.12 and, if any proposed nomination or
business is not in compliance with this Section 2.12, to declare that
such defective proposal shall be disregarded.
(ii) For purposes of this Section 2.12, "public
announcement" shall mean disclosure in a press release reported by
the Dow Jones News Service, Associated Press or comparable national
news service or in a document publicly filed by the corporation with
the Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
(iii) Notwithstanding the foregoing provisions of this
Section 2.12, a shareholder shall also comply with all applicable
requirements of the Exchange Act and the rules and regulations
thereunder with respect to the matters set forth in this Section
2.12. Nothing in this Section 2.12 shall be deemed to limit the
corporation's obligation to include shareholder proposals in its
proxy statement if such inclusion is required by Rule 14a-8 under the
Exchange Act.
ARTICLE THREE
Directors
3.01. General Powers. All corporate powers shall be exercised
by or under the authority of, and the business and affairs of the
corporation shall be managed under the direction of, the corporation's
Board of Directors. In addition to the powers and authorities expressly
conferred upon it by these bylaws, the Board of Directors may do all such
lawful acts and things as are not by the Wisconsin Business Corporation
Law, the Articles of Incorporation or these bylaws directed or required to
be exercised or done by the shareholders.
3.02. Number of Directorship Positions; Chairman of the Board.
(a) Number of Directors. Except as otherwise provided in
paragraph (c) of this Section 3.02, the number of directors of the
corporation shall be six (6).
(b) Board of Directors' Power to Alter the Number of Directors.
The Board of Directors shall have the power (subject to any limitations
prescribed by the Articles of Incorporation) by a resolution adopted by
not less than a majority of all directors serving on the Board of
Directors at the time of such adoption to alter at any time and from time
to time the number of total directorship positions on the Board of
Directors. Upon the adoption of any resolution in the manner provided in
the preceding sentence, the total number of directorship positions on the
Board of Directors shall be equal to the number specified in such
resolution. If the Board of Directors shall determine to reduce the
number of directorship positions, then the term of each incumbent member
shall end upon the election of directors at the next annual meeting of
shareholders of the corporation and the persons elected to fill such
reduced number of directorship positions shall be deemed to be the
successors to all persons who shall have previously held such directorship
positions.
(c) Default. In the event that the corporation is in Default
(as defined in the Articles of Incorporation) in payment of dividends on
the 13% Senior Preferred Stock, $1.00 par value per share, of the
corporation (the "Senior Preferred Stock") or any stock on a parity with
the Senior Preferred Stock as to dividends and the holders of such stock
become entitled to elect two directors pursuant to Article Five, paragraph
A(2)(a)(iii) of the Articles of Incorporation, the number of total
directorship positions on the Board of Directors shall increase by two
effective as of the time that the holders of such stock elect two
directors pursuant to Article Five, paragraph A(2)(a)(iii) of the Articles
of Incorporation. When the Default is "cured" (as defined in the Articles
of Incorporation) or there is no longer any Senior Preferred Stock or any
stock on a parity with the Senior Preferred Stock outstanding, whichever
occurs earlier, the two directors elected pursuant to Article Five,
paragraph A(2)(a)(iii) of the Articles of Incorporation shall resign and
the total number of directorship positions shall be decreased by two
effective as of the date of the last such resignation.
(d) Chairman of the Board. The Board of Directors may elect a
director as the Chairman of the Board. The Chairman of the Board shall,
when present, preside at all meetings of the shareholders and of the Board
of Directors, may call meetings of the shareholders and the Board of
Directors, shall be the Chairman of the Executive Committee, shall advise
and counsel with the President, and shall perform such other duties as set
forth in these bylaws and as determined by the Board of Directors. The
Chairman shall be neither an officer nor an employee of the corporation
(by virtue of his election and service as Chairman of the Board) and may
use the title Chairman or Chairman of the Board interchangeably.
3.03. Tenure and Qualifications. Each director shall hold
office until the next annual meeting of the shareholders and until his
successor shall have been elected and, if necessary, qualified, or until
his prior death, resignation or removal. A director may be removed by the
shareholders only at a meeting of the shareholders called for the purpose
of removing the director, and the meeting notice shall state that the
purpose, or one of the purposes, of the meeting is the removal of the
director. A director may be removed from office with or without cause
only by the voting group entitled to vote in the election of such
director. A director shall be removed if the number of votes cast to
remove the director exceeds the number of votes cast not to remove such
director. A director may resign at any time by delivering written notice
which complies with the Wisconsin Business Corporation Law to the Board of
Directors, to the Chairman of the Board, if any, or to the corporation. A
director's resignation is effective when the notice is delivered unless
the notice specifies a later effective date. Directors need not be
residents of the State of Wisconsin or shareholders of the corporation.
3.04. Regular Meetings. The Board of Directors shall provide,
by resolution, the date, time and place, either within or without the
State of Wisconsin, for the holding of regular meetings of the Board of
Directors without other notice than such resolution.
3.05. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board,
if any, the President or any three directors. The Chairman of the Board,
if any, or the President may fix the time, date and place, either within
or without the State of Wisconsin, for holding any special meeting of the
Board of Directors, and if no other place is fixed, the place of the
meeting shall be the principal business office of the corporation in the
State of Wisconsin.
3.06. Notice; Waiver. Notice of each special meeting of the
Board of Directors shall be given (a) by oral notice delivered or
communicated to the director by telephone or in person not less than
twenty-four hours prior to the meeting or (b) by written notice delivered
to the director in person, by telegram, teletype, facsimile or other form
of wire or wireless communication, or by mail or private carrier, to each
director at his business address or at such other address as the person
sending such notice shall reasonably believe appropriate, in each case not
less than forty-eight hours prior to the meeting. The notice need not
prescribe the purpose of the special meeting of the Board of Directors or
the business to be transacted at such meeting. If given by telegram, such
notice shall be deemed to be effective when the telegram is delivered to
the telegraph company. If given by teletype, facsimile or other wire or
wireless communication, such notice shall be deemed to be effective when
transmitted. If mailed, such notice shall be deemed to be effective when
deposited in the United States mail so addressed, with postage thereon
prepaid. If given by private carrier, such notice shall be deemed to be
effective when delivered to the private carrier. Whenever any notice
whatever is required to be given to any director of the corporation under
the Articles of Incorporation or these bylaws or any provision of the
Wisconsin Business Corporation Law, a waiver thereof in writing, signed at
any time, whether before or after the date and time of meeting, by the
director entitled to such notice shall be deemed equivalent to the timely
giving of such notice. The corporation shall retain any such waiver as
part of the permanent corporate records. A director's attendance at or
participation in a meeting waives any required notice to him or her of the
meeting unless the director at the beginning of the meeting or promptly
upon his or her arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to
action taken at the meeting.
3.07. Quorum. Except as otherwise provided in the Articles of
Incorporation or these bylaws or by the Wisconsin Business Corporation
Law, directors holding a majority of the positions on the Board of
Directors established pursuant to Section 3.02 of these bylaws shall
constitute a quorum for transaction of business at any meeting of the
Board of Directors. A majority of the directors present (though less than
a quorum) may adjourn any meeting of the Board of Directors from time to
time without further notice.
3.08. Manner of Acting. The affirmative vote of a majority of
the directors present at a meeting of the Board of Directors at which a
quorum is present shall be the act of the Board of Directors unless the
Wisconsin Business Corporation Law, the Articles of Incorporation or these
bylaws require the vote of a greater number of directors.
3.09. Presumption of Assent. A director who is present and is
announced as present at a meeting of the Board of Directors or any
committee thereof created in accordance with Article IV of these bylaws,
when corporate action is taken on a particular matter, assents to the
action taken unless any of the following occurs: (a) the director objects
at the beginning of the meeting or promptly upon his or her arrival to
holding the meeting or transacting business at the meeting; (b) the
director dissents or abstains from an action taken and minutes of the
meeting are prepared that show the director's dissent or abstention from
the action taken; (c) the director delivers written notice that complies
with the Wisconsin Business Corporation Law of his or her dissent or
abstention from the action taken on the particular matter to the presiding
person of the meeting before its adjournment or to the corporation
immediately after adjournment of the meeting; or (d) the director dissents
or abstains from an action taken, minutes of the meeting are prepared that
fail to show the director's dissent or abstention from the action taken,
and the director delivers to the corporation a written notice of that
failure that complies with the Wisconsin Business Corporation Law promptly
after receiving the minutes. Such right of dissent or abstention shall
not apply to a director who votes in favor of the action taken on the
particular matter.
3.10. Action by Directors Without a Meeting. Any action
required or permitted by the Articles of Incorporation, these bylaws or
the Wisconsin Business Corporation Law to be taken at any meeting of the
Board of Directors or any committee thereof created pursuant to Article IV
of these bylaws may be taken without a meeting if the action is taken by
all members of the Board of Directors or such committee, as the case may
be. The action shall be evidenced by one or more written consents
describing the action taken, signed by each director or committee member,
as the case may be, and retained by the corporation. In the event one or
more positions on the Board of Directors or any committee thereof shall be
vacant at the time of the execution of any such consent, such consent
shall nevertheless be effective if it shall be signed by all persons
serving as members of the Board of Directors or of such committee, as the
case may be, at such time and if the persons signing the consent would be
able to take the action called for by the consent at a properly
constituted meeting of the Board of Directors or such committee, as the
case may be.
3.11. Compensation. The Board of Directors, irrespective of
any personal interest of any of its members, may establish reasonable
compensation of all directors for services to the corporation as directors
or may delegate such authority to an appropriate committee of the Board of
Directors. The Board of Directors also shall have authority to provide
for or delegate authority to an appropriate committee of the Board of
Directors to provide for reasonable pensions, disability or death
benefits, and other benefits or payments, to directors, officers and
employees and to their estates, families, dependents or beneficiaries on
account of prior services rendered by such directors, officers and
employees to the corporation.
3.12. Telephonic Meetings. Except as herein provided and
notwithstanding any place set forth in the notice of the meeting or these
bylaws, members of the Board of Directors (and any committees thereof
created pursuant to Article IV hereof) may participate in regular or
special meetings by, or through the use of, any means of communication by
which (a) all participants may simultaneously hear each other, such as by
conference telephone, or (b) all communication is immediately transmitted
to each participant, and each participant can immediately send messages to
all other participants. If a meeting is conducted by such means, then at
the commencement of such meeting the presiding person shall inform the
participating directors that a meeting is taking place at which official
business may be transacted. Any participant in a meeting by such means
shall be deemed present in person at such meeting. Notwithstanding the
foregoing, no action may be taken at any meeting held by such means on any
particular matter which the presiding person determines, in his or her
sole discretion, to be inappropriate under the circumstances for action at
a meeting held by such means. Such determination shall be made and
announced in advance of such meeting.
3.13. Conduct of Meetings. The Chairman of the Board, if any,
and in his or her absence, the President, and in their absence, any
director chosen by the directors present, shall call meetings of the Board
of Directors to order, shall act as chairman of the meeting and shall
otherwise preside at the meeting. The Secretary of the corporation shall
act as secretary of all meetings of the Board of Directors but in the
absence of the Secretary, the presiding person may appoint any other
person present to act as secretary of the meeting. Minutes of any regular
or special meeting of the Board of Directors shall be prepared and
distributed to each director.
ARTICLE FOUR
Committees of the Board of Directors
4.01. General.
(a) Establishment. The Board of Directors by resolution
adopted by the affirmative vote of a majority of all of the directors then
in office pursuant to Section 3.02 of these bylaws may establish one or
more committees, each committee to consist of two or more directors of
this corporation elected by the Board of Directors. The term "Board
Committee" as used in these bylaws means any committee comprised
exclusively of directors of the corporation which is identified as a
"Board Committee" either in these bylaws or in any resolutions adopted by
the Board of Directors.
(b) Membership. The Board of Directors by resolution adopted
by the affirmative vote of a majority of all directors then in office
shall have the power to: (i) establish the number of membership positions
on each Board Committee from time to time and change the number of
membership positions on such Committee from time to time; provided each
Board Committee shall consist of at least two members; (ii) appoint any
director to membership on any Board Committee who shall be willing to
serve on such Committee; (iii) remove any person from membership on any
Board Committee with or without cause; and (iv) appoint any director to
membership on any Board Committee as an alternate member. A person's
membership on any Board Committee shall automatically terminate when such
person ceases to be a director of the corporation.
(c) Powers. Except as otherwise provided in Section 4.01(d) of
these bylaws, each Board Committee shall have and may exercise all the
powers and authority of the Board of Directors, when the Board of
Directors is not in session, in the management of the business and affairs
of the corporation to the extent (but only to the extent) such powers
shall be expressly delegated to it by the Board of Directors or by these
bylaws. Unless otherwise provided by the Board of Directors in creating
the committee, a committee may employ counsel, accountants and other
consultants to assist it in the exercise of its authority.
(d) Reserved Powers. No Board Committee shall have the right
or power to do any of the following: (i) authorize distributions; (ii)
approve or propose to shareholders action that the Wisconsin Business
Corporation Law requires to be approved by shareholders; (iii) fill
vacancies on the Board of Directors, or, unless the Board of Directors
provides by resolution that vacancies on a committee shall be filled by
the affirmative vote of a majority of the remaining committee members, on
any Board Committee; (iv) amend the Articles of Incorporation; (v) adopt,
amend or repeal these bylaws; (vi) approve a plan of merger not requiring
shareholder approval; (vii) authorize or approve reacquisition of shares,
except according to a formula or method prescribed by the Board of
Directors; and (viii) authorize or approve the issuance or sale or
contract for sale of shares, or determine the designation and relative
rights, preferences and limitations of a class or series of shares, except
that the Board of Directors may authorize a committee to do so within
limits prescribed by the Board of Directors.
(e) Vote Required. Except as provided by the Wisconsin
Business Corporation Law or in the Articles of Incorporation or these
bylaws, the members holding at least a majority of the membership
positions on any Board Committee shall constitute a quorum for purposes of
any meeting of such committee. The affirmative vote of the majority of
the members of a Board Committee present at any meeting of the Board
Committee at which a quorum is present shall be necessary and sufficient
to approve any action within the Board Committee's power, and any action
so approved by such a majority shall be deemed to have been taken by the
Board Committee and to be the act of such Board Committee.
(f) Governance. The Board of Directors may designate the
person who is to serve as chairman of and preside over any Board
Committee, and in the absence of any such designation by the Board of
Directors, the members of the Board Committee may either designate one
member of the Board Committee as its chairman to preside at any meeting or
elect to operate without a chairman, except as otherwise required by these
bylaws. Each Board Committee may appoint a secretary who need not be a
member of the Committee or a member of the Board of Directors. Each Board
Committee shall have the right to establish such rules and procedures
governing its meetings and operations as such committee shall deem
desirable provided such rules and procedures shall not be inconsistent
with the Articles of Incorporation, these bylaws, or any direction to such
committee issued by the Board of Directors.
(g) Alternate Committee Members. The Board of Directors may
designate one or more directors as alternate members of any Board
Committee, and any such director may replace any regular member of such
Board Committee who for any reason is absent from a meeting of such Board
Committee or is otherwise disqualified from serving on such Board
Committee.
4.02. Executive Committee. The corporation shall have an
Executive Committee. The Executive Committee shall be a Board Committee
and shall be subject to the provisions of Section 4.01 of these bylaws.
The Executive Committee shall assist the Board of Directors in developing
and evaluating general corporate policies and objectives. The Executive
Committee shall perform such specific assignments as shall be expressly
delegated to it from time to time by the Board of Directors and shall
(subject to the limitations specified in Section 4.01(d) of these bylaws
or imposed by the Wisconsin Business Corporation Law) have the power to
exercise, when the Board of Directors is not in session, the powers of the
Board of Directors except to the extent expressly limited or precluded
from exercising such powers in resolutions from time to time adopted by
the Board of Directors. Meetings of the Executive Committee may be called
at any time by any two members of the Committee. The time and place for
each meeting shall be established by the members calling the meeting. The
Chairman of the Board, when present, shall preside at all meetings of the
Executive Committee.
4.03. Audit Committee. The corporation shall have an Audit
Committee. The Audit Committee shall be a Board Committee and shall be
subject to the provisions of Section 4.01 of these bylaws. The Audit
Committee shall: (a) recommend to the Board of Directors annually a firm
of independent public accountants to act as auditors of the corporation;
(b) review with the auditors in advance the scope of their annual audit;
(c) review with the auditors and the management, from time to time, the
corporation's accounting principles, policies and practices and its
reporting policies and practices; (d) review with the auditors annually
the results of their audit; (e) review from time to time with the auditors
and the corporation's financial personnel the adequacy of the
corporation's accounting, financial and operating controls; (f) review
transactions between the corporation or any subsidiary of the corporation
and any shareholder who holds at least fifty percent of the total number
of shares outstanding of the corporation's Class A Common Stock or Class B
Common Stock (a "Controlling Shareholder") or any subsidiary of a
Controlling Shareholder in accordance with policies adopted by the Board
of Directors; and (g) perform such other duties as shall from time to time
be delegated to the Committee by the Board of Directors. The membership
of the Audit Committee shall always be such that a majority of the members
of the Audit Committee shall not be full-time employees of any Controlling
Shareholder, the corporation or any of their respective subsidiaries.
Within the limitations prescribed in the preceding sentence, the
membership on the Audit Committee shall be determined by the Board of
Directors as provided in Section 4.01 of these bylaws.
4.04. Compensation Committee. The corporation shall have a
Compensation Committee. The Compensation Committee shall be a Board
Committee and shall be subject to the provisions of Section 4.01 of these
bylaws. The Compensation Committee shall have the authority to establish
the compensation and benefits for directors, officers and, at the option
of the Compensation Committee, other managerial personnel of the
corporation and its subsidiaries, including, without limitation, fixing
the cash compensation of such persons, establishing and administering
compensation and benefit plans for such persons and determining awards
thereunder, and entering into (or amending existing) employment and
compensation agreements with any such persons. The Compensation Committee
may also recommend persons to be elected as officers of the corporation or
any of its subsidiaries to the Board of Directors. The Compensation
Committee shall perform such other duties as shall from time to time be
delegated to the Compensation Committee by the Board of Directors. The
authority of the Compensation Committee shall be subject to such
limitations and restrictions as may be imposed by the Board of Directors,
which may delegate the authority to establish or administer specific
employee compensation or benefit plans to one or more other Board
Committees or one or more persons designated by the Board of Directors.
The Compensation Committee shall consist solely of members of the Board of
Directors who are not officers of the corporation. The membership of the
Compensation Committee shall be determined by the Board of Directors as
provided in Section 4.01 of these bylaws.
ARTICLE FIVE
Officers
5.01. Number. The principal officers of the corporation shall
be appointed by the Board of Directors and shall consist of a President,
one or more Vice Presidents, a Secretary and a Treasurer. Such other
officers and assistant officers as may be deemed necessary or desirable
may be appointed by the Board of Directors. The President must be a
member of the Board of Directors, but no other officer need be a member of
the Board of Directors. Any two or more offices may be held by the same
person. In its discretion, the Board of Directors may choose not to fill
any office for any period as it may deem advisable, except the principal
offices of President, Vice President, Treasurer and Secretary. The Board
of Directors may authorize any officer to appoint one or more officers or
assistant officers.
5.02. Appointment and Term of Office. The officers of the
corporation to be appointed by the Board of Directors shall be appointed
annually by the Board of Directors at its first meeting following the
annual meeting of shareholders. If the appointment of officers shall not
occur at such meeting, such appointment shall occur as soon thereafter as
conveniently may be. Each officer shall hold office until the earlier of:
(a) the time at which a successor is duly appointed and, if necessary,
qualified, or (b) his or her death, resignation or removal as hereinafter
provided. The Board of Directors shall have the right to enter into
employment contracts providing for the employment of any officer for a
term longer than one year, but no such contract shall preclude the Board
of Directors from removing any person from any position with the
corporation whenever in the judgment of the Board of Directors the best
interests of the corporation would be served thereby.
5.03. Removal. The Board of Directors may remove any officer
and, unless restricted by the Board of Directors or these bylaws, an
officer may remove any officer appointed by that officer, at any time,
with or without cause and notwithstanding the contract rights, if any, of
the officer removed. The appointment of an officer does not of itself
create contract rights.
5.04. Resignation. An officer may resign at any time by
delivering notice to the corporation that complies with the Wisconsin
Business Corporation Law. The resignation shall be effective when the
notice is delivered, unless the notice specifies a later effective date
and the corporation accepts the later effective date.
5.05. Vacancies. A vacancy in any principal office because of
death, resignation, removal, disqualification or otherwise, shall be
filled by the Board of Directors for the unexpired portion of the term.
If a resignation of an officer is effective at a later date as
contemplated by Section 5.04 of these bylaws, the Board of Directors may
fill the pending vacancy before the effective date if the Board provides
that the successor may not take office until the effective date.
5.06. General Powers of Officers. For purposes of these
bylaws, the corporation's President and each Vice President shall be
deemed to be a "senior officer". Whenever any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee shall
authorize the "proper" or "appropriate" officers of the corporation to
execute any note, contract or other document or to take any other action
or shall generally authorize any action without specifying the officer or
officers authorized to take such action, any senior officer acting alone
and without countersignatures may take such action on behalf of the
corporation. Any officer of the corporation may on behalf of the
corporation sign contracts, reports to governmental agencies, or other
instruments which are in the regular course of business, except where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these bylaws to some other officer or agent of the
corporation, or shall be required by the Wisconsin Business Corporation
Law or other applicable law to be otherwise signed or executed.
5.07. The President. The President shall be the chief
executive officer of the corporation and, subject to the control of the
Board of Directors, shall in general supervise and control all of the
business and affairs of the corporation. He shall, when present, in the
absence of the Chairman of the Board, if any, preside at all meetings of
the shareholders. In general he shall perform all duties incident to the
office of chief executive officer and such other duties as may be
prescribed by the Board of Directors from time to time.
5.08. Vice Presidents. Each Vice President shall perform such
duties and have such powers as the Board of Directors may from time to
time prescribe. The Board of Directors may designate any Vice President
as being senior in rank or degree of responsibility and may accord such a
Vice President an appropriate title designating his senior rank such as
"Executive Vice President" or "Senior Vice President" or "Group Vice
President". The Board of Directors may assign a certain Vice President
responsibility for a designated group, division or function of the
corporation's business and add an appropriate descriptive designation to
his title.
5.09. Secretary. The Secretary shall (subject to the control
of the Board of Directors): (a) keep the minutes of the shareholders' and
the Board of Directors' meetings in one or more books provided for that
purpose (including records of actions taken without a meeting); (b) see
that all notices are duly given in accordance with the provisions of these
bylaws or as required by the Wisconsin Business Corporation Law; (c) be
custodian of the corporate records and of the seal of the corporation and
see that the seal of the corporation is affixed to all documents, the
execution of which on behalf of the corporation under its seal is duly
authorized; (d) maintain a record of the shareholders of the corporation
in a form that permits preparation of a list of the names and address of
all shareholders by class or series of shares and showing the number and
class or series of shares held by each shareholder; (e) have general
charge of the stock transfer books of the corporation; (f) supply in such
circumstances as the Secretary deems appropriate to any governmental
agency or other person a copy of any resolution adopted by the
corporation's shareholders, Board of Directors or Board Committee, any
corporate record or document, or other information concerning the
corporation and its officers and certify on behalf of the corporation as
to the accuracy and completeness of the resolution, record, document or
information supplied; and (g) in general, perform all duties incident to
the office of Secretary and perform such other duties and have such other
powers as the Board of Directors or the President may from time to time
prescribe.
5.10. Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
corporation; (b) maintain appropriate accounting records; (c) receive and
give receipts for monies due and payable to the corporation from any
source whatsoever, and deposit all such monies in the name of the
corporation in such banks, trust companies or other depositories as shall
be selected by or under authority of the Board of Directors; and (d) in
general, perform all of the duties incident to the office of Treasurer and
such other duties as from time to time may be assigned to him by the
President. The Treasurer shall give a bond if required by the Board of
Directors for the faithful discharge of his duties in a sum and with one
or more sureties satisfactory to the Board of Directors.
5.11. Assistant Secretaries and Assistant Treasurers. There
shall be such number of Assistant Secretaries and Assistant Treasurers as
the Board of Directors may from time to time authorize. The Assistant
Secretaries may sign with the President or a Vice-President certificates
for shares of the corporation, the issuance of which shall have been
authorized by a resolution of the Board of Directors. The Assistant
Treasurers shall respectively, if required by the Board of Directors, give
bonds for the faithful discharge of their duties in such sums and with
such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such
duties and have such authority as shall from time to time be delegated or
assigned to them by the Secretary or the Treasurer, respectively, or by
the President or the Board of Directors.
5.12. Other Assistants and Acting Officers. The Board of
Directors shall have the power to appoint, or to authorize any duly
appointed officer of the corporation to appoint, any person to act as
assistant to any officer, or as agent for the corporation in his or her
stead, or to perform the duties of such officer whenever for any reason it
is impracticable for such officer to act personally, and such assistant or
acting officer or other agent so appointed by the Board of Directors or an
authorized officer shall have the power to perform all the duties of the
office to which he or she is so appointed to be an assistant, or as to
which he or she is so appointed to act, except as such power may be
otherwise defined or restricted by the Board of Directors or the
appointing officer.
ARTICLE SIX
Contracts, Loans, Checks and Deposits
6.01. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute or deliver any instrument in the name of and on behalf of the
corporation, and such authorization may be general or confined to specific
instances. In the absence of other designation, all deeds, mortgages and
instruments of assignment or pledge made by the corporation shall be
executed in the name of the corporation by the President or one of the
Vice Presidents and by the Secretary, an Assistant Secretary, the
Treasurer or an Assistant Treasurer; the Secretary or an Assistant
Secretary, when necessary or required, shall affix the corporate seal
thereto; and when so executed no other party to such instrument or any
third party shall be required to make any inquiry into the authority of
the signing officer or officers.
6.02. Loans. No indebtedness for borrowed money shall be
contracted on behalf of the corporation and no evidences of such
indebtedness shall be issued in its name unless authorized by or under the
authority of a resolution of the Board of Directors. Such authorization
may be general or confined to specific instances.
6.03. Checks, Drafts, etc. All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued
in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation and in such manner as shall
from time to time be determined by or under the authority of a resolution
of the Board of Directors.
6.04. Deposits. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the
corporation in such banks, trust companies or other depositaries as may be
selected by or under the authority of a resolution of the Board of
directors.
6.05. Voting of Securities Owned by this Corporation. Subject
always to the specific directions of the Board of Directors, (a) any
shares or other securities issued by any other corporation and owned or
controlled by this corporation may be voted at any meeting of security
holders of such other corporation by the President of this corporation, if
he or she be present, or in his or her absence by any Vice President of
this corporation who may be present, and (b) whenever, in the judgment of
the President, or in his or her absence, of any Vice President, it is
desirable for this corporation to execute a proxy or written consent in
respect to any share or other securities issued by any other corporation
and owned by this corporation, such proxy or consent shall be executed in
the name of this corporation by the President or one of the Vice
Presidents of this corporation, without necessity of any authorization by
the Board of Directors, affixation of corporate seal, if any, or
countersignature or attestation by another officer. Any person or persons
designated in the manner above stated as the proxy or proxies of this
corporation shall have full right, power and authority to vote the shares
or other securities issued by such other corporation and owned by this
corporation the same as such shares or other securities might be voted by
this corporation.
6.06. No Nominee Procedures. The corporation has not
established, and nothing in these bylaws shall be deemed to establish, any
procedure by which a beneficial owner of the corporation's shares that are
registered in the name of a nominee is recognized by the corporation as
the shareholder under Section 180.0723 of the Wisconsin Business
Corporation Law.
6.07. Performance Bonds. The President and the Treasurer of
the corporation, and either one of them, shall have the continuing
authority to take all actions and to execute and deliver any and all
documents or instruments (including, without limitation, reimbursement
agreements and agreements of indemnity) in favor of such parties, in such
amounts and on such terms and conditions as may be necessary or useful for
the corporation or any of its direct or indirect subsidiaries to obtain
performance bonds, surety bonds, completion bonds, guarantees, indemnities
or similar assurances (collectively referred to as "Performance Bonds")
from third parties as such officer shall, in his sole discretion, deem
necessary or useful to facilitate and promote the business of the
corporation or any of its subsidiaries; provided, however, that the
contingent liability of the corporation with respect to Performance Bonds
for the corporation's subsidiaries shall not exceed $200,000 in any single
transaction or $1 million in the aggregate without the specific
authorization of the Board of Directors. Any action taken or document or
instrument executed and delivered by any such officer after December 31,
1993, that is within the scope of the authority granted in this Section
6.07 is hereby ratified, approved and confirmed. If any party shall
require resolutions of the Board of Directors with respect to the approval
of any actions of any officer of the corporation or documents or
instruments related to the Performance Bonds and within the scope of and
generally consistent with this Section 6.07, such resolutions shall be
deemed to have been duly approved and adopted by the Board of Directors,
and may be certified by the Secretary whenever approved by the President
or the Treasurer, in his sole discretion, and a copy thereof has been
inserted in the minute book of the corporation.
ARTICLE SEVEN
Corporate Stock
7.01. Certificates for Shares. Certificates representing
shares of any class of stock issued by the corporation shall be in such
form, consistent with the Wisconsin Business Corporation Law, as shall be
determined by the Board of Directors. Such certificates shall be signed
by the President or a Vice President and by the Secretary or an Assistant
Secretary and shall be sealed with the seal, or a facsimile of the seal,
of the corporation. If a certificate is countersigned by a transfer agent
or registrar, other than the corporation itself or its employees, any
other signature or countersignature on the certificate may be a facsimile.
In case any officer of the corporation, or any officer or employee of the
transfer agent or registrar who has signed or whose facsimile signature
has been placed upon such certificate ceases to be an officer of the
corporation, or an officer or employee of the transfer agent or registrar
before such certificate is issued, the certificate may be issued by the
corporation with the same effect as if the officer of the corporation, or
the officer or employee of the transfer agent or registrar had not ceased
to be such at the date of its issue. All certificates for shares shall be
consecutively numbered or otherwise identified. The name of the person to
whom the shares represented thereby are issued, with the number of shares
and date of issue, shall be entered on the books of the corporation. All
certificates surrendered to the corporation for transfer shall be
canceled, and no new certificate shall be issued in replacement until the
former certificate for a like number of shares shall have been surrendered
and canceled, except as otherwise provided in Section 7.04 of these bylaws
with respect to lost, stolen or destroyed certificates.
7.02. Transfer Agent and Registrar. The Board of Directors may
from time to time with respect to each class of stock issuable by the
corporation appoint such transfer agents and registrars in such locations
as it shall determine, and may, in its discretion, appoint a single entity
to act in the capacity of both transfer agent and a registrar in any one
location.
7.03. Transfers of Shares. Transfers of shares shall be made
only on the books maintained by the corporation or a transfer agent
appointed as contemplated by Section 7.02 of these bylaws at the request
of the holder of record thereof or of his attorney, lawfully constituted
in writing, and on surrender for cancellation of the certificate for such
shares. Prior to due presentment of a certificate for shares for
registration of transfer, the corporation may (but shall not be required
to) treat the person in whose name corporate shares stand on the books of
the corporation as the only person having any interest in such shares and
as the only person having the right to receive dividends on and to vote
such shares, and the corporation shall not be bound to recognize any
equitable or other claim to or interest in such shares on the part of the
other person, whether or not it shall have express or other notice
thereof. Where a certificate for shares is presented to the corporation
or a transfer agent with a request to register for transfer, the
corporation or the transfer agent, as the case may be, shall not be liable
to the owner or any other person suffering loss as a result of such
registration of transfer if (a) there were on or with the certificate the
necessary endorsements, and (b) the corporation or the transfer agent had
no duty to inquire into adverse claims or has discharged any such duty.
The corporation or transfer agent may require reasonable assurance that
such endorsements are genuine and effective and compliance with such other
regulations as may be prescribed by or under the authority of the Board of
Directors.
7.04. Lost, Stolen or Destroyed Certificates. The Board of
Directors may direct a new certificate or certificates to be issued in
place of any certificate or certificates theretofore issued by the
corporation alleged to have been lost, stolen or destroyed, upon the
making of an affidavit of that fact by the person claiming the certificate
of stock to be lost, stolen or destroyed. When authorizing such issue of
a new certificate or certificates, the Board of Directors may, in its
discretion and as a condition precedent to the issuance thereof, require
the person requesting such new certificate or certificates, or his or her
legal representative, to give the corporation a bond in such sum as it may
direct as indemnity against any claim that may be made against the
corporation with respect to the certificate alleged to have been lost,
stolen or destroyed.
7.05. Restrictions on Transfer. The face or reverse side of
each certificate representing shares shall bear a conspicuous notation of
any restriction imposed by the corporation upon the transfer of such
shares.
7.06. Consideration for Shares. The Board of Directors may
authorize shares to be issued for consideration consisting of any tangible
or intangible property or benefit to the corporation, including cash,
promissory notes, services performed, contracts for services to be
performed or other securities of the corporation. Before the corporation
issues shares, the Board of Directors shall determine that the
consideration received or to be received for the shares to be issued is
adequate. The determination of the Board of Directors is conclusive
insofar as the adequacy of consideration for the issuance of shares
relates to whether the shares are validly issued, fully paid and
nonassessable. The corporation may place in escrow shares issued in whole
or in part for a contract for future services or benefits, a promissory
note, or otherwise for property to be received in the future, or make
other arrangements to restrict the transfer of the shares, and may credit
distributions in respect of the shares against their purchase price, until
the services are performed, the benefits or property are received or the
promissory note is paid. If the services are not performed, the benefits
or property are not received or the promissory note is not paid, the
corporation may cancel, in whole or in part, the shares escrowed or
restricted and the distributions credited.
7.07 Stock Regulations. The Board of Directors shall have the
power and authority to make all such further rules and regulations not
inconsistent with the Wisconsin Business Corporation Law as it may deem
expedient concerning the issue, transfer and registration of certificates
representing shares of the corporation.
ARTICLE EIGHT
General Provisions
8.01. Fiscal Year. The fiscal year of the corporation shall
begin and end on such dates as the Board of Directors shall determine by
resolution.
8.02. Seal. The corporate seal shall have inscribed thereon
the name of the corporation, the year of its organization and the words
"Corporate Seal, Wisconsin." The seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE NINE
Amendments
9.01. By Directors. Except as otherwise provided by the
Wisconsin Business Corporation Law or the Articles of Incorporation, these
bylaws may be amended or repealed and new bylaws may be adopted by the
Board of Directors at any meeting at which a quorum is in attendance;
provided, however, that the shareholders in adopting, amending or
repealing a particular bylaw may provide therein that the Board of
Directors may not amend, repeal or readopt that bylaw.
9.02. By Shareholders. Except as otherwise provided in the
Articles of Incorporation, these bylaws may also be amended or repealed
and new bylaws may be adopted by the shareholders at any annual or special
meeting of the shareholders at which a quorum is in attendance.
9.03. Implied Amendments. Any action taken or authorized by
the shareholders or by the Board of Directors, which would be inconsistent
with the bylaws then in effect but is taken or authorized by affirmative
vote of not less than the number of votes or the number of directors
required to amend the bylaws so that the bylaws would be consistent with
such action, shall be given the same effect as though the bylaws had been
temporarily amended or suspended so far, but only so far, as is necessary
to permit the specific action so taken or authorized.
ARTICLE TEN
Indemnification
10.01. Certain Definitions. All capitalized terms used in this
Article X and not otherwise hereinafter defined in this Section 10.01
shall have the meaning set forth in Section 180.0850 of the Statute. The
following capitalized terms (including any plural forms thereof) used in
this Article X shall be defined as follows:
(a) "Affiliate" shall include, without limitation, any
corporation, partnership, joint venture, employee benefit plan,
trust or other enterprise that, directly or indirectly through
one or more intermediaries, controls or is controlled by, or is
under common control with, the Corporation.
(b) "Authority" shall mean the entity selected by the
Director or Officer to determine his or her right to
indemnification pursuant to Section 10.04.
(c) "Board" shall mean the entire then elected and serving
Board of Directors of the Corporation, including all members
thereof who are Parties to the subject Proceeding or any related
Proceeding.
(d) "Breach of Duty" shall mean the Director or Officer
breached or failed to perform his or her duties to the
Corporation and his or her breach of or failure to perform those
duties is determined, in accordance with Section 10.04, to
constitute misconduct under Section 180.0851(2)(a) 1, 2, 3 or 4
of the Statute.
(e) "Corporation," as used herein and as defined in the
Statute and incorporated by reference into the definitions of
certain capitalized terms used herein, shall mean this
Corporation, including, without limitation, any successor
corporation or entity to the Corporation by way of merger,
consolidation or acquisition of all or substantially all of the
capital stock or assets of this Corporation.
(f) "Director or Officer" shall have the meaning set forth
in the Statute; provided, that, for purposes of this Article X,
it shall be conclusively presumed that any Director or Officer
serving as a director, officer, partner, trustee, member of any
governing or decision-making committee, employee or agent of an
Affiliate shall be so serving at the request of the Corporation.
(g) "Disinterested Quorum" shall mean a quorum of the
Board who are not Parties to the subject Proceeding or any
related Proceeding.
(h) "Party" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article X, the
term "Party" shall also include any Director, Officer or
employee who is or was a witness in a Proceeding at a time when
he or she has not otherwise been formally named a Party thereto.
(i) "Proceeding" shall have the meaning set forth in the
Statute; provided, that, for purposes of this Article X,
"Proceeding" shall include all Proceedings (i) brought under (in
whole or in part) the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, their respective
state counterparts, and/or any rule or regulation promulgated
under any of the foregoing; (ii) brought before an Authority or
otherwise to enforce rights hereunder; (iii) any appeal from a
Proceeding; and (iv) any Proceeding in which the Director or
Officer is a plaintiff or petitioner because he or she is a
Director or Officer; provided, however, that such Proceeding is
authorized by a majority vote of a Disinterested Quorum.
(j) "Statute" shall mean Sections 180.0850 through
180.0859, inclusive, of the Wisconsin Business Corporation Law,
Chapter 180 of the Wisconsin Statutes, including any amendments
thereto, but, in the case of any such amendment, only to the
extent such amendment permits or requires the Corporation to
provide broader indemnification rights than the Statute
permitted or required the Corporation to provide prior to such
amendment.
10.02. Mandatory Indemnification. To the fullest extent
permitted or required by the Statute, the Corporation shall indemnify a
Director or Officer against all Liabilities incurred by or on behalf of
such Director or Officer in connection with a Proceeding in which the
Director or Officer is a Party because he or she is a Director or Officer.
10.03. Procedural Requirements.
(a) A Director or Officer who seeks indemnification under
Section 10.02 shall make a written request therefor to the Corporation.
Subject to Section 10.03(b), within sixty days of the Corporation's
receipt of such request, the Corporation shall pay or reimburse the
Director or Officer for the entire amount of Liabilities incurred by the
Director or Officer in connection with the subject Proceeding (net of any
Expenses previously advanced pursuant to Section 10.05).
(b) No indemnification shall be required to be paid by the
Corporation pursuant to Section 10.02 if, within such sixty-day period:
(i) a Disinterested Quorum, by a majority vote thereof, determines that
the Director or Officer requesting indemnification engaged in misconduct
constituting a Breach of Duty; or (ii) a Disinterested Quorum cannot be
obtained.
(c) In either case of nonpayment pursuant to Section 10.03(b),
the Board shall immediately authorize by resolution that an Authority, as
provided in Section 10.04, determine whether the Director's or Officer's
conduct constituted a Breach of Duty and, therefore, whether
indemnification should be denied hereunder.
(d) (i) If the Board does not authorize an Authority to
determine the Director's or Officer's right to indemnification hereunder
within such sixty-day period and/or (ii) if indemnification of the
requested amount of Liabilities is paid by the Corporation, then it shall
be conclusively presumed for all purposes that a Disinterested Quorum has
determined that the Director or Officer did not engage in misconduct
constituting a Breach of Duty and, in the case of subsection (i) above
(but not subsection (ii)), indemnification by the Corporation of the
requested amount of Liabilities shall be paid to the Officer or Director
immediately.
10.04. Determination of Indemnification.
(a) If the Board authorizes an Authority to determine a
Director's or Officer's right to indemnification pursuant to Section
10.03, then the Director or Officer requesting indemnification shall have
the absolute discretionary authority to select one of the following as
such Authority:
(i) An independent legal counsel; provided, that such
counsel shall be mutually selected by such Director or Officer
and by a majority vote of a Disinterested Quorum or, if a
Disinterested Quorum cannot be obtained, then by a majority vote
of the Board;
(ii) A panel of three arbitrators selected from the panels
of arbitrators of the American Arbitration Association in
Milwaukee, Wisconsin; provided, that (A) one arbitrator shall be
selected by such Director or Officer, the second arbitrator
shall be selected by a majority vote of a Disinterested Quorum
or, if a Disinterested Quorum cannot be obtained, then by a
majority vote of the Board, and the third arbitrator shall be
selected by the two previously selected arbitrators; and (B) in
all other respects, such panel shall be governed by the American
Arbitration Association's then existing Commercial Arbitration
Rules; or
(iii) A court pursuant to and in accordance with Section
180.0854 of the Statute.
(b) In any such determination by the selected Authority there
shall exist a rebuttable presumption that the Director's or Officer's
conduct did not constitute a Breach of Duty and that indemnification
against the requested amount of Liabilities is required. The burden of
rebutting such a presumption by clear and convincing evidence shall be on
the Corporation or such other party asserting that such indemnification
should not be allowed.
(c) The Authority shall make its determination within sixty
days of being selected and shall submit a written opinion of its
conclusion simultaneously to both the Corporation and the Director or
Officer.
(d) If the Authority determines that indemnification is
required hereunder, the Corporation shall pay the entire requested amount
of Liabilities (net of any Expenses previously advanced pursuant to
Section 10.05), including interest thereon at a reasonable rate, as
determined by the Authority, within ten days of receipt of the Authority's
opinion; provided, that, if it is determined by the Authority that a
Director or Officer is entitled to indemnification as to some claims,
issues or matters, but not as to other claims, issues or matters, involved
in the subject Proceeding, the Corporation shall be required to pay (as
set forth above) only the amount of such requested Liabilities as the
Authority shall deem appropriate in light of all of the circumstances of
such Proceeding.
(e) The determination by the Authority that indemnification is
required hereunder shall be binding upon the Corporation regardless of any
prior determination that the Director or Officer engaged in a Breach of
Duty.
(f) All Expenses incurred in the determination process under
this Section 10.04 by either the Corporation or the Director or Officer,
including, without limitation, all Expenses of the selected Authority,
shall be paid by the Corporation.
10.05. Mandatory Allowance of Expenses.
(a) The Corporation shall pay or reimburse, within ten days
after the receipt of the Director's or Officer's written request therefor,
the reasonable Expenses of the Director or Officer as such Expenses are
incurred, provided the following conditions are satisfied:
(i) The Director or Officer furnishes to the Corporation
an executed written certificate affirming his or her good faith
belief that he or she has not engaged in misconduct which
constitutes a Breach of Duty; and
(ii) The Director or Officer furnishes to the Corporation
an unsecured executed written agreement to repay any advances
made under this Section 10.05 if it is ultimately determined by
an Authority that he or she is not entitled to be indemnified by
the Corporation for such Expenses pursuant to Section 10.04.
(b) If the Director or Officer must repay any previously
advanced Expenses pursuant to this Section 10.05, such Director or Officer
shall not be required to pay interest on such amounts.
10.06. Indemnification and Allowance of Expenses of Certain
Others.
(a) The Corporation shall indemnify a director or officer of an
Affiliate (who is not otherwise serving as a Director or Officer) against
all Liabilities, and shall advance the reasonable Expenses, incurred by
such director or officer in a Proceeding to the same extent hereunder as
if such director or officer incurred such Liabilities because he or she
was a Director or Officer, if such director or officer is a Party thereto
because he or she is or was a director or officer of the Affiliate.
(b) The Corporation shall indemnify an employee who is not a
Director or Officer, to the extent that he or she has been successful on
the merits or otherwise in defense of a Proceeding, for all reasonable
Expenses incurred in the Proceeding if the employee was a Party because he
or she was an employee of the Corporation.
(c) The Board may, in its sole and absolute discretion as it
deems appropriate, pursuant to a majority vote thereof, indemnify (to the
extent not otherwise provided in Section 10.06(b)) against Liabilities
incurred by, and/or provide for the allowance of reasonable Expenses of,
an authorized employee or agent of the Corporation acting within the scope
of his or her duties as such and who is not otherwise a Director or
Officer.
10.07. Insurance. The Corporation may purchase and maintain
insurance on behalf of a Director or Officer or any individual who is or
was an authorized employee or agent of the Corporation against any
Liability asserted against or incurred by such individual in his or her
capacity as such or arising from his or her status as such, regardless of
whether the Corporation is required or permitted to indemnify against any
such Liability under this Article X.
10.08. Notice to the Corporation. A Director, Officer or
employee shall promptly notify the Corporation in writing when he or she
has actual knowledge of a Proceeding which may result in a claim of
indemnification against Liabilities or allowance of Expenses hereunder,
but the failure to do so shall not relieve the Corporation of any
liability to the Director, Officer or employee hereunder unless the
Corporation shall have been irreparably prejudiced by such failure (as
determined, in the case of Directors and Officers only, by an Authority).
10.09. Severability. If any provision of this Article X shall
be deemed invalid or inoperative, or if a court of competent jurisdiction
determines that any of the provisions of this Article X contravene public
policy, this Article X shall be construed so that the remaining provisions
shall not be affected, but shall remain in full force and effect, and any
such provisions which are invalid or inoperative or which contravene
public policy shall be deemed, without further action or deed by or on
behalf of the Corporation, to be modified, amended and/or limited, but
only to the extent necessary to render the same valid and enforceable.
10.10. Nonexclusivity of Article X. The rights of a Director,
Officer or employee (or any other person) granted under this Article X
shall not be deemed exclusive of any other rights to indemnification
against Liabilities or advancement of Expenses which the Director, Officer
or employee (or such other person) may be entitled to under any written
agreement, Board resolution, vote of shareholders of the Corporation or
otherwise, including, without limitation, under the Statute. Nothing
contained in this Article X shall be deemed to limit the Corporation's
obligations to indemnify a Director, Officer or employee under the
Statute.
10.11. Contractual Nature of Article X; Repeal or Limitation of
Rights. This Article X shall be deemed to be a contract between the
Corporation and each Director, Officer and employee of the Corporation and
any repeal or other limitation of this Article X or any repeal or
limitation of the Statute or any other applicable law shall not limit any
rights of indemnification against Liabilities or allowance of Expenses
then existing or arising out of events, acts or omissions occurring prior
to such repeal or limitation, including, without limitation, the right of
indemnification against Liabilities or allowance or Expenses for
Proceedings commenced after such repeal or limitation to enforce this
Article X with regard to acts, omissions or events arising prior to such
repeal or limitation.
EXHIBIT 4.9
JOHNSON WORLDWIDE ASSOCIATES, INC.
1326 Willow Road
Sturtevant, Wisconsin 53177
AMENDMENT NO. 2
As of September 30, 1994
The First National Bank of Chicago
One First National Plaza, Suite 0324
Chicago, Illinois 60670-0324
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
Societe Generale
118 West Madison Street, Suite 3400
Chicago, IL 60602
Ladies and Gentlemen:
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), hereby agrees with you as follows:
1. Definitions. Reference is made to the Revolving and Term Loan
Agreement dated as of October 2, 1991 (the "Credit Agreement") between the
Company and each of you. Terms defined in the Credit Agreement as
supplemented and amended hereby and not otherwise defined herein are used
herein with the meanings so defined.
2. Amendment of Definition of "Revolving Commitment Expiration Date".
The definition of "Revolving Commitment Expiration Date" in Section 1.01
of the Credit Agreement is amended by deleting the paragraph in its
entirety and substituting the following: "shall mean September 29, 1995".
3. Fees. Section 2.15(a) is hereby amended by deleting the paragraph and
substituting the following:
"The Company agrees to pay to the Agent for distribution to the Banks
a commitment fee (the "Commitment Fee") on the average daily unused
portion of the Aggregate Commitment, at the rate of 3/16 of 1% from
the date hereof to and including October 1, 1994 and 1/8 of 1% per
annum thereafter. The Commitment Fee shall be computed on the basis
of the actual number of days elapsed and a year of 365/366 days, shall
accrue from the Effective Date and shall be payable quarterly, in
arrears on each March 31, June 30, September 30, and December 31,
thereafter, commencing December 31, 1991 and ending on the Revolving
Commitment Expiration Date."
4. Representations and Warranties. The Company hereby represents and
warrants that:
4.1. Corporate Authority. The Company has all necessary corporate
power and has taken all corporate action necessary to make this
Amendment the valid and enforceable obligation it purports to be.
4.2. No Legal Obstacle to Amendment. The execution and delivery of
this Amendment will not constitute or result in (i) a breach of
the provisions of the charter or by-laws of the Company or any
material contract to which it is a party or by which it is bound
or any presently existing applicable law, judgment, decree or
governmental order, rule or regulation applicable to it, or (ii)
the creation under any agreement of any lien, charge or
encumbrance upon any of the assets of the Company.
4.3. No Governmental or Other Approvals. No consent, approval,
authorization of, or declaration or filing with, any governmental
authority on the part of the Company is required for the valid
execution and delivery of this Amendment.
5. Miscellaneous. The Credit Agreement as supplemented and amended
hereby is confirmed in full force and effect. The invalidity or
unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. The
headings of this Amendment are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof. This Amendment may be
executed in any number of counterparts which together shall be governed by
and construed in accordance with the laws of the State of Illinois and any
applicable federal law and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
If the forgoing corresponds with your understanding of our agreement,
kindly sign this letter and the accompanying copies thereof in the
appropriate space below and return the same to the Company. This
Amendment No. 2 shall be effective as of the date first above written upon
receipt by the Agent of executed copies of this Amendment No. 2 signed by
the Company and each Bank.
Very truly yours,
JOHNSON WORLDWIDE ASSOCIATES, INC.
By: /s/ Carl G. Schmidt
Title: Vice President & Chief
Financial Officer
The foregoing is hereby accepted and agreed to:
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ Deborah E. Stevens
Title: Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ F.R. Dengel
Title: Vice President
SOCIETE GENERALE
By: /s/ Joseph A. Philbin
Title: Vice President
EXHIBIT 4.10
JOHNSON WORLDWIDE ASSOCIATES, INC.
222 Main Street
Racine, Wisconsin 53403
AMENDMENT NO. 2
As of August 29, 1994
The First National Bank of Chicago
One First National Plaza, Suite 0324
Chicago, Illinois 60670-0324
Firstar Bank Milwaukee, N.A.
777 East Wisconsin Avenue
Milwaukee, Wisconsin 53202
M&I Marshall & Ilsley Bank
770 North Water Street
Milwaukee, Wisconsin 53202
NBD Bank, N.A.
611 Woodward Avenue
Detroit, Michigan 48226
Ladies and Gentlemen:
Johnson Worldwide Associates, Inc., a Wisconsin corporation (the
"Company"), hereby agrees with you as follows:
1. Definitions. Reference is made to the Revolving Loan Agreement dated
as of April 2, 1993 (the "Credit Agreement") between the Company and each
of you. Terms defined in the Credit Agreement as supplemented and amended
hereby and not otherwise defined herein are used herein with the meanings
so defined.
2. Amendment of Definition of "Maturity Date". The definition of
"Maturity Date" in Section 1.01 of the Credit Agreement is amended by
deleting "August 29, 1994 or such date to which the Maturity Date may be
extended pursuant to Section 2.13 of the Agreement" therefrom and
inserting in its place the following: "August 28, 1995 or such date to
which the Maturity Date may be extended pursuant to Section 2.13 of this
Agreement."
3. Fees. Section 2.12(a) is hereby amended by deleting the paragraph
and substituting the following:
"The Company agrees to pay to the Agent for distribution to the Banks
a commitment fee (the "Commitment Fee") on the average daily unused
portion of the Aggregate Commitment, at the rate of 3/16 of 1% from
the date hereof to and including August 28, 1994 and 1/8 of 1% per
annum thereafter. For purposes of this Section 2.12(a), Absolute
Rate Loans shall not be deemed usage of the Commitment of each Bank.
The Commitment Fee shall be computed on the basis of the actual
number of days elapsed and a year of 365/366 days, shall accrue from
the Effective Date and shall be payable quarterly, in arrears on each
March 31, June 30, September 30, and December 31, thereafter,
commencing March 31, 1993 and on the Maturity Date."
4. Representations and Warranties. The Company hereby represents and
warrants that:
4.1. Corporate Authority. The Company has all necessary corporate power
and has taken all corporate action necessary to make this Amendment the
valid and enforceable obligation it purports to be.
4.2. No Legal Obstacle to Amendment. The execution and delivery of this
Amendment will not constitute or result in (i) a breach of the provisions
of the charter or by-laws of the Company or any material contract to which
it is a party or by which it is bound or any presently existing applicable
law, judgment, decree or governmental order, rule or regulation applicable
to it, or (ii) the creation under any agreement of any lien, charge or
encumbrance upon any of the assets of the Company.
4.3. No Governmental or Other Approvals. No consent, approval,
authorization of, or declaration or filing with, any governmental
authority on the part of the Company is required for the valid execution
and delivery of this Amendment.
5. Miscellaneous. The Credit Agreement as supplemented and amended
hereby is confirmed in full force and effect. The invalidity or
unenforceability of any term or provision hereof shall not affect the
validity or enforceability of any other term or provision hereof. The
headings of this Amendment are for convenience of reference only and shall
not alter or otherwise affect the meaning hereof. This Amendment may be
executed in any number of counterparts which together shall be governed by
and construed in accordance with the laws of the State of Illinois and any
applicable federal law and shall bind and inure to the benefit of the
parties hereto and their respective successors and assigns.
If the foregoing corresponds with your understanding of our agreement,
kindly sign this letter and the accompanying copies thereof in the
appropriate space below and return the same to the Company. This
Amendment No. 2 shall be effective as of the date first above written upon
receipt by the Agent of executed copies of this Amendment No. 2 signed by
the Company and each Bank.
Very truly yours,
JOHNSON WORLDWIDE ASSOCIATES,
INC.
By: /s/ Carl G. Schmidt
Title: Vice President & Chief
Financial Officer
The foregoing is hereby accepted and agreed to:
THE FIRST NATIONAL BANK OF
CHICAGO
By: /s/ Deborah E. Stevens
Title: Vice President
FIRSTAR BANK MILWAUKEE, N.A.
By: /s/ F.R. Dengel
Title: Vice President
M&I MARSHALL & ILSLEY BANK
By: /s/ Thomas P. Mahoney
Title: Vice President
NBD BANK, N.A.
By: /s/ Thomas H. Gordy
Title: Second Vice President
Management's Discussion and Analysis
Results of Operations
The following discussion includes comments and analysis relating to the
Company's results of operations and financial condition for the three
years ended September 30, 1994. This discussion should be read in
conjunction with the consolidated financial statements and related notes
that immediately follow this section. Comparisons reflect results from
continuing operations.
Summary of Consolidated Financial Results
(millions of dollars,
except per share amounts) 1994 1993 1992
Net sales $284.3 $280.3 $275.8
Gross profit 110.8 115.7 112.2
Operating expenses(1) 91.9 104.5 92.6
Operating profit(1) 18.9 11.2 19.6
Interest expense 6.8 8.3 10.2
Income from continuing
operations(1) 8.1 .6 5.4
Per common share 1.01 .08 .67
(1) Includes pre-tax restructuring charges of $13 million and $4.5
million in 1993 and 1992, respectively.
1994 vs 1993
Net Sales
Sales were $284.3 million in 1994 compared to $280.3 million in 1993, an
increase of 1.4%. The sales increase as measured in U.S. dollars was
positively impacted by the effect of stronger foreign currencies relative
to the U.S. dollar in comparison to 1993.
In North America, fishing products led the sales increase, primarily on
the strength of Minn Kota electric trolling motors. The line of motors
introduced in 1993 continues to increase Minn Kota's market share. Sales
of camping products in North America decreased slightly overall as Old
Town Canoe recorded gains while other camping products decreased. Diving
sales increased in the U.S. market while marine product sales decreased,
primarily due to elimination of certain non-strategic products in 1994.
European sales as measured in U.S. dollars increased 5.8% from 1993, but
increased less in local currencies. Fishing and camping products were
contributors, increasing 12%, led by Jack Wolfskin's brand expansion.
Diving products had a slight increase in sales and improved operating
performance. Sales of marine products were flat, affected by the weak
economy in France, which is their primary market, and a reduction in the
number of products offered, but operating results improved.
The Company's Japanese business recorded strong sales growth, reflecting a
strong market for the Company's diving products, increased penetration of
fishing and camping products and benefiting from the strong value of the
yen.
Operating Profit
The Company's operating profit was $18.9 million in 1994 as compared to
$11.2 million in 1993. The 1993 results reflect the establishment of a
$13 million pre-tax restructuring reserve. Results in 1994 were
significantly impacted by European fishing and marine operations where
operating profit more than doubled over the prior year. Margins and
operating profit were reduced in 1994 by fourth quarter inventory
adjustments totaling $5.4 million, primarily in North American operations.
Many of the products involved in the writedown were not part of the
Company's core recreation products business. The inventory adjustments
account, in large measure, for the disproportionate contribution of
earnings from outside North America to total operating results. Gross
profit margins outside North America held steady in 1994 compared to 1993.
Other Income and Expenses
Interest expense decreased in 1994 reflecting lower debt levels beginning
in May 1994 offset by rising interest rates in the U.S. Other expenses,
net of other income, decreased from the prior year, primarily due to
higher interest income from increasing interest rates and higher invested
balances and lower foreign exchange losses.
Income From Continuing Operations
Income from continuing operations of $8.1 million or $1.01 per share in
1994 was $7.5 million or $ .93 per share more than 1993. Restructuring
charges reduced 1993 earnings per share by $1.10. Excluding the
restructuring charge, earnings per share from continuing operations were
$1.18 in 1993. The effective tax rate returned to a more historical level
in 1994 due to increasing levels of pretax income. The 1993 tax rate was
impacted by restructuring charges.
Discontinued Operations
On July 28, 1993, the Company's Board of Directors approved a formal plan
to divest the Company's Marking Systems group. As a result, all
operations of the Marking Systems group were classified as discontinued
operations for all years presented. At that time, the Company recorded a
loss on disposal of discontinued operations of $3.0 million. During 1994,
the Company completed the sales of the businesses comprising the Marking
Systems group and recorded a gain on disposition of approximately $4.1
million as net sales proceeds exceeded expectations.
Restructuring
As a result of the desire of management and the Board of Directors to
strategically reposition the Company as an integrated global recreation
products company, restructuring reserves totaling $13 million and $4.5
million were recorded in 1993 and 1992, respectively. The key components
of these charges were losses on the disposal of non-strategic recreation
product lines totaling $6.4 million, creation of a centralized management
structure totaling $2.3 million, severance costs of $3.6 million and
facilities closing costs of $1.1 million. The majority of the
restructuring charges were for future cash outlays, however, provisions
were included for inventory and equipment writedowns and a $2.1 million
writeoff of goodwill associated with non-strategic recreation product
lines. As of September 30, 1994, approximately $1.1 million of unexpended
reserves remained as a liability of the Company.
In the aggregate, the Company expects its obligations for restructuring to
approximate the amounts accrued in 1993 and 1992. However, certain
estimates of the cost of components of the charges will vary from the
amounts originally determined. In particular, the extent of restructuring
of European operations (and the related cost) will be less than originally
anticipated. This is offset by approximately $5 million of costs from the
disposition of the Elliot commercial life raft operation, which was
consummated in 1994. Restructuring charges total approximately $15
million for North American operations, of which Elliot was a part, with
the remainder attributable primarily to European businesses. The
repositioning strategy of the Company will result in reduced operating
costs over time.
1993 vs 1992
Net Sales
Sales were $280.3 million in 1993 compared to $275.8 million in 1992, an
increase of 2%. The sales increase as measured in U.S. dollars was
reduced by the effect of weaker foreign currencies in comparison to 1992.
Fishing products lead the North American sales increase, primarily on the
strength of Minn Kota electric trolling motors. A new line of motors
introduced in 1993 successfully increased Minn Kota's market share from
the 1992 level, after the Company's share of the electric trolling motor
market declined in 1992. Sales of camping products in North America
increased slightly as Old Town Canoe recorded strong gains of 11% while
other camping products increased slightly. Marine product sales increased
primarily due to new product introductions while diving sales remained
even in the flat U.S. market, but had significantly improved margins and
operating results.
European sales as measured in U.S. dollars declined 4.5% from 1992, but
increased in local currencies. Camping products were a strong
contributor, increasing 15%, led by Jack Wolfskin's brand expansion.
Diving products had another solid year in the face of tough European
economies with a slight increase in sales and improved operating
performance. Sales of fishing and marine products were adversely affected
by the weak economy in France, which is their primary market. Fishing was
also negatively impacted by the bankruptcy of a distributor in Italy,
while the worldwide boating depression continued to affect marine sales.
The Company's Japanese business recorded a strong sales increase
reflecting an improved market for diving products and benefiting from the
strong value of the yen.
Operating Profit
The Company's operating profit of $11.2 million in 1993 was $8.4 million
less than 1992. The decrease was due to the establishment of a $13
million pre-tax restructuring reserve in 1993. A substantial portion of
these restructuring charges were incurred in North America, which
contributes to the disproportionate contribution of earnings from outside
North America to total operating results.
Other Income And Expenses
Interest expense decreased in 1993 reflecting lower interest rates in key
European countries and in the U.S. Other expenses, net of other income,
increased from the prior year, primarily due to foreign exchange losses in
Europe during early 1993 and lower interest income due to lower interest
rates.
Income From Continuing Operations
Income from continuing operations of $640,000 or $ .08 per share in 1993
was $4.7 million, or $ .59 per share less than 1992. The restructuring
charges reduced 1993 and 1992 earnings per share by $1.10 and $ .36,
respectively. Excluding the restructuring charges, earnings per share
from continuing operations were $1.18 and $1.03 in 1993 and 1992,
respectively.
Discontinued Operations
The after-tax income from the Marking Systems group was $1.2 million for
1993 as compared to $2.3 million for 1992. This decrease reflects
$750,000 of costs associated with facility closures, a loss of $830,000
incurred in disposal of one of its product lines, the cost of a litigation
settlement in the amount of $1.5 million and the negative impact of the
Swedish recession.
Financial Condition
In the two years prior to 1992 the Company invested more than $50 million
in acquisitions, primarily by increasing its debt position. These
investments increased the Company's leverage and expanded its total asset
base. The Company significantly reduced its investment in acquisitions in
1992, and no acquisitions were completed in 1993 or 1994 as the Company
focused on repositioning its existing businesses.
Working Capital
The following table sets forth the Company's working capital position at
the end of the past three years:
(millions of dollars) 1994 1993 1992
Current assets $155.4 $182.6 $171.0
Current liabilities 54.0 78.4 67.8
Working capital $101.4 $104.2 $103.2
Current ratio 2.9 to 1 2.3 to 1 2.5 to 1
Current assets included $46.5 million and $41.7 million of Marking Systems
assets, net of liabilities, at October 1, 1993 and October 2, 1992,
respectively. The Company divested these assets in 1994.
Total inventories increased by $3.1 million from 1993, primarily as a
result of growth of North American diving inventories established during
the reorganization of the Company and the changing relationship between
the U.S. dollar and currencies of countries where the Company has
operations, offset by increased reserves in North America.
The increase of $10.1million in accounts receivable was due to the success
of early season selling programs in North America, overall higher fourth
quarter 1994 sales and was magnified by the same foreign currency
movements that affected inventories. Current liabilities decreased by
$24.4 million as certain of the proceeds from the sale of the Marking
Systems group noted above were used to reduce debt.
Capitalization
The following table sets forth the Company's debt and capital structure at
the end of the past three years:
(millions of dollars) 1994 1993 1992
Current debt $16.1 $ 37.1 $32.2
Long-term debt 31.2 44.5 43.3
----- ----- -----
Total debt 47.3 81.6 75.5
Shareholders' equity 128.2 110.8 118.7
----- ----- -----
Total
capitalization $175.5 $192.4 $194.2
===== ===== =====
Debt to total capital 27.0% 42.4% 38.9%
===== ===== =====
The Company's debt ratio has improved and indicates its underlying
financial strength.
Capital Expenditures, Depreciation and Amortization
Expenditures for property, plant and equipment were $14 million in 1994
and $8.4 million in 1993. The Company's investments are made primarily
for tooling for new products and enhancements. In 1994, the Company
constructed and occupied an office and research facility. In 1995,
capital expenditures will total approximately $13 million. These
obligations are expected to be funded by working capital or existing bank
lines of credit of the Company. Depreciation and amortization charges
were $7.0 million in 1994, $7.2 million in 1993 and $6.5 million in 1992.
Other Factors
The Company has not been significantly impacted by inflationary pressures
over the last several years. Price increases, and in certain situations,
price decreases have been implemented for individual products but there
have not been any significant price or cost increases on any of its major
product lines. The Company anticipates that rising costs of basic raw
materials may impact 1995 operating costs. The Company is involved in
several initiatives to reduce the impact of these cost changes on its
operating margins.
<PAGE>
Johnson Worldwide Associates, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(thousands of dollars) September 30, October 1,
1994 1993
ASSETS
Current assets:
Cash and temporary cash investments $ 15,588 $ 4,415
Accounts receivable, less allowance for
doubtful accounts of $2,317 and $1,606
in 1994 and 1993, respectively 54,942 44,803
Inventories 70,389 67,323
Deferred income taxes 7,482 7,816
Other current assets 6,967 11,707
Net assets of discontinued operations --- 46,504
------- -------
Total current assets 155,368 182,568
Property, plant and equipment 26,579 19,052
Intangible assets 35,009 34,957
Other assets 2,725 2,544
------- -------
Total assets $219,681 $239,121
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Notes payable and current maturities of
long-term obligations $ 16,097 $ 37,123
Accounts payable 13,467 11,874
Accrued liabilities:
Salaries and wages 5,207 4,807
Income taxes 5,145 4,214
Restructuring 1,077 8,905
Other 13,041 11,518
------- -------
Total current liabilities 54,034 78,441
Long-term obligations, less current
maturities 31,190 44,543
Other liabilities 6,260 5,319
------- -------
Total liabilities 91,484 128,303
------- -------
Shareholders' equity:
Preferred stock issued: none --- ---
Common stock:
Class A shares issued: September 30,
1994, 6,859,558; October 1, 1993,
6,758,346 343 337
Class B shares issued (convertible
into Class A): September 30, 1994,
1,230,599; October 1, 1993, 1,230,883 62 62
Capital in excess of par value 43,330 41,696
Retained earnings 79,538 67,340
Contingent compensation (242) (350)
Cumulative translation adjustment 5,166 1,733
------- -------
Total shareholders' equity 128,197 110,818
------- -------
Total liabilities and
shareholders' equity $219,681 $239,121
======= =======
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Johnson Worldwide Associates, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF OPERATIONS
Year Ended
(thousands of dollars, except September 30, October 1, October 2,
per share data) 1994 1993 1992
Net sales $284,343 $280,292 $275,845
Cost of sales 173,507 164,573 163,660
------- ------- -------
Gross profit 110,836 115,719 112,185
------- ------- -------
Operating expenses:
Marketing and selling 59,347 56,965 52,866
Financial and
administrative management 24,126 26,085 26,911
Research and development 5,304 5,200 4,869
Profit sharing 1,639 1,695 1,860
Amortization of acquisition
costs 1,482 1,581 1,615
Restructuring charges --- 13,000 4,500
------- ------- -------
Total operating expenses 91,898 104,526 92,621
------- ------- -------
Operating profit 18,938 11,193 19,564
Interest income (531) (459) (689)
Interest expense 6,845 8,309 10,180
Other expenses, net 140 648 198
------- ------- ------
Income from continuing
operations before income
taxes 12,484 2,695 9,875
Income tax expense 4,338 2,055 4,509
Income from continuing
operations 8,146 640 5,366
Discontinued operations:
Income from discontinued
operations, net of income
tax expense of $1,293 and
$1,803 in 1993 and 1992,
respectively --- 1,169 2,304
Gain (loss) on disposal of
discontinued operations,
net of income tax expense
(benefit) of $(2,277) and
$3,000 in 1994 and 1993,
respectively 4,052 (3,000) ---
------- ------ -------
Net income (loss) $ 12,198 $(1,191) $ 7,670
======= ====== =======
EARNINGS (LOSS) PER COMMON
SHARE:
Continuing operations $ 1.01 $ .08 $ .67
Discontinued operations .50 (.23) .29
------ ------ -------
Net income (loss) $ 1.51 $ (.15) $ .96
====== ====== =======
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Johnson Worldwide Associates, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Cumula-
tive
Capital Con- Trans-
in Excess tingent lation
Common of Par Retained Compen- Adjust-
(thousands of dollars) Stock Value Earnings sation ment
BALANCE, SEPTEMBER 27,
1991 $394 $40,529 $60,861 $ (75) $3,593
Net income --- --- 7,670 --- ---
Exercise of stock
options --- 27 --- --- ---
Issuance of
restricted stock 1 186 --- (186) ---
Issuance of stock
under employee stock
purchase plan 1 214 --- --- ---
Amortization of
contingent
compensation --- --- --- 40 ---
Tax benefit of stock
options exercised --- 28 --- --- ---
Translation
adjustment --- --- --- --- 5,386
------ ------ ------ ------ ------
BALANCE, OCTOBER 2,
1992 396 40,984 68,531 (221) 8,979
Net loss --- --- (1,191) --- ---
Exercise of stock
options 2 355 --- --- ---
Issuance of
restricted stock 1 212 --- (212) ---
Amortization of
contingent
compensation --- --- --- 83 ---
Tax benefit of stock
options exercised --- 145 --- --- ---
Translation
adjustment --- --- --- --- (7,246)
------ ------- ------- ------ ------
BALANCE, OCTOBER 1,
1993 399 41,696 67,340 (350) 1,733
Net income --- --- 12,198 --- ---
Exercise of stock
options 5 1,226 --- --- ---
Issuance of
restricted stock --- 70 --- (70) ---
Issuance of stock
under employee stock
purchase plan 1 188 --- --- ---
Amortization of
contingent
compensation --- --- --- 178 ---
Tax benefit of stock
options exercised --- 150 --- --- ---
Translation
adjustment --- --- --- --- 3,433
------- -------- -------- ------ ------
BALANCE, SEPTEMBER 30,
1994 $405 $43,330 $79,538 $(242) $5,166
======= ======== ======== ======= ======
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Johnson Worldwide Associates, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended
September 30, October 1, October 2,
(thousands of dollars) 1994 1993 1992
CASH PROVIDED BY (USED FOR)
OPERATIONS:
Net income (loss) $12,198 $(1,191) $7,670
Noncash items:
Depreciation and amortization 6,987 7,167 6,522
Deferred income taxes (694) (2,255) (1,979)
Writedown of intangible assets --- 2,060 ---
Loss (income) from
discontinued operations (4,052) 1,831 (2,304)
Change in:
Accounts receivable, net (8,397) (6,624) (2,469)
Inventories (993) (2,639) (2,002)
Restructuring accrual (7,828) 4,405 4,500
Accounts payable and other
accrued liabilities 3,576 3,604 822
Net assets of discontinued
operations 4,036 (6,611) 342
Other, net 2,705 (3,566) (124)
------- ------- -------
7,538 (3,819) 10,978
------- ------- -------
CASH PROVIDED BY (USED FOR)
INVESTING ACTIVITIES:
Proceeds from sales of
discontinued operations and
other businesses 48,076 --- ---
Net assets of businesses
acquired --- --- (705)
Net additions to property, plant
and equipment (12,294) (5,334) (6,891)
Other, net 58 (26) (1,914)
------- ------- -------
35,840 (5,360) (9,510)
------- ------- -------
CASH PROVIDED BY (USED FOR)
FINANCING ACTIVITIES:
Issuance of senior notes --- 15,000 ---
Principal payments on senior
notes and term loan (5,000) (5,000) (5,000)
Net change in notes payable and
other long-term obligations (29,284) 25 (715)
Issuance of common stock 1,570 503 271
-------- ------- -------
(32,714) 10,528 (5,444)
Effect of foreign currency
fluctuations on cash 509 (479) 609
Increase (decrease) in cash and
temporary cash investments 11,173 870 (3,367)
CASH AND TEMPORARY CASH
INVESTMENTS:
Beginning of year 4,415 3,545 6,912
------ ------ ------
End of year $15,588 $ 4,415 $ 3,545
====== ====== ======
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Notes to Consolidated Financial Statements
1. Summary Of Significant Accounting Policies
Principles Of Consolidation
The consolidated financial statements include the accounts of Johnson
Worldwide Associates, Inc. and all majority owned subsidiaries (the
Company). Significant intercompany accounts and transactions have been
eliminated in consolidation.
The Company's fiscal year ends on the Friday nearest September 30. The
fiscal years ended September 30, 1994, October 1, 1993 and October 2, 1992
(hereinafter 1994, 1993 and 1992, respectively) comprise 52, 52 and 53
weeks, respectively.
Cash and Temporary Cash Investments
For purposes of the consolidated statements of cash flows, the Company
considers all short-term investments in interest bearing bank accounts,
securities and other instruments with an original maturity of three months
or less, to be equivalent to cash.
Inventories
Inventories are stated at the lower of cost (determined using the
first-in, first-out method) or market.
Inventories related to continuing operations at the end of the respective
years consist of the following:
(thousands of dollars) 1994 1993
Raw materials $19,058 $16,622
Work in process 4,625 4,834
Finished goods 54,260 47,618
------ ------
77,943 69,074
Less:reserves 7,554 1,751
------ ------
$70,389 $67,323
====== ======
In the fourth quarter of 1994, the Company recorded charges totaling $5.4
million to reduce the carrying value of certain elements of inventory to
their net realizable value.
Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated
depreciation. Depreciation of plant and equipment is determined by
straight-line and accelerated methods over estimated useful lives.
Upon retirement or disposition, cost and the related accumulated
depreciation are removed from the accounts and any resulting gain or loss
is recognized in operating results.
Property, plant and equipment related to continuing operations at the end
of the respective years consist of the following:
(thousands of dollars) 1994 1993
Property and improvements $ 953 $ 751
Buildings and improvements 15,048 10,385
Furniture, fixtures
and equipment 49,140 41,736
------- -------
65,141 52,872
Less: accumulated
depreciation 38,562 33,820
------- -------
$26,579 $19,052
======= =======
Intangible Assets
Intangible assets are stated at cost less accumulated amortization.
Amortization is computed using the straight-line method over 40 years for
goodwill and periods ranging from 3 to 16 years for patents, trademarks
and other intangibles.
The Company assesses the recoverability of goodwill primarily by
determining whether the amortization of the balance over its remaining
life can be recovered through undiscounted future operating cash flows of
the acquired operation. The amount of goodwill impairment, if any, is
measured primarily based on projected discounted future operating cash
flows using a discount rate reflecting the Company's cost of funds.
Intangible assets related to continuing operations at the end the
respective years consist of the following:
(thousands of dollars) 1994 1993
Goodwill $42,878 $41,179
Patents, trademarks and other
intangibles 4,643 4,686
------- -------
47,521 45,865
Less: accumulated amortization 12,512 10,908
------- -------
$35,009 $34,957
======= =======
Income Taxes
The Company provides for income taxes currently payable and deferred
income taxes resulting from temporary differences between financial
statement and taxable income.
Effective October 3, 1992, the Company adopted Statement 109, Accounting
for Income Taxes, which requires a change from the deferred method of
accounting for income taxes to the asset and liability method. The
cumulative effect of the change in method of accounting for income taxes
was not significant, and accordingly, it has not been separately presented
in the 1993 consolidated statement of operations.
Federal and state income taxes are provided on foreign subsidiary income
distributed to or taxable in the United States during the year. At
September 30, 1994, net undistributed earnings of foreign subsidiaries are
approximately $27,457,000. A substantial portion of these unremitted
earnings have been permanently invested abroad and no provision for
federal or state taxes is made on these amounts. With respect to that
portion which may be returned to the United States, provision is made for
taxes if the amounts are significant.
The Company's United States entities file a consolidated federal income
tax return.
Employee Benefits
The Company and certain of its subsidiaries have various pension and
profit sharing plans. U.S. pension obligations are funded by payments to
pension fund trustees. Other foreign pensions are funded as expenses are
incurred. The Company's policy is generally to fund the minimum amount
required under the Employee Retirement Income Security Act of 1974 for
plans subject thereto. Profit sharing costs are funded at least annually.
Foreign Currency Translation
Assets and liabilities of foreign operations are translated into United
States dollars at the rate of exchange existing at the end of the year.
Results of operations are translated at monthly average exchange rates.
Gains and losses resulting from the translation of foreign currency
financial statements are deferred and classified as a separate component
of shareholders' equity.
Gains or losses on foreign exchange contracts that qualify as hedges are
recognized as an adjustment of the carrying amount of the item hedged. The
Company hedges certain loans denominated in foreign currencies. The
notional value of these contracts at September 30, 1994 is approximately
$13.1 million.
Revenue Recognition
Revenue from sales is recognized on the accrual basis, primarily upon the
shipment of products, net of estimated costs of returns and allowances.
Research and Development
Research and development costs are expensed as incurred.
Reclassification
Certain reclassifications have been made to prior years' amounts to
conform with the current year presentation.
2. Restructuring Charges
In 1993 and 1992, the Company accrued pre-tax restructuring charges of
$13,000,000 and $4,500,000, respectively. These restructuring charges are
presented as a separate component of operating profit and established
reserves for costs to be incurred related to facility closures, employee
severance, litigation contingencies and inventory writedowns.
Additionally, included as part of the 1993 reserve charge are amounts for
recruiting and moving employees and allowances for exit from certain
extraneous recreational product categories.
The net realizable value of assets of recreational product categories held
for sale, consisting primarily of accounts receivable and inventory less
the associated liabilities, has been classified as other current assets at
October 1, 1993. Such assets were disposed of in 1994. Unamortized
goodwill which was associated with certain of these product categories in
the amount of $2,100,000 has been written off against the restructuring
reserve in 1993.
3. Discontinued Operations
In July 1993, the Board of Directors approved a formal plan to divest the
Company's Marking Systems group, which manufactured and marketed hand
stamps, ink rolls, ink cartridges and liquid ink jets. As a result of
the adoption of the plan of divestiture, the Marking Systems operations
have been classified as discontinued for all years presented. The
Company estimated in 1993 that the Marking Systems group would be sold
for its net book value after consideration of earnings to the date of
disposal. Tax expense of $3,000,000 was provided in recognition of
estimated tax liabilities associated with the divestiture. This
provision resulted in recognition of a loss on disposal. The Company
completed the divestiture in two separate transactions in 1994 resulting
in a gain of $4,052,000 as net sales proceeds exceeded expectations. Net
sales of the Marking Systems group to the disposal dates are $36,075,000,
$58,996,000 and $58,128,000 for 1994, 1993 and 1992, respectively.
Interest expense of $41,000, $79,000 and $53,000 that is directly
attributable to the Marking Systems group is allocated to discontinued
operations.
4. Acquisitions
In 1992, the Company acquired a framing system for commercial tents. The
purchase price of the acquisition was $700,000 of which $405,000 was
recognized as goodwill. The acquisition was accounted for using the
purchase method and, accordingly, the consolidated financial statements
include the results of operations since the date of acquisition.
5. Notes Payable and Long-Term Obligations
Short-term obligations at the end of the respective years consist of the
following:
(thousands of dollars) 1994 1993
Bank loans $ 9,264 $13,200
Commercial paper -- 17,975
Current maturities of
long-term obligations 6,833 5,948
------- -------
$16,097 $37,123
======= =======
These arrangements provide for short-term borrowings with interest rates
set periodically by reference to market rates. The Company has lines of
credit, both foreign and domestic, totaling $83,559,000, including
$35,000,000 in support of commercial paper issuance, of which $74,295,000
is available at September 30, 1994. The Company also utilizes letters of
credit for trade financing purposes.
Long-term obligations at the end of the respective years consist of the
following:
(thousands of dollars) 1994 1993
Senior notes $35,000 $40,000
Revolving credit facility -- 7,237
Notes payable, 4.75% to 11%,
maturing through December 2005 3,023 3,254
------ ------
38,023 50,491
Less: current maturities 6,833 5,948
------ ------
$31,190 $44,543
====== ======
In 1993 and 1991, respectively, the Company issued unsecured senior notes
of $15,000,000 with an interest rate of 6.58% and $25,000,000 with an
interest rate of 9.16%. Equal annual principal payments of $7,500,000 for
the 1993 senior notes are due in 1998 and 1999. Remaining annual
principal payments for the 1991 senior notes are $6,000,000 in September
1995 and $7,000,000 in both September 1996 and 1997. Proceeds from
issuance of the senior notes have been used to reduce outstanding
borrowings under the Company's revolving credit facility.
The Company's $25,000,000 revolving credit facility, which allows for
borrowings in certain foreign currencies, expires on September 29, 1995
and is convertible into a term loan, payable in two equal installments on
September 29, 1996 and 1997. Interest on borrowings is set periodically
by reference to market rates such as the London Interbank Offered Rate.
Based on the borrowing rates currently available to the Company for debt
with similar terms and average maturities, the fair value of the Company's
long-term obligations at September 30, 1994 and October 1, 1993 is
$37,165,000 and $53,086,000, respectively. The carrying value of all
other financial instruments approximates the fair value.
It is an event of default under certain of the Company's loan agreements
if Samuel C. Johnson, members of his family and related entities (Johnson
Family) fail to own stock having votes sufficient to elect a 51% majority
of the directors. As of September 30, 1994, the Johnson Family held
approximately 2,130,000 shares or 31% of the Class A common stock,
approximately 1,160,000 shares or 94% of the Class B common stock and
approximately 72% of the voting power of both classes of common stock
taken as a whole. The agreements also contain restrictive covenants
regarding the Company's net worth, indebtedness and distributions.
Principal amounts payable on long-term obligations in each of the five
years ending September 1999 are $6,833,000, $7,361,000, $7,377,000,
$7,847,000 and $7,675,000.
Interest paid was $6,864,000, $8,325,000 and $10,307,000 for 1994, 1993
and 1992, respectively.
6. Lease Commitments
The Company leases certain operating facilities and machinery and
equipment under long-term, noncancelable operating leases. Future minimum
rental commitments under noncancelable operating leases related to
continuing operations having an initial or remaining term in excess of one
year at September 30, 1994 are as follows:
Fiscal Year (thousands of dollars)
1995 $3,689
1996 2,800
1997 2,191
1998 1,159
1999 871
Thereafter 3,884
------
$14,594
======
Rental expense under all leases related to continuing operations is
approximately $5,145,000, $5,432,000 and $5,012,000 for 1994, 1993 and
1992, respectively.
7.Income Taxes
As discussed in Note 1, the Company adopted Statement 109 as of October 3,
1992. The cumulative effect of this change in accounting for income taxes
is $95,000. Prior years' financial statements have not been restated to
apply the provisions of Statement 109.
Income tax expense (benefit) for the respective years attributable to
income from continuing operations consists of the following:
(thousands of dollars) 1994 1993 1992
Current:
Federal $(2,045) $ 582 $1,848
State 439 539 597
Foreign 5,381 3,545 4,405
Deferred 562 (2,611) (2,341)
------ ------ ------
$ 4,338 $2,055 $4,509
====== ====== ======
The significant components of deferred tax expense (benefit) attributable
to income from continuing operations are as follows:
(thousands of dollars) 1994 1993
Deferred tax expense (benefit)
(exclusive of effects of other
components listed below) $ 998 $(3,037)
Adjustments to deferred tax assets
and liabilities for enacted
changes in tax laws and rates (18) 307
Increase (decrease) in beginning
of the year balance of the
valuation allowance for deferred
tax assets (418) 119
----- -------
$562 $(2,611)
===== =======
In assessing the realizability of deferred tax assets, the Company
considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable
income during the years in which those temporary differences become
deductible. The Company considers the scheduled reversal of deferred tax
liabilities, projected future taxable income and tax planning strategies
in making this assessment.
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities at the end of
the respective years are presented below:
(thousands of dollars) 1994 1993
Deferred tax assets:
Inventories $2,836 $ 862
Compensation 1,816 1,603
Restructuring 377 4,247
Foreign income taxes 1,489 706
Foreign tax credit carryforwards 1,331 1,321
Net operating loss carryforwards 360 788
Other 2,870 2,556
------ ------
Total deferred tax assets 11,079 12,083
Less: valuation allowance 1,591 2,009
------ ------
Net deferred tax assets 9,488 10,074
------ ------
Deferred tax liabilities:
Foreign statutory reserves (891) (879)
Acquisition accounting (561) (597)
------ ------
Total deferred tax liabilities (1,452) (1,476)
------ ------
Net deferred tax asset $8,036 $8,598
====== ======
Following is the income (loss) from continuing operations before income
taxes for domestic and foreign operations:
(thousands of dollars) 1994 1993 1992
United States $ 350 $(10,280) $ 348
Foreign 12,134 12,975 9,527
------- ------- ------
$12,484 $ 2,695 $9,875
======= ======= ======
The significant differences between the statutory federal tax rates and
the effective income tax rates are as follows:
1994 1993 1992
Statutory U.S. federal income
tax rate 34.0% 34.0% 34.0%
State income taxes, net of
federal income tax benefit 1.9 12.7 4.2
Foreign rate differential 5.2 24.3 5.5
Foreign operating losses
(benefit) (2.7) 13.2 4.3
Tax credits (0.7) (5.2) (1.1)
Other (3.0) (2.7) (1.2)
---- ---- ----
34.7% 76.3% 45.7%
==== ==== ====
At September 30, 1994, the Company has $1,331,000 of foreign tax credit
carryforwards related to continuing operations available to be offset
against future U.S. tax liability. The credits begin expiring in 1997 if
not utilized.
During 1994, 1993 and 1992, foreign net operating loss carryforwards
related to continuing operations were utilized, resulting in a reduction
in income tax expense of $428,000, $264,000 and $19,000, respectively. At
September 30, 1994, certain of the Company's foreign subsidiaries have net
operating losses totaling $1,180,000 which are available to offset future
taxable income over the next 6 to 9 years. They are anticipated to be
utilized against profits over the next several years.
Taxes paid related to continuing operations are $5,896,000, $6,069,000
and $6,327,000, for 1994, 1993 and 1992, respectively.
8. Employee Benefits
Net periodic pension cost for noncontributory pension plans related to
continuing operations includes the following components:
(thousands of dollars) 1994 1993 1992
Service cost $265 $218 $225
Interest on projected
benefit obligation 568 515 455
Return on plan assets (411) (240) (342)
Net amortization and deferral 3 (125) (34)
Effect of plan curtailment 177 -- --
---- ---- ----
Net periodic pension cost $602 $368 $304
==== ==== ====
The funded status of the plans related to continuing operations is as
follows at the end of each year:
(thousands of dollars) 1994 1993
Actuarial present value of
benefit obligations:
Vested benefits $ 5,727 $4,915
Non-vested benefits 326 470
----- -----
Accumulated benefit obligation 6,053 5,385
Effect of projected compensation
levels 1,770 1,952
----- -----
Projected benefit obligation 7,823 7,337
Plan assets at fair value 5,601 5,123
------ ------
Projected benefit obligation in
excess of plan assets (2,222) (2,214)
Unrecognized net loss 1,136 1,528
Unrecognized prior service cost 303 328
Unrecognized net asset (737) (618)
------ -----
Pension liability recognized in
the consolidated balance sheets $(1,520) $(976)
====== =====
Actuarial assumptions used to determine the projected benefit obligation
and net periodic pension cost are:
1994 1993 1992
Discount rate 8% 8% 9%
Rate of increase in
compensation levels 5% 5% 5%
Expected long-term rate
of return on plan assets 8% 8% 8%
Plan assets are invested primarily in stock and bond mutual funds and
insurance contracts.
A majority of the Company's full-time employees are covered by profit
sharing programs. Participating entities determine a profit sharing
distribution as a percentage of pre-tax profit adjusted to yield a defined
return on tangible net worth. Individual employees share in the
distribution based on a combination of salary and years of service.
9. Preferred Stock
The Company is authorized to issue 1,000,000 shares of preferred stock in
various classes and series, of which there are none currently issued or
outstanding.
10. Common Stock
Common stock at the end of the respective years consists of the following:
1994 1993
Class A, $.05 par value:
Authorized 20,000,000 20,000,000
Issued and outstanding 6,859,558 6,758,346
Class B, $.05 par value:
Authorized 3,000,000 3,000,000
Issued and outstanding 1,230,599 1,230,883
Holders of Class A common stock are entitled to elect 25% of the members
of the Board of Directors and holders of Class B common stock are entitled
to elect the remaining directors. With respect to matters other than the
election of directors or any matters for which class voting is required by
law, holders of Class A common stock are entitled to one vote per share
while holders of Class B common stock are entitled to ten votes per share.
If any dividends (other than dividends paid in shares of the Company) are
paid by the Company on its common stock, a dividend would be paid on each
share of Class A common stock equal to 110% of the amount paid on each
share of Class B common stock. Each share of Class B common stock is
convertible at any time into one share of Class A common stock. During
1994, 1993 and 1992, respectively, 284, 1,587 and 2,258 shares of Class B
common stock were converted into Class A common stock.
11. Stock Ownership Plans
At September 30, 1994, the Company's stock option plans provide for
options to acquire shares of Class A common stock by key executives and
non-employee directors. All options have been granted at a price not less
than fair market value at the date of grant and become exercisable over
periods of one to four years from the date of grant, unless accelerated.
A summary of stock option activity related to the Company's stock option
plans is as follows:
Option
Number Price
of Shares Per Share
Outstanding at September 27, 1991 362,271 $3.50-$23.25
Granted 120,885 18.63-23.25
Exercised (4,910) 4.44-5.63
Cancelled (1,000) 19.88
------- -----------
Outstanding at October 2, 1992 477,246 3.50-23.25
Granted 193,555 16.38-21.25
Exercised (63,721) 3.50-19.88
Cancelled (12,250) 17.13-23.25
------- -----------
Outstanding at October 1, 1993 594,830 3.50-23.25
Granted 122,000 23.00-24.38
Exercised (88,663) 3.50-23.25
Cancelled (40,558) 17.13-22.00
------- -----------
Outstanding at September 30, 1994 587,609 $3.50-$24.38
======= ============
Exercisable at September 30, 1994 292,435 $3.50-$23.75
======= ============
Available for grant at
September 30, 1994 535,425
=======
A restricted stock plan provides for the issuance of up to 300,000 shares
of Class A common stock to certain key employees. At September 30, 1994,
October 1, 1993 and October 2, 1992, there were 276,333, 273,500 and
263,500, respectively, shares of Class A common stock issued under this
plan. The fair value of the shares awarded in excess of the amount paid
for such shares is recognized as contingent compensation and is being
amortized over three years from the dates of award, unless accelerated,
the period after which all restrictions will have lapsed.
The Company's employee stock purchase plan provides for the issuance of up
to 150,000 shares of Class A common stock at a purchase price of not less
than 85% of the fair market value at the date of grant. During 1994 and
1992, 9,432 and 13,825 shares, respectively, were issued under this plan.
No shares were issued under this plan in 1993.
12. Related Parties
The Company and S.C. Johnson & Son, Inc. are controlled by the Johnson
Family. Various transactions are conducted between the Company and
organizations controlled by the Johnson Family. These include consulting
services, office rental, certain administrative activities, such as
telephone service and in 1994, the purchase of land for the Company's
headquarters facility.
Total costs of these transactions are $1,548,000, $871,000 and $932,000,
for 1994, 1993 and 1992, respectively, of which $210,000 and $16,000 are
outstanding at September 30, 1994 and October 1, 1993, respectively.
13. Geographic Segments of Business
The Company conducts its worldwide operations through separate geographic
area organizations which represent major markets or combinations of
markets. The operations are conducted in the United States and various
foreign countries, primarily in Europe, Canada and the Pacific Basin.
Identifiable assets represent assets that are used in the Company's
operations in each geographic area at year-end.
(thousands of dollars) 1994 1993 1992
Net sales:
United States $157,221 $159,845 $151,147
Europe 100,270 94,777 99,255
Other 26,852 25,670 25,443
------- ------- -------
$284,343 $280,292 $275,845
======= ======= =======
Operating profit:
United States $5,847 $2,109 $8,695
Europe 10,151 6,407 8,534
Other 2,940 2,677 2,335
-------- ------- -------
$18,938 $11,193 $19,564
======== ======= =======
Identifiable assets:
United States $109,306 $97,420 $86,586
Europe 90,852 77,360 89,771
Other 19,523 17,837 18,200
Discontinued
operations, net -- 46,504 41,724
------- ------- -------
$219,681 $239,121 $236,281
======= ======= =======
14. Earnings Per Share
Earnings per share of common stock are computed on the basis of a
weighted average number of common and common equivalent shares
outstanding. Shares shown below are fully diluted. Primary and fully
diluted earnings per share are the same. The per share effect of
discontinued operations is calculated by dividing the applicable income or
loss from discontinued operations by the weighted average common and
common equivalent shares outstanding.
(thousand of dollars,
except per share amounts) 1994 1993 1992
Weighted average common
shares outstanding 8,019,017 7,936,326 7,891,883
Common equivalent shares 48,612 38,092 60,918
--------- --------- ---------
Weighted average common
and common equivalent
shares outstanding 8,067,629 7,974,418 7,952,801
========= ========= =========
Income from continuing
operations $8,146 $ 640 $5,366
===== ====== ======
Earnings per share from
continuing operations $1.01 $ .08 $.67
===== ===== ====
15. Litigation
The Company is subject to various legal actions and proceedings in the
normal course of business, including those related to environmental
matters. Although litigation is subject to many uncertainties and the
ultimate exposure with respect to these matters cannot be ascertained,
management does not believe the final outcome will have a significant
effect on the consolidated financial statements.
<PAGE>
Independent Auditors' Report
Shareholders and Board of Directors Johnson Worldwide Associates, Inc.:
We have audited the consolidated balance sheets of Johnson Worldwide
Associates, Inc. and subsidiaries as of September 30, 1994 and October 1,
1993 and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the years in the three year period ended
September 30, 1994. These consolidated financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these consolidated financial statements 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 consolidated financial statements referred to above
present fairly, in all material respects, the financial position of
Johnson Worldwide Associates, Inc. and subsidiaries at September 30, 1994
and October 1, 1993, and the results of their operations and their cash
flows for each of the years in the three year period ended September 30,
1994, in conformity with generally accepted accounting principles.
KPMG PEAT MARWICK LLP
Milwaukee, Wisconsin
November 10, 1994
REPORT OF MANAGEMENT
The management of Johnson Worldwide Associates, Inc. is responsible for
the preparation and integrity of all financial statements and other
information contained in this Annual Report. We rely on a system of
internal financial controls to meet the responsibility of providing
accurate financial statements. The system provides reasonable assurances
that assets are safeguarded, that transactions are executed in accordance
with management's authorization and that the financial statements are
prepared on a worldwide basis in accordance with generally accepted
accounting principles.
The financial statements for each of the years covered in this Annual
Report have been audited by independent auditors, who have provided an
independent assessment as to the fairness of the financial statements.
The Audit Committee of the Board of Directors meets with management and
the independent auditors to review the results of their work and to
satisfy itself that their responsibilities are being properly discharged.
The independent auditors have full and free access to the Audit Committee
and have discussions with the Committee regarding appropriate matters,
with and without management present.
John D. Crabb
President and Chief Executive Officer
Carl G. Schmidt
Vice President and Chief Financial Officer
<PAGE>
<TABLE>
FIVE YEAR FINANCIAL SUMMARY
<CAPTION>
Year Ended
--------------------------------------------------------------------------
(thousands of dollars, except September 30, October 1, October 2, September 27, September 28,
per share data) 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA <F1>
Net sales $284,343 $280,292 $275,845 $258,154 $217,285
Gross profit 110,836 115,719 112,185 105,317 92,088
Selling, general, and administrative
expenses 91,898 91,526 88,121 81,656 66,235
Restructuring -- 13,000 4,500 -- --
Operating profit 18,938 11,193 19,564 23,661 25,853
Interest expense 6,845 8,309 10,180 9,343 6,604
Other (income) expense, net (391) 189 (491) 1,295 (128)
----- ------ ------ ------- ------
Income from continuing operations
before income taxes 12,484 2,695 9,875 13,023 19,377
Income tax expense 4,338 2,055 4,509 5,581 7,165
------- ------ ------ ------ -------
Income from continuing operations 8,146 640 5,366 7,442 12,212
Income from discontinued operations -- 1,169 2,304 3,703 3,337
Gain (loss) on disposal of
discontinued operations 4,052 (3,000) -- -- --
------- ------- ------- ------- -------
Net income (loss) $ 12,198 $ (1,191) $ 7,670 $ 11,145 $ 15,549
======= ======= ======= ======= =======
Earnings (loss) per common share
Continuing operations $ 1.01 $ .08 $ .67 $ .94 $ 1.53
Discontinued operations $ .50 $ (.23) $ .29 $ .46 $ .42
------- ------- ------ ------- -------
Net income (loss) $ 1.51 $ (.15) $ .96 $ 1.40 $ 1.95
======= ======= ======= ======= =======
Weighted average common and
common equivalent shares
outstanding 8,068 7,974 7,953 7,939 7,975
BALANCE SHEET DATA<F1>
Total assets $219,681 $239,121 $236,281 $217,641 $181,367
Long-term obligations, less current
maturities 31,190 44,543 43,327 41,170 37,513
Shareholders' equity 128,197 110,818 118,669 105,302 96,783
<FN>
<F1> All periods have been reclassified to reflect the discontinuation of the Company's marking systems segment.
</TABLE>
<PAGE>
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
<TABLE>
QUARTERLY FINANCIAL SUMMARY
<CAPTION>
(thousands of dollars,
except per share data) First Second Third Fourth
------------------ ----------------- ----------------- ------------------
1994 1993 1994 1993 1994 1993 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales $44,009 $46,929 $84,305 $85,259 $95,083 $93,297 60,946 54,807
Gross profit 17,951 19,027 35,983 36,532 40,221 38,982 16,681 21,178
Income (loss)
Continuing operations (2,024) (2,160) 6,129 5,409 7,939 6,182 (3,898) (8,791)
Discontinued operations -- 1,178 -- 1,550 4,052 836 -- (5,395)
Net income (loss) (2,024) (982) 6,129 6,959 11,991 7,018 (3,898) (14,186)
Earnings (loss) per common
share:
Continuing operations (.25) (.27) .76 .68 .98 .77 (.48) (1.10)
Discontinued operations -- .15 -- .19 .50 .11 -- (.68)
Net income (loss) (.25) (.12) .76 .87 1.48 .88 (.48) (1.78)
Stock prices
High 27.00 19.75 26.50 20.75 25.25 20.88 26.50 22.50
Low 21.00 14.75 23.25 16.25 21.00 17.00 23.25 19.75
</TABLE>
<PAGE>
Corporate Headquarters
Johnson Worldwide Associates, Inc.
1326 Willow Road
Sturtevant, Wisconsin 53177 USA
(414) 884-1500
Transfer Agent and Registrar
Firstar Trust Company
Corporate Trust Department
P.O. Box 2077
Milwaukee, WI 53201
(414) 765-6700
Common Stock
NASDAQ Symbol: JWAIA
Johnson Worldwide Associates, Inc.
Class A Common Stock is traded on the NASDAQ Over the Counter National
Market System.
Annual Meeting
The Annual Meeting of Shareholders will convene at 9:45 a.m. (CST) on
January 25, 1995, in the Grand Ballroom, Salon A & B, Racine Marriott,
7111 Washington Avenue, Racine, Wisconsin.
Form 10-K
You may receive a copy of the Johnson Worldwide Associates, Inc. Form 10-K
filed with the Securities and Exchange Commission by writing to the
Secretary at Corporate Headquarters.
Shareholder Inquiries
Communication concerning the transfer of shares, lost certificates or
changes of address should be directed to the Transfer Agent.
EXHIBIT 21
JOHNSON WORLDWIDE ASSOCIATES, INC. AND SUBSIDIARIES
The following lists the principal direct and indirect subsidiaries of
Johnson Worldwide Associates, Inc. as of September 30, 1994. Inactive
subsidiaries are not presented.
Jurisdiction in
Name of Subsidiary (1)(2) which Incorporated
Airguide Instrument Company Illinois
America Outdoors, Inc. (3) Alabama
Jack Wolfskin International Ltd. United Kingdom
Jack Wolfskin Adventure Equipment
Ltd. United Kingdom
Johnson Beteiligungsgesellschaft mbH Germany
Jack Wolfskin Ausrustung fur
Draussen GmbH Germany
Johnson Outdoors V mbH Germany
Scubapro Taucherauser GmbH Germany
Johnson Leisure Incentives, Inc. Delaware
Johnson Worldwide Associates Australia
Pty. Ltd. Australia
Johnson Worldwide Associates Canada Inc. Canada
JWA Europe, S.A. France
Mitchell Sports, S.A. France
Mitchell France, S.A. France
Distribution Moderne De
Marques (4) France
Mitchell Holland BV Netherlands
Mitchell U.K. Ltd. United Kingdom
Old Town Canoe Company Delaware
Plastimo Manufacturing (UK) Ltd. (5) United Kingdom
Plastimo, S.A. France
Plastimo Espana, S.A.Spain Spain
Plastimo Holland BV Netherlands
Plastimo Nordic AB Sweden
Scubapro Sweden AB Sweden
Under Sea Industries, Inc. Delaware
Scubapro Asia, Ltd. Japan
Scubapro Espana, S.A.(4) Spain
Scubapro Eu AG Switzerland
Scubapro Europe Benelux Belgium
Scubapro Europe S.R.L. Italy
Scubapro Italy S.R.L. Italy
Scubapro Norge, AS Norway
Scubapro Taucherausrustungen Austria
Gesellschaft GmbH
Scubapro (U.K.) Ltd.(5) United Kingdom
(1) Unless otherwise indicated in brackets, each company does business
only under its legal name.
(2) Unless otherwise indicated by footnote, each company is a
wholly-owned subsidiary of Johnson Worldwide Associates, Inc.
(through direct or indirect ownership).
(3) Percentage of stock owned is 95%.
(4) Percentage of stock owned is 98%.
(5) Percentage of stock owned is 99%.
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
Shareholders and Board of Directors
Johnson Worldwide Associates, Inc.:
We consent to incorporation by reference in the Registration Statements
(No. 33-19804, 33-19805, 33-35309, 33-50680, 33-52073 and 33-54899) on
Form S-8 of Johnson Worldwide Associates, Inc. of our reports dated
November 10, 1994, relating to the consolidated balance sheets of Johnson
Worldwide Associates, Inc. and subsidiaries as of September 30, 1994 and
October 1, 1993 and the related consolidated statements of operations,
shareholders' equity, and cash flows and related schedules for each of the
years in the three year period ended September 30, 1994 which reports
appear or are incorporated by reference in the 1994 Annual Report on Form
10-K of Johnson Worldwide Associates, Inc.
KPMG Peat Marwick LLP
Milwaukee, Wisconsin
December 13, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF JOHNSON WORLDWIDE ASSOCIATES, INC.
AS OF AND FOR THE YEAR ENDED SEPTEMBER 30, 1994 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> SEP-30-1994
<PERIOD-START> OCT-02-1993
<PERIOD-END> SEP-30-1994
<CASH> 15,588
<SECURITIES> 0
<RECEIVABLES> 57,259
<ALLOWANCES> 2,317
<INVENTORY> 70,389
<CURRENT-ASSETS> 155,368
<PP&E> 65,141
<DEPRECIATION> 38,562
<TOTAL-ASSETS> 219,681
<CURRENT-LIABILITIES> 54,034
<BONDS> 31,190
<COMMON> 405
0
0
<OTHER-SE> 127,792
<TOTAL-LIABILITY-AND-EQUITY> 219,681
<SALES> 284,383
<TOTAL-REVENUES> 284,303
<CGS> 173,507
<TOTAL-COSTS> 173,507
<OTHER-EXPENSES> 90,046
<LOSS-PROVISION> 1,421
<INTEREST-EXPENSE> 6,845
<INCOME-PRETAX> 12,484
<INCOME-TAX> 4,338
<INCOME-CONTINUING> 8,146
<DISCONTINUED> 4,052
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,198
<EPS-PRIMARY> 1.51
<EPS-DILUTED> 1.51
</TABLE>
